German economy to grow after two straight years of contraction, IfW says
BERLIN, June 12 (Reuters) - The German economy is expected to grow this year following two consecutive years of contraction, the Kiel Institute for the World Economy (IfW) said on Thursday.
The economic institute raised its forecast to 0.3% growth from the stagnation it had previously envisaged.
The revision is due to a better-than-expected first quarter, when the economy grew by 0.4%.
"The German economy is seeing some light at the end of the tunnel," the economists said in their new forecasts.
They are also more optimistic about next year, raising the forecast for Europe's largest economy to 1.6% growth from the previous forecast of 1.5% in 2026.
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The Guardian
35 minutes ago
- The Guardian
‘Modest fashion' headed for mainstream despite political hostility, say experts
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Telegraph
an hour ago
- Telegraph
British firms are being stifled by excessive regulation and bureaucracy
The all-party House of Lords Financial Services Regulation Committee which I chair has just completed a year-long inquiry into how effective the regulators are at fulfilling their duties to boost competitiveness and growth. It's a sad tale of a deeply entrenched culture of risk aversion, of disproportionately high costs of compliance, and of a complex regulatory landscape driven by expansion and overlap in the regulators' remits and by the volume and scope of regulatory activity. There is no doubt that operational inefficiencies and suffocating bureaucracy are damaging growth and place the UK at a competitive international disadvantage. Despite the regulators' growth mandate, the firms which gave evidence to the year-long inquiry say the system is slow and inflexible. Firms complain of being buried under regulatory paperwork and of facing a never-ending barrage of information requests from both the FCA and PRA. The CEO of Nationwide told the inquiry she received 4,519 pieces of direct correspondence in 12 months. Santander responded to more than 300 regulatory requests and managed 400 regular regulatory reports equating to over 2,500 submissions a year. One firm told us it employed 78 compliance officers for its UK operations compared with a total of 73 to cover the other 40 countries it operated in. We were dismayed by the evidence we received which highlighted long-standing issues that limit investment and the ability of financial firms to grow, innovate and compete. The lack of proportionality in the regulators' approach was evident in the FCA's failure to distinguish between wholesale and retail markets and the PRAs approach to capital requirements. The vagueness surrounding the Consumer Duty and the Financial Ombudsman's evolution into a quasi-regulator has created uncertainty and a worrying perception of a regulatory penalty for investment in UK businesses. It is essential for the FCA and FOS to be aligned on redress and interpretation. The FCA and the PRA alone employ around 6,500 staff at a cost of £1.1 billion. This results in an ever-rolling stream of consultation documents, regulatory changes and compliance advice which firms are expected to follow, communicated sometimes informally through speeches by senior regulators and letters to CEOs. My committee receives notice of these every week and it is frankly overwhelming. The regulators lack clear focus and appear to be still haunted by the 2008 financial crisis. This leads to excessive caution, sluggish approvals, high compliance costs and endless red tape. There is an urgent need for the FCA and PRA senior leadership to drive cultural change. This change should emphasise a more tailored and proportional approach to the risks posed by regulated firms, a culture of continual operational improvement and innovation, and a more transparent and trusting relationship with the businesses they regulate. An approach is needed which embraces technology and streamlines compliance for fintech and AI-driven firms. The skills and quality of staff are vitally important and that means addressing remuneration. A revolving door sees regulators losing some of their most talented people, recruited to advise the companies they once regulated at substantially higher salaries. We were surprised by the difference in candour between the evidence we received from the industry in public and the views expressed to us privately. We were obliged to take evidence in private in order to get many firms to share their concerns. At one meeting I attended, a CEO read out his brief from his compliance department which said that if Lord Forsyth invited him to give evidence to his committee under no circumstances should he agree to do so. This is not a healthy situation and there needs to be a much more open and trusting relationship between the regulators and the firms they regulate. In a competitive market, speed matters. Yet firms say UK regulators are lagging behind international rivals when it comes to authorising new products, people and operations. While official stats suggest improvements, they take too long and many say those numbers are misleading: they exclude the time regulators 'stop the clock' to request more data. If launching a new fintech product takes six months longer in London than in Singapore, investors and innovators will simply go elsewhere. We heard many positive reports of the success of the concierge approach of the Singapore regulator, which involved helping firms to grow and comply with regulatory provisions. Our regulators have much to learn from this approach. The Chancellor has placed a great deal of faith in the regulators stimulating economic growth. Our report makes one thing clear: the regulators can't do this alone. The Government must step up. That means clearer economic goals, better use of statutory guidance and more robust performance tracking. Right now, metrics are focused on operational inputs, not outcomes. Without stronger leadership from HM Treasury and without aligning regulators, industry and Parliament, the growth and competitiveness objectives will be little more than political window dressing.
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2 hours ago
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National Lottery bosses being ‘micro-managed' after IT upgrade failure
The new operator of the National Lottery is coming under intense scrutiny from regulators as it struggles to carry out a much- delayed technology upgrade. Allwyn UK, which took over running the lottery in February last year, is being closely monitored by the Gambling Commission amid growing concerns about its handling of the contract and a pledge to increase charitable donations. The regulator is understood to be demanding that it signs off decisions in all areas of the business, including reviewing and approving contracts. This increased level of monitoring by the watchdog is understood to be the reason why Allwyn is shutting down National Lottery terminals for 36 hours to carry out a major system update later this summer. The mounting pressure from regulators follows Allwyn's failure to carry out a crucial IT upgrade and after it watered down key promises on charitable donations. Allwyn, which is owned by Czech billionaire Karel Komárek, has said it will pump £350m into modernising the National Lottery, including upgrading its estate of 43,500 terminals. The tech update was supposed to be in place when Allwyn took over the contract from previous incumbent Camelot, but has been plagued by delays. Allwyn has said the overhaul is critical to its promise to increase returns to good causes. The company initially said it would increase donations from £17.9bn to £38bn over the course of the 10-year licence – equivalent to about £3.8bn a year. But it has watered down these targets by pledging to double returns by the end of its licence, from £30m to £60m a week – or less than £3.2bn a year. The Gambling Commission, which awarded the fourth National Lottery licence to Allwyn in September 2022, is reportedly considering taking action against the company over its failure to deliver on promises made during its bid. These include the delayed tech upgrade, as well as a vow to reduce ticket prices for the main lottery draw from £2 to £1. One Allwyn insider took aim at the 'severe level of micro-management' by the regulator, branding it 'completely disproportionate'. Legal action They warned that the interference was harming Allwyn's ability to raise money for good causes, as well as its ability to compete with rivals such as Omaze and the People's Postcode Lottery. The regulator is itself facing legal action from Richard Desmond, the media mogul who launched an unsuccessful bid to secure the fourth licence. Mr Desmond this week filed a claim in the Competition Appeals Tribunal over £70m set aside for charitable donations under Camelot. He alleges that these funds constitute a 'subsidy' and should be recovered from Allwyn. The fresh legal challenge comes on top of a £1.3bn claim against the Gambling Commission over its decision to hand the licence to Allwyn. Mr Desmond is arguing that the bidding process for the 10-year contract was unfair. A spokesman for Allwyn said: 'We of course work very closely with the regulator. It is right, proper and required by the regulations that they play an active oversight role, especially as we work towards the biggest technical transformation the National Lottery has seen in 30 years.' A Gambling Commission spokesman said: 'The commission continues, as it has done since the start of implementation, to oversee and assess Allwyn's contractual obligations to deliver the technology upgrade of the National Lottery which Allwyn committed to in its successful application. 'At the same time the commission is fulfilling its statutory duties, as the regulator of the National Lottery, to regulate Allwyn's operation of the National Lottery in accordance with the fourth National Lottery licence.'
