* Britain scores badly for economic inclusivity - WEF * Chinese GDP set to miss target - president * FTSE 100 hits new record high * Pound slumps on renewed fears of hard Brexit ahead of May speech * Banking sector under pressure after agency cuts Italy’s credit rating 1.11pm GMT Now over to Greece. The prospect of further instability in the eurozone is mounting as consternation grows over the inability of Greece and its creditors to complete a second bailout review of the debt-stricken economy. Helena Smith reports from Athens: Fears are growing in Greece and abroad over continued friction between Athens and its creditors. Prolonged foot dragging over completion of a second bailout review has triggered mounting speculation that the debt-stricken country could be headed for new polls if it fails to come to some accord with lenders. The prospect of the IMF not participating in the current programme - mooted last week by Germany’s powerful finance minister Wolfgang Schauble who suggested the European Stability Mechanism could assume the role instead – may have elicited thinly disguised euphoria in Greece but has been met with angst elsewhere. Schauble also hinted that departure of the IMF could mean even stricter terms for Greece – in short, a fourth bailout programme for a country now in its eighth year of austerity-induced depression. This morning the ESM’s managing director Klaus Regling highlighted concerns saying whatever happened the German Bundestag would have to ratify the move. Berlin is the biggest contributor of the three rescue programmes that since 2011 have kept Greek bankruptcy at bay and had originally said it would only continue disbursing funds if the IMF was on board. If the review’s conclusion is delayed for much longer officials worry Greece will miss the next target: of getting Greek bonds included in the European Central Banks QE programme in March. All off which has put Athens’ leftist led administration under additional pressure to come up with alternatives to the “illogical” demands it says the IMF is now making – starting with the body’s insistence that it legislate further multi-year pension cuts and income-tax hikes worth €4.5bn to ensure that primary surplus targets are met. Speculation of euro exit is once again gaining currency despite fiscal adjustment and the immense sacrifices the country has already made. Amid talk of the drachma returning, the government has signalled it is now working on new proposals for lenders which it will present at the next euro group of euro area finance ministers on January 26. 12.52pm GMT THE WORLD ECONOMIC FORUM HAS ALSO FOUND THAT INCOMES ACROSS MANY ADVANCED COUNTRIES SHRANK SINCE 2008; ANOTHER SIGN THAT ECONOMIC POLICIES NEED TO CHANGE. WEF’s new report on economic inclusivity (see last post) shows that median income shrank by almost 2.5% between 2008 and 2013 across the 26 advanced economies where data is available. “To respond more effectively to social concerns, economic policy needs a new compass setting, broad-based progress in living standards, and a new mental map in which structural reform is reimagined and reapplied to this task, with chief economic advisers and finance ministers prioritizing it every bit as much their traditional focus on macroeconomic, financial supervisory and trade policy.” Continue reading...
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