Seven days in the Square Mile

The Bank of England downgraded its outlook for Britain’s economy to its weakest level for a decade, estimating that there is a “one in four” chance of recession in the first half of 2019. The later release of worse-than-expected GDP figures for the past quarter – showing that the economy actually contracted in December – intensified the gloom. Governor Mark Carney described Brexit as an “acid test” for the future of global trade, claiming that trade conflicts are more of a threat to the world economy than a financial crisis. Markets jumped midweek on news that the US might extend the 1 March deadline to reach a trade deal with China, if a “real deal” is a prospect. Britain signed a trade deal with Switzerland – a “continuity agreement” guaranteeing the existing terms of “preferential” trade. It is one of only a handful of deals to have been agreed – a far cry from the “40 free-trade agreements before we leave the EU” promised by International Trade Secretary Liam Fox in 2017. Shares in Debenhams jumped 40% after it secured a £40m cash lifeline from banks and bondholders. The chain is still expected to pursue a company voluntary arrangement, likely to mean store closures. The Government rejected a planning appeal by shale gas firm Cuadrilla to frack at a second site in Lancashire. Ikea announced it will trial the sale of refurbished furniture to create a more “circular business model”.