UK Enters Negative Inflation

By Rowan Williams
  • – UK enters negative inflation
  • – Former Thai PM Yingluck on trial
  • – AIIB founding members to meet this week


The UK inflation rate turned negative in April for the first time on record, new figures from the Office for National Statistics (ONS) have shown. The Consumer Prices Index (CPI) – a standard measure of inflation in Britain – fell to -0.1 percent in April, with the fall primarily attributed to falling air fares and ferry ticket prices. The ONS estimates that the last period of negative inflation occurred in 1960, before current records began, when prices fell by 0.6 percent. The fall had been expected by UK monetary authorities: Chancellor George Osborne has said that the fall will be temporary, and not turn into more damaging deflation. Independent analysts have agreed that the fall should be temporary, and could help to boost short-term economic growth. Interest rates are also expected to be kept at a record low in light of the news. The Bank of England has said that inflation should rise later in 2015 once comparisons with figures the year previous no longer have to take in the effects of last year’s drop in oil prices.

The former Prime Minister of Thailand, Yingluck Shinawatra, has begun trial for criminal negligence in Bangkok. Yingluck spoke only to plead not guilty in the court, and was granted bail on the condition she may not leave Thailand. Yingluck stands accused of negligence in a rice subsidy scheme; under the alleged scheme, rice farmers in rural areas that largely supported Yingluck’s party were paid double the market rate for their crops, in a programme that cost the government billions of dollars. If found guilty, Yingluck could face a ten-year prison sentence. Yingluck told supporters outside court that she would prove her innocence. Yingluck served as Thailand’s Prime Minister until May 2014, when she was forced from office by a military coup. The next hearing in the trial has been scheduled for 21 July.

Representatives from the founding nations of the China-led Asian Infrastructure Investment Bank (AIIB) will meet in Singapore this week to discuss operational policies for the bank’s establishment. Attendees will also discuss the draft articles of agreement for the bank. The AIIB currently comprises of 57 member countries, with the US, Japan and Canada absent. Beijing has said it will not wield a veto within the AIIB – a move that will differentiate the AIIB from the US-led World Bank, where Washington holds a limited veto. AIIB founding member countries will initially pay one fifth of the bank’s authorised capital of US$50 billion.

The Papers

News of nurse Victorino Chua, who was found guilty on Monday of murdering two patients and poisoning 20 others, makes the front pages of several tabloid papers today as well as The Daily Telegraph. The Telegraph leads with a report into the “Scandal of the foreign nurses with bogus papers” after doubts arose over the validity of Chua’s qualifications. According to the paper, the number of nurses in the UK using bogus qualifications could be in the thousands. The Times leads with news that a Russian “supergrass” businessman found dead at his home in Surrey had been poisoned. Russian whistleblower Alexander Peripilichnyy, who wished to investigate corrupt Moscow tax officials, may have been killed by a rare poison, a pre-inquest has heard. The Guardian leads with news of “the fossil fuel industry’s $5.3tn dirty secret”. According to the paper, the amount of annual subsidies spent worldwide funding the oil, gas and coal industry totals £3.4 trillion a year. The International Monetary Fund has called the figures “shocking”, and said that the figure is greater than global governments’ spending on health. The Financial Times also leads with an oil-related story, reporting that falling oil prices have led to “$100bn of projects on ice as majors retreat”. Major oil industry firms have pulled out of spending on new projects, the paper writes, with “Canada hit hardest” by the retreat. The Independent leads with news that allies of former Labour Party Leader Ed Miliband have condemned a “leadership ‘stitch-up’”, with politicians accusing one trade union of “trying to keep modernisers off the ballot paper” in the Labour leadership contest.

British Media on China

On Li Keqiang’s visit to South America: Premier Li Keqiang’s eight-day tour of Latin America has received coverage from the BBC and Daily Telegraph. The BBC writes that Premier Li is seeking “deals” in Latin America, reporting that China is “expected to sign infrastructure deals worth at least $50bn” in Brazil alone. The BBC also features a video report on the story, focusing on the mutually beneficial nature of the relationship between China and Latin America. The Daily Telegraph writes that Premier Li is on a “charm offensive” in the region, but notes “controversy” over China’s plans to fund construction of a railway through the Amazon rainforest. The paper also reports denials from Beijing that China’s interest in the region equates to “muscling in on the United States’ ‘backyard’”.

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