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Egyptian pound steady on official market, weaker on black market

April 19, 2015 - reuters.com

CAIRO, April 19 (Reuters) - Egypt's central bank kept the pound EGP= steady at 7.53 to the dollar at a foreign exchange auction on Sunday, while the currency weakened slightly on the black market. The central bank has kept the official exchange rate steady for more than two months after letting the pound weaken at the start of the year. This and other measures have combined to reduce black market trading dramatically. The bank said it offered $40 million at auction on Sunday and sold $38.2 million at a cut-off price of 7.5301 pounds per dollar CBEO , unchanged from its last auction on Thursday. The rates at which banks are allowed to trade dollars are determined by the results of official auctions, giving the central bank effective control over exchange rates. A trader in the parallel market said the pound was trading at 7.67 pounds to the dollar on Sunday, from 7.66 on Thursday. Black market traders say volumes have fallen dramatically since the central bank's move against them and since it imposed a cap in February on the amount of dollars that can be deposited in banks. The limit discourages use of the black market by depriving those who exchange dollars outside official channels from a place to keep their funds. (Reporting By Stephen Kalin; Editing by Jon Boyle) ((stephen.kalin@thomsonreuters.com; +20 101 584 1700; Reuters Messaging: stephen.kalin.thomsonreuters.com@reuters.net)) Keywords: EGYPT FOREX/

EU states should back action to protect migrants in Med -Mogherini

April 19, 2015 - reuters.com

BRUSSELS, April 19 (Reuters) - EU foreign policy chief Federica Mogherini urged on Sunday European governments to support action to protect migrants in the Mediterranean, following one of the worst migrant boat disasters over the weekend. ID:nL5N0XG04V "We have said too many times 'never again'. Now is time for the European Union as such to tackle these tragedies without delay," Mogherini said in a statement. "We need to save human lives all together, as all together we need to protect our borders and to fight the trafficking of human beings." EU foreign ministers will discuss the issue at a meeting in Luxembourg, Mogherini said. (Reporting by Robin Emmott) ((robin.emmott@thomsonreuters.com; +32 2 287 6835; Reuters Messaging: robin.emmott.thomsonreuters.com@reuters.net)) Keywords: EUROPE MIGRANTS/EURO

Saudi's SABIC Q1 revenues down 28 pct y/y, oil price "out of control"

April 19, 2015 - reuters.com

DUBAI, April 19 (Reuters) - Revenues at Saudi Basic Industries Corp 2010.SE (SABIC) plunged 28 percent from a year earlier to 35.56 billion riyals ($9.48 billion), and dropped 18 percent from the previous quarter, acting chief executive Yousef Abdullah al-Benyan said on Sunday. He was speaking to reporters after the company, one of the world's largest petrochemicals groups, reported a 39 percent year-on-year drop in first-quarter net income, blaming the slide in oil and petrochemical product prices. SABIC made a net profit of 3.93 billion riyals in the three months to March 31. ID:nL5N0XG01D Benyan said the fall in oil and petrochemical product prices was "out of control", but that his company was nevertheless well placed to deliver sustainable growth and superior returns, helped by 4 percent gross domestic product growth expected in Saudi Arabia this year. The outlook is positive for the Asian petrochemicals market because of growth in China, while Africa looks promising for future investment, he added. Benyan said the company had no plans at present to tap the debt market, and was not planning to refinance a loan maturing in June. The company is not in the business of hedging currencies and that is not on its radar, but it does its best to maintain cash to meet its needs in Europe and minimise its exposure to swings in the euro EUR= exchange rate, he said in answer to a question about the impact of the euro's weakness. (Reporting by Matt Smith; Editing by Olzhas Auyezov) ((matt.smith1@thomsonreuters.com; 00971506354039; Reuters Messaging: matt.smith1.thomsonreuters.com@reuters.net)) Keywords: SABIC RESULTS/CEO

MIDEAST STOCKS - Factors to watch - April 19

April 19, 2015 - reuters.com

DUBAI, April 19 (Reuters) - Here are some factors that may affect Middle East stock markets on Sunday. Reuters has not verified the press reports and does not vouch of their accuracy. INTERNATIONAL/REGIONAL * GLOBAL MARKETS-Shares slide on China margin crackdown, dollar falls MKTS/GLOB * MIDEAST STOCKS-Strong oil lifts Gulf; Dubai property stocks surge ID:nL5N0XD3G8 * Oil falls from 2015 peaks, Brent jumps 9.6 pct on the week O/R * OPEC oil output surge boosts surplus, despite higher demand ID:nL5N0XD271 * Gold pares gains after U.S. inflation data ID:nL4N0XE2U4 * Iranian banks agree to cut rates after inflation plunge ID:nL5N0XF0A9 * Israel says to transfer of frozen tax funds to Palestinians ID:nL5N0XF05T * Obama says will sign bill allowing Congress to review Iran deal ID:nL2N0XE1HG * Former president defiant as humanitarian toll mounts in Yemen war ID:nL4N0XE3U4 * Obama calls Saudi King Salman to discuss Yemen -White House ID:nL2N0XE2MD * Iran submits four-point Yemen peace plan to United Nations ID:nL2N0XE1K6 * Islamic State militants clash with security forces inside Iraq's largest refinery ID:nL5N0XD4ZR * Saddam aide, Iraqi insurgent leader al-Douri reported killed ID:nL5N0XE3MO * U.S., allies target Islamic State with 21 air strikes -statement ID:nL2N0XE14P * Islamic State claims car bomb at U.S. Consulate in Erbil ID:nL5N0XE3TD * Assad says Turkish support "main factor" in Idlib takeover ID:nL5N0XE1Y8 EGYPT * Egypt's GASC buys 300,000 tonnes wheat ID:nL5N0XF0EU * Bomb attacks kill soldier, wound five in Egypt's Sinai ID:nL5N0XD1ZI * Egypt supports sugar producers, may slap big tariff on imports ID:nL5N0XD1AM * Orascom Construction CEO bullish on Egypt, wants more reforms ID:nL5N0XD3NM * Egyptian pound steady on official market, weaker on black market ID:nL5N0XD2RG SAUDI ARABIA * Saudi Arabia to open stock market to foreigners on June 15 ID:nL5N0XD35P * Saudi Hollandi Bank eyes strong profit, loan growth in 2015 ID:nL5N0XD27Z * Saudi hardware retailer SACO to raise $134 mln from float - lead ID:nL5N0XD3QX * Saudi's Yansab to shut petchem plants for maintenance ID:nL5N0XD3DT * Saudi Arabia's Dar Al Arkan Q1 net profit slumps 40.6 pct, meets estimates ID:nL5N0XD3FI * Saudi's Ma'aden says Q1 profit more than doubles on sales growth ID:nL5N0XD3AZ * Saudi Jarir Marketing proposes Q1 dividend of 2.25 riyals/share ID:nL5N0XD380 UNITED ARAB EMIRATES * Dubai's Amlak Finance says targets May for trading restart ID:nL5N0XD3XZ * Etisalat unit PTCL Q1 profit falls 84 pct as costs rise, revenue ebbs ID:nL5N0XD2VY QATAR * Qatar sells June al-Shaheen crude at 10-month high ID:nL4N0XE2NX BAHRAIN * Pending Formula One race spurs renewed Shi'ite protests in Bahrain ID:nL5N0XE35E * Bahrain December bank lending shrinks 5.9 pct y/y ID:nL5N0XD3G6 OMAN * Oman LNG looks to sell cargo to Asia via Union Fenosa Gas -traders ID:nL5N0XE1KF (Compiled by Dubai newsroom) ((dubai.newsroom@reuters.com)) Keywords: MIDEAST FACTORS/

U.S., China top dumping of electronic waste; little recycled

April 19, 2015 - reuters.com

* Waste totals 41.8 million tonnes in 2014, worth $52 bln * Norway, Switzerland, Iceland top in per capita waste * Less than a sixth of all e-waste recycled By Alister Doyle OSLO, April 19 (Reuters) - The United States and China contributed most to record mountains of electronic waste such as cellphones, hair dryers and fridges in 2014 and less than a sixth ended up recycled worldwide, a U.N. study said on Sunday. Overall, 41.8 million tonnes of "e-waste" -- defined as any device with an electric cord or battery -- were dumped around the globe in 2014 and only an estimated 6.5 million tonnes were taken for recycling, the United Nations University (UNU) said. "Worldwide, e-waste constitutes a valuable 'urban mine', a large potential reservoir of recyclable materials," said David Malone, the U.N. under-secretary-general and rector of UNU. The report estimated that the discarded materials, including gold, silver, iron and copper, was worth some $52 billion. The United States led e-waste dumping with 7.1 million tonnes in 2014, ahead of China on 6.0 million and followed by Japan, Germany and India, it said. The United States, where individual states run e-waste laws, reported collection of 1 million tonnes for 2012 while China said it collected 1.3 million tonnes of equipment such as TVs, refrigerators and laptops in 2013. Norway led per capita waste generation, with 28 kg (62 lbs) dumped per inhabitant, followed by Switzerland, Iceland, Denmark and Britain. On that ranking, the United States was ninth and China was not among a list of the top 40. Researchers said that in many case it made economic sense to recover metals that included 16.5 million tonnes of iron, 1.9 million tonnes of copper as well as 300 tonnes of gold. The gold alone was valued at $11.2 billion, with the precious metal used in devices because it is a good, non-corrosive conductor of electricity. "At the same time, the hazardous content of e-waste constitute a 'toxic mine' that must be managed with extreme care," said Malone, referring to components such as lead and mercury which are found on some discarded devices. Global volumes of e-waste were likely to rise by more than 20 percent to 50 million tonnes in 2018, driven by rising sales and shorter lifetimes of electronic equipment, the report said. Ruediger Kuehr, one of the authors of the report, said many people were aware of the global problem of waste but often left ageing toys or cellphones in drawers or cellars at home. "People don't see it as an issue in their own households," he said. (Reporting by Alister Doyle; Editing by Crispian Balmer) ((alister.doyle@thomsonreuters.com; +47 4683 74 83;)) Keywords: ENVIRONMENT WASTE/

France: euro's fall has been very helpful; at a good level now

April 18, 2015 - reuters.com

WASHINGTON, April 18 (Reuters) - The euro's depreciation has been very helpful, but it is a good level now and stability is needed now, French Finance Minister Michel Sapin said on Saturday. "The fall in the value of the euro is very good news for all of Europe and in particular for France. It's very good news," Sapin told reporters during meetings of the International Monetary Fund and the World Bank. A weaker euro helps facilitate the sale outside the euro zone of airplanes and other products, and enables European countries to defend themselves against goods that arrive from abroad, he said. "So today, we're in a good situation. The euro is at a good level. It's one of the elements...that enable us to have stronger growth in France," he said. But now the euro zone economies need stability, he said. They had needed to evolve, and that has happened thanks to the European Central Bank's policy of monetary easing. "When you see the evolution of the value of the euro, it's substantial," he said, adding that the moment arrives when stability is needed so people are not always in a wait-and-see mode. "So I think what would be good for the European economy is a vision of stability. It doesn't mean things won't move. Markets can move...but the perspective that seems good is one of stability," he said. (Reporting by Randall Palmer; Editing by Andrea Ricci) ((randall.palmer@thomsonreuters.com, Twitter @reutersPalmerR; +1-613-235-6745; Reuters Messaging: randall.palmer.thomsonreuters.com@reuters.net)) Keywords: IMF G20/FRANCE

UPDATE 1-China says to accelerate reforms to support yuan in IMF currency basket

April 18, 2015 - reuters.com

(changes dateline to WASHINGTON; updates with Zhou comments to IMF) WASHINGTON, April 18 (Reuters) - Beijing will accelerate reforms to the country's currency as part of a push for the yuan's inclusion in the International Monetary Fund's currency basket, China's central bank governor Zhou Xiaochuan said on Saturday. In a statement to the IMF steering committee, Zhou argued that Beijing had made strides toward making the yuan freely convertible, and that it should be included in the IMF's Special Drawing Rights basket. China has committed to further open its capital account and liberalize the way the exchange rate for the yuan, or RMB, is managed, including reducing currency market intervention. "China is not far from achieving its goal of RMB capital account convertibility," Zhou said. Winning approval for the yuan's inclusion in the IMF's currency basket could raise China's standing in the global financial system and mark an important step in Beijing's emergence as a global power. The United States, the IMF's top shareholder, has said China's currency is not yet ready to join the SDR basket. A top IMF official said China does not want to bend the rules in its favor. ID:nL2N0XF0C5 Zhou had earlier commented on the currency reform push in an interview with Xinhua reporters in Washington on Friday, where he was attending a meeting of the IMF. (Reporting by Jason Lange in Washington; Additional reporting by Pete Sweeney and David Lin in Shanghai; Editing by Jeremy Laurence and Tim Ahmann) ((pete.sweeney@thomsonreuters.com; +86 158 0188 9934; Reuters Messaging: pete.sweeney.thomsonreuters.com@reuters.net)) Keywords: CHINA YUAN/

Iranian banks agree to cut rates after inflation plunge

April 18, 2015 - reuters.com

By Sam Wilkin DUBAI, April 18 (Reuters) - Iranian banks agreed on Saturday to cut deposit and lending rates, the head of Iran's largest commercial bank said, after a sharp fall of inflation gave policymakers more room to pursue faster economic growth. "The directors of state and private banks today agreed...to reduce the one-year deposit rate to 20 percent," the semi-official Mehr news agency quoted Abdolnaser Hemmati, managing director of state-run Bank Melli, as saying. Lending rates were also cut by between 2 and 3 percentage points in response to the drop of inflation, statements by Iranian President Hassan Rouhani and the views of the economy minister and central bank governor, he said. The changes will take effect on May 5 subject to the approval of the central bank. One-year deposit rates are currently capped at 22 percent under a similar agreement reached last year. With tighter monetary and fiscal policy, Rouhani's administration has brought annual inflation down to 15.6 percent from over 40 percent two years ago. Saturday's rate decision suggests authorities now believe the fight against inflation is largely won. The foreign exchange market may also be a factor in the rate decision. Tehran reached a preliminary agreement with world powers early this month on curbing its nuclear programme; if a final deal is reached by a June 30 deadline, economic sanctions on Iran will be lifted. This could encourage the public to start releasing into the market large amounts of hard currency - perhaps billions of dollars - which it hoarded during the sanctions era. That could push the free market rate of the rial up sharply, and officials have said they do not want to see sharp rial appreciation because it could hurt Iranian exporters. Iran's economy grew 2.8 percent from a year earlier in the third quarter of the fiscal year that began on March 21, 2014, according to central bank data, too slowly to bring down high unemployment or raise living standards damaged by years of sanctions. (Editing by Andrew Torchia) ((sam.wilkin@thomsonreuters.com; +971 4453 6548; Reuters Messaging: sam.wilkin.thomsonreuters.com@reuters.net)) Keywords: IRAN BANKS/INTEREST RATE

Bank of Canada decision pushed traders to catch up on C$ -Poloz

April 18, 2015 - reuters.com

By Randall Palmer WASHINGTON, April 18 (Reuters) - The Bank of Canada's decision to hold interest rates steady last month, coming on the heels of rising oil prices, appears to have pushed hesitant foreign exchange traders to bid up the Canadian dollar, central bank Governor Stephen Poloz said. He was referring to the central bank's April 15 rate decision, which came after a surprise rate cut in January and was coupled with a forecast that economic growth would rebound strongly this year from zero growth in the first quarter. "I think that in the days leading up to the decision, oil prices were breaking out on the upside. They were just steadily moving up. And the Canadian dollar usually responds and wasn't," he told reporters late on Friday on the sidelines of the spring meetings of the International Monetary Fund and the World Bank. "My sense is that when the decision came, that allowed the market to kind of clear up whatever uncertainties they had and did a little catching up to the oil price. That's one interpretation anyway." Upon release of Wednesday's rate decision and the central bank's monetary policy report, the Canadian dollar CAD= rose from C$1.2522 to the U.S. dollar (79.86 U.S. cents) to C$1.2436 (80.41 U.S. cents) within minutes. Its gains continued as Poloz said in a news conference later on Wednesday that if the economic outlook panned out as projected he would not need to take out any more "insurance," meaning a further rate cut would not be needed. The Canadian dollar ended at C$1.2300 (81.30 U.S. cents) on Wednesday. The currency was at C$1.2245 (81.67 U.S. cents) on Saturday. Canada is a major oil exporter. (Reporting by Randall Palmer; Editing by Paul Simao) ((randall.palmer@thomsonreuters.com, Twitter @reutersPalmerR; +1-202-659-7990; Reuters Messaging: randall.palmer.thomsonreuters.com@reuters.net)) Keywords: IMF G20/CANADA

Russia hasn't reached deal to provide 3-5 bln euros to Greece - RIA cites Kremlin spokesman

April 18, 2015 - reuters.com

MOSCOW, April 18 (Reuters) - Russia has not reached an agreement with Greece to provide it with 3 billion to 5 billion euros, Russia's RIA news agency reported on Saturday, citing Kremlin spokesman Dmitry Peskov. Earlier on Saturday, German magazine Der Spiegel reported that Greece was poised to sign a gas deal with Russia as early as Tuesday which could bring 3 billion to 5 billion euros into depleted government coffers. ID:nL5N0XF07E (Reporting By Jason Bush; Editing by Angus MacSwan) ((jason.bush@thomsonreuters.com; +7 495 775 1242; Reuters Messaging: jason.bush.reuters.com@reuters.net)) Keywords: EUROZONE GREECE/RUSSIA LOAN

UPDATE 1-China, Malaysia renew currency swap arrangement for 3 years

April 18, 2015 - reuters.com

(Sources directly to Malaysian central bank, adds bank comment, background) SHANGHAI, April 18 (Reuters) - China and Malaysia have renewed their currency swap arrangement for a further three years, according to a statement on the website of the Malaysian central bank. The swap exchanges 180 billion yuan ($29.04 billion) for 90 billion ringgit ($24.83 billion), according to the report, unchanged from the previous swap arrangement in 2012, which increased the size of the first swap signed in 2009. "This renewed bilateral currency swap arrangement reinforces the on-going commitment by both central banks in promoting the use of local currencies for payment settlement," said Bank Negara Malaysia in its statement. "The currency swap arrangement will further reinforce the economic and financial linkages as well as promote bilateral trade and investment flows between Malaysia and China." A separate report on China's official Xinhua news service said the agreement was signed by Malaysian central bank head Zeti Akhtar Aziz and his Chinese counterpart Zhou Xiaochuan in the United States. ($1 = 6.1976 Chinese yuan renminbi) ($1 = 3.6240 ringgit) (Reporting by Pete Sweeney; Editing by Mark Potter) ((pete.sweeney@thomsonreuters.com; +86 158 0188 9934; Reuters Messaging: pete.sweeney.thomsonreuters.com@reuters.net)) Keywords: CHINA FOREX/SWAPS

China, Malaysia renew currency swap arrangement for 3 years - Xinhua

April 18, 2015 - reuters.com

SHANGHAI, April 18 (Reuters) - China and Malaysia have renewed their currency swap arrangement for a further three years, according to a report by China's official Xinhua news service, quoting a statement by the Malaysian central bank. The swap exchanges 180 billion yuan ($29.04 billion) for 90 billion ringgit ($24.83 billion), according to the report, unchanged from the previous swap arrangement. ($1 = 6.1976 Chinese yuan renminbi) ($1 = 3.6240 ringgit) (Reporting by Pete Sweeney; Editing by Mark Potter) ((pete.sweeney@thomsonreuters.com; +86 158 0188 9934; Reuters Messaging: pete.sweeney.thomsonreuters.com@reuters.net)) Keywords: CHINA FOREX/SWAPS

Ukraine's state-run railway will not seek coupon, principal cut - FinMin

April 18, 2015 - reuters.com

KIEV, April 18 (Reuters) - Ukraine's state-run railway company Ukrzaliznytsia will seek only a maturity extension of its $500 million eurobond and not a principal or coupon reduction in debt restructuring talks with bondholders, the Finance Ministry said on Saturday. The railway company's bonds due in 2018 are to be restructured under an International Monetary Fund-backed (IMF) overhaul of Ukraine's sovereign and state-guaranteed debt to plug a $15 billion funding gap. The Finance Ministry has made clear it will seek to cut the face value of Ukraine's sovereign debt. But earlier in April it hinted it would not press for such a reduction for the bonds of two sub-sovereigns, state-run Ukreximbank and Oschadbank -- a fact it confirmed earlier this week. At a presentation about restructuring plans in Washington to bondholders late on Friday, Ukraine said Ukrzaliznytsia debt would be treated in a similar way. "Including these entities (Oschadbank, Ukreximbank, Ukrzaliznytsia) is essential to meeting Target 1 of the debt operations. However, each entity will undergo a separate process targeting its specific situation," the finance ministry said Target 1 foresees only a maturity extension of the bond repayment and does not envisage reductions of the principal and coupon. Ukrainian officials have set themselves a June deadline to complete debt talks under a $40 billion funding package backed by the IMF of which the restructuring forms a part. But many analysts are sceptical the planned timeframe is realistic. (Reporting and writing by Natalya Zinets and Richard Balmforth; Editing by Mark Potter) ((Richard.Balmforth@thomsonreuters.com; +380442449150; Reuters Messaging: richard.balmforth.thomsonreuters.com@reuters.net)) Keywords: UKRAINE CRISIS/RAILWAYS

China says to accelerate reforms to support yuan in IMF currency basket - Xinhua

April 18, 2015 - reuters.com

SHANGHAI, April 18 (Reuters) - China central bank governor Zhou Xiaochuan said Beijing would accelerate reforms to the country's currency to push for the yuan's inclusion in the International Monetary Fund's currency basket, known as Special Drawing Rights (SDRs), the official Xinhua news agency reported on Saturday. Zhou made the comments during an interview with Xinhua reporters in Washington, D.C. on Friday, where he was attending a meeting of the IMF. China has committed to further open its capital account and liberalise the way the exchange rate is managed, including reducing intervention in the domestic currency market, which would alleviate concerns among IMF members that incorporating the currency would increase liquidity and policy risks in the SDR regime. (Reporting by Pete Sweeney and David Lin; Editing by Jeremy Laurence) ((pete.sweeney@thomsonreuters.com; +86 158 0188 9934; Reuters Messaging: pete.sweeney.thomsonreuters.com@reuters.net)) Keywords: CHINA YUAN/

RPT-INSIGHT-In Labour's Scottish bastion, nationalists prepare an upset

April 18, 2015 - reuters.com

(Repeats April 17 story with no change to text) * Labour facing big losses in Scotland * Scottish nationalists poised to end political era * Election could bring major changes for Britain * Glasgow is symbol of Labour's reversal of fortune By Andy Bruce, Kate Holton and Guy Faulconbridge GLASGOW/LONDON April 17 (Reuters) - In Scotland's biggest city, nationalists have triggered a once-in-a-century shift in political loyalties that could dash Labour leader Ed Miliband's dreams of winning the May 7 election and thrust secessionist 'kingmakers' to the heart of British power. The shifting currents in Glasgow, the citadel of Scottish socialism for more than a century, show the seriousness of the nationalists' bid to end Labour's dominance of Scotland, a significant change in recent British political history. The nationalist challenge could trigger events after the election that threaten the future of the United Kingdom and possibly its membership of the European Union. Scots voted to preserve the United Kingdom in a Sept. 18 referendum but the once marginal Scottish National Party (SNP) has spent two decades persuading Scots that it is a worthy alternative to Labour, which many voters say has abandoned its Scottish heritage. "We're recovering from a period where the Scottish Labour party wasn't strong enough, and it wasn't good enough. And that takes time," said Jim Murphy, leader of the Scottish Labour Party. "We've got less than three weeks to turn it round but I'm confident that we can," said Murphy, a 47-year-old teetotal vegetarian who opinion polls show has so far failed to stem a flood of support from Labour to the SNP. The destiny of Glasgow's once safe Labour seats will show whether Labour has lost Scotland, a defeat that would scupper Miliband's bid to win an overall majority in the 650-seat London parliament and potentially give the SNP a kingmaker position from which to bargain for more powers for Scotland. The loss of Glasgow, a party stronghold for so many decades, would symbolise the extent of Labour's decline in Scotland and the emerging supremacy of the nationalists. Labour won all seven of Glasgow's seats in the British parliament in the 2010 election with apparently unassailable majorities of up to 16,000 votes. Now all but one are threatened by the SNP, according to John Curtice, professor of politics at the University of Strathclyde and Scotland's most respected opinion poll analyst. "Glasgow North East is the safest Labour seat in the country and nobody has yet come up with an opinion poll that suggests it could be lost," he told Reuters. "But everything else in the city is absolutely up for grabs." GLASGOW 'UP FOR GRABS' From the banks of the River Clyde, Glasgow's merchants earned fortunes in the 18th Century from tobacco from America and after the American Revolution disrupted trade, they imported sugar from the West Indies. Glasgow became one of Europe's biggest shipbuilding centres by the 19th Century but by the early 20th Century, the docks of "Red Clydeside" were breeding a radical socialism that spooked Britain's leaders during World War One. Labour became Scotland's biggest party in the British parliament in 1922 and the last time it lost Scotland in a national election was in 1955. By 2014, 45 percent of Scots would vote for independence. In a small campaign office in a block of council flats, the SNP candidate for Glasgow Central, Alison Thewliss, is trying to sow the seeds of Labour's defeat. Asked why so many Scots were turning away from Labour, she said: "They saw Labour joining up with the Tories during the referendum, and it's hurt people actually." Labour's joint effort with the Conservative Party to urge Scots to reject independence alienated some voters, even those who support the 308-year-old union, she said. 'SENSE OF ENTITLEMENT' Labour's potential loss of Scotland illustrates the divergence of England and Scotland and what many Scots see as an arrogant London political establishment that has failed to heed or address their needs. While Conservative Prime Minister Margaret Thatcher moved England rightwards from 1979 to 1990, Scots stood opposed, especially to Thatcher's use of Scotland to test an unpopular poll tax. Her successors, from John Major to Labour prime ministers Tony Blair and Gordon Brown, broadly accepted Thatcher's legacy while millions of Scots held to their socialist traditions. Those traditions go back to the dawn of the British Labour movement when Keir Hardie, the Scottish trade unionist born in Glasgow in 1856, helped found the Labour Party. As Blair moved Labour rightwards to win voters in England and established the Scottish parliament, the party assumed its Scottish flank would be secure. That opened an opportunity for the SNP, which pitches itself as the social conscience of Scotland opposed to what leader Nicola Sturgeon calls the crumbling institutions of the London elite. Just 12 years after the establishment of the Scottish Parliament, the SNP would topple Labour, winning a majority in the 2011 Scottish election. "Labour has, from the 1970s, been regarded as the natural party of government in Scotland," said Stewart MacLennan, 64, a former Labour candidate who now backs the SNP. But now Murphy is greeted on the campaign trail by SNP taunts that Labour, whose party colour is red, are the "Red Tories", in reference to the Conservatives' nickname. 'REAPING THE WHIRLWIND' While the SNP has added members since the referendum, opinion polls show its share of the vote has risen just a few percentage points. What has changed is that Scots now appear to have broken a tradition of voting SNP only in Scottish elections and have now also fixed their sights on the London parliament. Such a change in voting habits could shake the foundations of Britain's political establishment. A YouGov poll on April 8-9 found the SNP had 49 percent support in Scotland, with Labour on 25 percent. It was the biggest lead so far for the SNP and the lowest level for Labour since 2007 in a YouGov poll. Under a uniform swing, the poll showed the SNP would win 53 seats out of all 59 in Scotland, up from 6 in the 2010 general election, while Labour would win four Scottish seats, down from 41 in 2010, making it Labour's worst result in Scotland since 1918, YouGov said. The Liberal Democrats would win one seat, down from 11 in 2010, while the Conservatives would hold its one seat. Losing so many seats would scupper Miliband's chances of leading a majority government and potentially allow Prime Minister David Cameron's Conservatives to win a second term. Sturgeon has given mixed signals on seeking a second independence referendum but has warned that a vote on Britain's membership of European Union, which Cameron has promised, could trigger another referendum. "The referendum last year was the culmination of a long process of political disillusionment," said Professor Gregor Gall, editor of the Scottish Labour History Society. "The whirlwind from that is still being reaped for Labour." (Writing by Guy Faulconbridge; Editing by Giles Elgood) ((guy.faulconbridge@thomsonreuters.com; +442075424758;)) Keywords: BRITAIN ELECTION/SCOTLAND (INSIGHT, PIX, TV,REPEAT

UPDATE 1-Bank of Canada ignores C$-tied rise in March core inflation

April 18, 2015 - reuters.com

(Adds comments about economic forecasts, whether more rate cuts needed) By Randall Palmer WASHINGTON, April 17 (Reuters) - The Bank of Canada will ignore that part of the surge in March core inflation which is due to the fall in the Canadian dollar, Governor Stephen Poloz said on Friday, adding that the growing output gap was exerting downward pressure on inflation. Canada's core inflation rose to 2.4 percent in March from 2.1 percent in February ID:nSCLHFEBWJ , putting it well above the central bank's 2 percent target. Poloz, however, said the jump was primarily due to higher prices for cars, which are sensitive to exchange rates. The Bank of Canada does not see price rises from the exchange rate pass-through as fundamental inflation, he told journalists on the sidelines of the spring meetings of the International Monetary Fund and World Bank in Washington. "As far as I know, the output gap's actually getting bigger as we sit here, not smaller, so the fundamental forces on inflation are downward, not upward," Poloz said. The increase in the gap between the economy's output and its potential, which he expects to be short-lived, is due to the harsh effect of the oil price crash on investment and income in oil-rich Canada. Falling oil prices have weighed on the Canadian dollar, which has fallen by about 12 percent against the U.S. dollar since last June. Poloz held interest rates steady on Wednesday after a surprise cut in January, despite his estimate that economic growth ground to a halt in the first quarter because of the drop in oil prices. He is banking on the economy picking up steam in the rest of the year. On Friday he deflected criticism from some economists that the central bank was too optimistic to predict growth bouncing back to 1.8 percent in the second quarter and to 2.8 percent in the third quarter. He said the bank's growth estimate for 2015 as a whole, at 1.9 percent, is close to and even more conservative than the 2 percent average growth estimate submitted by a range of economists to Finance Minister Joe Oliver for his 2015-2016 budget. "It makes me wonder why anybody would be skeptical of the pattern that we've laid out when the average works out to be virtually the same," Poloz said. When he cut the overnight lending rate in January, he referred to it as insurance against the effects of oil prices, and he was asked on Friday how bad things have to get in coming quarters for him to take out more insurance, or cut again. "It would have to be evaluated in full-, full-blown analysis of what has happened to the output gap and our projection of the output gap," he said. "If it's going to close in a reasonable space of time, and get inflation stably on our 2 percent target, then we're good." The situation in January was highly uncertain, with oil prices even $10 a barrel below the assumption the central bank made at the time and with no certainty of where they would settle. "So it was a pretty nervous thing. There were so many things moving at once, so the term 'insurance' captured the situation well," he said. "Now that the dust has settled a little bit and we can get a better look at it and re-run everything, it appeared as we said on Wednesday to be about the right amount of insurance to get the output gap on track to late 2016 closure." The bank's next interest rate decision is on May 27. (Reporting by Randall Palmer; Editing by Paul Simao) ((randall.palmer@thomsonreuters.com, Twitter @reutersPalmerR; +1-202-659-7990; Reuters Messaging: randall.palmer.thomsonreuters.com@reuters.net)) Keywords: IMF G20/CANADA

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