Davos 2017: Hammond fires Brexit warning; Kissinger says Trump must help rebuild world order - as it happened
UK chancellor tells WEF that Britain will reinvent itself if it has to, as Davos ends with comments from veteran diplomat Henry Kissinger
- Latest: Kissinger on Brexit, Trump and more....
- Hammond: We'll leave economic mainstream if we have to
- Hammond: Blair allowed 'tide' of migration into UK in 2004
- Oxford's Ngaire Woods: UK risks smashing own kneecaps
- Hammond: UK inflation is going up
- Hands up if you think Brexit won't happen
4.56pm GMT
Oh, one last thing. You'll never guess which Davos regular has just landed a swanky job.....
Related: World's largest fund manager to pay for George Osborne's investment advice
4.48pm GMT
Our work here is done. Thanks for reading and commenting through the week.
Here's Larry Elliott's news story on today's key developments:
Related: Philip Hammond blames Tony Blair for Brexit vote
Related: Davos 2017: what we learned at the WEF
4.37pm GMT
The World Economic Forum is wrapping up now, which is just as well as my laptop is seizing up after a week of constant activity.
The co-chairs of this year's event have been speaking; Save the Children's Helle Thorning-Schmidt cites Tuesday's speech by president Xi as a key moment:
On President Xi of China's speech, @HelleThorning_S tells #wef17 that she felt we were witnessing the week when the world turned upside down
#wef17 co-chair @sharmeenochinoy says it was good to see art included in the communications in Davos, not seen as something separate.
Industry's Next Frontier https://t.co/q3ERaWJKM2 pic.twitter.com/fsDpndp8tJ
4.28pm GMT
Perhaps the most interesting part of Kissinger's appearance was his advice to Donald Trump to redefine America's role in the world.
Here's the full quotes, courtesy of CNBC:
"One of the major achievements or impacts of President Obama was to withdraw America from some positions in which it was overextended but also to create the feel that America was withdrawing from the world even in places in which over extension would not apply and where its contribution remains essential.
"So President Trump will have to find a definition of the American role that answers the concern of many parts of the world that America was giving up its indispensable role of leadership in many countries - and major contribution in others - and define what and where America can lead and where it must contribute and in that help in the creation of an international order."
#Kissinger at #wef17: #Trump must define American role in world as #Obama gave perception America was withdrawing https://t.co/GPrPZWGB1u pic.twitter.com/XWFkDh4FtH
4.02pm GMT
On Brexit, Kissinger says it could be used in a creative way -- to create Europe and America in the Atlantic partnership.
It could seek to address the problem that some of the key issues in Europe, such as the economy and security, are very difficult to solve in a forum where unanimity is the absolute requirement.
3.57pm GMT
The Atlantic Partnership is crucially importance, says Kissinger, in avoiding a return to the problems that used to characterise Europe.
It needs to be reconstructed, but with the attitude that it is the key element of both US and European policy.
Prof Schwab interviewing Henry Kissinger at @wef Davos pointing to the importance of Atlantic partnership pic.twitter.com/8ICVFdzl9u
3.53pm GMT
On the Middle East, Kissinger says it is important that progress is made at the Syrian peace talks in Astana, as a precursor for further progress.
Those talks start next week, and are organised by Russia and Turkey.
3.49pm GMT
Q: What advice would you give president Trump about Russia, if you were secretary of state?
America and Russia seem to be making the worst assumptions about each other today, Henry Kissinger replies.
#Kissinger live from NY @Davos:US and Russia make worst assumptions about each other. Agree w/ Trump's deescalating attitute towards Moscow pic.twitter.com/5Qfqe56VU0
Kissinger speaking to Davos says Russia has "secured equilibrium in the world." Also says hopes for "serious dialogue" under Trump.
3.45pm GMT
Kissinger's advice to Trump: to find a definition of American role in areas where perception it gave up its leadership&thus create new order
3.41pm GMT
Q: What advice would you give president Trump?
President Trump must find a definition of America's role in the world, and decide in what way America can lead, what it can contribute, to help create an international world order, Kissinger replies.
#Kissinger #wef17 about @realDonaldTrump : he has to find the defining of America in the world @dw_business @dwnews
3.39pm GMT
Henry Kissinger is now joining the delegates at Davos, by video link, to discuss the state of the world today.
He starts by paying tribute to Shimon Peres, the Israeli statesman and Davos favourite who died in September 2016.
2.56pm GMT
Rosberg is telling an audience in Davos about what it takes to make it to the top.
Losses, failure, are not always a bad thing. They can help you. I can look back [at my career in F1] and say I've ticked all the boxes.
I find that life has more to offer than driving around in circles.
This year I realised how much my private life had an impact... simplifying it so that it took the least possible energy from me, so that I could 100% focus on the job of racing. It really made a difference.
2.40pm GMT
F1 champ Rosberg is giving an interview at Davos. Watch it here.
Thank you @wef for having me here!! #WEF2017 #davos. https://t.co/0BB6qW3Ex9 pic.twitter.com/8w2hLxkX2x
2.32pm GMT
Roberto Azevedo, director general of the World Trade Organization, is concerned about the tone of some of the conversations at Davos.
I've heard a lot in Davos about trade wars. That would destroy jobs, not create jobs.
We must definitely avoid talking ourselves into a crisis."
2.03pm GMT
The BBC's Call the Midwife gets a mention by the Davos (non Brit) panel on the hospital of the future.
Elizabeth Nabel, president of Harvard-affiliated Brigham and Women's Health Care describes the programme as "charming" as she discusses her belief that health care should be provided as much as possible at home in the community.
1.53pm GMT
As the world's political and business leaders debate inequality and globalisation in Davos, Harrods is making some changes after it was criticised by a union.
Related: Harrods stops taking cut of tips in its restaurants after protests
1.21pm GMT
Away from Davos for a moment, but on the subject of Brexit, the Gambia's new president has been speaking to Sky News:
The new Gambian president has told Sky News that he considers the UK to be his country's number one trading partner https://t.co/a092F1uCgf
1.16pm GMT
The panel on the hospital of the future is underway.
Panelists are pondering what a hospital in a major city is going to be like in 2027.
12.53pm GMT
Larry Elliott, the Guardian's economics editor, has the full story on how the chancellor, Phillip Hammond, is blaming Tony Blair for Brexit:
Related: Philip Hammond blames Tony Blair for Brexit vote
12.48pm GMT
Third time lucky?
The same Davos crowd that said last year Brexit wouldn't happen and Hillary would win now says Trump will be great for the US economy. Hmm.
12.40pm GMT
Currently underway is a debate on mental health and what might be done to mitigate the consequences of mental illness.
Also coming up:
12.13pm GMT
Stephen Lewis, chief economist at ADM Investor Services, says it is not surprising that the German Chancellor, Angela Merkel, and the French President, Franiois Hollande, have chosen to stay away from Davos this year:
It is not difficult to understand why, for some European leaders, Davos is now a no-no. To be seen by their voters junketing with business chiefs in a luxury resort would merely serve to heighten the populist rage that has been shaking the foundations of the political order in Europe.
Admittedly, [UK prime minister] Mrs May addressed the meeting but she was in the special position of having a job to do to persuade corporate managers that Brexit would not render the UK a less friendly environment for business.
President Xi's attendance was perhaps the most significant of these political comings and goings, though. Beijing surely recognises that Mr Trump's approach to international trade could well result in the reversal of the globalisation process that has so favoured China's economic development.
By presenting himself as the champion of free markets, he was probably hoping to win good will towards China among the multinational globalisers.
Related: Xi Jinping signals China will champion free trade if Trump builds barriers
11.58am GMT
The World Economic Forum is not giving up on the idea of globalisation that works for everyone:
There's still time to make globalization work for all. Let's start by fixing wage inequality https://t.co/SOGThsChbr pic.twitter.com/zcydMgTOYX
11.05am GMT
The panel ends with Christine Lagarde, IMF chief, urging advanced economies to do more to support the developing world.
She says:
Growth is not sustainable if it is not inclusive.
Otherwise we will be dealing with massive inequality issues at all levels.
10.54am GMT
Q: There is concern that there might be no agreement, two years after triggering Brexit, leading to a cliff-edge. How concerned would you be about that?
Wolfgang Schauble says it would be "a disaster for all of us if that happened."
10.52am GMT
Wolfgang Schauble isn't convinced by Hammond's threat to leave the economic mainstream.
The Financial Times's Martin Wolf, who is moderating the panel, asks the German finance minister to comment on the idea that Britain will become "Singapore on Thames"
I can't see that the UK, this great nation, would compare itself with Singapore.
10.43am GMT
If America aggravates some of our largest lenders, and raise our deficits, quite frankly that puts even more pressure on the dollar, Larry Fink adds. That's a very hard thing to navigate.
He explains:
Right now the biggest lender is Japan, the second biggest lender is China.
We need to be paying quite a bit of attention to our relationships worldwide, as the biggest borrower in the world.
10.39am GMT
Larry Fink, the head of US investment group BlackRock, says the election of Donald Trump and the Brexit vote have both had an immediate boost to consumer optimism.
These votes have had an immediate impact on families, they feel they have a voice now and their voice has changed policy, so they're feeling happier and spending more.
10.36am GMT
Philip Hammond then warns his audience at Davos that Britain could quit the economic mainstream if it doesn't get a comprehensive free trade agreement with the EU.
Our "strong preference is that we remain within the European economic mainstream", with reciprocal access to each others markets, and Britain "continuing to operate to European norms and regulatory standards," says Hammond.
But if we are driven out of that market, and denied access to our most important market, we will reinvent ourselves and find a new way of being competitive.
10.25am GMT
Philip Hammond goes next.
He says Britain has confounded sceptics who thought the British economy would suffer an immediate shock after voting to leave the UK.
It was absolutely the opposite of the anti-trade rhetoric that we heard in the United States.
But what there was clearly was a strong strand of feeling against uncontrolled migration.
10.13am GMT
Germany's finance minister, Wolfgang Schauble, says Germany would suffer if there was a decline in free trade.
Brexit will not have a big impact on the German economy this year, though.
10.11am GMT
Christine Lagarde speaks first.
She says there are good signs in the global economy - for a start, the IMF isn't revising down its growth forecasts any more
9.59am GMT
Philip Hammond has now hotfooted it across the conference to join a panel discussion on the global economic outlook, with IMF chief Christine Lagarde, Japan's central bank chief Haruhiko Kuroda, Wall Street titan Larry Fink and German finance minister Wolfgang Schiuble.
Here's a live feed:
9.58am GMT
Official figures for the how UK retailers fared over the crucial Christmas period are out and will not make pretty reading for the industry.
Contrasting with the largely upbeat tone of retailers' trading updates, the official statistics suggest retail sales volumes dropped 1.9% in December from the month before. That was the biggest drop since April 2012 and far worse than forecasts for a 0.1% dip in a Reuters poll of economists.
Retailers saw a strong end to 2016 with sales in the final quarter up 5.6% on the same period last year, although the amount bought fell between November and December once the effects of Christmas are removed. There were some notably strong figures from smaller retailers, in particular butchers, who reported a significant boost in sales in the run-up to Christmas."
Alan Clarke, economist at Scotiabank, called it a "disastrous December" and pointed to the effects of a pick-up in inflation last month.
We know from the CPI [inflation] data earlier in the week that prices rose more than expected in December and now we also know that sales volumes fell. This is likely to be the theme for the rest of the year - higher prices will reduce disposable income and hurt consumer spending growth."
9.47am GMT
Another interesting angle - Hammond told the panel that he thinks the Brexit deal can be done in two years, but there might have to be an 'interim' arrangement if a final trade deal isn't ready.
PM's speech didnt countenance idea deal might not be done in 2 yrs. Hammond just acknowledged might take longer + floated add interim period
Hammond: if no Brexit trade deal after two years but two sides making progress, UK would still exit in 2019 but agree interim arrangement.
We think Brexit can be done in 2 years if there is a political will on both sides to do so, says Philip Hammond at #wef17
9.43am GMT
Here's Reuters' take on Philip Hammond's migration comments:
British finance minister Philip Hammond said on Friday it was an "open question" whether migrants from the European Union would enjoy easier access to Britain after Brexit than those from other parts of the world.
"That could be a subject for the negotiations. What we have said clearly is that we cannot accept the principle of free movement," Hammond said in response to a question at a panel discussion in the Swiss ski resort of Davos.
9.38am GMT
Could Britain leave the EU and rejoin in the future?
British people are starting to feel that through increased inflation, and we'll see more of that through this year.
That's the mechanism that allows economic shocks to be handled in a smooth way.
UK Chancellor Hammond: British People Are Feeling Effect Of Weaker STG
-STG Fall Feeding Through Into UK Inflation
9.36am GMT
Hammond was also asked about the issue of EU citizens currently living in the UK
He says Europe rejected the idea of an immediate reciprocal deal, because nothing can be discussed until everything is discussed.
Hammond: we suggested immediate deal guaranteeing EU citizens right to remain in UK & vice versa for UK citizens in EU.
EU rejected proposal
9.25am GMT
Hammond: if no Brexit trade deal after two years but two sides making progress, UK would still exit in 2019 but agree interim arrangement.
9.23am GMT
More Hammond:
Hammond: we will not look to be a "full" member of the customs union. Theresa May uses that language deliberately
Hammond: we have a shared problem over land border btwn UK + Irl, nobody in EU wants to see Irl's economy or peace undermined by Brexit
9.20am GMT
On to geopolitics.
The change of administration in Washington is a very big issue for the UK, and has introduced even more uncertainty for the EU than Brexit, Hammond continues.
It is not an exaggeration that for some eastern partners of the EU, security is a much bigger issue than economics.
Hammond says the election of #Trump has introduced an even bigger uncertainty for the EU than Brexit
Hammond: Brexit introduced uncertainty for the EU. The change in the US administration probably introduced even more uncertainty.
9.15am GMT
We want to find the best people from around the world, Barclays CEO Jes Staley tells the panel.
One of the reasons for the City's success is the acceptance that financial companies can being talent from anywhere. Staley doesn't think the UK people want that to stop.
9.13am GMT
Mario Monti says there has been "a fundamental change in a small time" in Britain's attitude to EU migration.
He reminds us that the UK was one of the members pushing to allow more countries to join the bloc a couple of decades ago.
The attitude in the UK now on EU migration is absolutely for sure derived from the mistake that Blair made to open the floodgates in 2004.
9.08am GMT
More from Hammond on migration:
What we've said clearly is that we cannot accept the principle of free movement.
UK Chancellor Hammond: UK Economy Effectively At Full Employment, Will Continue To Need Migrants - RTRS
9.05am GMT
Hammond insists Britain isn't anti-migration.
There might be a few people in the UK whose view is the migrants don't come in, but it's absolutely not the majority view, he says, adding:
It is very important to the British people that we control our borders, but most of them do not want to use that control to shut the borders, they simply want to have the control.
9.03am GMT
Professor Ngaire Woods then gives a passionate call to the government not to include students in its migration controls.
She says that Britain needs to be at the front of the knowledge economy to succeed. Oxford is fighting against top US universities to attract the best students, and Brexit could make this much harder.
If we have a tone in Britain that it's less welcoming of immigrants then it can't attract the best talent in the world then it doesn't become Global Britain, it becomes Doors Shut Britain."
If we make them part of Britain's immigration debate we've smashing our own kneecaps before even beginning the race....
Don't kneecap your best asset. Let us thrive, make sure that immigration policies tell the world that Britain is open and welcoming to the best most entrepreneurial, energetic talent from all over, without restraint and constraint.
8.54am GMT
Professor Ngaire Woods, professor of global economic governance at Oxford University, tells the Davos panel that successful Brexit negotiations can't be done in two years, and criticises the "gloating" among leave supporters.
Woods says that May and Hammond are taking a positive, constructive approach - but not everyone in their party is taking the same view.
There are still factions that are gloating about Brexit - and that unfortunately takes an unconstructive tone.
The cool constructive approach that the PM and chancellor are taking needs to quickly infect all their party and people who supported Brexit.
"The ideal would be a 10 year period in which you could put each piece together and end up in a Churchillian world of a more coherent EU without Britain, and Britain as a constructive friend sitting alongside it".
8.43am GMT
Mario Monti, the former Italian PM and European commissioner, is also on the panel - and is roasting David Cameron for calling last year's EU referendum.
Monti starts by welcoming the "clarity" that Britain has given about its Brexit plans in recent days.
"He put his country and the whole of Europe on the line to achieve this"
The consequences have been rather devastating, not only for him personally but because the whole political system in the UK has been blocked, paralysed and made uncertain.
8.37am GMT
Hammond adds that it would be economically "sub-optimal" if countries and companies had to start precautionary spending in case Brexit turned out badly.
For example, France would also have to invest in new systems at its own borders.
8.34am GMT
Philip Hammond at #wef17 says benefit of May's speech is that Brexit is now a "shared challenge" for the UK and EU member states
8.33am GMT
Philip Hammond starts by telling Davos that Theresa May's Brexit speech on Tuesday was an important step forward.
We've now set out an agenda that lets this become a shared problem that has to be solved.
It will become clear, I hope pretty quickly, that there is a shared ambition to get to an end state arrangement that will mean maximising the reciprocal access to each other's markets and the level of co-operation across this range of non-economic areas as well.
8.25am GMT
Philip Hammond's session begins with an audience question - who thinks Britain is not going to leave the EU?
No one puts their hand up...
8.17am GMT
8.05am GMT
Former foreign office minister Mark Malloch-Brown reckons Theresa May's cabinet is the "B team".
Speaking on the same panel as Pascal Lamy, Malloch-Brown says:
"In the history of the Tory party, they have never been able to form a second cabinet if the first one falls under a bus.
If the first one (David Cameron's) gets knocked out because it makes a mess of Brexit you get the B team."
8.01am GMT
Pascal Lamy, the former EU trade commissioner and former director general of the World Trade Organisation, has an interesting theory about the government's Brexit plan: it is all a ruse to disguise the fact that Britain is not going to leave the EU.
Speaking at a Clifford Chance breakfast in Davos, Lamy says:
"It is like world war two where the allies intoxicated the Germans into thinking the landings were going to take place in northern France when in fact they were going to take place in western France. That's what's happening here."*
You have a fake foreign minister, then you have a message that Brexit means Brexit, then you choose the most costly option so that at some stage people realise that the costs are not worth it."
Related: Davos 2017: Soros says UK in denial over Brexit, and May won't last - Day Three as it happened
7.53am GMT
Good morning from Davos, where the final day of the World Economic Forum is getting under way.
Today we'll be hearing a lot more about Brexit, the global economy and Donald Trump, as the presidential inauguration reminds delegates that the world is changing - and not the way most would like.
Good morning from #Davos. On day4 of #wef17 the state of the world & Trump talk of town w/ Lagarde, Schiuble, Hammond, Kuroda center stage. pic.twitter.com/0w9gvaJ1U1
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