Australia predicts a dramatic fall of iron ore prices

Mine

Shares in Australian mining companies have fallen after the government forecasted a dramatic decline in iron ore prices.

The government forecast an iron ore price of $46.70 a tonne by 2018, almost half the current level of $80.

The current price is supported by resurgent demand from China.

But the Department of Industry, Innovation and Science said that demand is unlikely to continue over the coming years.

The department also lowered its forecast for iron ore exports by 2% to 832.2 million tonnes for the fiscal year 2016-17.

Australia is the world’s biggest supplier of iron ore and shares in the country’s main mining companies fell after the report was released.

Hardest hit was Fortescue Metals which fell more than 3% in early trade, while commodity giants BHP Billiton and Rio Tinto also saw their shares prices drop.

In its forecast early last year, the department had predicted an iron ore price of $44.10 per tonne, but an increase in Chinese demand spurred the price to above $80.

BMW ‘absolutely committed’ to a new Mexican plant

Jeep cars

Fiat Chrysler Automobiles (FCA) has announced a $1bn (£816m) investment to produce three Jeep models in the US.

Under the plan it will also move the production of a Ram pickup truck from Mexico to the US.

The location of car production has become a sensitive issue, as President-elect Donald Trump is critical of firms that have moved production to Mexico and has threatened to impose tariffs.

However, BMW has told the BBC it will go ahead with a new plant in Mexico.

The German car giant is spending $1bn on a new factory at San Luis Potosi to make its 3 Series cars for sale across North America.

BMW sales and marketing director Ian Robertson told the BBC that the firm was “absolutely” committed to the facility.

He added that the company was investing a similar sum of money in a plant in South Carolina and pointed out that BMW was the biggest exporter of cars from the US.


The president-elect has threatened car makers with a “border tax” if they make cars in Mexico and sell them in the US.

cancelled a $1.6bn plan to build a plant in Mexico and instead decided to expand operations in Michigan.

Ford boss Mark Fields said the decision was partly due to falling sales of small cars and partly a “vote of confidence” in Mr Trump’s policies.

On the same day as Ford’s announcement, Mr Trump had criticised General Motors on Twitter for making cars in Mexico and importing them into the US.

“General Motors is sending Mexican-made model of Chevy Cruze to US car dealers tax-free across border. Make in USA or pay big border tax!” he tweeted.

FCA said its announcement was the second phase of a plan, first outlined in January, to expand in the market for pickup trucks and sports utility vehicles (SUVs).

It will invest in a plant in Michigan, so that it can produce two new Jeep SUVs and take on the production of a Ram truck, currently made in Mexico.

An Ohio plant will be retooled to make a new Jeep pickup truck.

As a result, FCA says that 2,000 jobs will be added.

UK superyacht industry sales rise to highest since 2008

Sunseeker yacht

Sales in the UK’s superyacht industry have reached their highest level since the 2008 financial crisis.

A report from British Marine, which represents the leisure, superyacht and small commercial marine industry, said revenues had risen 1.6% to £3.01bn in the year to April 2016.

It is the first time the £3bn mark has been breached since 2008-2009.

However, the report predicted growth would slow during 2017, amid uncertainty over Brexit negotiations.

Total revenue fell in the wake of financial crisis, reaching its lowest point in the financial year 2011-2012 of £2,85bn and has been gradually picking up since then.

Increased revenue from engine and equipment manufacturing, as well as a jump in sales of hire and charter boats, are believed to have driven the sales increase.

Exports for the year were down 0.7% to £882m but British Marine said that in the last few months the industry had benefited from the fall in the pound against the dollar and the euro since the referendum, as it has boosted buying power from overseas customers.

However, marine businesses surveyed for the report expected that the support from the strong pound would be a short-term benefit.

Howard Pridding, chief executive of British Marine, said: “The industry remains robust – revenue is growing and we are taking on more employees.

“Despite the post-referendum volatility impacting on business and consumer confidence, the industry remains bullish.”

The report said industry growth was expected to slow in 2017 “as economic volatility increases closer to and during negotiations over the UK’s exit from the European Union.”

Sunseeker and Princess are the UK’s biggest superyacht companies. Globally, the industry is the fourth largest in terms of turnover.

UK spending growth ‘at two-year high’

Shoppers Oxford Street

The final three months of last year saw the strongest quarterly growth in consumer spending in two years, according to payment card company Visa.

Its research, which reflects cash and card spending, showed expenditure rising at an annual rate of 2.8% in the fourth quarter.

That was the quickest quarterly growth rate since the end of 2014.

The report comes ahead of trading updates this week from Marks and Spencer, Tesco and Morrisons.

a shock to the retail sector when it reported a disappointing Christmas trading period and warned that conditions would continue to be difficult this year.

Next shares lost almost 20% in two days and the warning also hit shares in Mark and Spencer and Debenhams.


Analysts think that Marks and Spencer, which publishes its trading update on Friday, can hardly fail to improve , when sales at its non-food business fell almost 6%.

Andrew Wade, from Numis Securities, thinks that M&S could report sales growth in clothing and homeware of 1%.

“M&S performed so poorly in clothing and homewares through the third quarter last year, we see a good possibility that the division reports a small positive LFL [like-for-like] outcome this time,” he said.

Morrisons releases its figures for the Christmas period on Tuesday, followed by Tesco on Thursday.

Analysts are expecting both of those supermarkets to report growth in like-for-like sales of around 1% for the Christmas trading period.

For December, Visa’s report showed overall spending increasing at an annual rate of 2.6%, with shops recording a modest 0.7% growth rate, but online spending growth rising by 5.5%.

Of all the categories measured, hotels, restaurants and bars saw the strongest expenditure growth, up 7.3%.

“Growth was once again led by the experience sector, with consumers going to Christmas markets, travelling to visit loved ones, or venturing to various parts of the country to celebrate,” said Kevin Jenkins, UK and Ireland managing director at Visa.

Fiat Chrysler commits $1bn to US plants

Jeep cars

Fiat Chrysler Automobiles (FCA) has announced a $1bn (£816m) investment to produce three Jeep models in the US.

Under the plan it will also move the production of a Ram pickup truck from Mexico to the US.

The location of car production has become a sensitive issue, as President-elect Donald Trump is critical of firms that have moved production to Mexico and has threatened to impose tariffs.

However, BMW has told the BBC it will go ahead with a new plant in Mexico.

The German car giant is spending $1bn on a new factory at San Luis Potosi to make its 3 Series cars for sale across North America.

BMW sales and marketing director Ian Robertson told the BBC that the firm was “absolutely” committed to the facility.

He added that the company was investing a similar sum of money in a plant in South Carolina and pointed out that BMW was the biggest exporter of cars from the US.


The president-elect has threatened car makers with a “border tax” if they make cars in Mexico and sell them in the US.

cancelled a $1.6bn plan to build a plant in Mexico and instead decided to expand operations in Michigan.

Ford boss Mark Fields said the decision was partly due to falling sales of small cars and partly a “vote of confidence” in Mr Trump’s policies.

On the same day as Ford’s announcement, Mr Trump had criticised General Motors on Twitter for making cars in Mexico and importing them into the US.

“General Motors is sending Mexican-made model of Chevy Cruze to US car dealers tax-free across border. Make in USA or pay big border tax!” he tweeted.

FCA said its announcement was the second phase of a plan, first outlined in January, to expand in the market for pickup trucks and sports utility vehicles (SUVs).

It will invest in a plant in Michigan, so that it can produce two new Jeep SUVs and take on the production of a Ram truck, currently made in Mexico.

An Ohio plant will be retooled to make a new Jeep pickup truck.

As a result, FCA says that 2,000 jobs will be added.

Theresa May: UK cannot keep ‘bits’ of EU membership

Theresa May

Prime Minister Theresa May has said the government’s thinking on Brexit “isn’t muddled at all”.

Her comments on Sky News come after the UK’s former ambassador to the EU, Sir Ivan Rogers, criticised ministers’ approach to negotiations.

Mrs May said the government’s priority was to get the “best possible deal” and that she would set out more detail on her aims “in the coming weeks”.

Brexit talks with the EU are expected to begin as early as April.

Mrs May said it was not possible for the UK to hold on to “bits” of membership after leaving the EU.

There has been much debate in recent weeks about the nature of Brexit, and whether controls on the movement of EU citizens will mean the UK leaves and customs union.

The government has also come under pressure to reveal more of its plan.

Sir Ivan stepped down from his ambassador role on Tuesday, criticising “muddled thinking” among ministers. He has been replaced by Sir Tim Barrow.

Mrs May told Sky News’s Sophy Ridge on Sunday: “Anybody who looks at this question of free movement and trade as a sort of zero-sum game is approaching it in the wrong way.

“I’m ambitious for what we can get for the UK in terms of our relationship with the European Union because I also think that’s going to be good for the European Union.

“Our thinking on this isn’t muddled at all.”

But it was “important to take some time” to look at the “complexity of the issues”, she added.

Mr May said: “Often people talk in terms as if somehow we are leaving the EU but we still want to kind of keep bits of membership of the EU.

“We are leaving. We are coming out. We are not going to be a member of the EU any longer.

“So the question is what is the right relationship for the UK to have with the European Union when we are outside.

“We will be able to have control of our borders, control of our laws.”

In the referendum last summer, voters opted by 51.9% to 48.1% in favour of Brexit.


Mrs May said: “This is what people were voting for on 23 June.

“But of course we still want the best possible deal for us, companies to be able to trade, UK companies to be able to trade in and operate within the European Union and also European companies to be able to trade with the UK and operate within the UK.”

The prime minister has promised to invoke Article 50 of the Lisbon Treaty – getting formal Brexit negotiations with the EU under way – by the end of March.

Mrs May told Sky: “Over the coming weeks, I’ll be setting out more details of my plan for Britain. Yes, that’s about getting the right deal for Brexit, but it is also about economic reform…

“It’s about getting the right deal internationally, but it’s also about a fair deal at home.”

Earlier, Europhile former Conservative chancellor Ken Clarke told BBC One’s Andrew Marr Show: “Theresa needs to address the more serious question of the muddle [Sir Ivan is] complaining about, see whether she agrees with him and decide whether she can improve the way in which she organises the government to get to a proper conclusion.”

Liberal Democrat leader Tim Farron said Mrs May’s comments “confirmed she is taking us towards a disastrous hard Brexit that will leave our country poorer and more divided”.

But Richard Tice, co-chairman of the Leave Means Leave campaign, said: “We welcome the prime minister’s commitment to taking back control of Britain’s borders, therefore ending preferential treatment for EU citizens.

“She is right that issues of trade and immigration are not binary because when Britain leaves the single market and the customs union, though freedom of movement will cease, Britain’s ability to trade with the EU and access the single market will continue.”

Theresa May: Government not muddled over Brexit

Theresa May

Prime Minister Theresa May has said the government’s thinking on Brexit “isn’t muddled at all”.

Her comments on Sky News come after the UK’s former ambassador to the EU, Sir Ivan Rogers, criticised ministers’ approach to negotiations.

Mrs May said the government’s priority was to get the “best possible deal” and that she would set out more detail on her aims “in the coming weeks”.

Brexit talks with the EU are expected to begin as early as April.

Mrs May said it was not possible for the UK to hold on to “bits” of membership after leaving the EU.

There has been much debate in recent weeks about the nature of Brexit, and whether controls on the movement of EU citizens will mean the UK leaves and customs union.

The government has also come under pressure to reveal more of its plan.

Sir Ivan stepped down from his ambassador role on Tuesday, criticising “muddled thinking” among ministers. He has been replaced by Sir Tim Barrow.

Mrs May told Sky News’s Sophy Ridge on Sunday: “Anybody who looks at this question of free movement and trade as a sort of zero-sum game is approaching it in the wrong way.

“I’m ambitious for what we can get for the UK in terms of our relationship with the European Union because I also think that’s going to be good for the European Union.

“Our thinking on this isn’t muddled at all.”

But it was “important to take some time” to look at the “complexity of the issues”, she added.

Mr May said: “Often people talk in terms as if somehow we are leaving the EU but we still want to kind of keep bits of membership of the EU.

“We are leaving. We are coming out. We are not going to be a member of the EU any longer.

“So the question is what is the right relationship for the UK to have with the European Union when we are outside.

“We will be able to have control of our borders, control of our laws.”

In the referendum last summer, voters opted by 51.9% to 48.1% in favour of Brexit.


Mrs May said: “This is what people were voting for on 23 June.

“But of course we still want the best possible deal for us, companies to be able to trade, UK companies to be able to trade in and operate within the European Union and also European companies to be able to trade with the UK and operate within the UK.”

The prime minister has promised to invoke Article 50 of the Lisbon Treaty – getting formal Brexit negotiations with the EU under way – by the end of March.

Mrs May told Sky: “Over the coming weeks, I’ll be setting out more details of my plan for Britain. Yes, that’s about getting the right deal for Brexit, but it is also about economic reform…

“It’s about getting the right deal internationally, but it’s also about a fair deal at home.”

Earlier, Europhile former Conservative chancellor Ken Clarke told BBC One’s Andrew Marr Show: “Theresa needs to address the more serious question of the muddle [Sir Ivan is] complaining about, see whether she agrees with him and decide whether she can improve the way in which she organises the government to get to a proper conclusion.”

Liberal Democrat leader Tim Farron said Mrs May’s comments “confirmed she is taking us towards a disastrous hard Brexit that will leave our country poorer and more divided”.

But Richard Tice, co-chairman of the Leave Means Leave campaign, said: “We welcome the prime minister’s commitment to taking back control of Britain’s borders, therefore ending preferential treatment for EU citizens.

“She is right that issues of trade and immigration are not binary because when Britain leaves the single market and the customs union, though freedom of movement will cease, Britain’s ability to trade with the EU and access the single market will continue.”

CES 2017: Nokia Android phone spurns the West

Nokia 6

The first Nokia-branded smartphone is to be released exclusively in China.

The device with the local internet retail giant JD.com.

The team behind the Nokia 6 phone said it believed the handset’s “premium design” would appeal to the local market.

The announcement coincided with the final day of the CES tech show in Las Vegas, where other new mobile phones and gadgets have been launched.

Nokia no longer manufactures phones that carry its name but has instead licensed its brand to another Finnish company, HMD Global.

Until now, the only phones that had been released under the deal had been more basic “feature phone” models.


The Android device had been highly anticipated and marked Nokia’s return to the smartphone market after a series of Windows Phone models. Microsoft briefly used the brand for about a year after buying Nokia’s mobile devices unit in 2014.

Nokia once dominated the mobile phone market but struggled after the launch of the iPhone a decade ago, and the subsequent release of Google’s Android operating system.

HMD Global had previously indicated it would release several Nokia-branded Android phones in 2017.

It is expected to provide details of at least some of the other launches at another trade show – Barcelona’s Mobile World Congress – in February.

“The decision by HMD to launch its first Android smartphone into China is a reflection of the desire to meet the real world needs of consumers in different markets around the world,” .

“With over 552 million smartphone users in China in 2016, a figure that is predicted to grow to more than 593 million users by 2017, it is a strategically important market where premium design and quality is highly valued by consumers.”


The Nokia 6 phone runs Android 7.0 – the latest version, also known as Nougat – and features:

  • a 5.5in 1080p “full high definition” screen
  • a 16 megapixel rear camera
  • four gigabyte of RAM memory and 64GB of storage
  • two amplifiers supported by Dolby Atmos audio processing, which HMD says creates audio that “seems to flow all around users”

The specifications are mid-range, and so is the price: 1,699 yuan ($245; £200).

That makes it slightly more expensive than Huawei’s Honor 6X but cheaper than Xiaomi’s Mi 5s.

Follow all our CES coverage at

Theresa May vows to correct ‘burning injustices’

Theresa May

Prime Minister Theresa May has promised to introduce wide-ranging social reforms to correct what she calls the “burning injustices” in modern society.

, she said the UK voted for Brexit to change the way the country works and said she wanted a “shared society”.

She said the government has a duty to intervene, including in markets that are not giving consumers the best deal.

Her comments come ahead of a Monday speech on social reform.

On becoming prime minister last summer, Mrs May pledged to lead a “one nation” government working for all and not the “privileged few”.

In the newspaper, Mrs May writes that a “shared society” means “a society that doesn’t just value our individual rights but focuses rather more on the responsibilities we have to one another… with a commitment to fairness at its heart”.

“It goes to the heart of my belief that there is more to life than individualism and self-interest,” she said.

“The social and cultural unions represented by families, communities, towns, cities, counties and nations are the things that define us and make us strong.

“And it is the job of government to encourage and nurture these relationships and institutions where it can, and to correct the injustice and unfairness that divides us wherever it is found…

“From tackling the increasing lack of affordability in housing, fixing broken markets to help with the cost of living, and building a great meritocracy where every child has the opportunity of a good school place, we will act across every layer of society to restore the fairness that is the bedrock of the social solidarity that makes our nation strong.”

Her predecessor David Cameron’s “Big Society” agenda relied on voluntary organisations rather than state intervention.

On Monday, Mrs May will use her speech to argue that previous administrations had focused too narrowly on the very poorest through the welfare system.

She is expected to say that people just above the welfare threshold feel that the system is “stacked against them”.

Mrs May will say her vision of a “shared society” is aimed at tackling “both the obvious and everyday injustices” in an effort to “overcome division and bring our country together”.

UK household debt now a record £13,000, says TUC

family around kitchen table

The average household in the UK now owes a record amount of £12,887, even before mortgages are taken into account, according to the TUC.

Its research was based on from the Office for National Statistics (ONS) for the three months to the end of September 2016.

According to the ONS, total unsecured debt hit an all-time high of £349bn at that point.

The TUC divided that number by the total number of households in the UK.

However, its figures are inflated by the inclusion of student loans, which have increased rapidly over the last couple of years.

Last week’s from the Bank of England, which exclude student loans, put the total at £192bn up until the end of November 2016.

That is the highest figure since December 2008, but not a record.

Nevertheless, officials at the Bank have indicated they are not that worried about debt levels at the moment.

“Interest rates are still very low, and are expected to remain so for the foreseeable future, so there are fewer concerns on debt servicing than there were in the past,” said Andy Haldane, the Bank’s chief economist, last week.

“There are reasons not to be too alarmed about it ticking up, but it is absolutely something we will watch carefully,” he said.


But others believe many households could run into financial difficulties this year.

“The majority of borrowers will currently be able to cope with this extra debt,” said Joanna Elson, chief executive of the Money Advice Trust.

“However, if the economy does indeed suffer in 2017, this borrowing could become more difficult to repay – and some households risk finding themselves exposed to sudden changes in financial circumstances.”

The TUC said that unsecured debt as a percentage of household income had now reached 27.4%, the highest figure for eight years.

And it claimed that weak growth in wages had left more families reliant on borrowing.

“These increases in household debt are a warning that families are struggling to get by on their pay alone,” said Frances O’Grady, the TUC’s general secretary.

“Unless the government does more for working people, they could end the New Year poorer than they start it.”

The exclusion of student debt from the figures makes a significant difference to the total amount of unsecured debt, which refers to borrowing through credit cards and loans, including finance for new cars.

Students who began studying in England in 2012 are expected to leave university with debts of almost £40,000, according to a House of Commons Library paper published last month.