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Stock markets are too high and set to fall, says Bank of England deputy

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The Bank of England expects stock markets around the world to fall as share prices do not reflect the many risks facing the global economy, its deputy governor has told the BBC.

Sarah Breeden said: "There's a lot of risk out there and yet asset prices are at all-time highs. We expect there will be an adjustment at some point."

It is unusual for a senior figure at the Bank to be so forthright on market movements.

Breeden, who is also the Bank's head of financial stability, declined to say when she expected markets to fall or by how much, but pointed to a number of factors that markets seemed complacent about.

"The thing that really keeps me awake at night is the likelihood of a number of risks crystallising at the same time – a major macroeconomic shock, confidence in private credit goes, AI and other risky valuations readjust – what happens in that environment and are we prepared for it?" she said.

A sharp fall in stock markets can have a number of effects on the economy. If households own shares, a fall in their value can make people feel poorer which might make them cut back on spending.

It can also make it harder for businesses to raise funds, which means they might reduce or delay investment. Falling markets can also hit confidence, which might lead to companies cutting back on hiring.

The US stock market is home to the world's biggest companies and has set a series of all-time highs recently despite warnings from the International Energy Agency that the world economy is facing the biggest energy shock in history.

Technology firms have poured hundreds of billions of dollars into AI infrastructure prompting some, including Microsoft founder Bill Gates to call it "a frenzy" that resembles the dotcom bubble of the late 1990s, when investors threw money at unproven start-ups that quickly went bust or had billions wiped off their value.

Nvidia boss Jensen Huang, the biggest supplier of chips to AI companies, is among those to dismiss these concerns.

A number of funds that mimic the role of banks and lend privately to businesses have sustained losses and have had to restrict withdrawals from investors, sparking concerns of weaknesses in the financial system.

Breeden said the enormous growth in this so called "shadow banking" system has not been tested.

"Private credit has gone from nothing to two-and-a-half trillion dollars in the last 15 to 20 years. It hasn't been tested at this scale with the degree of complexity and interconnections it has with the rest of the financial system so far," she said.

"It's a private credit crunch, rather than a banking-driven credit crunch, that we're worried about."

The UK stock market does not contain the kind or size of AI companies that have helped drive US markets to records but the FTSE 100 index is also within 5% of its own all-time high.

Breeden said her job was not to predict when and how much the markets fall but to ensure the financial system is ready if it does.

"What we are watching for: is how might those prices fall? Will there be a sharp adjustment downwards? And if there is such an adjustment, how will that affect the economy? I'm not saying it will happen today, tomorrow, in 12 months' time. It's ensuring that if it happens the system is resilient."

📰 மூல செய்தி (Source): https://www.bbc.com/news/articles/c75kp1y43lgo?at_medium=RSS&at_campaign=rss

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Iranian group could be labelled national threat under proposed new law

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Legislation which would enable the home secretary to designate some state-linked organisations such as Iran's Islamic Revolutionary Guard Corps (IRGC) as a threat to national security could come into force as early as next month.

The National Security (State Threats) Bill was introduced to Parliament on Tuesday, and could become law within weeks.

It would allow Shabana Mahmood to designate groups involved in "foreign power threat activity" such as assassination attempts, surveillance and sabotage.

The bill also creates three new criminal offences, including one of supporting a designated state threat organisation and two of assisting and accepting material benefit from such a group.

The legislation was suggested by the government's Independent Reviewer of State Threats Legislation Jonathan Hall KC, when he concluded that it was difficult to ban state-linked groups like the IRGC as terrorist organisations.

In the last year, men have been convicted of spying on Hong Kong dissidents in the UK on behalf of China, carrying out an arson attack on a Ukrainian warehouse on behalf of the Russian group Wagner, and stabbing an opposition journalist in Wimbledon on behalf of Iran.

In those last two cases, the people who carried out the attacks were criminals who were doing it for money.

These cases showed that often hostile foreign powers were not only using their intelligence agencies to undermine security in the UK, but were also hiring criminal proxies through other state-linked organisations such as the Wagner Group and the IRGC.

It meant that the National Security Act 2023, which focused on foreign intelligence services, was quickly out of date.

Prime Minister Sir Keir Starmer said: "Where foreign states are found to be engaging in activity that threatens lives or undermines our democratic institutions, we must ensure that such actions have consequences.

"We will not tolerate hostile actors paying petty criminals to do their dirty work."

Mahmood said: "Foreign states are becoming ever more aggressive – attacking our communities, our way of life, and our institutions – and hiding their tracks behind proxies.

The bill is seen in Whitehall as a vital upgrade of the National Security Act which was only passed three years ago.

Officials say they have been seeing unprecedented levels of threat from people and groups working on behalf of foreign states.

The Director General of MI5, Sir Ken McCallum, said the security service had "tracked more than 20 potentially lethal Iran-backed plots" in just one year.

The prime minister and home secretary fast-tracked the legislation after recent attacks on Jewish targets.

Several of those were claimed by a new group calling itself Harakat Ashab al-Yamin.

The IRGC was set up after the 1979 revolution to defend the country's new Islamic system, but has since become a powerful arm of the state with a reach beyond Iran's borders.

In the impact assessment accompanying the bill, it is anticipated that 10 or fewer organisations will be designated as state threats in the first year after the legislation is passed.

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📰 மூல செய்தி (Source): https://www.bbc.com/news/articles/cgqj8xzkqqyo?at_medium=RSS&at_campaign=rss

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Construction on fire site by Glasgow Central Station might not start for several years

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The leader of Glasgow City Council has said construction work on the Union Corner site destroyed by fire earlier this year might not begin for five or six years.

Susan Aitken added that the planning and consultation process regarding the land is likely to last until about 2030, partly because the wrecked building has a complicated ownership structure.

She made the comments at an event organised by online newspaper The Glasgow Bell last week. Glasgow City Council said it was exploring options for the site in the short, medium and long term.

A devastating fire broke out on Union Street on 8 March, initially starting in a vape shop on Union Street and then spreading further up the street.

The building is managed by property company Stelmain on behalf of Dunaskin Properties, while the ground-floor retail unit where the fire began is owned by Afton Estates.

Multiple ownership means it is likely to take time before development proposals start to be looked at.

BBC Scotland News understands the council leader's estimated timescale is shared by other senior officials within the local authority.

A spokesperson for Glasgow City Council said: "We are continuing to work on making the site safe – at this point, focusing on works on the western gable wall – with a view to reopening Union Street as quickly as possible.

"Beyond that, we are working with the owners on how the site will look and feel and how it could be used in the short, medium and long-term."

A recovery group has already been convened, which includes representatives of design and architecture companies.

Only the façade of the building at the corner of Gordon Street and Union Street was left standing after the fire in March.

The building known as Union Corner, dates back to 1851, pre-dating Glasgow Central Station which opened in 1879.

📰 மூல செய்தி (Source): https://www.bbc.com/news/articles/cd7wx7409g7o?at_medium=RSS&at_campaign=rss

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Hidden camera found in government building

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A hidden camera has been discovered in a government building in the heart of Westminster.

The electronic device was found in the communal area of the complex on Marsham Street, where the Home Office and Ministry of Housing, Communities and Local Government (MHCLG) are based.

The i newspaper, which first reported the story, said it was found behind a ceiling panel within the last two months, and security services have been informed.

Home Office sources say it was found in MHCLG's part of the building, away from ministerial offices. An MHCLG spokesperson said: "We do not comment on security matters."

The building is the base for the Home Office, responsible for policing in England and Wales and national security, and MHCLG, which is responsible for housing and planning policy in England.

Tory shadow Cabinet Office minister Alex Burghart said: "This is a serious incident that demands an urgent investigation.

"The discovery of a hidden camera inside a building that occupies the Home Office and other departments raises questions about the security of government departments and those seeking to undermine them.

"The public deserves answers. We urgently need to know who was responsible, how long this device was in place and whether any sensitive or classified information has been compromised."

The Home Office declined to comment. The prime minister's spokesman declined to comment, referring reporters to the earlier statement from MHCLG.

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📰 மூல செய்தி (Source): https://www.bbc.com/news/articles/c802r4xnkrxo?at_medium=RSS&at_campaign=rss

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