Bernard Hickey details the key news overnight in 90 seconds at 9am in association with BNZ, including renewed fears of a double dip recession in the global economy. The Dow fell 1% at one stage and the euro fell again to new lows against the US dollar. The oil price fell under US$70 a barrel for the first time in a year. The NZ dollar fell to 69.5 USc because it is seen as a riskier currency that is exposed to moves in the global economy and commodity prices. The realisation is dawning that Europe in particular and other developed countries face years of slow spending and growth as consumers cut debts from record levels. China's housing boom may also be busting. Beijing sales fell 82% in April from March and prices fell 22% after a government crackdown on a runaway property development sector. Also, the pound fell after new Prime Minister David Cameron revealed 'bad decisions' made by previous PM Gordon Brown in the last few months in office and called an emergency budget for June 22. HT Andrew Wilson via email.
The incoming chief secretary at the U.K. Treasury, David Laws, found a note last week from his predecessor, Liam Byrne, that read: “Dear Chief Secretary, I’m afraid to tell you there’s no money left.” The note was “honest,” Laws, the No. 2 in the Treasury, told a press conference in London today. “But slightly less than I was expecting.” Speaking to reporters in London today, Osborne said there is a “strong economic case” for 6 billion pounds of “immediate” cuts to tackle Britain’s budget deficit.
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