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Volkswagen’s threat to the German model
Most scandals blow over. Some blow up. Volkswagen will be of the latter kind. The penalties and damages resulting from VW’s manipulation of emissions tests could easily add up to more than €100bn. The total economic costs would be a multiple of that, more than what Germany would ever have faced from a Greek exit from the eurozone. More importantly, the Volkswagen scandal has the potential to unhinge the German economic model. It has been over-reliant on the car industry, just as the car industry has been over-reliant on diesel technology.
UK interest rates to stay at record low but another hawk could appear
The UK’s rate-setters are widely expected to hold fire on interest rates when they meet this Thursday, but the door is open for at least one more member of the nine-strong committee to dissent than last time around. Last month saw the Bank of England’s monetary policy committee vote eight to one to hold rates at their record low of 0.5 per cent. Despite the economy growing strongly, inflation has been dragged down this year due to a combination of low oil prices, cheap commodities, and a strong pound, which weighs on the price of imported goods.
Volkswagen to hold extraordinary board meeting on Wednesday
Volkswagen’s supervisory board will hold an extraordinary meeting on Wednesday at which finance chief Hans Dieter Poetsch is expected to be appointed as new head of the 20-member controlling panel.
Call for UK-wide taskforce on Volkswagen emissions scandal
A UK-wide taskforce should be set up in response to the Volkswagen emissions scandal, according to Scotland’s environment secretary Richard Lochhead. Mr Lochhead has written to UK transport minister Patrick McLoughlin with the proposal, voicing his “deep concern” over the German car maker’s actions. VW admitted 11 million of its diesel vehicles were fitted with a device to provide false emission results.
Mr Lochhead said: “It makes sense to have a co-ordinated response.”
A UK Department for Transport spokesman said: “The UK government expects VW to support owners of these vehicles already purchased in the UK and we are playing our part by ensuring no one will end up with higher tax costs as a result of this scandal.”
Volkswagen recently confirmed that nearly 1.2 million vehicles in the UK were affected by the scandal.
The car maker estimated that figure included about 106,000 vehicles north of the border, the Scottish government said. The company has also suspended the sale of 4,000 vehicles in the UK.
The Daily Mail
Living wage will cost jobs, warn small firms: Two out of five claim they will have to slow recruitment to pay for the new scheme
Small firms will have to put up their prices and slow recruitment to cope with the new national living wage, research has suggested.
Nearly two out of five small companies think the wage rise will have a negative impact on their business while only 6 per cent thought it would have a positive effect, a survey of 1,200 firms by the Federation of Small Businesses found. The rate of £7.20 an hour for over-25s comes into force from April and will rise to £9 an hour by 2020. The current minimum wage for workers aged over 21 is £6.70 an hour.