Google says it’ll invest $13B in US data centers and offices this year

Google today announced that it will invest $13 billion in data centers and offices across the U.S. in 2019. That’s up from $9 billion in investments last year. Many of these investments will go to states like Nebraska, Nevada, Ohio, Texas, Oklahoma, South Carolina and Virginia, where Google plans new or expanded data centers. Though like most years, it’ll also continue to expand many of its existing offices in Seattle, Chicago and New York, as well as in its home state of California.

Given Google’s push for more cloud customers, it’s also interesting to see that the company continues to expand its data center presence across the country. Google will soon open its first data centers in Nevada, Nebraska, Ohio and Texas, for example, and it will expand its Oklahoma, South Carolina and Virginia data centers. Google clearly isn’t slowing down in its race to compete with AWS and Azure.

“These new investments will give us the capacity to hire tens of thousands of employees, and enable the creation of more than 10,000 new construction jobs in Nebraska, Nevada, Ohio, Texas, Oklahoma, South Carolina and Virginia,” Google CEO Sundar Pichai writes today. “With this new investment, Google will now have a home in 24 total states, including data centers in 13 communities. 2019 marks the second year in a row we’ll be growing faster outside of the Bay Area than in it.”

Given the current backlash against many tech companies and automation in general, it’s probably no surprise that Google wants to emphasize the number of jobs it is creating (and especially jobs in Middle America). The construction jobs are obviously temporary, though, and data centers don’t need a lot of employees to operate once they are up and running. Still, Google promises that this will give it the “capacity to hire tens of thousands of employees.”

Post-Brexit trade partners ask UK to lower human rights standards

International trade secretary, Liam Fox, explains why limited progress has been made

Britain has received demands to roll back its human rights standards in exchange for progress on post-Brexit trade deals, including from some countries that ministers are pushing to secure agreements with.

In an admission that some countries have sought to extract a high price for their continuing to trade with Britain after leaving the EU, Liam Fox, the international trade secretary, said some nations had made the requests as part of talks.

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To avoid environmental catastrophe, everything must change | Letters

Readers respond to an article and editorial on the use of agricultural pesticides and the alarming decline in insect numbers

It is not just the insects that are in serious decline, but also the entomologists who study them (Plummeting insect numbers threaten collapse of nature, 11 February), both in terms of promoting and conserving beneficial species and combating pests. In 2016, I had an article published in the scientific literature entitled Insect biology – a vulnerable discipline?, highlighting the good that insects do as well as the bad, and how necessary research is on insects, but also how this has been eroded for many years by reductions in both government and industrial funding.

For example, Rothamsted Research in Hertfordshire, where I spent most of my career, used to have a thriving entomological research community working on various aspects concerning the role of insects in the agroecosystem. However, especially since the early years of this century, most of this vital work has been terminated due to severe cutbacks in funding, with very few projects surviving. In my view, considering the importance of insects as described in your article, renewed funding is urgently required to continue such essential exploration of insect science in all its diversity.
Hugh Loxdale
Honorary visiting professor, School of Biosciences, University of Cardiff

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There is little confidence that things are good in our economy, or about to get better | Greg Jericho

The housing market is likely to stay weak until the overall economy is back in sync

Housing and personal finance commitments are one of the best indicators of how people are feeling. Yes, we may respond to a survey that we feel confident or not about the economy but if you really want to see what people feel, look at their borrowing. You don’t take out a loan for a car or for a new block of land or for a house when you think things are not looking good. And right now there seems to be very little confidence that things are good, or about to get better.

Housing finance is subject to other vagaries than “confidence”. You might feel secure in your job but you are not sure if it is the “right time to buy”. Such issues however are not the case for buying a car, and the latest finance figures show throughout the past year the amount of personal fixed finance for a car loan fell every month:

Related: With an election looming, the government’s fear is palpable | Greg Jericho

Related: An interest rate cut might be coming – and the reason why is rather scary | Greg Jericho

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Block Kit helps deliver more visually appealing content in Slack

Slack has become a critical communications tool for many organizations. One of the things that has driven its rapid success has been the ability to connect to external enterprise apps inside of Slack, giving employees what is essentially a centralized work hub. This ability has led to some unintended consequences around formatting issues, which Slack addressed today with two new tools, Block Kit and Block Kit Builder.

Block Kit lets developers present dense content in a much more visually appealing way, while Block Kit Builder is a prototyping tool for building more attractive apps inside Slack. The idea is to provide a way to deliver content inside of Slack without having to do workarounds to make the content look good.

Before and after applying Block Kit. Screen: Slack

Bear Douglas, who is Slack’s director of developer of relations, says developers have been quite creative up until now when it comes to formatting, but the company has been working to simplify it. Today’s announcement is the culmination of that work.

“Block Kit makes it easier for people to quickly design a customized app in Slack. We’ve launched a no-code builder that will let people design the messages that they show inside Slack,” she explained.

She said that while this tool is really designed for people with some programming or Slack admin-level knowledge, the ultimate goal is to make it easy enough for non-technical end users to build apps in Slack, something that is on the road map. What enhancing these tools does, however, is show people just what is possible inside of Slack.

“When people see Block Kit in action, it is illuminating about what can be done, and it helps them understand that it doesn’t just need to be your communications center or [something that pings you] when your website blows up. You can actually get work done inside of Slack,” she said.

One other advantage of using Block Kit is that apps will display messages consistently, whether you are using the web or mobile. Prior to having these tools, workarounds might have looked fine on the web, but the spacing might have been off on mobile or vice versa. Block Kit lets you design consistent interfaces across platforms.

Among the tools Slack is offering, none is actually earth-shattering, but in total they provide users with the ability to format their content in a way that makes sense using common design elements like image containers, dividers and sections. They are also offering buttons, drop-down menus and a calendar picker.

Both of these tools are available starting today in the Block Kit hub.

Inflation drops in UK and US thanks to cheaper energy – as it happened

Boost for real wages as the cost of living rises at its slowest rate in two years


Time for a quick recap.

The cost of living has eased on both sides of the Atlantic, thanks to recent falls in energy costs.

.@SkyNews @adamboultonSKY Great news on 1.8% inflation figures today. Raising the personal tax allowance and the #nationallivingwage has seen real wages increase at the fastest rate in a decade

U.S. markets open higher

Stocks are after President Trump signaled a more conciliatory stance toward China, fueling hopes of a breakthrough in the trade war

Related: Spain’s PM set to call snap election after budget rejected

You probably don’t need another reason to worry about Brexit.

But just in case….

The government’s push to roll over EU trade deals from which the UK currently benefits has yielded agreements covering only £16bn of the near-£117bn of British trade with the countries involved.

Despite frenetic efforts by ministers to ensure the continuity of international trade after the UK leaves the EU on 29 March, the international trade secretary, Liam Fox, has so far only managed to secure deals with seven of the 69 countries that the UK currently trades with under preferential EU free trade agreements, which will end after Brexit.

Related: Brexit: UK has rolled over just £16bn out of £117bn trade deals

Here’s an interesting chart, showing how inflation is sizzling in San Francisco, but rather weaker in Washington:

Why national inflation numbers rarely match anecdotal experience.

Nick Kilbey, Sales Trader at Foenix Partners, says America’s central bank can afford leave interest rates unchanged for longer – as inflation is looking subdued.
He writes:

Whilst another round of trade talks between the US and China are keeping investors on edge this week, US Inflation provided a distraction as it dropped to 1.6%, the smallest print since June 2017, with lower energy costs the main culprit once again. So far Economic growth in the US has moderated only marginally and the economy remains robust, despite the ongoing dispute with China. However, with broader inflation at 1.6%, it certainly underscores the Fed’s “wait and see” stance and their ability to remain patient.

Capital Economics has dug into the CPI figures, and explains how cheaper energy is helping Americans handle the cost of living.

Gasoline prices fell by 5.5% month-on-month in January, the third consecutive monthly decline of around that magnitude.

However, piped natural gas prices fell by only 0.3% m/m, which barely began to reverse the 5.1% m/m spike in December. With natural gas prices falling sharply, CPI piped gas will drop more markedly in February

At just 1.6%, US inflation is now at a 19-month low.

More reaction to the US inflation figures:

Still waiting for inflation. Monthly CPI flat and core CPI up 2.2% year over year. Justifies Fed’s wait and see attitude with regards to future rate hikes.

U.S. rental inflation is starting to come down faster now. It moderated to 3.43% in January versus 3.47% in December and 3.61% in November, marking the lowest level in four years

Newsflash: inflation has also fallen in America…and again, cheaper energy can take some credit.

US consumer prices were unchanged month-on-month in January.

U.S. consumer prices flat in January due largely to lower oil prices. Increase in inflation in past 12 months slows to 1.6% from 1.9%. Weakest in a year and a half. Core CPI up 0.2% on the month, yearly rate unchanged at 2.2%. Inflation still tame.

U.S. consumer prices flat in January due largely to lower oil prices. Increase in inflation in past 12 months slows to 1.6% from 1.9%. Weakest in a year and a half. Core CPI up 0.2% on the month, yearly rate unchanged at 2.2%. Inflation still tame.

Here’s our news story about the impact that Brexit is having on the construction industry:

Related: Brexit delaying public and private projects, says Galliford Try

Wall Street is expected to open higher in two hours time, as trade deal optimism continues to push shares up.

The Dow Jones industrial average is expected to gain 80 points, or 0.3%, after President Donald Trump said he may let a China trade-deal deadline “slide” if the two sides were making enough progress.

Newsflash: There’s drama in Spain, where the parliament has just voted down the government’s 2019 budget.

That’s a blow to Spain’s socialist government, who have been blocked by an alliance of rightwing parties and Catalan secessionists.


Government and PSOE party sources said the snap election date had not been set, although 14 April was most likely, followed by 28 April because [PM Pedro] Sánchez wants a ballot as soon as possible to mobilise left-leaning voters against the threat of the right coming to power.

The Socialists are ahead in opinion polls – which show them on around 30% of voting intentions – but the two main right-of-centre parties together poll at more than 30%. In Spain’s most populous region of Andalucía they unseated the socialists last year with the help of the far-right party Vox.

Back in the City, the FTSE 100 is closing in on a new four-month high.

The blue-chip index is now up 50 points at 7184, only a few points away from last week’s peak.

This chart, from the inflation report, shows how the energy price cap kicked in, pulling the cost of living down;

Thomas Wells, manager of the Smith & Williamson Global Inflation-Linked Bond Fund, fears a disorderly Brexit would send inflation soaring again:

He says:

“With the UK mired in a major political crisis, we are still conscious that a ‘crash out’ Brexit would deliver a short-term inflation shock.”

Nice emoji work here

UK inflation fell to 1.8% in January – the lowest in 2 yrs

ONS say the fall is due mainly to cheaper gas, electricity + petrol⛽️ partly offset by rising ferry prices ⛴️+ air fares ✈️ falling more slowly than last year

The slump in eurozone factory output shows European manufacturers are being hit by a swath of problems – at home and abroad.

Bert Colijn of ING (who may have been enjoying a recent BBC hit drama) explains:

The eurozone industrial sector is plagued with more drama than an average episode of The Bodyguard. Trade wars, emission standard related production delays, yellow vest movements and slowdowns in emerging markets have all played a part in the weakening of production over recent months, causing two quarters of declining production.

While the headline figure was much worse than anticipated, durable goods production increased in December and intermediate goods production was flat after a sharp decline in November. Out of the large economies, both Germany and France saw production increase, while Spain, Italy and the Netherlands contributed to the decline.

Here’s my colleague Richard Partington on the drop in UK inflation:

Related: Fall in energy prices drags UK inflation to two-year low

One month’s decent inflation figures doesn’t make up for 10 years of austerity….

Uk drop in inflation means that real wages are now only 5% lower than they were in 2008

Good news for cash-conscious families: Stephen Clarke of Resolution Foundation thinks inflation will keep falling:

This will provide a welcome boost to household spending power and means we could be in for wage growth of 1.5% next month (first time this has happened since mid-2016)

Fall has been driven by Ofgem’s price cap on standard variable tariffs which caused a noticeable fall in housing & household service inflation in January

We could be in for further falls in the months ahead. Producer prices (often a leading indicator) also fell this month, driven by significant falls in global energy (oil) prices

Yikes! Eurozone factories have just suffered their worst month since the financial crisis.

Industrial production across the eurozone shrank by 0.9% in December, new figures show. That means output was a shocking 4.2% lower than a year before.


LATEST: Industrial production across the 19-nation euro area is falling at the fastest pace since the financial crisis

Eurozone industrial production plunges -0.9% MoM in December, well below the expected -0.4% and by a surprising -4.2% YoY (Exp. -3.2%), the worst decline since Dec 2009. Recession looks more likely in the euro area @graemewearden

UK house price inflation has also slowed, to a five year low.

Average prices rose by 2.5% year-on-year in December, the ONS reports, down from 2.7% in November.

Commenting on today’s figures on house prices for the UK, our Head of Inflation Mike Hardie said

#UK house price growth continues to slow and in London prices are now lover than a year ago. The reason is a combination of tighter credit standards, changes to Stamp Duty & #Brexit uncertainties $EURGBP

These UK inflation figure are a real boost to household incomes.

They could help people save a bit more, says Kate Smith, Head of Pensions at Aegon:

“Inflation fell for the third month in a row to 1.8% in January, the lowest level since January 2017, bringing the 12-month rate finally below the Bank of England’s target of 2%. With the latest wage growth figures showing a positive trend, the gap between earnings and inflation continues to widen and households will feel an ease in the cost of living. In the period of real wage growth, individuals should find themselves in a strong financial position to set out financial goals and those who can afford to save any additional income should be encouraged to do so.

Taking a glass-half-empty approach, weak inflation can also be a sign that economic activity is cooling.

Nancy Curtin, chief investment officer of Close Brothers Asset Management, explains:

“Despite the UK labour market remaining tight, political and economic uncertainty have held prices down. With oil prices low on the back of weaker global demand and air fares tumbling, inflation has kept close to the Bank of England’s target.

“The sluggish UK economy is symptomatic of the wider picture. Central banks across the globe have taken their foot off the stimulus pedal and we are now seeing the results. With idiosyncratic issues in both the US and Europe slowing growth, Brexit affecting the UK, trade disputes, and a Chinese slowdown, we’re indisputably in a mid-cycle slowdown. A global recession seems a far flung prospect, however in the UK Carney must be flexible and data-driven, putting decisive monetary policy on the back burner until greater political and economic clarity emerges.”

Irony of the day: January’s inflation report shows that the energy price cap helped UK households… just a week after regulators agreed to LIFT the cap because wholesale prices have risen.

Here’s some instant reaction to the unexpectedly large drop in UK inflation:

Welcome news for UK real pay growth prospects, as UK CPI inflation fell to 1.8%y/y in January, with the core measure (that excludes food & fuel) steady at 1.9%y/y. Gas & electric prices were the biggest factor behind the fall (linked to Ofgem’s January price cap).

Headline inflation rate drops below the @bankofengland’s 2% target for the first time in two years (CPI down to 1.8% in Jan)

Inflation matters little to the pound in a market dominated by Brexit will-they-won’t-they

Falling inflation means that real wages are rising.

Average basic pay in the UK rose by 3.3% per year in the quarter to November (the most recent data available). So if inflation is just 1.8%, that means real earnings are growing by roughly 1.5% per year.

Here’s the Office for National Statistics’ explanation for how cheaper energy has pulled inflation down over the last year

The largest downward contribution to the change in the CPIH 12-month rate came from housing and household services, where gas and electricity prices fell, between December 2018 and January 2019, by 8.5% and 4.9%, respectively.

The downward movement partially reflected the response from energy providers to Ofgem’s January energy price cap which came into effect from 1 January 2019.

Clothing and footwear price have fallen over the last 12 months, today’s inflation report shows.

That’s a sign that struggling retailers have been slashing prices in an effort to lure shoppers.

Cheaper energy costs helped to pull Britain’s inflation rate down to just 1.8% last month, below the Bank of England’s target.

Prices of electricity, gas and other fuels fell between December 2018 and January 2019 compared with price rises the same time a year ago.
These downward effects were partially offset by air fares, with prices falling between December 2018 and January 2019 by less than a year ago.

Newsflash: UK inflation has hit a two-year low of 1.8% in January, bringing some relief to households.

That’s lower than expected, and down from 2.1% in December.

UK CPI Y/Y (Jan)
Actual: 1.8% Survey: 1.9% Prior: 2.1% #gbp

UK Core CPI Y/Y (Jan)
Actual: 1.9% Survey: 1.9% Prior: 1.9% #gbp

UK furniture and homeware group Dunelm is also getting ready for Brexit.

It told the City this morning that it has been stockpiling some popular items, in case of a no-deal crisis.

The business imports less than 1% of its goods from EU countries. However, we have identified some risks arising from potential disruption at ‘deep-sea’ ports in the period following exit.

Actions have been taken within the business and throughout our supply chain to mitigate these risks, such as purchasing incremental stock of some best-selling lines and securing additional supply chain capacity.

European stock markets are all showing gains, following president’s Trump’s hint that he might give China more time to reach a trade deal.

UK housebuilder Galliford Try has added its voice to the chorus urging MPs to avoid a no-deal Brexit.

In its latest financial results, the company says crashing out of the EU would badly hurt the economy:

We consider that a controlled departure under the terms of a withdrawal agreement between the UK and the EU will have no significant direct impact, with supply chains and EU and other overseas labour able to adjust over time as detailed future arrangements become clear.

If the UK leaves without a deal, the biggest impact we foresee is the effect on our markets, and on Linden Homes market in particular, of a potential severe decline in consumer confidence and economic activity in general

Britain’s FTSE 100 has opened 25 points higher at 7,157.

That takes it closer to last week’s four-month high.

Equity market investors can practically taste the beautiful piece of chocolate cake served on a Mar a Lago plate.

Enthusiasm about the prospect of a US-China trade deal led equities to rally. The hope is that not only will there be no new taxes, but some of the existing taxes may be reversed.

Sterling is bobbing around the $1.29 mark against the US dollar this morning, roughly where it ended yesterday. Today’s inflation data could move the currency pair, though.

In focus today will be inflation data from the UK and US which could move GBP and USD.

Asian markets reacted positively to Donald Trump’s hint, hitting their highest levels in four months.

US negotiators are having high-level meetings with Chinese officials in Beijing this week, and flexibility on the deadline would reduce the pressure for an immediate breakthrough.

Any delay to higher tariffs would be positive for markets, so the news was greeted by an equity rally, with cyclical and trade-dependent stocks outperforming.

Overnight, Donald Trump has hinted that he could extend the deadline to reach a trade deal with China.

The US president revealed that the existing plan – for a trade deal by March 1st – could be rejigged, if Washington and Beijing are making progress.

“If we’re close to a deal where we think we can make a real deal and it’s going to get done, I could see myself letting that slide for a little while.

“But generally speaking, I’m not inclined to do that.”

China trade deal deadline could slide: Trump via @ReutersTV

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Related: Wednesday briefing: Drinking up time? Brexit plot spilled in Brussels

The US headline inflation dynamic is going to be weak in the first half of 2019 – but that is all down to energy prices. Underlying that, core inflation should actually be pretty firm (our economists note demand is strong, evidenced by strong chain-store sales and very healthy income growth). The Fed has explicitly said it can wait as long as inflation is under control – so stronger inflation supports a less dovish outlook and stronger US dollar.

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