World

A British cabinet member admitted Friday “I don’t know where Boris is” as the prime minister checked out on holiday, in a week that saw the Bank of England warn a year-long recession is coming.

Boris Johnson has since Wednesday been on a belated honeymoon with wife Carrie, according to Downing Street.

Aides said he still remained at the helm, rather than handing over temporarily to Deputy Prime Minister Dominic Raab, but refused to confirm the honeymoon destination. 

The UK embassy in Ljubljana confirmed that Johnson was on a private visit to Slovenia.

Johnson will have a lot more time on his hands after September 6, when he is due to hand over to either Liz Truss or Rishi Sunak as Conservative leader, but decided to take a break sooner.

Chancellor of the Exchequer Nadhim Zahawi is also on holiday this week, and the opposition Labour party accused the government’s two senior-most members of being “missing in action”.

“I don’t know where Boris is, but I’m in constant contact with him,” Business Secretary and Truss supporter Kwasi Kwarteng told Times Radio. 

He said he exchanges WhatsApp messages with both Johnson and Zahawi “all the time”, and insisted that criticism the government was doing nothing about the economic crisis was “false”.

Zahawi said he had remained in touch with Bank of England governor Andrew Bailey on Thursday after the central bank hiked interest rates from 1.25 to 1.75 percent, the biggest rise in 27 years.

The bank is trying to rein in surging inflation, which it warned could peak at 13.3 percent, as it forecast the UK economy would enter a recession in the fourth quarter that will last until late 2023.

“For me, like I’m sure lots of others, there is no such thing as a holiday and not working. I never had that in the private sector, not in government,” Zahawi said in a statement.

– ‘Magical solutions’ –

Foreign Secretary Truss and Sunak, Zahawi’s predecessor as chancellor, clashed anew over how to address the crisis in a televised debate late Thursday.

“The reality is we’re facing a recession if we carry on with our business-as-usual policies,” Truss, who is leading in surveys of Tory members, told reporters on Friday.

She plans an emergency budget to lower taxes immediately to combat the cost-of-living crisis, and to review the independent Bank of England’s inflation-fighting mandate.

But Sunak said tax cuts financed with more borrowing would force the bank to increase interest rates even more, insisting on the need to maintain fiscal rigour and tame the price pressures first.

Former cabinet minister Liam Fox, who supports Sunak, warned against “magical solutions” via debt-financed tax cuts as proposed by Truss.

The two candidates were due later Friday to host another hustings event in front of Tory members, who have until September 2 to vote. 

At Thursday’s Sky News debate, Truss was forced on the back foot after the moderator highlighted her shifting stances over the years, including a major policy U-turn this week on pay for public-sector workers.

But Sunak also faced embarrassment after video emerged of him telling grassroots Tories in wealthy Kent last week that, as chancellor, he had diverted government funds away from “deprived urban areas”.

His campaign said that in the video, obtained Friday by the New Statesman magazine, Sunak had merely stressed the need to shift the focus of government help to other towns and rural areas.

But senior Labour MP Lisa Nandy said: “This leadership race is revealing the Conservatives’ true colours. 

“It’s scandalous that Rishi Sunak is openly boasting that he fixed the rules to funnel taxpayers’ money to prosperous Tory shires.”

The US jobs market grew much faster than expected in July, lifting employment back to pre-pandemic levels, in news welcomed by President Joe Biden as he faces tough midterm elections — but which also fuels concerns over sky-high inflation.

Even the White House had predicted job gains would slow last month, which Biden had said was part of the natural downshift after the rapid rebound of the world’s largest economy from the pandemic downturn.

Instead, US job growth jumped in July, as the economy added a surprising 528,000 positions, more than double what economists were expecting, according to official data released Friday. That took the jobless rate back to the pre-pandemic level of February 2020.

“Today, the unemployment rate matches the lowest it’s been in more than 50 years: 3.5 percent,” Biden said in a statement.

“More people are working than at any point in American history… there’s more work to do, but today’s jobs report shows we are making significant progress for working families.”

On top of the hiring surge last month, the Labor Department report said the outsized job gain in June was revised higher, as was May, adding a total 28,000 positions to the initial data.

Other recent US economic data has stoked recession fears, but White House Press Secretary Karine Jean-Pierre called Friday’s employment report “one of the many economic indicators (that) shows us that we are not in a recession, that we are in a transition.”

Meanwhile, the closely watched report showed wages jumped in July — with average hourly earnings up 15 cents from June — stoking concerns about a possible wage-price spiral. Over the past 12 months, average hourly earnings have increased by 5.2 percent.

That’s good for families struggling to make ends meet as they face soaring prices for groceries and gas, but could drive firms to raise prices further.

With inflation topping nine percent, the highest in more than 40 years, the Federal Reserve has been raising interest rates aggressively to cool the economy, and economists now say a third consecutive three-quarter-point hike is likely in September.

Biden, in remarks at the White House, acknowledged “how hard it is to feel good about job creation when you already have a job and you’re dealing with rising prices, food, gas and so much more.”

The US president called for passage of his health and climate investment bill that has picked up momentum on Capitol Hill in recent days, calling it “a game changer for working families and our economy.”

– ‘Wow’ –

After recent data showed GDP contracted for the second consecutive quarter — causing many to say the economy is in recession — US stocks had been gaining ground due to investor optimism that the Fed would be able to dial back its inflation-fighting efforts.

But Wall Street opened lower following the jobs report and struggled throughout the session to shake early losses amid concerns about coming rate hikes.

With the latest increase, total non-farm employment recovered to its pre-pandemic level, the data showed, and hiring topped 430,000 in the past three months.

KPMG economist Diane Swonk’s initial reaction: “Wow.”

“This report pushes the Fed towards a 75 basis point move AGAIN in September,” she said on Twitter.

From zero at the start of the year, the Fed has raised the benchmark borrowing rate four times, and pledged to continue its war on inflation.

And central bankers this week have made it clear that investor optimism about a possible downshift was misplaced.

“Recession is now less of a worry. Inflation is more of a worry,” Harvard economist Jason Furman tweeted. “The Fed will likely need to do more.”

The central bank will get another employment report and multiple inflation reports before its next policy meeting in mid-September.

While employers for months have been struggling to find workers — with nearly two open positions for every unemployed person in the work force — job gains have continued.

Hiring was robust in leisure and hospitality and health care, which each adding 96,000 or more in july, while manufacturing and construction gained at least 32,000.

Builders in particular have been under pressure as the struggle to meet high demand for construction, especially homes, but employment in the sector is now back to its pre-pandemic level, the report said.

But there were signs of strains as well. The number of people working part time for economic reasons, which dropped sharply in June, rebounded in July. And a growing number of workers are taking on second jobs, including 403,000 with two full-time positions.

The share of people in the labor force has been stuck at around 62 percent, and some economists are pointing to the impact of long-Covid, which is keeping potential workers on the sidelines.

Kathryn Bach of the Brookings Institution said she believes there could be as many as four million people prevented from working due to the effects of Covid-19.

Elon Musk has accused Twitter of fraud, alleging the social media platform misled him about key aspects of its business before he agreed to a $44 billion buyout, as their court fight heats up.

The Tesla boss lodged the claim as he fights back against Twitter’s lawsuit seeking to force him to close the deal, which he has tried to cancel.

Musk argued in the filing to a Delaware court that the number of users actually shown advertising on the platform is about 65 million lower than the firm’s 238 million figure.

“Twitter’s disclosures have slowly unraveled, with Twitter frantically closing the gates on information in a desperate bid to prevent the Musk Parties from uncovering its fraud,” the claim alleged.

Musk is asking the court to free him from the agreement and make Twitter pay him an amount in damages to be determined at trial, which set to open on October 17.

Billions of dollars are at stake, but so is the future of Twitter, which Musk has said should allow any legal speech — an absolutist position that has sparked fears the network could be used to incite violence.

In its own filing, Twitter rejected the mercurial billionaire’s argument, calling it “as implausible and contrary to fact as it sounds.”

“According to Musk, he — the billionaire founder of multiple companies, advised by Wall Street bankers and lawyers — was hoodwinked by Twitter into signing a $44 billion merger agreement,” Twitter said.

Musk last week filed his countersuit, which was finally made public on Thursday.

The entrepreneur accused Twitter of not just deceiving him, but also of lying to US market regulators.

Musk relied on Twitter’s filings to the Securities and Exchange Commission because he thought doing his own diligence — digging into the company’s value — “costly and inefficient”, his court claim said.

Analyst Dan Ives said the social media platform’s share price gave a clear idea of how investors think the fight will end.

“The countersuit Musk filed against Twitter raised some interesting points, however legally speaking the Street views this more of a sign of weakness than strength for Musk,” he told AFP.

Twitter shares closed up 3.5 percent at $42.52 on Friday, while Tesla shares ended down more than 6.5 percent.

– ‘Twitter has complied in every respect’ –

The legal fight is gathering speed as preparations have begun for the five-day trial in Delaware’s Chancery Court, which specializes in complex, high-stakes business world battles.

This battle flows from Musk wooing Twitter’s board with a $54.20 per-share offer in April, but then in July announcing he was terminating their agreement because the firm had misled him regarding its tally of fake and spam accounts.

Twitter has stuck by its estimates that bots make up fewer than five percent of users.

The social media platform told the court that Musk’s claim that the false account figure tops 10 percent is “untenable.”

Twitter also disputed Musk’s assertion he has the right to walk away if its bot count is found to be wrong, since he didn’t seek information on that topic when he made the buyout offer.

The company accuses Musk of contriving a story to escape a merger agreement that he no longer found attractive.

“Twitter has complied in every respect with the merger agreement,” the company said in a court filing.

“Musk’s counterclaims, based as they are on distortion, misrepresentation, and outright deception, change nothing.”

The social media platform has urged shareholders to endorse the deal, setting a vote on the merger for September 13.

While fielding questions at an annual Tesla shareholders meeting Thursday, Musk was asked whether his potential ownership of Twitter might distract from his running of the electric car company.

“I think Tesla, you know, would continue to do very well even if I was kidnapped by aliens, or went back to my home planet,” he joked, drawing laughter and applause. 

“To be frank, I don’t have an easy answer,” Musk added.

He assured shareholders that, for now, he has no plans to leave his Tesla chief role.

Stock markets mostly fell Friday as a much stronger-than-expected US jobs report raised the prospect that the Federal Reserve will maintain its aggressive monetary policy to combat inflation.

Official data published Friday showed the US economy added 528,000 positions, defying all expectations of a slowdown.

Friday’s data also showed US wages jumped, which will add to inflation concerns and likely push the Fed to raise rates aggressively again next month.

The Fed has previously said its decision will be guided by data.

Markets fell after the “absolutely monster” jobs report leaves “the Fed with all the ammo it needs to keep on hiking a lot more,” Markets.com analyst Neil Wilson told AFP.

But after tumbling decisively just after the data, Wall Street equities later came back somewhat, lifting the Dow into positive territory by the session’s end and lessening losses on the other two indices.

“Stocks really did hold up today all things considered, given the perspective going into the report,” said Briefing.com analyst Patrick O’Hare, who added that investors may have interpreted the data as showing the economy can withstand the Fed’s actions.

The broad-based S&P 500 finished at 4,145.19, down 0.2 percent for the day but up 0.3 percent for the week.

The dollar also rallied on the US jobs report.

In Europe, London equities ended the day down 0.1 percent one day after the Bank of England unveiled a half-point interest rate hike and forecast UK inflation topping 13 percent on surging domestic energy bills.

The BoE’s rate increase followed more aggressive monetary policy from the European Central Bank and the Fed as authorities crack down on rampant inflation in the wake of Russia’s invasion of Ukraine.

Back in the eurozone, Frankfurt stocks shed 0.7 percent and Paris declined 0.6 percent at the close of trading.

– ‘Stagflation awaits’ –

“The dire warnings from the BoE are impossible to ignore as other central banks desperately try to avoid a similar fate,” OANDA analyst Craig Erlam told AFP.

“It seems only a matter of time until others are forced to accept that a recession is the price to pay for getting inflation under control.”

He added: “A period of stagflation now awaits the UK — and others may not be far behind as the crushing impact of energy prices wreaks havoc on living standards and saps demand.”

Stagflation is a toxic mixture of stubbornly high consumer prices and low economic growth.

– Key figures at around 2030 GMT –

New York – Dow: UP 0.2 percent at 32,803.47 (close)

New York – S&P 500: DOWN 0.2 percent at 4,145.19 (close)

New York – Nasdaq: DOWN 0.5 percent at 12,657.55 (close)

London – FTSE 100: DOWN 0.1 percent at 7,439.74 (close)

Frankfurt – DAX: DOWN 0.7 percent at 13,573.93 (close)

Paris – CAC 40: DOWN 0.6 percent at 6,472.35 (close)

EURO STOXX 50: DOWN 0.8 percent at 3,725.39 (close)

Tokyo – Nikkei 225: UP 0.9 percent at 28,175.87 (close)

Hong Kong – Hang Seng Index: UP 0.1 percent at 20,201.94 (close)

Shanghai – Composite: UP 1.2 percent at 3,227.03 (close)

Euro/dollar: DOWN at $1.0184 from $1.0246 Thursday

Pound/dollar: DOWN at $1.2075 from $1.2160

Euro/pound: UP at 84.32 pence from 84.26 pence

Dollar/yen: UP at 135.00 yen from 132.89 yen

Brent North Sea crude: UP 0.8 percent at $94.92 per barrel

West Texas Intermediate: UP 0.5 percent at $89.01 per barrel

burs-jmb/sw

Relatives of 10 workers trapped in a flooded coal mine in northern Mexico clung to hope they were still alive Friday, more than 48 hours after a cave-in sparked a major rescue operation.

Family members spent a second night waiting anxiously for news after the latest disaster to strike Mexico’s main coal-producing region in Coahuila state.

“I feel desperate, not knowing what’s happening and when I’ll see him again,” said Jesus Mireles Romo, whose father was among the missing.

“But I have faith that it will turn out well, that they will all get out,” he told AFP, his eyes red from crying.

The 24-year-old rushed to the mine in Agujita in the municipality of Sabinas with his two brothers on Wednesday to try to help the victims before the authorities took over, and has not left since.

“It’s painful to see your children who don’t lose hope of seeing their father again,” said his mother Claudia Romo, 45.

Five miners managed to escape in the initial aftermath of the cave-in Wednesday, but since then no survivors have been found.

More than 300 soldiers and other personnel joined the rescue effort unfolding about 1,130 kilometers (700 miles) north of Mexico City, the government said.

– ‘Working tirelessly’ –

Soldiers and emergency workers labored through the night under floodlights pumping out water from the mine to try to make it safe enough to enter.

Authorities said the three mine shafts descended 60 meters (200 feet) and the floodwater inside was 30 meters deep — slightly lower than the day before.

“It’s essential to reduce the water level… to allow the safe entry of specialized search and rescue personnel,” civil defense national coordinator Laura Velazquez said.

“We’re working tirelessly to rescue the 10 trapped miners,” she said.

Family members cried and comforted each other while hopes of finding survivors dimmed with each passing hour.

“What we want is for them to retrieve the bodies,” Angelica Montelongo said with a sad and tired look, before summoning up new hope that her brother Jaime would be rescued.

“But hey, God willing, right? You have to have faith that they’re alive,” she said.

Miners and their relatives painted a picture of a precarious profession fraught with risks due to lax safety standards.

“When everything’s fine, you don’t think about the danger, but when things happen you think about quitting,” said Luis Armando Ontiveros.

However, looking for a new job does not seem like a viable option for the 48-year-old, whose father taught him to dig for coal at an early age.

Besides, the father-of-three said he needed the monthly salary equivalent to about $500 — roughly twice the minimum wage — to pay for his children’s education so they do not have to follow in his footsteps.

– History of accidents –

Crudely constructed mines like the one that collapsed lack concrete reinforcements to protect workers from a cave-in, engineering expert Guillermo Iglesias said.

The miners “dig a shaft two meters in circumference and keep digging until they reach a small layer of coal,” he told local radio.

The only thing supporting the surrounding earth is usually a large plastic tube through which the workers enter, he added.

Coahuila’s state government said the miners had been carrying out excavation work when they hit an adjoining area full of water, causing the shaft to collapse and flood.

Coahuila has seen a series of fatal mining accidents over the years.

Last year, seven miners died when they were trapped in the region.

The worst accident was an explosion that claimed 65 lives at the Pasta de Conchos mine in 2006.

Only two bodies were retrieved after that tragedy and the families have repeatedly urged the Mexican authorities to recover them.

Elon Musk has accused Twitter of fraud, alleging the social media platform misled him about key aspects of its business before he agreed to a $44 billion buyout, as their court fight heats up.

The Tesla boss lodged the claim late Thursday as he fights back against Twitter’s lawsuit seeking to force him to close the deal, which he has tried to cancel.

Musk argued in the filing to a Delaware court that the number of users actually shown advertising on the platform is about 65 million lower below the firm’s 238 million figure.

“Twitter’s disclosures have slowly unraveled, with Twitter frantically closing the gates on information in a desperate bid to prevent the Musk Parties from uncovering its fraud,” the claim alleged.

Musk is asking the court to free him from the agreement and make Twitter pay him an amount in damages to be determined at trial, which set to open on October 17.

Billions of dollars are at stake, but so is the future of Twitter, which Musk has said should allow any legal speech — an absolutist position that has sparked fears the network could be used to incite violence.

In its own filing, Twitter rejected the mercurial billionaire’s argument, calling it “as implausible and contrary to fact as it sounds.”

“According to Musk, he — the billionaire founder of multiple companies, advised by Wall Street bankers and lawyers — was hoodwinked by Twitter into signing a $44 billion merger agreement,” Twitter said.

Musk last week filed his countersuit, which was finally made public on Thursday, along with a legal defense against Twitter’s claim that he is contractually bound to complete the takeover deal.

The entrepreneur accused Twitter of not just deceiving him, but also of lying to US market regulators.

Musk relied on Twitter’s filings to the Securities and Exchange Commission because he thought doing his own diligence — digging into the company’s value — “costly and inefficient”, his court claim said.

– ‘Twitter has complied in every respect’ –

The legal fight is gathering speed as preparations have begun for the five-day trial in Delaware’s Chancery Court, which specializes in complex, high-stakes business world battles.

This battle flows from Musk wooing Twitter’s board with a $54.20 per-share offer in April, but then in July announcing he was terminating their agreement because the firm had misled him regarding its tally of fake and spam accounts.

Twitter, whose shares were up about 3.5 percent to $42.51 on Friday, has stuck by its estimates that less than five percent of the activity on the platform is due to software “bots” rather than people.

The social media platform told the court that Musk’s claim that the false account figure tops 10 percent is “untenable.”

Twitter also disputed Musk’s assertion he has the right to walk away if its bot count is found to be wrong, since he didn’t seek information on that topic when he made the buyout offer.

The company accuses Musk of contriving a story to escape a merger agreement that he no longer found attractive.

“Twitter has complied in every respect with the merger agreement,” the company said in the filing made to Chancery Court.

“Musk’s counterclaims, based as they are on distortion, misrepresentation, and outright deception, change nothing.”

The social media platform has urged shareholders to endorse the deal, setting a vote on the merger for September 13.

While fielding questions at an annual Tesla shareholders meeting Thursday, Musk was asked whether his potential ownership of Twitter might distract from his running of the electric car company.

“I think Tesla, you know, would continue to do very well even if I was kidnapped by aliens, or went back to my home planet,” he jokes, drawing laughter and applause. 

“To be frank, I don’t have an easy answer,” Musk added.

He assured shareholders that, for now, he has no plans to leave his Tesla chief role.