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Business news live: Eurozone recession draws nearer as German private sector shrinks for first time since 2013

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Ben Chapman
Monday 23 September 2019 09:22 BST
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Car makers on the Continent warned today that a no-deal Brexit put millions of jobs and billions of euros in revenue at risk
Car makers on the Continent warned today that a no-deal Brexit put millions of jobs and billions of euros in revenue at risk

The prospect of the eurozone falling into recession is looming larger after a further sign of deep problems in Germany, Europe's largest economy.

Survey data suggests Germany's private sector shrank in September for the first time since 2013, when the eurozone was still dealing with the fallout from a sovereign debt crisis.

Car makers on the Continent warned today that a no-deal Brexit put millions of jobs and billions of euros in revenue at risk.

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Welcome to The Independent's live coverage of business and economics events in the UK and around the world.

The latest survey of manufacturers and service businesses in Europe's largest economy delivered a further sign that Germany is entering a recession and could drag the eurozone with it.

The two sectors, which make up more than two-thirds of Germany's economy, contracted in September, according to Markit's Purchasing Managers' Index (PMI) survey.

It came after car manufacturers warned that millions of jobs could be adversely affected if the UK leaves the EU without a deal next month.

ben.chapman23 September 2019 10:13
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Wages are flatlining because companies are scrapping swathes of mid-tier positions - replacing them with algorithms and cheap offshore labour, according to a new report.

White-collar recruitment specialist Hays found that with jobs like paralegal work and administration, new technology is making these roles redundant, leaving over-qualified professionals working in lower-tier positions instead.

PA news agency

ben.chapman23 September 2019 10:14
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Google limits storage of audio to be snooped on by human beings

Google says it will cut down on the amount of audio it stores from its voice assistant, after outrage over the use of human reviewers to snoop on people's recordings without their knowledge.

Tech firms including Google, Amazon and others have faced anger after it was revealed they hired hundreds of staff to listen in to clips of recordings from AI assistants.

Google said that it will now ask every user to re-affirm their choice before it starts storing their personal audio.

The tech giant will also let users make their device less sensitive to the phrase "Hey Google", with the hope of reducing false activations which result in audio being recorded and stored without their knowledge.

Apple's Siri and Amazon's Alexa as well as Microsoft and Facebook - have all faced criticism over similar privacy concerns.

Some human reviewers employed by the tech firms, ostensibly to check the accuracy of AI assistants, claimed they heard private, intimate and illegal conversations while carrying out their jobs.

ben.chapman23 September 2019 11:06
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Tube staff ready to take industrial action over assaults on London Underground

After a surge in violent assaults on London Underground workers, the Rail Maritime and Transport union has warned strike action could be stepped up.

A "shocking attack" took place in East London last week, the RMT said.

RMT general secretary Mick Cash said: "It is clear that violent crime is spiralling out of control as staffing levels are hacked back to the bare bones in the dash for budget-driven cuts.

"A key group of our members will be taking action from later this week and we will have no hesitation in escalating the dispute of that is what it takes.

"RMT has warned repeatedly that the all-out drive towards an automated and faceless Tube would turn our trains and stations into a criminals' paradise and those who have ignored those warnings should act now before more serious injuries or worse occurs on the Tube."

ben.chapman23 September 2019 11:19
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Thomas Cook collapse leaves couple's £40,000 wedding in jeopardy

A bride and groom whose wedding party paid £40,000 for flights and hotels through Thomas Cook are nervously waiting to find out if their marriage can go ahead following the collapse of the travel giant.

The UK's largest peacetime repatriation has been launched after Thomas Cook ceased trading in the early hours of Monday morning when they failed to secure a last-ditch rescue deal.

"Heartbroken" Amy Wright, 27, and a wedding party of around 40 people were due to travel on 3 October to the island of Kos in Greece.

Her sister Katie Langley, 23, told the PA news agency the group had paid between £35,000 and £40,000 for the two-week trip through Thomas Cook, including flights and hotels.

"My sister got a phone call from the travel agent at 7 o'clock this morning. She's been helpful and said she'll put us at the top of the list," she said.

"Thomas Cook staff have been really helpful but it's the people from above who aren't telling people what to do."

ben.chapman23 September 2019 11:35
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WeWork's biggest investor seeks to oust controversial CEO Neumann

Adam Neumann's time in charge of WeWork could be drawing to a close as the firm's biggest investor reportedly draws up plans to oust him.

WeWork's much-hyped stock market flotation was put on hold earlier this month after receiving little interest from investors worried about an inflated price, questionable business model and unusual corporate governance arrangements.

Japan's SoftBank, is now looking for ways to get rid of Neumann, Reuters reported, citing four people familiar with the matter.

Softbank ploughed millions into WeWork at a sky-high valuation of $47bn in January. Now, the office sharing start-up is struggling to attract buyers for its shares at a third of that price tag and could be forced to launch an IPO at $10bn, according to the news agency.

ben.chapman23 September 2019 11:50
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'Dreadful' data from Germany

Claus Vistesen, Chief Eurozone Economist Pantheon Macroeconomics, has issued a damning assessment of the problem's facing Germany.

"Another dreadful set of PMI data from the Eurozone’s largest economy," Vistesen says.

The contraction in manufacturing worsened with the PMI sliding to a gruelling 41.4, from 43.5 in August, and what’s worse, the services index also weakened, to 52.5 from 54.8 last month. Many analysts will use this as justification for evidence that the manufacturing recession is spreading into the rest of the economy, but the problem is that the services PMI is an unreliable indicator for such a shift.

It often exhibits large swings for no reason whatsoever. That said, we don’t want to stand in the way of the main story here. These headlines are ugly, and more-or-less confirm that the German economy entered recession in Q2 and Q3. Uncertainty over global trade, and the tariff stand-off between China and the US, are now driving a deterioration in German manufacturing, which is as bad as during the 2008 crash. 

ben.chapman23 September 2019 11:53
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Mike Ashley in yet another takeover bid

Mike Ashley appears to have an insatiable appetite for takeover deals - despite swoops for House of Fraser, Evans Cycles and Sofa.com, as well as interest in HMV and Patisserie Valerie, the retail mogul has launched a big for Goals Soccer Centres.

Sports Direct, the jewel in the crown of Ashley's ever-expanding retail empire, revealed today that it put forward a 5p-a-share approach for Goals on 5 September.

Sports Direct already owns 18.9 per cent of Goals, which recently uncovered "improper behaviour" with its accounts dating back to 2010.

Goals has not yet allowed Sports Direct to look at its books.

ben.chapman23 September 2019 12:05
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Thomas Cook collapse latest

Julie Palmer, a partner at Begbies Traynor (a firm which specialises in corporate restructuring), has commented on today's news.

Ms Palmer noted that a number of factors contributed to the collapse, such as Brexit and the rise of online bookings, but said the company's management strategy could have played a role in its demise.

She said:

“Questions do have to be asked of the management’s strategy. Other competitors, such as Tui, have faced similar issues yet have weathered this storm and developed a more compelling product offering. 

“Unfortunately, the Thomas Cook model was heavily based on a legacy model of high street travel agencies combined with a lacklustre online offering. 

“But whatever the reasons for Thomas Cook’s demise, the UK travel industry will be reeling for some time with the loss of one of its most respected and historic names.”

ben.chapman23 September 2019 12:22
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The government is facing heavy criticism for its handling of Thomas Cook and the fate of its 9,000 UK workers:

ben.chapman23 September 2019 12:35

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