This week George Osborne was forced to slash growth forecasts for the UK in his Budget. Britain is on the brink of losing its AAA rating from a second ratings agency. Cyprus has to raise 5.8bn euros before Monday to qualify for a 10bn-euro bailout. Several thousand opponents of Egypt’s Muslim Brotherhood clashed with supporters of the Islamist group injuring at least 40 people and comedian Jim Davidson has been questioned about new allegations of sexual offences as part of a probe related to the Jimmy Savile inquiry.
1. Budget 2013
Chancellor George Osborne has insisted his economic approach is working, despite being forced to slash growth forecasts for the UK in his Budget. Mr Osborne said his Budget would be “for people who work hard and aspire to get on”. He predicted that this year, the economy would avoid slipping back into recession, that more people would be in work then ever before, and that the number of people claiming unemployment benefit would fall. A variety of forthcoming tax and benefit changes were announced in last year’s Autumn Statement. But the chancellor added some new, eye-catching measures in this year’s Budget.
Mr Osborne cut corporation tax to 20% and froze petrol duty rises. He also cut beer duty by 1p a pint, axed future above inflation rises, and unveiled measures to help housebuyers. Mr Osborne admitted it was taking longer than expected but insisted “we are, slowly but surely, fixing our country’s economic problems”. Ed Miliband said Mr Osborne had broken the deal he made with the British public when the coalition came to power, that all the pain of austerity would be worth it when the “good times” returned”. Three years on, what does he say? Exactly what he said three years ago,” said the Labour leader.
2. UK face second cut to AAA rating
A month since Britain was downgraded by Moody’s, Fitch Ratings warned it was likely to downgrade the country in the coming weeks citing high government debt levels and weak growth. A decision is due by the end of April, Fitch said in a statement.
The move by Fitch was not unexpected but will be another setback for Chancellor George Osborne. A downgrade could push up borrowing costs for households, businesses and the Government. The review follows the Budget this week in which UK growth forecasts for 2013 were halved. Osborne has staked his reputation on repairing Britain’s public finances and had promised to protect its triple-A rating. In response to the Fitch announcement, the Treasury said: “This serves to underline that there are no easy answers to problems built up over many years. But we are, slowly but surely, fixing our country’s economic problems. “As the chancellor said at the budget: it’s taking longer than anyone hoped, but we’re on the right track.”
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3. Cyprus bailout bid
Cypriot President Nicos Anastasiades and party leaders are due in Brussels for last-ditch talks on how to secure crucial EU funding. Cyprus faces a Monday deadline to clinch a 10 billion euro bailout from the European Union or the European Central Bank says it will cut off emergency funding to the country’s stricken banks, spelling certain collapse and potentially pushing the island out of Europe’s single currency.
Parliament voted on Friday and among nine bills approved, Cyprus’s parliament voted a restructure of the banking sector. Parliament also voted for capital controls to prevent large withdrawals from Cyprus. Banks in Cyprus have been closed since Monday and many businesses are only taking payment in cash. Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low. “At the moment, supplies will last another two or three days,” said Adamos Hadijadamou, head of Cyprus’s Association of Supermarkets. “We’ll have a problem if this is not resolved by next week.”
On Tuesday, parliament overwhelmingly rejected a levy that would have made small savers pay 6.75%, while larger investors would have paid 9.9%. The proposal provoked widespread anger among both ordinary savers and large-scale foreign investors, many of them Russian. The government fears a levy would prompt foreign investors to withdraw their money, destroying one of the island’s biggest industries. The Cypriot parliament is not expected to reconvene until after European finance ministers meet on Sunday, Reuters news agency reported.
4. Opposition protesters clash with Muslim Brotherhood
Opposition protesters in Egypt have clashed with members of the governing Muslim Brotherhood in several towns, leaving scores of people injured. On Friday, several thousand activists supporters marched to Cairo’s Mokattam area to face Brotherhood supporters and police guarding the movement’s headquarters.
Riot police fired tear gas as the rival groups clashed in the streets around the Brotherhood headquarters. Protesters hurled Molotov cocktails and stones, a witness said. About 40 people were wounded in the fighting, Health Ministry official Khaled al-Khatib told state news agency MENA.
Although nationwide protests have dwindled since the end of last year when thousands took to the streets after Mursi gave himself sweeping powers, Egypt is still deeply split between Islamists, including the Brotherhood, and opposition groups. The turmoil is hindering the efforts of Mursi, elected in June, to revive an economy in crisis and reverse a fall in Egypt’s currency by luring back investors and tourists.
5. Jim Davidson re-arrested over further sexual offence claims
On Wednesday Jim Davidson was answering bail on Wednesday at a London police station when he was “further arrested on suspicion of sexual offences”, said Scotland Yard. He was initially arrested in January by detectives from Operation Yewtree. His Solicitor, Henri Brandman, said that “several women” had made allegations against Mr Davidson dating back about 20 years, and in one case dating back 35 years. He added: “The complainants were all adults at the time of the alleged events. Jim vigorously denies the allegations”.
Scotland Yard has so far arrested 11 people under Operation Yewtree, its inquiry into historical allegations of sexual abuse linked to the entertainment industry. The investigation was launched in the wake of revelations that ex-TV presenter and Radio 1 DJ Jimmy Savile subjected hundreds of young people and children to sexual abuse over four decades.
Sources: bbc.co.uk; reuters.uk.com
Image Credits: guardian.co.uk, http://www.hm-treasury.gov.uk