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US shutdown takes its toll

The damage to the US economy from the government shutdown is a "little bit worse" than predicted, says Hassett.

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The US economy is slowing by about 0.1 percentage point a week as the stand-off between Donald Trump and Speaker of the House of Representatives Nancy Pelosi continues.

Kevin Hassett, chair of the Council of Economic Advisers, yesterday, 16 January suggested that the economy had lost close to half a percentage point of growth as the negative impact from the longest in US modern history government shutdown begins to show.

The ratings agency Standard & Poor’s analysed that the potential loss from the continued shutdown will be greater than $5.7 billion – the amount Trump is demanding for the wall along the Mexican border.

Pelosi yesterday wrote to the US president suggesting that he should delay his State of the Union address until the shutdown was over.

Meanwhile, Theresa May survived the no-confidence vote by 325 votes to 306. She then called on members of Parliament from all parties to hold talks in another attempt to break the impasse on the Brexit withdrawal agreement. Opposition leader Jeremy Corbyn said he would only join the talks if May ruled out a no-deal Brexit.

The UK prime minister will seek a consensus from across the House of Commons that she can present to the European Union. She must present her plan B to Parliament on Monday, 21 January. That said, it appears the European side may offer a possibility to extend the 29 March deadline to leave the EU after Germany and France indicated there was willingness to resume withdrawal negotiations.

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