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No Brexit trade deal could cost reeling UK economy $25 billion next year – CNN

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The British economy has been pummeled by the pandemic. Now, after a meeting of EU leaders decided that not enough progress has been made in talks on a new trade deal with the United Kingdom, Johnson faces a difficult choice: Does he keep discussions going past a self-imposed deadline, or walk away?
Both roads lead to a tough 2021 for Britain as the country battles the twin shocks of coronavirus and Brexit. But failing to secure an agreement with the United Kingdom’s biggest export market would amplify the pain.
Walking away empty handed would create disruptions to trade when the transition period ends later this year, shaving more than $25 billion off the UK economy in 2021 compared to a scenario where a limited free trade deal is agreed, according to a CNN Business analysis based on forecasts from Citi and the Institute for Fiscal Studies. That would put the country even further behind on its efforts to recover from the historic shock triggered by the pandemic.
“The combination of Covid-19 and the exit from the EU single market makes the UK outlook exceptionally uncertain,” Laurence Boone, chief economist at the Organization for Economic Cooperation and Development, said in a report this week. “Actions taken to address the pandemic and decisions made on future trading relationships will have a lasting impact on the United Kingdom’s economic trajectory for years to come.”

Little progress on deal

The clock is ticking for the United Kingdom and the European Union to come to terms, with Britain set to lose its favorable trading status with the bloc at the end of December.
Meetings this week concluded without any major breakthroughs. Fishing rights and the framework for resolving future disputes remain key sticking points, according to Mujtaba Rahman, managing director for Europe at Eurasia Group, a political risk consultancy.
“We don’t think the deal will flounder on fish, but we do think the technical and political challenges it presents will be more difficult to overcome than many believe,” Rahman said Thursday.
Johnson had said that terms of the future trading arrangement needed to be hammered out by mid-October to give businesses enough time to plan for the outcome. That deadline has now come and gone.
On Thursday, the European Union said it was willing to continue discussions in the coming weeks. But the United Kingdom’s chief negotiator, David Frost, said on Twitter that the conclusions of the EU Council left him “disappointed” and that Johnson would set out the UK position on Friday.
Rahman believes it’s still in Johnson’s best political interest to strike a deal, given the criticism of his management the Covid-19 crisis.
“As Johnson’s government tears itself apart on coronavirus, the need for a political win, which only a deal can be, is greater than ever,” he said.
The United Kingdom has in recent days opted for a regional approach as its coronavirus cases spike, reimposing strict rules in Liverpool and barring people from different households from meeting indoors in London starting Saturday. That’s led to criticism from both those worried about the impact on the economy, and those who believe dramatic national measures are necessary to keep the situation under control.

Businesses sound alarm

The confusion over where Brexit goes next couldn’t come at a worse time for the United Kingdom.
Citi and IFS estimate that the UK economy will contract by 9.4% this year. That would be the largest drop since 1921, according to data from the Bank of England. The additional restrictions coming into effect could make matters worse.
A disorderly break with the European Union on top of the coronavirus recession would only prolong the recovery.
With a limited trade agreement, the UK economy is due to bounce back with growth of 4.6% in 2021 before losing some momentum between 2022 and 2024, according to IFS and Citi projections. Failing to reach a trade deal with Europe would shave as much as one percentage point off that level of growth. The difference comes out to nearly £20 billion, or over $25 billion.
According to economists at Citi and IFS, even the best-case scenario of a limited trade agreement would leave the UK economy 2.1% smaller in 2021 than it would have been if the transition period was extended indefinitely.
With significant uncertainty clouding the outlook, businesses are expressing anxiety about the next few months.
In a survey of more than 950 executives released Friday by the Institute of Directors, roughly a quarter of respondents said they aren’t sure they’ll be prepared for the end of the transition period.
“The prospect of no deal would be daunting enough, let alone dealing with it in the middle of a global pandemic,” IoD senior policy adviser Allie Renison said. “These disruptions won’t cancel each other out. If anything they would compound the pain for British businesses.”

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Sunak Boosts UK Aid Again as Economy Reels Under Virus Curbs – Yahoo Canada Finance

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The Canadian Press

Plot thickens over origins of pope’s civil union endorsement

VATICAN CITY — Questions swirled Thursday about the origins of Pope Francis’ bombshell comments endorsing same-sex civil unions, with all evidence suggesting he made them in a 2019 interview that was never broadcast in its entirety.
The Vatican refused to comment on whether it cut the remarks from its own broadcast or if the Mexican broadcaster that conducted the interview did. And it didn’t respond to questions about why it allowed the comments to be aired now in the documentary “Francesco,” which premiered Wednesday.
In the movie, which was shown at the Rome Film Festival, Francis said gay people have the right to be in a family since they are “children of God.”
“You can’t kick someone out of a family, nor make their life miserable for this,” the pope said. “What we have to have is a civil union law; that way they are legally covered.”
Those comments caused a firestorm, thrilling progressives and alarming conservatives, given official Vatican teaching prohibits any such endorsement of homosexual unions.
While serving as archbishop of Buenos Aires, Francis endorsed civil unions for gay couples as an alternative to same-sex marriages. However, he had never come out publicly in favour of legal protections for civil unions as pope, and no pontiff before him had, either.
One of Francis’ top communications advisers, the Rev. Antonio Spadaro, insisted the pope’s comments were old news, saying they were made during a May 2019 interview with Mexican broadcaster Televisa.
“There’s nothing new because it’s a part of that interview,” Spadaro told The Associated Press as he exited the premiere. “It seems strange that you don’t remember.”
But Televisa didn’t air those comments when it broadcast the interview — nor did the Vatican when it put out its recordings of it. The broadcaster has not commented on the intrigue.
The Vatican frequently edits the pope in official transcripts and videos, especially when he speaks on sensitive issues. Yet some version of the footage was apparently available in the Vatican archives, which were opened to filmmaker Evgeny Afineevsky.
Televisa has not confirmed that the comments were made during its interview, but the scene of the documentary is identical to the Televisa interview, including the yellow background, a chair in the corner and slightly off-centre placement of the chain of Francis’ pectoral cross.
The official 2019 Vatican News transcript of that interview, as well as the official Vatican edit, contains no such comment on the need for legal protections for civil unions. The official edit does include his comments on the need for gay people to feel they are part of a family, as he has said previously.
Further muddying the waters is the fact that Afineevsky, when pressed by reporters late Wednesday, said the pope made the comments to him directly, through a translator, but declined to say when.
When The Associated Press interviewed Afineevsky on Oct. 14, the director was asked if he realized at the time that Francis’ comments were going to grab headlines.
Afineevsky dodged the question about the origin of the quote and seemed to not appreciate its significance. But he said that he hoped journalists would take more away from the film.
“If journalists will be focusing on this movie only on that, then it will be a pity,” he said. “But I think that’s one of the issues that our world needs to understand, that we’re all equal.”
The head of the Vatican communications branch, Paolo Ruffini, refused to speak to reporters who attended an award ceremony Thursday in the Vatican gardens for Afineevsky, and the director himself kept his distance.
The Catholic Church teaches that gay people must be treated with dignity and respect but that homosexual acts are “intrinsically disordered.” A 2003 document from the Vatican’s doctrine office stated the church’s respect for gay people “cannot lead in any way to approval of homosexual behaviour or to legal recognition of homosexual unions.”
Doing so, the Vatican reasoned, would not only condone “deviant behaviour,” but create an equivalence to marriage, which the church holds is an indissoluble union between man and woman.
That document was signed by the then-prefect of the office, Cardinal Joseph Ratzinger, the future Pope Benedict XVI and Francis’ predecessor.
Afineevsky, who is gay, had expressed surprise after the premiere that the pope’s comments had created such a stir, saying Francis wasn’t trying to change doctrine but was merely expressing his belief gay people should enjoy the same rights as heterosexuals.
On Thursday, he declined to take any further questions and sought to put attention on the main issues dealt with in the film: climate change, refugees and poverty.
“I am so proud that finally ‘Francesco’ is on its way to the road to change hearts and minds,” he said at the prize ceremony in the Vatican gardens. “Finally, I am happy that I can bring voices from the Rohingya refugees, refugees from Syria, the voices of victims of sexual abuse, voices from different points from different corners of the world.”
___
Associated Press journalist Trisha Thomas contributed.

Nicole Winfield, The Associated Press

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Diesel Gas Market May Signal a Weaker Economy – Barron's

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An oil pumpjack operates in Signal Hill, south of Los Angeles, California on April 21, 2020


Frederic J. Brown/AFP/Getty Images

The diesel market serves as a barometer for the state of the economy because the fuel is widely used in the transportation industry, and the signals it’s giving off in terms of supply, demand and prices don’t point to a very promising future.

“It’s the best fuel to see how the economy is recovery” as it’s a “fuel of industry,”
Patrick De Haan
, head of petroleum analysis at GasBuddy.

At the supply level, “diesel is far more bleak than gasoline to a refiner,” he says. U.S. gasoline inventories are under their year-ago level, “thanks to strong discipline by refiners,” but supplies of distillates, which include diesel and jet fuel, are running “some 30% above year-ago levels.” That’s “representative of a slowdown in the economy and certainly, air travel,” said De Haan.

For the four-week period ended Oct. 16, jet fuel product supplied, a measure of demand, was down nearly 46% compared with the same period a year ago, according to the U.S. Energy Information Administration. Given the weak demand, many refineries have favored production of diesel over jet fuel.

At the same time, diesel demand has taken a hit when economic activity is reduced, there’s fewer trucks on the road, and “thousands of school buses aren’t running,” says De Haan. “Right now, diesel demand is weaker and hasn’t seen the return gasoline has, and that bodes poorly for the situation going forward.”

Still, there have been signs of improving demand, with diesel consumption starting to move toward the four-week average, “potentially indicating that the worst is in the rearview mirror for the economy,” says Denton Cinquegrana, chief oil analyst at the Oil Price Information Service by IHS Markit.

Prices between the two fuels, meanwhile, point to a slow economic recovery. Diesel prices have been generally higher than gasoline prices for the “better part of the last two decades,” in part because a barrel of crude oil typically yields far less diesel than gasoline, says De Haan. However, in “quite a rare feat,” diesel prices have fallen under gasoline in some cases. That hasn’t happened since ultra clean diesel was mandated in 2007 and became more expensive to refine as a result, he says.

At the wholesale level, where refiners sell to retailers, gasoline prices have been higher than diesel’s. Wholesale prices in July for gasoline were at $1.38 a gallon, while diesel for on-highway use was at $1.254, according to the EIA’s latest figures. At the retail level, however, the average gasoline price was at $2.15 as of the week ended Oct. 19, below the $2.388 price for diesel.

Retail prices recently saw around a 20-cent difference, the lowest monthly average since September 2017, according to Cinquegrana. The narrow price difference has a lot to do with high U.S. diesel inventories, so he believes it’s “more about hefty supplies than a ‘yay or nay’ vote on the health of the economy.”

It’s also difficult to figure out whether price changes in diesel are due to economic growth or to “changes in jet fuel demand, or demand for heating oil, the latter of which can be influenced by winter weather, says
Richard Joswick
, head of oil pricing analytics at S&P Global Platts.

“Gasoline demand is slowly recovering, as is diesel, with the economy,” he says. Still, the current relative weakness in diesel is primarily due to the loss of demand for jet fuel, and demand for that is “likely to lag as both business travel and leisure travel will probably be slower to recover than other parts of the economy.”

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Calgary's post-pandemic economy poised for 6.9% expansion in 2021, report says – CBC.ca

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Calgary’s economy is going to start roaring back to life next year, but not before the city posts a dismal 10.1 per cent GDP contraction for 2020 as the pandemic and the energy sector slump continue to take their toll, according to a report released Tuesday. 

The Conference Board of Canada’s forecast for Calgary’s economy says that after being put through the wringer in 2020, the city’s fortunes will start to turn around in the new year.

“As the pandemic eases and oil prices slowly begin to strengthen, our call is for the Calgary economy to expand by 6.9 per cent in 2021,” the report said.

Calgary’s labour market already shed 44,000 jobs from the second quarter of 2019 to the first quarter of 2020. 

Another 90,900 jobs were lost in the second quarter of this year, and the board predicts employment will fall by a record 8.0 per cent overall in 2020.

The report predicts Calgary’s unemployment rate will remain high for many more months, averaging 11.3 per cent this year and 10.4 per cent next year.

“Calgary won’t recover its lost jobs until the end of 2022, partly because the oil and gas sector will recover only slowly,” the report said.

Some sectors of the economy are expected to recover faster than others.

The board says Calgary’s badly bruised retail sector — which saw sales drop by 5.1 per cent in 2020 — will bounce back and grow 9.7 per cent in 2021.

But the arts and entertainment industry, which declined 26.2 per cent, and the accommodation and food industry, which fell by 36.9 per cent, might not fully rebound until 2022, the report says.

Speaking Tuesday at the annual outlook conference hosted by Calgary Economic Development, ATB Financial chief economist Todd Hirsch said it’s expected that unemployment in Alberta will drop only slightly to 11 per cent next year and remain in the double digits for some time yet.

The Conference Board of Canada says Calgary’s employment rate and GDP will recover slowly but surely over the next two years. (Conference Board of Canada)

“It’s going to take a lot of growth, maybe a few years of growth, to absorb all of that excess labour and make sure everyone finds jobs. So it’s going to take us a while and we don’t think we’re going to be back into single digits probably until 2022 or even later,” he said.

“To get back to 2014 levels, we estimate that’s not going to happen until probably 2024. So it’s sort of a lost decade of growth for this province.”

Calgary Economic Development is banking on the technology sector to help turn around the city’s fortunes.

CEO Mary Moran says companies are already realizing what Calgary has to offer, pointing to how several tech firms have moved into empty office space downtown.

“You have seen the real estate industry adjust to … shorter-term leases, different floor plates, different amenities that they’re offering. And those ones that have made that adjustment are the ones where the tech companies are migrating to.”

Moran says her organization’s goal is to double the number of tech companies in Calgary by the end of this decade.

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