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German industrial output unexpectedly falls

People walk along the river in Frankfurt, Germany. PHOTO: AP

FRANKFURT (AFP) – German industrial production unexpectedly fell in May, official data showed yesterday, fuelling concerns that a tentative recovery in Europe’s largest but beleaguered economy is losing steam.

Output dropped 2.5 per cent month-on-month, federal statistics agency Destatis said, after a slight increase in April.

Analysts surveyed by financial data firm FactSet had expected an increase of 0.2 per cent in May.

Hit by high inflation, a manufacturing slowdown and weakness in key trading partners, Germany was the only major advanced economy that shrank in 2023.

At the start of the year a string of indicators had suggested a recovery was gaining momentum but in recent weeks those hopes have been tempered by less positive data.

“As the second half of the year has just started, optimism has given way for more realism,” said ING economist Carsten Brzeski.

“The German economy is losing steam again.”

In May’s factory output data, there were heavy falls in construction, which was down 3.3 per cent, the auto sector, which was down 5.2 per cent, and other sectors including electrical equipment and mechanical engineering.

People walk along the river in Frankfurt, Germany. PHOTO: AP

New UK government faces tough economic challenge

A police officer stands guard outside Number 10 Downing Street in London, United Kingdom. PHOTO: AFP

LONDON (AFP) – Britain’s new Labour government has pledged immediate action to grow the economy after clinching a landslide election victory to oust the Conservatives, but its task could be hampered by strained state finances following huge COVID expenditures.

The centre-left Labour administration led by Prime Minister Keir Starmer has promised investment in key areas such as health and education but also stresses the need to balance the books.

This after government coffers were further hit by subsidies for energy bills after the invasion of Ukraine sent oil and gas prices rocketing.

Starmer will want to avoid a repeat of October 2022, when the then-Conservative government’s proposed unfunded tax cuts spooked markets and tanked the pound.

It also sank the chaotic premiership of Liz Truss, who lasted just 49 days before she was replaced by Rishi Sunak.

A police officer stands guard outside Number 10 Downing Street in London, United Kingdom. PHOTO: AFP

Truss then lost her seat in Thursday’s election.

Britain’s economy is currently on a more stable footing after exiting a mild recession and as inflation returns to normal.

Labour “will benefit from the economic recovery”, noted United Kingdom (UK) economist at Capital Economics research group Ashley Webb.

However, eight years after Britain voted for Brexit, businesses still lament economic fallout caused by the country’s departure from the European Union (EU), with little prospect of change in the near future.

Starmer has ruled out returning Britain to the European single market, customs union, or bringing back free movement of EU nationals.

“I want investors to look at Britain and say it is a safe haven in a turbulent world, a place where I can invest with confidence in a world where perhaps other countries are tilting to more populist politics,” Labour finance spokesperson Rachel Reeves said ahead of Thursday’s UK vote.

She has also said that “change will be achieved only on the basis of iron discipline”.

British public debt has flirted with a level totalling 100 per cent of gross domestic product in recent months – a situation not seen since the 1960s.

“The reason for Starmer’s popularity (is) because he offered a changeless change,” said senior teaching associate in political economy at the University of Cambridge James Wood.

“He basically is a Conservative in a red tie,” Wood said in reference to the colour associated with the Labour party and Starmer’s prudence around spending.

Ahead of the election, Labour increasingly won support of company bosses and key UK publications – including the Financial Times – who believe the party can successfully manage the economy.

Following Labour’s landslide, business chiefs yesterday urged Starmer to prioritise economic growth.

The Confederation of British Industry declared that “now is the moment to get behind growth”, while manufacturers’ organisation MakeUK said Labour “faced an “urgent need to kick start the UK’s anaemic growth levels of recent years and boost investment in our infrastructure”.

The City of London Corporation, which is the local authority for the capital’s financial district, called on Starmer to place the powerful sector “at the forefront of Labour’s plans to drive growth”.

Included in Labour’s spending plans is the creation of publicly-owned Great British Energy, with the aim of slashing bills as millions of Britons still struggle with a high cost of living.

The party has an ambition also to hike defence spending to 2.5 per cent of gross domestic product from around two.

According to senior partner at tax specialists Sopher + Co Daniel Sopher, “tax is going to go up” to fund public services.

“There’s only so much to what one can increase debt to,” he told AFP.

Labour landslide win

ABOVE & BELOW: Keir Starmer speaks to the media; and Starmer, former prime ministers Tony Blair and Gordon Brown ahead of the Accession Council ceremony at St James’ Palace, London. PHOTO: AP

LONDON (AP) – For someone often derided as dull, Keir Starmer has delivered a sensational election result.

Starmer has led Britain’s Labour Party to a landslide election victory, and became prime minister – the first leader from the centre-left party to win a United Kingdom (UK) national election since Tony Blair, who won three in a row starting in 1997.

It’s the latest reinvention for a man who went from human rights attorney to hard-nosed prosecutor and from young radical to middle-aged pragmatist.

Like Blair, who refashioned the party as “New Labour” in the 1990s, 61-year-old Starmer led Labour to victory over Rishi Sunak’s Conservative Party in Thursday’s election after dragging the party towards the political middle ground.

He won by promising voters change, but also calm, vowing to restore stability to public life and give Britain “the sunlight of hope” after 14 years of turmoil under the Conservatives.

ABOVE & BELOW: Keir Starmer speaks to the media; and Starmer, former prime ministers Tony Blair and Gordon Brown ahead of the Accession Council ceremony at St James’ Palace, London. PHOTO: AP
PHOTO: AP
Keir Starmer walks with his wife Victoria as supporters applaud before his speech at the Labour party’s annual conference in Liverpool. PHOTO: AP
King Charles III greets Labour leader Sir Keir Starmer during an audience. PHOTO: AP

“People look at Starmer and they see this guy who is very solid, clearly very able in his professional life,” said author of How Labour Wins (and Why it Loses) Douglas Beattie.

“I think people want that caution, they want that stability.” A former chief prosecutor for England and Wales, Starmer has often been caricatured by Conservative opponents as a “lefty London lawyer”. He was knighted for his role leading the Crown Prosecution Service, and opponents like to use his title, Sir Keir Starmer, to paint him as elite and out of touch.

Starmer prefers to stress his humble roots and everyman tastes. He loves football – still plays the sport on weekends – and enjoys nothing more than watching Premier League team Arsenal. He and his wife Victoria, who works in occupational health, have two teenage children they strive to keep out of the public eye. During the campaign he was stubbornly resistant to revealing flashes of personality, telling a Guardian interviewer that he couldn’t remember any of his dreams, did not have a favourite novel and had no childhood fears.

When he did get personal, telling a journalist that he hopes to carve out Friday evenings to spend with his family, and Friday night dinners are a family tradition – the Conservatives used it against him, claiming Starmer planned to be a part-time prime minister.

Born in 1963, Starmer is the son of a toolmaker and a nurse who named him after Keir Hardie, the Labour Party’s first leader. One of four children, he was raised in a cash-strapped household in a small town outside London.

“There were hard times,” he said in a speech launching his election campaign. “I know what out-of-control inflation feels like, how the rising cost of living can make you scared of the postman coming down the path: ‘Will he bring another bill we can’t afford?’”

Starmer’s mother suffered from a chronic illness, Still’s disease, that left her in pain, and Starmer has said that visiting her in the hospital and helping to care for her helped form his strong support for the state-funded National Health Service.

He was the first member of his family to go to college, studying law at Leeds University and Oxford. As a lawyer, he took civil liberties cases including that of the “McLibel Two”, green activists sued by McDonald’s for handing out leaflets saying the restaurant chain sold unhealthy food.

The cases often put him at odds with both Conservative and Labour governments, so his switch to become head of the Crown Prosecution Service in 2008 surprised some colleagues.

But during five years in the job he gained a reputation as a tough and hard-working director of public prosecutions.

Starmer entered politics relatively late, in his 50s, and was elected to Parliament in 2015. He often disagreed with party leader Jeremy Corbyn, a staunch socialist, at one point quitting the party’s top team over disagreements, but agreed to serve as Labour’s Brexit spokesman under Corbyn.

Starmer has faced repeated questions about that decision, and about urging voters to support Corbyn, a divisive figure under whose leadership the party was hammered in the 2019 election. He said he wanted to stay and fight to change Labour, arguing that “leaders are temporary, but political parties are permanent”.

After Corbyn led Labour to election defeats in 2017 and 2019 – the latter the party’s worst result since 1935 – Labour picked Starmer to lead efforts to rebuild.

His leadership has coincided with a turbulent period that saw Britain suffer through the COVID-19 pandemic, leave the European Union (EU), absorb the economic shock of the Ukraine conflict and endure economic turmoil from Liz Truss’ turbulent 49-day term as prime minister in 2022.

Voters are weary from a cost-of-living crisis, a wave of public sector strikes and political turmoil that saw the Conservative Party dispatch two prime ministers within weeks in 2022 – Boris Johnson and Truss – before installing Sunak to try to steady the ship.

Starmer promised “a culture change in the Labour Party”. His mantra is now “country before party”.

Starmer has promised voters that a Labour government can ease Britain’s chronic housing crisis and repair its fraying public services, especially the creaking health service – but without imposing tax increases or deepening the public debt.

“While I don’t think anyone is particularly excited about Keir Starmer, I think he has done a good job of situating himself to bring government back to where it belongs,” said senior lecturer in modern history at City University of London Lise Butler.

Fierce fighting breaks out in Myanmar’s civil war

File photo shows members of one of the ethnic armed forces in front of the captured building of the Myanmar War Veterans' Organisation in Nawnghkio township in Shan state, Myanmar. PHOTO: AP

BANGKOK (AP) – New fighting has broken out in northeastern Myanmar, bringing an end to a Chinese-brokered cease-fire and putting pressure on the military regime as it faces attacks from resistance forces on multiple fronts in the country’s civil war.

The Ta’ang National Liberation Army, one of three powerful militias that launched a surprise joint offensive last October, renewed its attacks on regime positions last week in northeastern Shan state, which borders China, Laos and Thailand, and the neighbouring Mandalay region with the support of local forces there.

Since then, the Myanmar National Democratic Alliance Army has joined in, and by yesterday, combined forces from the two allied militias had reportedly encircled the strategically important city of Lashio, headquarters of the regime’s northeastern military command.

This is the next phase of October’s “1027” offensive, said spokesperson Lway Yay Oo for the TNLA, which last week said the military provoked retaliation with artillery and airstrikes despite the cease-fire.

“In phase two, our number one aim is the eradication of the military dictatorship, and number two is the protection and safety of local people,” she said.

File photo shows members of one of the ethnic armed forces in front of the captured building of the Myanmar War Veterans’ Organisation in Nawnghkio township in Shan state, Myanmar. PHOTO: AP

Spokesperson Thet Swe for the military regime accused the militias of putting civilians in jeopardy by restarting the fighting.

“As the TNLA are starting to violate the cease-fire, the Tatmadaw is protecting the lives and the property of the ethnic people,” he said in an email to the AP, referring to the military by its Burmese name.

The TNLA claims to have already captured more than 30 army outposts, and to now control the western part of Mogok, whose ruby mines make it a lucrative target. There is also fighting for the town of Kyaukme, which sits at a highway crossroads, and Nawnghkio to the southwest, which leads toward the major military garrison town of Pyin Oo Lwin along the same highway.

“That’s where you need to cut it off to prevent the military from sending reinforcements,” said Singapore-based analyst Morgan Michaels with the International Institute of Strategic Studies who runs its Myanmar Conflict Map project.

In Mandalay, the region west of Shan, a local People’s Defence Force – an armed resistance group – joined the TNLA’s offensive. Spokesperson Osmond for the Mandalay People’s Defence Force, who would only give his nom de guerre because of safety concerns, said his and other local resistance groups have seized nearly 20 military outposts.

With the renewed violence in the northeast, China’s Foreign Ministry told the Associated Press it stood ready to again provide support for peace talks.

“China urges all parties in Myanmar to earnestly abide by the cease-fire agreement, exercise maximum restraint, disengage on the ground as soon as possible, and take practical and effective measures to ensure the tranquility of the China-Myanmar border and the safety of Chinese personnel and projects,” the ministry said in a faxed reply to questions.

Asian markets down as traders await US jobs report

The stock exchange in New York, United States. PHOTO: AP
HONG KONG (AFP) – Asian markets were largely down yesterday, a day after Tokyo’s indexes hit record highs as traders prepared for a key United States (US) jobs report while European exchanges edged up on calming electoral news from the United Kingdom (UK) and France.
 
Japan’s Nikkei 225 ended flat while the broader Topix index, which a day earlier surpassed its previous peak set in 1989, also shed some of its gains.
 
“The fact that the Topix, which indicates the overall performance of the Japanese market, has in turn broken its own record, is news of great importance,” said analyst Takuma Ikemoto of the Tokai Tokyo Intelligence Lab.
 
The capitalisation of Japan’s prime market has also increased significantly, showing “that Japanese companies are constantly strengthening their ability to generate profits and… indicates that the Japanese stock market has entered a new phase”, he said.
 
The yen continued strengthening against the dollar after hitting its lowest level in nearly four decades.
 
The stock exchange in New York, United States. PHOTO: AP
Shares in Hong Kong ended a four-day winning streak, while stocks in mainland China were trading lower after the European Union (EU) slapped extra provisional duties of up to 38 per cent on Chinese electric car imports on Thursday.
 
European markets built on gains yesterday after a Labour win in the UK and moves to block a far-right ascent in France.
 
London, Paris and Frankfurt all moved higher in early trading.
 
The return of the main opposition Labour Party to power in Britain ended 14 years of Tory rule and strengthened the pound even before results were announced.
 
An expected period of stability has ushered in optimism for investors after a prime ministerial game of musical chairs in Downing Street.
 
In France, the withdrawal of 200 centrist and left-wing candidates from this weekend’s runoff to avoid splintering the vote in favour of the far-right National Rally of Marine Le Pen boosted the euro and breathed life into European markets.
 
 But analysts remain wary that the second-biggest economy in the EU could be headed for a period of political deadlock if there is no overall winner in the polls.
 
Investor sentiment was also lifted on Thursday as softer US labour market data gave the Federal Reserve room to cut interest rates, with another key jobs report due Friday.
 
“We expect US labour market data will show more signs of cooling in June,” Alvin Tan of RBC Capital Markets said.
 
Gains were capped, with Wall Street shut for the July 4 Independence Day holiday in the US.

Oil prices on track for fourth straight week of gains

Oil rose this week on strong summer demand expectations in the United States. PHOTO: THE STAR

ANN/THE STAR – Oil prices dipped yesterday but were on track for a fourth straight week of gains and were near their highest levels since late April on hopes of strong summer fuel demand and some supply concerns.

Brent crude futures, which have risen seven per cent over the last four weeks, slipped 31 cents, or 0.4 per cent, to USD87.12 a barrel by 0415 GMT.

United States (US) West Texas Intermediate (WTI) crude futures, which have climbed nine per cent over the past four weeks, was at USD83.70, down 18 cents, or 0.2 per cent. With the US market shut for the Fourth of July holiday on Thursday, trading was thin and there was no settlement for WTI.

Oil rose this week on strong summer demand expectations in the US, the world’s largest oil consumer.

“Market sentiment has been supported this week by strong mobility indicators and intensifying geopolitical tension in the Middle East,” analysts at ANZ Research said in a note yesterday.

Oil rose this week on strong summer demand expectations in the United States. PHOTO: THE STAR

The US Energy Information Administration (EIA) reported a massive 12.2 million barrel draw in inventories last week, compared with analysts’ expectations for a draw of 700,000 barrels.

US data on Wednesday showed that first-time applications for unemployment benefits increased last week while jobless numbers also rose, which analysts said could potentially hasten interest rate cuts by the Federal Reserves and support oil markets.

On the supply side, media reported on Thursday that Russia’s oil producers Rosneft and Lukoil will sharply cut oil exports from the Black Sea port of Novorossiisk in July.

Meanwhile, Saudi Arabia’s Saudi Aramco cut the price for the flagship Arab Light crude it will sell to Asia in August to USD1.80 a barrel above the Oman/Dubai average, underscoring pressure faced by Organization of the Petroleum Exporting Countries (OPEC) producers as non-OPEC supply grows.

Traders were also tracking the war in Gaza and elections in France and the United Kingdom, analysts said.

Three childhood friends arrested for trafficking cannabis via Telegram

Sentul district police chief ACP Ahmad Sukarno Mohd Zahari holds up seized materials. PHOTO: BERNAMA

KUALA LUMPUR (BERNAMA) – Malaysian police arrested three childhood friends on Monday on suspicions of heading a cannabis trafficking syndicate via Telegram.

Sentul district police chief ACP Ahmad Sukarno Mohd Zahari said the three local men, 20 to 24, were arrested in two raids between 2.20pm and 5.50pm in the areas around Publika and Wisma Cosway, Jalan Raja Chulan in Kuala Lumpur.

The syndicate had been using courier services to distribute the drugs throughout the Klang Valley without meeting customers directly after collecting their orders via Telegram, he said, adding that interrogation of the suspects led the police to a premises in Wisma Cosway, where the police seized 23.322 kilogrammes (kg) of cannabis.

“A white polystyrene box filled with dried cannabis leaves weighing 0.414kg and three clear plastic bags filled with cannabis flowers with a total weight of 0.65kg were also seized,” he said in a media conference at the Sentul district police headquarters in Kuala Lumpur yesterday. A Mercedes Benz and a Nissan Almera were also seized at the Wisma Cosway parking lot and all seizures were estimated to be worth MYR85,980, he said.

“The three suspects do not have any prior criminal records, but one tested positive for THC,” he said.

Sentul district police chief ACP Ahmad Sukarno Mohd Zahari holds up seized materials. PHOTO: BERNAMA

Oh deer!

ABOVE & BELOW: Founder of the ‘Asbl Sauvons Bambi’ association Cedric Petit uses a drone to detect deer hiding in the tall grass of the Mehaigne meadows in Namur, Belgium. PHOTO: AFP

ÉGHEZÉE, BELGIUM (AFP) – Cedric Petit’s drone hummed above a Belgian field. He spotted a white dot on the control screen: a tiny fawn nestled in the tall grasses – soon to be rescued from a grisly end.

Four years ago, the 40-year-old wildlife lover founded a group with a simple mission: “Saving Bambi” helps farmers avoid the nasty surprise of finding a tiny mammal or nesting bird ground up by their machinery.

Called in before the harvest, usually last-minute and working for free, Petit and his fellow volunteers use drones equipped with heat-sensitive cameras to locate at-risk animals and move them to the safety of woods nearby.

“Accidents are happening more and more often – that’s why we’re here,” said Petit, tramping through a field of alfalfa, an animal feed crop, after a dawn rescue in Eghezee in central Belgium.

“Because of unpredictable weather linked to climate change, crops are growing all year round, and harvesting is coming earlier and earlier, including between late April and late June, which is the birthing period for fawns,” said Petit, who grew up in a family of farmers.

ABOVE & BELOW: Founder of the ‘Asbl Sauvons Bambi’ association Cedric Petit uses a drone to detect deer hiding in the tall grass of the Mehaigne meadows in Namur, Belgium. PHOTO: AFP
PHOTO: AFP
PHOTO: AFP
PHOTO: AFP
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Photos show Cedric Petit rescuing deer detected with his drone. PHOTO: AFP

Operating across Belgium and neighbouring Luxembourg, his association said it rescued 834 fawns last year – up from 353 the previous year.

Its work is modelled on the example of Germany and Switzerland, where larger networks of volunteers carry out thousands of rescues every year across huge areas of farmland.

Petit’s growing Belgian operation has around 80 drone pilots who freely devote their time during the most critical six weeks of the year – like him, they work around their day jobs.

To get a good wide view of a field, pilots fly their drones at a height of around 70 metres – taking the time needed to spot a fawn curled at ground level. Barely weeks old, the animals’ spindly legs are still too frail to carry their own weight, making them entirely vulnerable to the blades of a giant mower.

On that morning in Eghezee, the drone sensor first spotted a hare enjoying a morning feast of alfalfa, then a young male roe deer taking a dawn stroll through the cool grasses.

At last Petit spotted a sleeping fawn, curled in a little ball.

He drew near, with gloves and a small crate covered in hay, to relocate the animal as gently as he can.

“This little guy is one-and-a-half, maybe two weeks old,” said Petit. “Now we need to move him to safety at the edge of the woods, where his mother can find him.”

Most rescues involve roe deer fawns, whose mothers move them from the woods into the fields after birth so they can bathe in sunlight in their crucial first days of life.

“Deer fawns are rarer – they’re tougher, like foals, and can keep up with their mothers pretty soon after birth,” Petit explained.

Beyond the animal welfare argument, “Saving Bambi” also helps ward off botulism poisoning for livestock – a risk were they to feed from bales of hay contaminated by animal carcasses.

“That’s a big problem that is best avoided,” summed up Bernard Debouche, the farmer who called Petit out on his latest early-morning mission.

Before knowing about the tracking system, Debouche would find the remains of a baby animal caught in the blades after mowing his fields – a “very unpleasant experience”, he recalled.

“We used to go blindly ahead, and sometimes we just couldn’t see them – they are so tiny we would just roll over them,” he said.

“And no one wants to see a young fawn crushed by a mower.”

Alien encounter?

Trooper Ryan Vanvleck in a photo with the UFO car. PHOTO: OKLAHOMA HIGHWAY PATROL

UPI – A Highway Patrol trooper in Oklahoma, United States (US) had an out-of-this-world experience when he pulled over a UFO-shaped vehicle on the highway.

The Oklahoma Highway Patrol (OHP) shared on social media that Trooper Ryan Vanvleck stopped the peculiar saucer-like vehicle on the Turner Turnpike due to an obstructed license plate.

The two occupants explained they were on their way to the annual UFO Festival in Roswell, New Mexico.

Vanvleck decided not to issue a citation and instead let the driver and passenger go with a warning – after posing for a couple photos. “It’s not every day you pull over a UFO,” the post said.

The same vehicle has been stopped just a couple of days earlier by a Crawford County Sheriff’s Office deputy in Missouri. The driver was issued a warning related to the UFO’s out-of-state registration, the sheriff’s office said.

The sheriff’s office said the driver was “warned about our strict enforcement of warp speed on the interstate” and was advised to keep “phasers on stun only while travelling”.

Trooper Ryan Vanvleck in a photo with the UFO car. PHOTO: OKLAHOMA HIGHWAY PATROL

Hundreds storm Pakistan power station over long outages

Commuters walk past a closed fuel station amid a nationwide strike in Karachi, Pakistan. PHOTO: AFP

QUETTA (AFP) – Hundreds of people in one of Pakistan’s hottest cities stormed a power station in protest against cuts lasting up to 20 hours a day, police said yesterday.

The protesters also ransacked the station’s neighbouring administrative office in Thursday night’s incident in rural Sibi, in southern Balochistan province, where temperatures peaked at 45 degrees Celsius (°C).

“People stormed the electricity supply office and ransacked it last night and a case has been lodged against them,” police official Anayatullah Bungulzai told AFP, adding that the group numbered up to 800 people.

Planned power cuts, also known as loadshedding, happen frequently in Pakistan due to fuel shortages, varying in length in different areas.

In Balochistan, Pakistan’s largest province, power outages are prolonged due to both electricity production deficits and unpaid bills by consumers that affect entire neighbourhoods.

Spokesperson Afzal Baloch for the Quetta Electricity Supply Company told AFP the company suffers “significant” monthly losses due to outstanding payments.

However, protester Noor Ahmad said yesterday they were “compelled” to act over “the excessive loadshedding lasting for hours despite our timely payments of bills”.

Sibi is one of the hottest settled areas in Pakistan, where temperatures regularly reach 50°C during heatwaves. Scientists said such conditions are becoming longer, more frequent and more intense as a result of climate change.

Balochistan is also one of Pakistan’s poorest provinces, and battles poor security, rugged terrain, an unreliable water supply and restricted employment opportunities.

Commuters walk past a closed fuel station amid a nationwide strike in Karachi, Pakistan. PHOTO: AFP
Protestors shout slogans during a demonstration against the power outages in Karachi. PHOTO: AFP