Pope Francis urges Davos to fight poverty and injustice; Elton John blasts 'disgraceful' inequality -- as it happened

Nick Fletcher until 3.30pm GMT and Graeme Wearden

from on 2018-01-22 22:12 (#3DY6R)

10.12pm GMT

That's all for tonight, from a rather cold and snowy Davos. See you in the morning for full coverage of Day 1. GW

7.40pm GMT

Here's the key message from Bollywood star Shah Rukh Khan's speech to WEF tonight, as he collected his Crystal Award.

"To disfigure a woman by throwing acid on her face is one of the crudest acts of subjugation imaginable. At the source of it lies the view that a woman does not have the right to assert her choice,.

We need to open access for each and every one with a true sense of ourselves, not as more powerful or less privileged but as equals."

7.29pm GMT

The dancing is over, and I've hotfooted it across from the Congress Centre to hear from Global Himalayan Expedition, an Indian social enterprise.

GHE have a good story to tell too - they've using solar panels and 'decentralized microgrids' to bring power to remote communities in India.

6.49pm GMT

Elton John's attack on inequality will, rightly, provoke reminders that he is himself fabulously wealthy - with an estimated 290m in the bank.

But that's what happens when you shift a quarter of a billion records over a glittering career. And in his defence, the Elton John AIDS Foundation (EJAF) has raised more than $400 million (according to WEF).

6.40pm GMT

From inequality to...ballet!

WEF delegates are now enjoying a performance led by La Scala's principal dancer i(C)toile Roberto Bolle, which I'm told "fuses the work of Antonio Vivaldi and Astor Piazzolla to explore the fine line between chaos and harmony in our relationship with nature."

6.23pm GMT

Finally, Sir Elton John receives his Crystal Award from the World Economic Foundation, for his philanthropic work.

"I wanted to reconnect, i wanted to be a decent person".

Turns out .@eltonofficial is as inspiring at giving speeches as he is at making music - moving description on what moved him to create .@ejaf and how the spread of HIV/AIDs was caused by the abandonment of our humanity #Davos2018 #HIV #WEF2018

The world needs to be changed - the inequality in the world is, to be honest, disgraceful.

6.17pm GMT

Now, Bollywood star Shar Rukr Khan gives a moving speech about the strength of women, such as those who have suffered acid attacks, and children who are overcoming suffering.

I want to thank my sister, my wife and my daughter for bringing me up well - Shah Rukh Khan
These beautiful words by an incredible actor and humanitarian make me prouder for being his fan.
Congratulations, @iamsrk!
CRYSTAL AWARD FOR SRK pic.twitter.com/DJTGAe9vIQ

Shah Rukh Khan wins the Crystal award for his work with Meer foundation for Children and Women. SRK comes up on stage and asks Sir Elton John and Cate Blanchett before you go can I take a selfie:) #YesBankNDTVAtDavos @Davos @ndtv @iamsrk pic.twitter.com/BckTFUWQYJ

6.13pm GMT

Collecting her WEF crystal award, Cate Blanchett tells the audience that we must rebuild the 'shared bonds' between people if we are to tackle the refugee crisis.

The Australian actor laments the lack of empathy and compassion. She explains that if we can drop the 'loaded label' of the word 'refugee' it is earlier to see the person behind it.

Once you've born witness you cannot turn away.

Actress Cate Blanchett takes a swipe at Trump in her speech at #Davos . She didn't mention him by name, but she lamented political rhetoric that "gnaws away at our empathy and compassion" for others, esp. refugees pic.twitter.com/X2kOuivuL9

6.01pm GMT

Pope Francis has sent a message to the World Economic Forum, and it's a stern warning that capitalism is failing to serve the people.

The message is being read by Cardinal Peter Kodwo Appiah Turkson.

The recurring financial instabilities have brought new problems and serious challenges that governments must confront, such as the growth of unemployment, the increase in various forms of poverty, the widening of the socio-economic gap and new forms of slavery, often rooted in situations of conflict, migration and various social problems.

Whenever a human life no longer proves useful for that machine, it is discarded with few qualms.

We cannot remain silent in the face of the suffering of millions of people whose dignity is wounded, nor can we continue to move forward as if the spread of poverty and injustice has no cause.

5.45pm GMT

Klaus Schwab welcomes delegates to the 48th World Economic Forum.

He calls WEF the "foremost multi-stakeholder group in the world".

5.41pm GMT

Delegates are flooding into the main Congress Hall at the World Economic Forum, as founder Klaus Schwab prepares to open this year's event.

5.30pm GMT

Just in: Nine out of ten business leaders in Britain are upbeat about the growth prospects for their companies this year despite uncertainty about the impact of Brexit.

That's according to consultancy firm PwC, which has just released its annual survey of chief executives at a press event in Davos.

5.07pm GMT

In a disappointing development, global flows of foreign direct investment (FDI) fell by 16% in 2017.

That's according to a new report from UNCTAD - the United Nation's arm for trade, investment and development issues.

"While FDI in developing countries remained at a level similar to the previous year, more investment in sectors that can contribute to the Sustainable Development Goals is still badly needed.

Promoting FDI for sustainable development remains a challenge."

4.39pm GMT

4.26pm GMT

As a measure of economic success, GDP has plenty of critics.

It's too blunt, it doesn't distinguish between building atom bombs or orphanages, or take account of environmental damage or economic inequality.

4.12pm GMT

The Treasury have sent a short response to today's IMF forecasts:

"We are building a Britain that is fit for the future by improving skills, backing innovation and investing in infrastructure to deliver a stronger economy and guarantee a better future for the next generation."

4.06pm GMT

Here's some reaction to the latest IMF forecasts:

IMF say Donald Trump's tax reforms will help spur the global economy in 2018, while Britain's prospects for 2019 are downgraded. As Ministers bemoan paralysis from May - perhaps she should take inspiration from across the pond?

Ahead of the Davos shenanigans, the IMF has raised its forecasts for the global #economy over the next few years. But, not for the UK - weak growth of 1.5% pa in 2018 and 2019.

4.02pm GMT

Although the IMF has raised its forecast for global growth, the UK has missed out.

The Fund has cut its forecast for UK growth in 2019 to 1.5%, down from 1.6% previously. Although that's a small move, it's notable that other countries have seen their projected growth revised UP.

"The IMF report out today confirms what others have been saying - the UK economy is not growing as fast as many other advanced economies. It further exposes the effect of the last seven years of Tory economic failure.

"Philip Hammond should drop his plans to continue the austerity policies that have weakened our economy. We urgently need a change of direction from the Chancellor. There is no excuse for a 'more of the same' approach.

3.52pm GMT

Only in #Davos you get a sign with "private car pick-up" direction alongside the "A day in the life of a refugee" exhibition. #Davos2018 #tonedeaf @tictoc #tictocnews pic.twitter.com/yFWsN3oLq9

3.37pm GMT

Outside the IMF's press conference, the weather at Davos is decidedly wintery.

Delegates are stepping off the train into a flurry of monster snowflakes, there are huge snowdrifts everywhere, and the roads are jammed in all directions.

3.24pm GMT

On that note, I'll hand over to Graeme Wearden in Davos.

3.08pm GMT

Here is a link to the opening remarks by Maurice Obstfeld, the IMF's economic counsellor, at the World Economic Outlook press conference:

Obtsfeld: Growth is picking up in Europe & Asia, with improved performance also in the U.S., Canada, and some large emerging markets, notably Brazil and Russia, India and Turkey #WEO https://t.co/RwK9i9BaG3 pic.twitter.com/v1JssYv4Jv

2.57pm GMT

Meanwhile US markets have opened lower, as investors concentrate more on the US government shutdown than the IMF's raised forecasts.

The Dow Jones Industrial Average is down 35 points or 0.13% while the S&P 500 is off 0.06% and the Nasdaq Composite 0.01% lower.

2.44pm GMT

Final question: will China continue to play a bigger role [in the global economy]?

Obstfeld: There is no question China is a major player. Chinese growth is incredibly important to world growth. It is important for China to support the multilateral system. It will require further steps from China, to open its own economy to imports and work on a range of issues. China's role is critical.

2.42pm GMT

Question on whether growth is even a worthwhile pursuit if not everyone benefits.

Obstfeld says GDP doesn't measure the distribution of rewards [from growth]. You could do that but it would be a value judgement, and economists have struggled with this for centuries. How do you measure overall utility?

2.36pm GMT

Question on bitcoin and systemic risk.

We don't like to comment on specific cryptocurrencies. Blockchain technology in general, we see possible advantages. It's an interesting development.

2.34pm GMT

Do you expect US growth to become a drag on global growth after 2020?

Obstfeld: The tax bill and its impact is complex, lot of uncertainty around our forecast. A lot of the impact is explicitly temporary. Could be a surge of investment in near term, when it stops could be some payback. But some [of the measures] are not temporary.

2.31pm GMT

What role does China play now compared to ten years ago? How about the Federal Reserve?

Obstfeld: China carried out large fiscal stimulus at time of crisis. Even though its growth rate has come down, it is still a major source of growth. there are challenges which the leadership has recognised in terms of strengthening financial regulations... the relationship between local and federal budgets. We see China as a strong driver of global growth going forward.

2.25pm GMT

Question on the risks facing the global economy.

Obstfeld says, It is hard to identify one risk, policymakers need to think broadly and for the long term, not just the next political cycle.

2.23pm GMT

The next recession may be closer than we think and the ammunition to combat it will be less than previously, he says.

On to the questions.

2.22pm GMT

The current upturn was not by chance, says Obstfeld, it owed much to accommodative macro economic polices.

Our view is the current upturn is not likely to be a new normal.

2.16pm GMT

Maurice Obstfeld, the IMF's economic counsellor, says countries have to ask themselves three questions: how can we raise our economic efficiencies over the long term; how can we avoid this upturn ending in new slowdown; and how can we be sure we have the tools to counter the next downturn.

2.13pm GMT

IMF managing director Christine Lagarde says we should be encouraged by global growth but should not be complacent.

There are too many people left out of the economic growth, she says.

2.06pm GMT

The IMF is holding a press conference on the world economic outlook which can be viewed here.

2.00pm GMT

The global economy will grow faster than expected this year and next as Donald Trump's corporate tax cuts provide a short-term shot in the arm, despite fears over rising inequality and overheating financial markets, the International Monetary Fund has said.

Launching its latest World Economic Outlook (WEO) report at the annual Davos gathering of the global elite in Switzerland this week, the IMF upgraded its growth forecast for the world economy by 0.2 percentage points to 3.9% for both 2018 and 2019.

1.44pm GMT

The view from the train on the way to the World Economic Forum in Davos, as seen by Graeme Wearden and Larry Elliott:

1.36pm GMT

Still with Greece, and ahead of the eurogroup meeting, the country's officials are expressing confidence that a new loan disbursement of up to a6.7bn will be granted. Helena Smith reports from Athens:

Greek officials are calling today's eurogroup the beginning of the end of Greece's nine-year ordeal under international supervision. Even though some demanded reforms are still pending, insiders are not anticipating especially tough words from euro area finance ministers when they meet under Mario Centeno for the first time this afternoon.

"I am 99 per cent sure they are going to give us the green light for the next [bailout] instalment," MEP Stelios Koulouglou told the Guardian. "We are expecting soft stuff."

Koulouglou, who represents the governing leftwing Syriza party in the European parliament, said disbursement would not only conclude the debt-stricken country's third compliance review but pave the way to the end of international supervision under its a86bn third bailout programme. "After this there is a fourth, and last, review but it won't be at all as gruelling and then we will be at the end."

Briefing reporters at 2 PM local time, the government spokesman, Dimitris Tzannakopoulos, said after today's euro group Athens would enter "the last stretch" before officially exiting the programme in August.

12.47pm GMT

There was good news for Greece and Spain from a couple of ratings agencies late on Friday, giving a lift to their bond prices today. Reuters reports:

Spain's borrowing costs fell to six-week lows and short-dated bond yields in Greece tumbled on Monday, after ratings upgrades for the two southern euro zone states provided further evidence of a turnaround for the bloc's peripheral economies.

Fitch upgraded Spain's credit rating to "A-" with a stable outlook late on Friday, citing a broad-based economic recovery and limited impact on the economy from Catalonia's independence bid. It was Spain's first "A" rating from one of the top three ratings agencies since the euro zone debt crisis.

12.37pm GMT

The US government shutdown may be having little impact so far on global equity markets, but it has pushed the already weak dollar even lower. Connor Campbell, financial analyst at Spreadex, said:

Sterling heavily flirted with $1.39 as it climbed 0.2%, while the euro crept back across $1.225 after rising by the same amount. Against each other, however, neither currency could gain the upper hand, with the pound effectively flat the wrong side of a1.134.

Despite cable lurking around its post-Brexit peak, the FTSE managed to overcome its initial wobble this Monday, nudging back above 7730 - roughly 70 points off its all-time highs - as the day went on. The DAX, meanwhile, remained in the ball-park of its own record intraday high, sitting flat around 30 or so points away from 13500 - the latest news surrounding a possible German coalition between the CDU and SPD could only keep the index from dipping in the red, rather than propel it to fresh highs.

12.17pm GMT

Greece is edging closer to an exit from its bailout programme:

#Eurogroup due to declare today that 3rd review of #Greece's 3rd bailout is more or less done. That will mean 12 reviews down since 2010, just one more (hopefully) to go https://t.co/DcLtI1ncnk

11.37am GMT

The world faces a massive and urgent need to reskill millions of workers whose jobs will be eliminated by technological change in the next few years.

A new report from the World Economic Forum shows that employees across the economy risk suffer falling incomes or unemployment as the 4th industrial revolution disrupts the workplace. To avoid this fate, millions of people need to be helped into new roles - probably into a whole new career path.

11.23am GMT

Time for a market update.

The FTSE 100 has recovered some of its poise after its early dip, and is now up around 0.07%.

Stock markets in Europe are a mixed bag this morning as investors access the political landscape. The shutdown of the US government hasn't spooked investors as there was a similar muted reaction the last time it happened in 2013, but nor has it given traders a reason to buy into the market. In Germany the SPD have agreed to begin formal talks with Angela Merkel's CDU. This is a step in the right direction for German politics and traders will be watching it closely.

10.23am GMT

In the wake of the collapse of Carillion, rival companies have been successful in their contingency plans to keep projects going, says ratings agency Moody's. But they could face having to sign new contracts on less favourable terms, it adds in a new report:

Project companies are satisfactorily implementing contingency plans to avoid an impact on services or cash flows after the liquidation of British construction and services firm Carillion. However, moderate credit deterioration is possible because some project companies will need to sign new contracts with alternative subcontractors, potentially with less favourable terms or pricing...

"Projects continue to provide contracted services despite Carillion's liquidation," said Kunal Govindia, a Moody's Assistant Vice President and co-author of the report. "However, if replacement subcontractors are procured it could lead to an increase in operating costs, although there are mitigating factors."

As part of their contingency planning, project companies had engaged with possible replacement subcontractors. Moody's expects that new subcontractors will join the various projects over the coming months. However, there is no guarantee that the new contract will be on the same terms and pricing. Project companies could potentially face increased FM costs without an accompanying increase in revenue.

Two factors mitigate this risk. Firstly, soft FM services are benchmarked periodically and cost increases are passed to offtakers. Secondly, projects are resilient to FM cost increases, as demonstrated by generally adequate cost increase sensitivities.

9.25am GMT

We've seen a number of companies jumping on the cryptocurrency bandwagon (step forward Long Island Iced Tea) and seeing their shares soar. And it hasn't peaked yet, it seems:

Sigh. "Stapleton Capital, a company originally formed to acquire a company or business in the telecoms sector, announces that the Directors have identified a number of blockchain technology investment opportunities" change of name of the Company to Blockchain Worldwide plc" pic.twitter.com/CvTALlU4j7

9.17am GMT

A rather downbeat survey on UK household finances from IHS Markit:

UK households gloomier about their finances in January amid rising prices. Need for debt rising at fastest rate in nearly a year https://t.co/TzVktgc5v0 pic.twitter.com/aEiy8NBRW5

8.53am GMT

You would imagine stock markets would be rather edgy at the prospect of a US government shutdown. But apparently not. The Dow Jones Industrial Average closed up 53 points on Friday, and the futures are indicating a small decline at today's open of around 44 points. And the long term impact on US markets seems limited:

As the US government shutdown moves into its third day the effects of a closure have little impact on the S&P over the long-term... pic.twitter.com/67XUAjnF1s

8.45am GMT

A new report on the growing gap between rich and poor is timely in the run up to the Davos meeting. Larry Elliott writes:

The development charity Oxfam has called for action to tackle the growing gap between rich and poor as it launched a new report showing that 42 people hold as much wealth as the 3.7 billion who make up the poorest half of the world's population.

In a report published on Monday to coincide with the gathering of some of the world's richest people at the World Economic Forum in Davos, Oxfam said billionaires had been created at a record rate of one every two days over the past 12 months, at a time when the bottom 50% of the world's population had seen no increase in wealth. It added that 82% of the global wealth generated in 2017 went to the most wealthy 1%.

8.40am GMT

Ahead of the latest World Economic Outlook, Lord Jim O'Neill - the former Conservative treasury minister and remain supporter - is optimistic about the outlook for the UK.

In an interview with BBC economics editor Kamal Ahmed, Lord O'Neill said the UK was benefiting from better than expected global growth, and forecasts are likely to be upgraded, dwarfing the more gloomy predictions about the effects of Brexit.

I certainly wouldn't have thought the UK economy would be as robust as it currently seems. That is because some parts of the country, led by the North West [of England], are actually doing way better than people seem to realise or appreciate.

As well as this crucial fact, the rest of the world is also doing way better than many people would have thought a year ago, so it makes it easier for the UK.

If that's the worst that Brexit will deliver, then I wouldn't worry about it. Now, my own view is if we go for a really hard Brexit or a no-deal Brexit, we'll probably suffer more than that 3%.

But if it is only 3%, what's going on with the rest of the world - helping us - and with productivity improving, that will easily dwarf a 3% hit over 13 years, easily.

I'm almost embarrassed to accept that it might sound like that. Because of course in principle I share the views of many that Brexit is a really weird thing for the UK to impose on itself from an economic perspective.

And maybe this [better global growth] means the country's going to be able to cope with Brexit better than certainly somebody like me might have thought some time ago.

8.13am GMT

Bookmakers' shares are showing losses on reports that the UK government is planning to cut the maximum stake on fixed odds betting terminals from 100 to 2. It said in October it would reduce the stake to between 50 and 2, to tackle the "crack cocaine of high street gambling." A consultation period ends on Tuesday.

William Hill is down 13%, Ladbrokes Coral has lost 12% and Paddy Power Betfair has fallen 2.6%. Analyst Alistair Ross at Investec said:

A DCMS official apparently indicated that while no formal decision has been made, 2 is 'highly likely'. However Matthew Hancock, the new Secretary of State, has only just been appointed (9 January), and we think it is unlikely that a final decision on FOBT staking limits has actually been made. We also note that the FOBT consultation only closes tomorrow, and suspect speculation on the final outcome is premature.

8.08am GMT

As expected it has been an uncertain start to the week for European markets.

The FTSE 100 has fallen 0.13%, while France's Cac is down 0.1%, Italy's FTSE MIB has lost 0.33% but Spain's Ibex is up 0.3%.

7.57am GMT

More on the German coalition talks. Here's ING economist Carsten Brzeski:

Given the very detailed informative talks in January, the official coalition talks should not take too long - if all parties stick to the desired results. However, the SPD delegate pushed the party leaders to renegotiate details of the informative talks regarding the healthcare system, the labour market and immigration, increasing pressure on the SPD to bring some new political achievements from the forthcoming talks. The willingness of the CDU to really re-open some of the most controversial issues seems to be very limited.

... However, once there is an official coalition agreement, all SPD party members, more than 440,000, will get the chance to vote for or against it. Compared with today's party congress, this party members' vote will be a much tougher nut to crack.

7.42am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

It's a fairly quiet start to the week at the moment but it is the quiet before the storm.

The data calendar is pretty empty today. This leaves markets at the mercy of media coverage of events at the World Economic Forum in Davos. Significant policy announcements are unlikely, but Davos does give journalists an opportunity to pontificate while wearing silly hats.

Having seen the US government shutdown confirmed after last week's US close there might be a case for suggesting that stocks may well be adversely affected. This seems unlikely in the long run given that the shutdown, at least in the short term, is likely to be fairly limited in nature, given that by and large economic data from across the globe continues to show a fairly robust level of economic activity.

Furthermore, dysfunctional US politics isn't really anything new, in fact dysfunctional politics appears to be becoming the norm, not only in the US, but the world over, even if in Germany we do appear to be starting to make progress on the formation of a new government after the German SPD party membership granted permission for the party leaders to begin new coalition talks with Angela Merkel.

European Opening Calls:#FTSE 7719 -0.15%#DAX 13469 +0.26%#CAC 5532 +0.10%#MIB 23737 -0.05%#IBEX 10501 +0.21%

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