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UK economy grows by 2.1% in August, lower than expected – The Guardian

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By William Schomberg and Andy Bruce

LONDON (Reuters) – Britain’s economy grew much more slowly than expected in August, setting back its recovery from the coronavirus lockdown, with much of what growth there was down to a one-off government restaurant subsidy programme, official data showed on Friday.

Gross domestic product rose by 2.1% from July, its slowest month-on-month increase since the economy began its recovery in May after a record slump, and not even half the median forecast of 4.6% in a Reuters poll of economists.

“While the latest data confirms a rebound in economic activity continued into August, the sharp slowdown in growth indicates that the recovery may be running out of steam, with output still well below pre-crisis levels,” Suren Thiru, head of economics at the British Chambers of Commerce said.

“The increase in activity in August largely reflects a temporary boost from the economy reopening and government stimulus, including the Eat Out to Help Out Scheme, rather than proof of a sustained ‘V’-shaped recovery.”

More than half of the economic growth in August came from the accommodation and food sector, where output surged by 71.4%, boosted by the Eat Out to Help Out scheme to subsidise meals and easing lockdown restrictions, the ONS said.

Sterling weakened against the U.S. dollar and the euro after the data was released.

The economy – which shrank by more than any other Group of Seven nation in the April-June period – remained 9.2% smaller than its level just before the pandemic hit Britain, the Office for National Statistics said.

“The economy continued to recover in August but by less than in recent months,” said ONS deputy national statistician for economic statistics Jonathan Athow.

The dominant services sector grew by 2.4% from July, a lot slower than expectations for growth of 5.0%.

Growth in the smaller manufacturing and construction sectors also fell short of forecasts.

Economists have warned that the British economy may struggle to grow in the months ahead as the number of COVID-19 cases began to rise in September and the government responded by tightening its restrictions on people gathering together.

Bank of England Governor Andrew Bailey said on Thursday that risks to Britain’s economy were “very much on the downside” and the central bank was ready to use its policy firepower to limit the impact of a second wave of COVID cases.

The BoE is widely expected to increase its bond-buying programme in November in its next move to pump more stimulus into the economy.

Britain is also facing the risk that it fails to secure a trade deal with the European Union with negotiations still ongoing ahead of the Dec. 31 expiry of the country’s post-Brexit transition period.

(Reporting by William Schomberg and Andy Bruce; editing by Kate Holton)

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Hilton CEO: 'We need additional stimulus to the economy, period' – Yahoo Canada Finance

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CBC

Vancouver crime rate steady in 2020 compared to 2019, according to new stats from VPD

Vancouver’s crime levels for 2020 are similar to 2019, according to a new report from the Vancouver Police Department. Comparing the same time period, from January to September, there were 4,396 reported crimes in 2020 versus 4,397 incidents in 2019.The VPD says certain types of crime have increased — for example, serious assaults have increased by 14 per cent over the previous year — and others, like robberies, have decreased by six per cent. Crime rose in these categories compared to 2019 according to the VPD report:   * The number of homicides are higher this year: 14 in 2020 versus nine in 2019. * Serious assaults, which includes assault with a weapon, assault causing bodily harm and aggravated assault, are up by 14 per cent. * Intimate partner violence is 4.6 per cent higher than 2019. * Anti-Asian hate crime incidents increased by 138 per cent. * Break-and-enters to businesses increased by 18 per cent. * Arson incidents increased by 39 per cent. * Assaults against police officers have gone up 47 per cent.Crime fell in these categories compared to 2019:   * Robberies are down six per cent. * Property crime decreased by 20 per cent. * Theft from vehicles has decreased by 37 per cent. * Theft, like shoplifting, decreased by 26.6 per cent. * Sexual offences reported to police have decreased by 5 per cent.Const. Tania Visintin with the Vancouver Police says some of the numbers can be explained by the pandemic shutdown including a decrease in shoplifting and the increase in business break-and-enters because many businesses were closed earlier this year. There was also data collected in specific neighbourhoods. The report found that in the three-block radius around Strathcona Park, calls to police for street disorder increased by 51 per cent. They increased by nine per cent in Chinatown and Yaletown.”There have been a group of very vocal Yaletown residents that have spoken to the city, especially about what’s been going on … so we hear these concerns. And as the police, we can definitely try to target these suspects,” Visintin said. She noted that police were able to arrest four people in connection with a series of mail thefts, break-and-enters and frauds in the downtown core this week.”We have these stats now and now we can continue with more projects and more reallocating of resources,” she said.

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Agriculture, manufacturing help soften blow to P.E.I.'s economy – CBC.ca

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The impact of COVID-19 on P.E.I.’s economy isn’t projected to be as bad as first expected, says the province’s director of economics and statistics.

Nigel Burns told a standing committee the GDP is expected to take a 3.9-per-cent hit this year, which is better than the five-per-cent-drop in previous projections.

He said up until July, the tourism industry was hit the hardest. But other industries, such as manufacturing and agriculture, haven’t been hit as hard, resulting in less of an impact on the Island’s overall economy.

Statistics Canada’s farm cash receipts report showed sales of $203.6 million for the first half of the year, the best first half since 2009. Crop sales drove most of the increase, with livestock sales up only marginally over 2019.

Burns said it’s “still not a great situation” for the overall economy.

Nigel Burns, P.E.I.’s director of economics and statistics, said while the economy is better than expected, it’s ‘still not a great situation.’ (Travis Kingdon/CBC)

“Everyone is predicting a contraction, but things are starting to tighten up and be less of an impact for the year,” he said.

“Since we don’t have such a big contraction, we won’t have as strong a rebound in the following year, but that’s OK, we have less destruction in the first place to heal in the second year.” 

Burns told the committee much still depends on how the COVID-19 situation progresses on P.E.I. and with its trading partners around the world.

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ADRIAN WHITE: Underground economy is thriving – Cape Breton Post

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There is no doubt that COVID-19 has changed the way businesses function in Cape Breton. The pandemic has forced many entrepreneurs to reshape operating strategies for financial survival.  

Think of the new safety protocols for restaurants to protect staff and customers from virus transmission. Think sporting events playing out before near-empty stadiums and instead focused heavily on revenues generated from media broadcast of the event.  

There are just too many changes to business practices to list here in this column including the growth of digitization in our economy but I wanted to single out a few examples to illustrate some telling impacts. 

One major impact comes from folks not feeling safe to travel outside the province or eat out in restaurants due to the pandemic. Instead, they are using some of those cash savings to fund home improvement projects right here in the Cape Breton economy. That is a good thing for our community and our workers and it supports the “Shop Local-Buy Local” mantra being promoted by the local business community. 

Demand in the home improvement sector has soared and is so strong that it has led to a shortage of building materials, a rapid rise in material costs and a shortage of skilled labour to take on those home improvement projects.  

Many new contractors have entered the home improvement business in 2020 and many anxious homeowners are in hot pursuit of their services. Sometimes these contractors show up when expected to do a job and sometimes not. This has been a long-standing problem with small contractors in Cape Breton.  

Some contractors present an official written quote including HST for the project leaving a paper trail to follow while other contractors are quite prepared to take cash from the customer thereby avoiding HST. Cash leaves little trail for CRA to follow when it comes to reporting taxable income. 

This practice leads me to shed some light on the underground economy and its impact on our well-being as a province. Statistics Canada defines the underground economy as “consisting of market-based activities, whether legal or illegal, that escape measurement because of their hidden, illegal or informal nature.”  

I use the construction industry as an easy-to-understand example but you can imagine other opportunities for tax avoidance including buying illegal cigarettes, street sold cannabis, cash tips, paying cash for services, Airbnb cash rentals, or offshore bank accounts not being reported to CRA. 

In Nova Scotia, according to Statistics Canada, the underground economy was estimated to be $1.28 billion in 2018. That is near 3 per cent of provincial GDP. This is revenue that escapes government taxation. Nova Scotia’s underground economy as a share of GDP is higher than the national average which is troubling. Taxes on $1.28 billion would go a long way to offset the forecasted 2020 Nova Scotia budget deficit of $853 million due to the pandemic. 

Some of the underground economy is driven by the fact Nova Scotia has the second-highest personal income tax rates in the country. It remains one of three remaining provinces in the country that still practices “bracket creep” on your personal income tax deduction by not adjusting it to CPI on your annual income tax return.  

The higher the taxes the more incentive it provides for individuals and companies to embrace tax avoidance. Alberta has one of the lowest personal income tax rates in Canada and no provincial sales tax. It abandoned “bracket creep” on its residents decades ago. It also has one of the lowest underground economy as a share of GDP rates in the country running at 1.8 percent of provincial GDP.  

British Columbia has the highest ratio at 3.7 percent of GDP. In Canada, the underground economy was valued at a whopping $61 billion in 2018 amounting to 2.7 per cent of national GDP.  

I can only imagine with the increased demand for home improvement projects in Canada due to the pandemic that underground economic activity will likely increase 50 per cent rising close to $90 billion for 2020. 

In Nova Scotia, residential construction accounts for over 25 percent of the estimated underground economy GDP.  The next six largest contributors to the underground economy amount to about 50 per cent of Nova Scotia’s underground economy. They are retail trade, accommodation/food services, finance/insurance/real estate, manufacturing, professional/technical services and health care/social assistance.   

If we want to grow the Nova Scotia economy and thereby increase tax revenues to pay for the services we all expect, we are going to have to rethink the tax burden on individuals and businesses to bring balance and fairness to the tax environment. It is one of the reasons we struggle to recruit doctors to Cape Breton. Above-average taxes in Nova Scotia hinder economic expansion. High taxes will continue to drive the underground economy and tax avoidance until we address them. 

Adrian White is CEO of NNF Inc, Business Consultants. He resides Sydney & Baddeck and can be contacted at awhite889@gmail.com.

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