Wanderlust

Category: ECONOMY

  • Sugar tax on comfortable beverages increases £154m

    A young boy drinks cola Symbol copyright Getty Photographs

    The New sugar tax on cushy beverages has raised £153.8m since it used to be introduced in April, the government has said.

    The figure, which covers the period to the tip of October, way the tax is on target to raise the envisioned proceeds of £240m for the entire year.

    The Brand New tax is carried out to soft drinks with a certain quantity of sugar in step with litre.

    Health officers have warned that extra action may well be taken in opposition to the food business until it cuts sugar further.

    Public Well Being England (PHE) says if the meals trade has now not made sufficient development on sugar relief it would face additional measures.

    How does the tax paintings?

    The levy is carried out to producers – whether or not they move it on to shoppers or now not is as much as them. There are 457 producers registered for the levy.

    Drinks with greater than 8g per 100ml face a tax rate similar to 24p per litre.

    Those containing FIVE-8g of sugar in line with 100ml face a rather lower charge of tax, of 18p per litre.

    Pure fruit juices are exempt as they do not carry brought sugar, while drinks with a high milk content are also be exempt due to their calcium content.

    Originally, the Treasury forecast it might lift more than £500m a year, however that has now been diminished to £240m as a result of a few manufacturers have decreased the sugar content of their products.

    In England that income is being invested in school sports and breakfast clubs.

    Products such as cakes, biscuits and other meals don’t seem to be coated via the tax, despite the fact that a separate initiative is encouraging manufacturers to cut back the sugar content of these pieces voluntarily.

  • Brexit plan will prevent EUROPEAN migrants ‘jumping the queue’ – May

    Image copyright EPA

    The Labour leader said Mrs Might’s “botched” deal “breaches the high minister’s personal pink strains” and “makes no mention of protecting frictionless trade”.

    Mr Corbyn recommended the european could imagine re-writing the draft agreement “at the eleventh hour” if MPs rejected the proposals.

    He additionally suggested the uk’s exit from the eu should be a catalyst for far-reaching economic and social modification and a “radical programme of investment” in infrastructure, training and skills.

    Why are other people unsatisfied with the deal?

    The draft report sets out the terms of the united kingdom’s departure, including how so much money can be paid to the european, main points of the transition period, and citizens’ rights.

    The transition length – lately due to remaining until 31 December 2020 – will imply the uk is formally out of the european, however still abiding by means of such a lot of its regulations. during this time, the two sides hope to negotiate a permanent trade deal.

    The UK and the eu need to keep away from a hard Northern Ireland border no matter what occurs, in order that they agreed to a “backstop” – described as an insurance policy through Mrs Would Possibly – geared toward reaching this if the sides can not agree a trade deal that avoids a physically visual border.

    Symbol copyright EPA

    But former International Secretary Boris Johnson used his column in Monday’s Day By Day Telegraph to renew his criticism of the draft agreement, describing it as a “585-page fig-leaf that does not anything to cover the embarrassment of our overall defeat”.

    And former Tory chief Lord Howard informed BBC Radio 4’s These Days programme that a vote of confidence can be a distraction.

    What’s the reaction from the european?

    Man Verhofstadt, The Ecu Parliament’s Brexit co-ordinator, said any ideas EUROPEAN nationals have been given preferential treatment had been incorrect seeing that they had been simply “workout rights which equipped freedom and possibilities”.

    Image Copyright @guyverhofstadt @guyverhofstadt

    Document

    Twitter post by @guyverhofstadt: EU citizens living, working, contributing to UK communities didn't Symbol Copyright @guyverhofstadt @guyverhofstadt

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    Michel Barnier, the eu’s leader Brexit negotiator, called on all events to “remain calm” and deal with the longer term agreement.

    Speaking at a press conference in Brussels after meeting the 27 different EU member states, he said the withdrawal deal was once “truthful and balanced” however made clear a transition length extension couldn’t be indefinite, “it has to be a set duration of time”.

    During Monday’s assembly, the Spanish govt raised issues approximately articles within the withdrawal settlement (184 and three), announcing that taken together they upload as much as Gibraltar remaining completely as UK territory.

    The BBC’s Brussels reporter Adam Fleming says such a lot member states, in conjunction with The European Commission and The European Council, do not consider Madrid’s studying of the textual content and are trying to find to offer reassurance.

    (more…)

  • Italy price range ‘sleepwalking into instability’ – Fee

    File photo: Italy's Deputy Prime Minister Luigi Di Maio, Prime Minister Giuseppe Conte, and Deputy Prime Minister Matteo Salvini, all confer during a press conference Symbol copyright AFP Symbol caption Italy’s PM Giuseppe Conte and his deputies are dealing with power from Brussels

    The Eu Commission has taken the first step towards sanctioning Italy over its nationwide funds in an ongoing row over the country’s finances.

    In October, the european executive frame rejected Italy’s draft finances and informed it to make adjustments – an extraordinary event in Eu politics.

    Italy, on the other hand, mentioned it could persist with its top-spending goals.

    On Wednesday, the Fee mentioned formal proceedings that might deliver financial sanctions were “warranted”.

    Its record mentioned a “particularly critical non-compliance with the monetary recommendation for 2019”, and Commission Vice-President Valdis Dombrovskis stated: “With what the Italian govt has put on the desk, we see a possibility of the rustic sleepwalking into instability.”

    He mentioned that the european’s disciplinary degree known as “over the top deficit procedure” (EDP) was now appropriate.

    Italy’s populist-led govt had already been told by the Commission to revise its price range, because of the prime level of national debt, which eurozone officials fear may cause instability for all the bloc.

    But the Rome govt didn’t make vital changes, putting the rustic on a collision course with Brussels.

    Italy’s populists agree new budget Italy defies ECU demand to cut budget EU rejects debt-hit Italy’s budget

    Underneath the foundations of the sanction procedure, doable consequences come with an outstanding of 0.2% of GDP – which for Italy’s economic system could price billions of euros – and a halt on the fee of any development funds.

    However, the method could take a long time, and Mr Dombrovskis said he was once still open to talks with Italy on the best way to deal with the disagreement.

    Italy’s deputy prime minister, Matteo Salvini, advised journalists he remained convinced about his executive’s budget plans. High Minister Giuseppe Conte stated he might meet Commission President Jean-Claude Juncker on Saturday to highlight the price range’s “solidity and effectiveness”.

    How did we get here?

    Italy’s present executive took place of business in June 2018 and is a coalition of the anti-established order 5 Star Movement and proper-wing League.

    Widely noticed as a populist coalition, the first national finances of latest government was once hammered out in September,

    The Problem for EUROPEAN officers used to be its high value for a country facing huge debts. the government deliberate to rack up the cheap deficit of 2.4% of GDP to finance its plans.

    The Fee had hoped for a lower funds cost because the previous government’s plans had been for a 0.8% deficit.

    Click to look content material: debt_ratios_Europe

    Italy is the third-largest financial system in the eurozone, but has more than two trillion euros in debt – that is 131% of the country’s entire economic output.

    To positioned that during context, it’s 2d simplest to Greece (178%), and much upper than the united kingdom (88%) or Germany (64.1%). The debt is comparable to about €37,000 for each individual in Italy.

    the federal government argues that further investment is needed to kick-start the slow Italian economic system, which has still no longer recovered from the financial challenge of a decade ago.

    Italy’s facts company Istat forecast on Wednesday that the economic system might grow by way of 1.3% in 2019, and 1.1% in 2018.

    While it said the price range could assist spice up call for in the Italian economic system, its 2019 estimate is beneath the executive’s figure of 1.5%.

    Shortly before the League-Five Star govt got here to energy, Istat forecast a enlargement determine of 1.4% for 2018, and it mentioned on Wednesday that enlargement was once slowing when compared with 2017.

    Why is Italy’s price range so dear?

    Italy’s executive hailed the funds as person who could “finish poverty”.

    The draft funds incorporated the fulfilment of election promises, equivalent to reversing plans to raise the retirement age and a guaranteed basic income of €780 (£700; $890) for bad households. Those two plans alone had been expected to overall approximately 0.7% of Italy’s GDP.

    It also incorporated tax cuts and reforms.

    Recent bad climate in Italy has also brought major infrastructure initiatives to the executive’s priorities – together with the aftermath of the Genoa bridge collapse in August, which raised issues over the country’s ageing public works.

  • 1/2 school training charges spent on teaching

    student Symbol copyright Getty Photographs

    Lower Than half the schooling charge paid by students in England will also be spent at the cost of teaching, says research from a college think tank.

    The Upper Training Coverage Institute says the rest is spent on buildings, IT and libraries, management, or welfare such as psychological health support.

    It comes as a review is scrutinising the associated fee of scholar charges and loans.

    A separate public spending watchdog record warns that the sale of student loans is providing terrible worth.

    The Public Bills Committee says that student loans with a face worth of £3.5bn were offered remaining 12 months to non-public buyers for £1.7bn – with MPs unconvinced this used to be a fair deal for taxpayers.

    Image copyright PA

    There have been tips that the evaluate is calling at cutting fees to £6,500 – raising questions on the price of turning in courses.

    Both university reports from the higher Training Policy Institute and the general public Money Owed Committee examine whether scholars and taxpayers are becoming worth for money.

    How is the schooling price spent?

    The suppose tank record says that universities might best spend FORTY FIVE% of lessons rate income on educating – with the remaining spent on other services or management.

    Students need to be given much more information about how their price is getting used, says the study.

    A breakdown from Nottingham Trent per student confirmed:

    39% spent on academic group of workers, course equipment and group of workers-similar costs 36% spent on buildings, libraries, IT, sports, careers, admissions, workforce, administration and widening get admission to to poorer applicants 17% invested in “enhancing instructing, analysis infrastructure and the student experience” 8% spent on professional services, including advertising and marketing, finance and the vice-chancellor’s pay

    The analysis also shows that universities can have very other ranges of dependency on the current £9,250 annual lessons charges.

    Training charges had been only 15% of source of revenue for Cambridge, but at Falmouth it was EIGHTY THREE% and Nottingham Trent was once EIGHTY ONE%.

    This puts financial pressure on universities to recruit – and closing week it was once found out that a college had to be bailed out with an emergency loan.

    Image copyright Alamy

    “Tuition fees were offered twenty years in the past and so they had been tripled two times. Ministers and regulators have many times demanded data on the place the charges pass. Yet there’s nonetheless little knowledge available,” says the institute’s director, Nick Hillman.

    The Place Of Business for college students said: “we will identify and will act after they aren’t clear about worth for money or aren’t handing over robust enough outcomes for college kids or taxpayers.”

    Who earnings from selling the student mortgage e book?

    A report from the general public Bills Committee warns that the taxpayer have to be getting a greater deal when the federal government sells off pupil loans to private traders.

    Last 12 months, it says the government handiest gained a go back of 48p within the pound – in the deal in which £3.5bn of pupil debt was sold for £1.7bn.

    The MPs realize that the whole value is not going to be acquired, because such a lot of scholars are unlikely to pay back all that they’ve borrowed.

    “on this case, executive won too little in go back for what it gave up,” says the committee.

    The committee, which oversees govt spending, says it is “no longer sure” by means of causes for the pricing of those public assets.

    It additionally calls for more transparency concerning the investors profiting from the sale.

    “the general public merits to grasp who stands to achieve from the sale of public assets,” says committee chair, Meg Hillier.

    Labour’s Angela Rayner described it as “ripping off the taxpayer”.

    However a spokeswoman for the dept for Education said: “we’re assured that we accomplished value for cash for taxpayers from the first sale of pupil loans.

    “as the Nationwide Audit Place Of Job has discovered, we gained extra for the loans than the value to govt of maintaining them, additional strengthening the general public price range.”

    However she mentioned the device was once designed on the basis that “many scholars will never fully pay again their loans”.

  • Government borrowing worse than expected in October

    Money Image copyright Getty Photographs

    The Federal Government borrowed way more than analysts expected in October, the first figures to be revealed for the reason that Philip Hammond’s Budget remaining month show.

    The deficit rose to £8.8bn from £7.2bn final 12 months, marking the most important October figure for three years, and well above the £6.1bn forecast.

    However, the quantity borrowed up to now this monetary yr is the lowest for THIRTEEN years.

    The figures come after the chancellor stated austerity used to be coming to an finish.

    The Place Of Business for National Records mentioned the current year-to-date borrowing was £26.7bn, that’s £11.2bn lower than the similar length last year and the bottom on the grounds that 2005.

    Hobby payments on executive debt additionally greater.

    “the rise in borrowing in comparison to ultimate 12 months used to be as a result of a £2.2bn upward push in “different” (in all probability departmental) spending,” stated Andrew Wishart, UK economist at Capital Economics.

    Should we be concerned?

    Mr Wishart said the October figures may well be a “being worried signal for the Chancellor” if the rage continued.

    Samuel Tombs, chief UK economist at Pantheon Macroeconomics, mentioned it used to be to soon to finish that the Chancellor could miss the legit forecast for borrowing this 12 months.

    He points out that the data will likely be revised and “the Chancellor won’t want to respond to a modest overshoot”.

    What about Brexit?

    The Nature of the UK’s exit from the european Union, is likely to have an have an effect on on the nation’s price range.

    In October, the Chancellor mentioned that a just right Brexit agreement would permit the Treasury to spend a “double deal dividend”.

    However, a no deal situation may just dissatisfied govt spending plans, economists say.

    “If there’s a no deal Brexit, the ensuing financial slowdown would almost definitely cause the general public funds to deteriorate additional,” Mr Wishart mentioned.

  • Brexit: Draft agreement on future dating right for UK, says May

    However The govt insists the united kingdom’s “crimson strains” on fishing had been secure, and the text acknowledges the united kingdom might be “an impartial coastal state” with the rights and obligations that entails.

    A executive source stated the eu had sought after “existing reciprocal get admission to to fishing waters and resources to be maintained” however this were rejected.

    Put Up-Brexit who will lead Europe? The withdrawal settlement – what it all way DUP-Tory deal no longer dead, says Foster

    The SNP’s leader at Westminster, Ian Blackford, said Scotland’s fishing rights had been “thrown overboard like they have been discarded fish”, including, “so much for taking back regulate, more like trading away Scotland’s pursuits”.

    And Sammy Wilson, Brexit spokesman for the DUP, which has been in a trust-and-supply agreement with the government, stated the “non-binding aspirational settlement” were drafted to “assist the prime minister, instead of mitigate the very damaging and dangerous draft withdrawal agreement”.

    Several ECU international locations have raised issues approximately Mrs May’s deliberate assembly with Mr Juncker on Saturday night time, pronouncing that it’s going to not lead to any adjustments within the textual content.

    Germany has reiterated that Angela Merkel wouldn’t attend Sunday’s meeting if the text has no longer been agreed in advance.

    Separately, EU diplomats have stated the Spanish executive “sees the making of a compromise” at the factor of Gibraltar.

    (more…)

  • Brexit: Why markets would possibly not bail out the PM’s deal

    Ben Bernanke, George W. Bush, Hank Paulson and Christopher Cox address the US in the week after the collapse of Lehman Brothers Symbol copyright Getty Images

    Financial markets have had a slightly unhealthy Brexit. they’ve taken solace in the fallacious issues and freaked out at ephemera. But there may be so much of talk on the moment that their conniptions might help be sure that Parliament passes Theresa Would Possibly’s withdrawal settlement.

    This is understood as the ‘Tarp’ state of affairs – a reference to the u.s. executive’s so-called Bothered Asset Aid Programme.

    In September 2008, the week that Lehman Brothers collapsed, Hank Paulson, the united states Treasury Secretary, asked a $700bn fund from Congress to fight the banking main issue – a fund to take care of “the illiquid property that are weighing down our economic system and perilous our economy”.

    In Short: he wanted $700bn to assist clean out the financial system and prevent the u.s. economy going into a out of control credit contraction that might cause an financial disaster.

    While he presented the initial draft, it was more or much less a request for blank cheque.

    Perhaps unsurprisingly, the u.s. House of Representatives grew to become him down – 228 votes to 205. Two-thirds of Republican contributors of congress voted by contrast thought from a Republican treasury secretary.

    The Dow Jones stock index fell 7%, its biggest-ever one-day fall.

    Confronted with that market disruption, 33 Republicans and 24 Democrats switched facets and the measure handed in a while afterwards.

    The Tarp situation in Westminster

    The Tarp scenario for Brexit that is circulating in Westminster is that MPs may vote down the regulation first time round. No Doubt, on the moment, it is hard to peer a path for it. However, the scenario is going, if there is a vicious monetary marketplace response, MPs will be cowed into balloting the withdrawal agreement through.

    There are, then again, a number of problems right here:

    First, the us is extra politically delicate to stock indices than we’re. And, even then, the case for voting the law through was once bolstered through a negative set of labour drive statistics that emerged between the first and second votes – the worst upward push in unemployment in 5 years. 2D, it is uncertain what marketplace response could shock MPs enough to modify their minds. so much of MPs get muddled approximately what to make of the converting price of government debt. And That I am doubtful whether our MPs may bear in mind what a large transfer – even a fifteen consistent with cent drop in the price of sterling, say – would mean or how they might react. it is simply now not in our political discourse. 3Rd, from the beginning to the tip of the method, the Tarp law ballooned from three pages to 450. there were tax breaks folded into the bill to buy off individual legislators. Our Parliament’s laws on amending regulation make it harder to add ‘pork’ to bills – but that still makes it much tougher to buy off individual MPs. Fourth, there was also a presidential election taking place and the 2 applicants – Barack Obama and John McCain – each supported the deal. The powers of patronage all went a method. The parties’ current and long term leaders all supported the plan. However it is unclear that anybody top any birthday party within the following couple of years will toughen this plan except Theresa Might. 5Th, if markets be expecting a loss on a primary vote, and anticipate it passing on a 2nd vote, these marketplace reactions might not happen whilst they are useful for parliamentary arithmetic. reckoning on Tarp makes it not likely to occur.

    This consequence remains to be conceivable and manageable – especially if one knows the Tarp scenario less actually.

    in the event you redefine it to a broader notion approximately how MPs might get freaked out through a few information at a few point and vote to accept no matter what deal is obtainable to them, then it becomes much more most likely.

    But perhaps it will be some news from Nissan or Airbus as opposed to the markets. Possibly it would possibly not be financial news at all. and maybe it’ll come while the deal had seemed lifeless in a couple of weeks time, now not between the primary and 2d votes.

    You can watch Newsnight on BBC 2 weekdays 22:30 or on iPlayer. join the programme on YouTube or practice them on Twitter.

  • U.S. stocks jump after two days of sharp losses; tech leads

    U.S. stocks are climbing Friday after two days of sharp losses as market favorites like Apple lead the way higher. Major indexes are up more than 1 percent, but they’re still on track for their bigges

    NEW YORK (AP) — U.S. stocks are climbing Friday after two days of sharp losses as market favorites like Apple lead the way higher. Major indexes are up more than 1 percent, but they’re still on track for their biggest one-week loss since late March.

    Technology companies recovered after taking some hard hits over the last two days. Apple climbed 2.9 percent to $220.71 and Microsoft gained 2.8 percent to $108.83. Consumer-focused companies also rallied, as Amazon jumped 4.1 percent to $1,789 and Netflix surged 5.5 percent to $338.74.

    The S&P 500 index climbed 36 points, or 1.4 percent, to 2,765 at 11:20 a.m. Eastern time. The benchmark index tumbled 5.3 percent over the past two days and as of Thursday it had fallen for six consecutive days. The S&P is down 5.6 percent since from its latest record high, set Sept. 20.

    The Dow Jones Industrial Average jumped 278 points, or 1.1 percent, to 25,330. The Nasdaq composite surged 149 points, or 2 percent, to 7,478. The Russell 2000 index gained 10 points, or 0.7 percent, to 1,555. That index, which is made up of smaller and more U.S.-focused companies, has fallen into a 10-percent “correction” since reaching a record high at the end of August.

    On the New York Stock Exchange, winners outnumbered losers by nearly three to one.

    The market’s recent losing streak started when strong economic data and positive comments from Federal Reserve Chair Jerome Powell helped set off a wave of selling in the bond market. Investors dumped bonds as they bet that the U.S. economy would keep growing at a healthy pace. The sales pushed bond prices lower and yields to seven-year highs.

    That drove interest rates sharply higher, which worried investors who felt that a big increase in interest rates could eventually stifle economic growth. Higher yields also make bonds more appealing to investors versus stocks.

    The most startling declines this week came from companies that have done very well recently, including technology companies and retailers. On Wednesday the three most valuable U.S. companies, Apple, Microsoft and Amazon, each took their biggest loss in more than two years. It was a dramatic end to three months of calm on the U.S. market.

    Several other groups of stocks that have struggled this year are now in a “correction,” a drop of at least 10 percent from a recent peak. They include basic materials makers, internet companies, banks and household goods makers.

    Bond prices turned lower as the stock market stabilized. The yield on the 10-year Treasury note rose to 3.15 percent from 3.13 percent.

    U.S. automakers Ford and General Motors continued to slump. GM shed 0.4 percent to $32.19, its lowest in almost two years, and Ford dipped 0.1 percent to $8.81, its lowest in almost nine years. Both have fallen more than 20 percent this year as the Trump administration’s tariffs on steel and aluminum send their manufacturing costs higher.

    The stocks have fallen further in recent days following reports Ford might cut jobs. In late September, Ford CEO Jim Hackett said the steel and aluminum duties would cost the company $1 billion through 2019.

    Stocks in Europe were little changed. The French CAC 40 rose 0.1 percent and the DAX in Germany slipped 0.1 percent, while Britain’s FTSE 100 was little changed. Asian stocks climbed. Japan’s Nikkei 225 index gained 0.5 percent after sinking early in the day and following a nearly 4 percent loss on Thursday. Hong Kong’s Hang Seng surged 2.1 percent and the Kospi in South Korea rose 1.5 percent.

    High-dividend stocks including utilities, real estate investment trusts and household goods traded lower or rose less than the rest of the market. Those stocks held up a bit better than the S&P 500 over the last six days. Investors view them as relatively safe, steady assets that look better when growth is uncertain and the rest of the market is in turmoil.

    U.S. crude oil added 1 percent to $71.69 a barrel in in New York. Brent crude, the international standard, inched up 0.1 percent to $80.31 a barrel in London.

    The dollar rose to 112.14 yen from 111.94 yen. The euro fell to $1.1558 from $1.1594.

    ____

    Associated Press Writer Annabelle Liang contributed from Singapore.

  • Turkey raises interest rates to 24% in new bid to boost lira

    Turkish lira Image copyright Getty Images

    The lira has risen against the dollar after Turkey’s central bank hiked interest rates to 24% on Thursday – the biggest increase in President Tayyip Erdogan’s 15-year rule.

    The hefty 6.25 percentage point rise is the bank’s latest attempt to stem the currency’s collapse.

    The lira is down 38% against the dollar this year despite Thursday’s slim gain.

    The move came despite Mr Erdogan repeating his opposition to high interest rates earlier in the day.

    He has repeatedly blamed the central bank for high inflation, which hit almost 18% last month, its highest level since 2003.

    Image copyright Getty Images Image caption President Erdogan has blamed Turkey’s central bank for high inflation

    Phoenix Kalen at Societe Generale said the market was both pleased and confused by the bank’s move.

    “It almost seems like it’s a game of ‘good cop, bad cop’ being played out between the Turkish authorities – with President Erdogan on the one hand still making statements regarding his dislike of interest rates and… a very sizeable reaction from the central bank in response to the recent inflationary and geopolitical developments,” she said.

    Brett Diment at Aberdeen Standard Investments said raising rates would put “Turkey on the slow road to recovering some monetary policy credibility, and that is critical”.

    Piotr Matys at Rabobank said Turkey also needed to resolve its trade dispute with the US and rebalance the economy away from big infrastructure projects and consumer spending.

    The central bank surprised investors by not raising rates when it last met in July.

    That decision sent the lira tumbling by a quarter and prompted Turkish authorities to impose a series of measures intended to support the currency.

    On Thursday Turkey banned the use of foreign currencies in the country’s property market.

  • Turkey bans use of foreign currency in property market

    Turkish President Recep Tayyip Erdogan gives a speech at Grand Ankara Hotel, Turkey, 13 September 2018 Image copyright Getty Images Image caption Mr Erdogan has said that only exporters and importers should deal in foreign currency

    Turkey is banning the use of foreign currencies in the country’s property market as it looks to stem the dramatic fall of its own currency, the lira.

    President Recep Tayyip Erdogan issued a decree on Thursday announcing that contracts for sales, rent and leasing must in future be made in lira.

    Mr Erdogan has previously urged Turks to sell their dollars and euros.

    The move came as Turkey’s central bank increased interest rates sharply in an attempt to curb the tumbling lira.

    The currency has lost almost a third of its value against the dollar since January.

    Thursday’s decree, which was published in the government’s official gazette, said all current agreements in the property sector made in foreign currencies must be changed within 30 days.

    Rental and sale agreements in Turkey are often offered in euros and dollars to foreigners living in the country.

    However, the property and construction market has become a concern for investors worried that Turkish companies that borrowed heavily to profit from a boom may struggle to repay loans in foreign currencies, as the weakened lira means there is now more to pay back.

    Turkey’s lira crisis explained Is Turkey heading for an economic crisis?

    In a speech to a traders’ confederation in the capital, Ankara, Mr Erdogan said on Thursday that nobody should carry out business in foreign currency apart from exporters and importers.

    He also criticised Turkey’s central bank, accusing it of failing to control inflation and urging it to cut interest rates just hours ahead of its announcement that it was raising rates to 24%.

    “As of today I have not seen the central bank fix inflation rates as they promised,” Mr Erdogan said.

    “Interest rates are the cause, inflation is the result. If you say ‘inflation is cause, the rate is the result’, you do not know this business, friend,” he added.

    Turkey’s lira jumped sharply following news of the rate increase.

    Ordinary Turks unmoved as business fears ‘calamity’

    By BBC Monitoring

    The new decree received limited attention from people in Turkey as most property sold or rented in foreign currency tends to be either commercial or high-end.

    Social media users commented that even if contracts were to change on paper, people who have valuable property would continue to receive their rent in dollars. Those who cannot “were renting out in Turkish liras anyway”, one said.

    Critics of the government called on the authorities to apply the new rule to its own agreements too.

    The changes are expected to affect mostly businesses, and many retailers have previously criticised the dollar-based rent policy in shopping centres, where it has been blamed for the bankruptcy of at least one major company. Shopping centre managers, however, say the change could be dangerous as it could be costly to repay bank loans taken out in dollars.

    Car rental companies, who would also be affected by the decree, are “in shock”, according to Turkish news website Dünya. A representative from the industry was quoted as saying that the move could “drive the industry to calamity”.

    Last month, Turkey’s weak currency received a small boost after Mr Erdogan raised tariffs on US imports including cars, alcohol and tobacco.

    The US earlier hit Turkey with tariffs on items such as steel and aluminium in an effort to increase pressure on the country to free the detained American pastor Andrew Brunson.

    Mr Brunson has been held for almost two years because of his alleged links to political groups that are outlawed in Turkey, which accuses the US of trying to bring it “to its knees” over the administration’s demands.

    US-Turkey row: Pastor a ‘pawn in personal feud’

    The fall in the value of the lira in recent months has pushed up the price of everyday items in Turkey and raised fears the country is sliding into an economic crisis.

    Experts have also warned that its weakness could infect other emerging market currencies.