Boris Johnson confirmed this week, the High Speed Rail network would be built in full. The 330 mile Y shaped network will connect London, Birmingham, Manchester, Leeds and Wigan.
Plans were also outlined plans for "High Speed North". The East West link across the Pennines will connect Liverpool, Manchester, Leeds and Hull. The Northern network would be extended to Carlise and Newcastle.
The HS2 costs would be closely monitored by cabinet. Grant Shapps, transport secretary, promised the whole of government would be involved in ensuring the project ran on budget. "Just like the Olympics"
A bridge across the Irish Sea is to be evaluated. Cycle tracks in the air are under review across London. 4,000 carbon neutral buses are to be added to the transport fleet. The project costs could total £150 billion in total.
For Sajid Javid it was all too much. The Chancellor resigned just four weeks before his maiden budget. "Boris Johnson had attached conditions to the role which "no self respecting minister would accept" he explained in his resignation letter.
All Treasury SPADs will be sacked. Partition walls between Number Ten and Eleven were to be knocked down. The Treasury was to be brought more directly under Prime Ministerial control.
Rishi Sunak was appointed to the job. Dubbed as the "Maharajah of the Yorkshire Dales" the fast rising Tory star is ex Goldman Sachs and is married to the daughter of the Infosys Tech billionaire, Narayana Murthy. A more flexible approach to "spending rules" from Treasury is now expected.
Fed warns on debt and spending ...
Spending was very much on the mind of Jerome Powell this week. The Chairman of the Federal Reserve warned Congress on Tuesday, of the dangers presented by rising U.S. debt and deficit.
Now would be a good time to begin to reduce the level of deficit the Chairman explained, putting the economy on a sustainable path for the future.
The deficit is set to exceed the $ one trillion dollar level this year. The Congressional Budget Office has warned deficits will average over $1.3 trillion in the years ahead. The deficit has already increased by $3 trillion dollars since Trump has been in office. A further $5 trillion will be added based on current plans and budgets. There are no plans to eliminate the deficit over the next ten years according to briefing documents.
It was a week of set backs and challenges for the President. The Senate voted to limit Trump's authority to wage war with Iran. A judge ordered all work on the Jedi project should be halted, pending a review of the Amazon claim of Presidential prejudice. The Department of Defense contract had been awarded to Microsoft. Trump hates Jeff Bezos and the Washington Post.
The President was accused of another quid pro quo in his dealings with New York. Attorney General William Barr complained "His tweets make it impossible to do my job". Trump attacked former Chief Of Staff John Kelly. John Bolton, former national security adviser, sprang to Kelly's defense.
Trump's nominee to the Federal Reserve Judy Shelton faces rejection by the senate. Trump admitted sending Giuliani to Ukraine, a claim he denied through the impeachment process.
A glimmer of hope for the President? U.S. troops will be leaving Afghanistan. A deal with the Taliban has been outlined. If the Taliban can stop killing people for a few weeks, the U.S. will begin to pull out military personnel from the country. This will "Open the way for the Afghan government and the Taliban to negotiate the future of the nation" ... Ah yes, peace in our time ... sort of ...
China ... Inflation on the rise ...
Chinese Inflation increased to the highest level in eight years in January. The consumer price index increased by 5.4% in the month. It was the highest level since October 2011.
Food prices increased by over 20%. Pork prices jumped by 114%. Pig stocks have halved over the last two years as the country has grappled with an outbreak of African swine fever.
The Coronavirus continues to weigh on the economy. It is thought that economic growth could slow to 4.5% in the first half of the year, as the country grapples with the viral outbreak.
Evidence continues to suggest the outbreak may have peaked. The number of new cases reported has fallen to around 2,000 per day by the end of last week. The World Health Organization reports some 49,000 cases to date. The mortality rate is approximately 2.8%.
A return to work is now encouraged. The impact of the outbreak is extensive. This week JCB warned of production cutbacks as a result of part shortages. Economists will be scouring the data releases over the next few weeks for further information on the extent of the economic slowdown.
The Saturday Economist
John Ashcroft publishes the Saturday Economist. Join the mailing list for updates on the UK and World Economy.
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