Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Two major credit agencies have slashed Thames Water’s debt rating into the lowest reaches of junk, piling pressure on the UK’s largest water utility as it runs through cash faster than expected and seeks to avoid a renationalisation.
Both S&P and Moody’s cut the rating on Thames Water’s £16bn of top-ranking debt by five notches to the equivalent of CCC+, putting it into so-called triple-C territory that is considered highly risky and prone to default. Thames Water lost its investment-grade credit rating in July.
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Both rating agencies cited the utility’s worsening liquidity situation as a driver behind the steep downgrades, with S&P citing “near-term liquidity stress” and Moody’s stating that the utility has a “significantly tighter liquidity position than previously expected”.
The Financial Times reported on Tuesday that Thames Water is burning cash at a faster rate than it earlier expected, pushing it to try to access back-up liquidity facilities and piling pressure on the company to roll £500mn of debt due in days.
Thames Water last week announced that it will run out of cash shortly after Christmas if it is not able to get permission from banks to access liquidity reserves and roll certain credit facilities, which will then mean it will have to call a default on its debt to access £550mn of reserve liquidity facilities to have enough cash until May 2025.
S&P said that this announcement was “contrary” to previous expectations and that it now assesses Thames Water’s “management and governance as negative”.
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Commenting on the downgrades, Thames Water said: “We continue to operate to the undertakings agreed with our regulator in July 2024 following the reduction in our class A debt rating to subinvestment grade and we continue to engage with creditors to consider options for the extension of our liquidity runway.”
In 2010 the Gulf state of Qatar bought luxury department store Harrods for £1.5bn, via its sovereign wealth fund, the Qatar Investment Authority.
It should have been the jewel in the Qatari crown. However, Harrods now faces serious sexual abuse allegations over the actions of its former boss, Mohamed Al Fayed.
Many of these claims were uncovered in a recent BBC investigation, but multiple legal experts have said Qatar either missed or dismissed much of what was already known about Al Fayed at the time of the purchase.
This includes a 2008 police investigation into the alleged assault of a 15-year-old girl in a Harrods boardroom.
Harrods has told the BBC it is “utterly appalled” by the allegations and has apologised to the victims.
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It now looks as if the scandal could cost the company and its owner millions.
So what, if anything, was known by Qatar about the allegations?
‘Inadequate’ due diligence
When a company buys another company, the process of looking to see if there are any skeletons in the cupboard is known as due diligence.
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The buyers will hire advisers who will ask the seller’s advisers questions about any issues they should know about. They may also do their own independent research.
When the owner is someone like Mohamed Al Fayed, who had several allegations surrounding him at the time of the deal, the buyer’s due diligence process should be lengthy.
“I think it would be sensible to ask detailed questions about number of claims, number of complaints – informal or formal – even if not upheld, subject of the complaints even if they were not upheld, number and value of settlements, number of NDAs (non-disclosure agreements),” says Beth Hale, a partner at law firm CM Murray.
In “exceptional cases” this information might scupper a deal, though she believes it is more likely the buyer would ask the seller to compensate them for any losses that might come from the alleged behaviour.
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This is what Ms Hale says a business should do if it were buying a company like Harrods in 2024, but she says that 2010 was a different time.
She says this pre-#MeToo era was a “world away in terms of attitudes and approaches to sexual harassment”.
“Sexual harassment claims did not form as big a part of due diligence then as they do now.”
She says it appears that either Qatar’s due diligence was “not adequate” or that the process did bring up certain claims and it decided to continue in any event, perhaps imagining that they might not end up hurting the company too badly.
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“Pre-#MeToo, with a couple of sexual harassment claims, a company might settle them, get an NDA, and move on.”
Catriona Watt, partner at Fox & Partners, says it looks as if Qatar may have known about the allegations but went ahead anyway.
“It seems to me that it wasn’t a complete secret. It was probably a calculated risk,” she says, adding the due diligence process “depends on the questions you ask”.
“You might say, ‘I only want to know about this if it has a value of X,”‘ she says.
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Virginia Albert, former marketing professor and current account director at advertising agency DeVito/Verdi, also believes Qatari views on women’s rights are relevant, suggesting they may not have considered sexual abuse allegations something sufficiently serious to warrant dropping the deal.
“You could argue that brands align with brand values during mergers,” she says, adding the Gulf state would have considered if its values “aligned with what they knew, if they knew, about the values of this department store”.
Lazard, which represented the Al Fayed Trust during the deal, told the BBC: “We strongly condemn the behaviour these reports have brought to light.”
Harrods and the Qatar Investment Authority did not reply to multiple requests for comment on the due diligence process when the company was bought. In its previous response to the BBC, Harrods said it had been settling claims “since new information came to light” last year.
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Meanwhile, Harrods’ managing director Michael Ward said on Thursday: “While it is true that rumours of [Al Fayed’s] behaviour circulated in the public domain, no charges or allegations were ever put to me by the police, the [Crown Prosecution Service], internal channels or others.
“Had they been, I would of course have acted immediately.”
Credit Suisse, now owned by UBS, represented the Qatar Investment Authority in the deal and declined to comment.
Compensation and reputation
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Whatever Qatar knew during the deal, the impact of the allegations is likely to be substantial.
First, there is the total cost of payments to the survivors of the alleged sexual abuse by Al Fayed, which multiple legal experts have told the BBC could be in the millions, with each individual claim likely to cost the firm a six-figure sum.
Harrods has accepted vicarious liability for some of the claims, a legal term meaning it accepts ultimate responsibility for Al Fayed’s alleged actions.
It could also be liable for alleged failings as an employer for charges such as negligence or failing to provide a safe working environment, experts predicted.
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Defending the legal case and hiring an independent investigator to look into the claims are also expected to be six-figure sums.
However, the real damage is expected to be reputational.
“People are going to be really, really pissed,” says Ms Albert, adding that many will want to see Harrods dealing with the serious allegations from the survivors swiftly and thoroughly.
“There’s so much more visibility now than there was.”
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What might save Harrods, she says, is the loyalty of its long-time shoppers, but the high-price point will make it much easier for casual customers who dislike the way the retailer is perceived to have treated women to go elsewhere.
She predicts boycotts and says the business may struggle to recover unless customers see action, rather than just words.
RETIRING early might sound like an impossible goal, but anyone can manage it if they know the tips and tricks to saving at the right time and in the right way.
The good news is that even small changes can make massive difference to how much you have saved and when you can afford to stop work.
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Find out what tips and tricks you need to know to retire earlyCredit: Alamy
A new movement, known as the FIRE movement (financial independence, retire early) are looking to retire as soon as possible.
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But you don’t need to be this extreme – there are realistic ways to retire early without working too hard.
The earlier you start making small changes, though, the easier it is, and if you leave retirement saving too late, you might actually have to retire later than you’d prefer.
We spoke to Robert Cochran, a pensions expert at Scottish Widows, to uncover the secret to retiring early and comfortably.
You can watch the video above to hear more about his top tips.
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Start early
Cochran’s first tip is to get saving as soon as possible. There are two reasons for this, the first is straightforward – starting earlier means more savings.
For instance, if you saved £100 a month into your pension from aged 16, you’d have £46,800 by the time you were 55, without any investment growth, employer contributions, or tax relief.
But, if you started at 40, you’d only have £22,500.
The more important consideration is investment growth, which compounds over time. Essentially this means that the returns you earn on your pensions are reinvested, which, so the money grows exponentially.
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Cochran explained: “Einstein said that compound interest was the eighth wonder of the world, these who know it will grow it, and those who don’t will pay it.”
For instance, if you pay a thousand pounds into a pension, and it earns 5%, in the first year you would get £50 added, in the second you’d have £1,050 invested and get £52.50 back.
The year after that you would get £55.13 added, and by year 10 you’d be getting £77.57 in interest – all without saving any extra money.
If you keep adding to the pension each year, the results are even more stark. For instance, if you saved £1,000 a year into a pension with growth of 5%, from age 18-55, you’d have £107,709.55 to retire on.
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Of that, £69,709.55 would be interest paid, which is essentially free money that you’ve earned on your savings.
If you were paying minimum auto-enrolment levels on the average UK full time salary, which works out as around £2,797 a year, you’d have £301,263.60 to retire on aged 55. But if you didn’t start saving till you were 30, you’d have just £142,964.33.
Consider saving into a pension for your children
Parents are allowed to open Junior SIPPs for their children, which is a way of saving money for their retirement.
You’re allowed to save up to £3,600 a year, 20% of which comes in the form of tax relief from the Government. That means you can save £240 a month before tax relief.
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If you do this from birth until they are 18, you’ll have over £64,800 saved for them.
Even if they never pay another penny in themselves, they’d have £394,075.17 by age 55, with returns of 5%. If they wait until they’re 60 to access the cash, they could have half a million pounds to retire on.
Cochran said: “You can actually pay contributions in for children. So, imagine somebody’s born and then you pay in contributions for them till they’re age 18… and then you leave that money to grow by the time they’re 60.
“That money could be worth £1 million. And that’s purely through compound and growth.”
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Don’t leave cash on the table
Cochran’s third tip is to make sure that you’re never missing out on free money that’s available.
The first thing to consider is auto-enrolment. Most people aged between 22 and 64 who are employed are auto-enrolled into a pension.
The minimum auto-enrolment level is 8% of your qualifying earnings, which is made up of a mix of money deducted from your salary, tax relief, and contributions from your employer.
It is possible to opt-out of auto-enrolment, but not only does that mean you won’t be saving, you’ll also miss out on the contributions from your workplace. That means you’re giving up free money from your boss, and you’ll lose the tax relief too.
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Even if you’re not eligible for auto-enrolment, for instance if you’re under 22, or earn less than £10,000 a year from a single employer, you might be able to opt in.
For instance, if you earn more than £6,240, you can choose to join the scheme and your employer will still have to pay contributions.
Another key thing to look out for is matching, which is when your employer says it will pay more money into the scheme if you do, up to a maximum.
Cochran explained: “Go back to your employer and find out the maximum contribution you’re entitled to get from them.
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“If you’re not receiving it, go ahead and ask for it. It might mean that you have to pay a little bit more, but do not leave cash on the table.”
Track down lost pensions
The Pension Policy Institute says that there is £26.6billion in lost pensions money.
Typically, this is where people have saved into a scheme but then moved job or house and forgotten about the pot.
Cochran said: “Use the Government’s free pension tracing service and find out what you’ve got.”
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To get started, gather all the pensions paperwork you do have, and make a list of every employer you’ve worked for or private pension you’ve opened.
The tracing service will tell you who ran the scheme at the time, and how to contact them. Then, you can get in touch and check whether they have any retirement savings in your name.
Make a plan
The fifth thing to do if you want to retire early is make a concrete plan.
Cochran said: “You need to know what you’re going to be doing in retirement… so, look towards your future. Use the tools and calculators that are there to help you.”
Start by working out how much you need to have squirrelled away, and don’t be scared by illustrative examples.
For instance, the Pensions and Lifetime Savings Association (PLSA) retirement living standards research says that a single person who wants a comfortable retirement will need £43,100 a year to live on.
But of course, this is higher than the average UK salary, and there are lots of people who live comfortably on much less.
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The amount you need will be determined by how early you want to retire, your life expectancy, your salary and typical monthly expenditure, and whether you own your home or not.
If you’re over 50, you can book a free and impartial session with a Pension Wise adviser who can share important information and make sure you understand all the facts before you decide to retire.
What are the different types of pensions?
WE round-up the main types of pension and how they differ:
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Personal pension orself-invested personal pension (SIPP) – This is probably the most flexible type of pension as you can choose your own provider and how much you invest.
Workplace pension – The Government has made it compulsory for employers to automatically enrol you in your workplace pension unless you opt out. These so-called defined contribution (DC) pensions are usually chosen by your employer and you won’t be able to change it. Minimum contributions are 8%, with employees paying 5% (1% in tax relief) and employers contributing 3%.
Final salary pension – This is also a workplace pension but here, what you get in retirement is decided based on your salary, and you’ll be paid a set amount each year upon retiring. It’s often referred to as a gold-plated pension or a defined benefit (DB) pension. But they’re not typically offered by employers anymore.
New state pension – This is what the state pays to those who reach state pension age after April 6 2016. The maximum payout is £203.85 a week and you’ll need 35 years of National Insurance contributions to get this. You also need at least ten years’ worth to qualify for anything at all.
Basic state pension – If you reach the state pension age on or before April 2016, you’ll get the basic state pension. The full amount is £156.20 per week and you’ll need 30 years of National Insurance contributions to get this. If you have the basic state pension you may also get a top-up from what’s known as the additional or second state pension. Those who have built up National Insurance contributions under both the basic and new state pensions will get a combination of both schemes.
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
New legislation that puts companies on the hook for employees committing fraud could lead to a significant increase in plea-bargain-style deals with the prosecutor, according to the head of the UK Serious Fraud Office.
SFO director Nick Ephgrave said deferred prosecution agreements — or DPAs — could come back with “a vengeance” once a new offence that puts the onus on businesses to prevent fraud comes into force, which is expected to be next year.
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Under a DPA, first introduced in the UK a decade ago, a criminal prosecution against a company is suspended if the business approaches the SFO and agrees to terms — approved by a judge — such as co-operating with investigations against individuals, paying a fine and abiding by certain conditions. This allows companies to avoid criminal convictions and long trials.
“DPAs I think are a really helpful and useful tool in the armoury,” said Ephgrave, who took over the helm a year ago this month.
“I think they could really come back with a bit of a vengeance when we have the duty to prevent fraud offence active.” The new rules “could lead to an uptick in DPA-type referrals”, he added.
“DPAs . . . avoid what is often going to be a very costly and lengthy trial, and get the benefit for victims . . . and or the benefit to the country of enormous fines, which then go back into the coffers,” he added.
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The SFO has previously secured a dozen DPAs against companies including Rolls-Royce and Airbus.
A former police officer and the first non-lawyer to run the SFO, Ephgrave is trying to resurrect the agency’s reputation after a number of high-profile failures.
Under previous director Lisa Osofsky the prosecutor closed several investigations against blue-chip companies, saw convictions quashed in cases after mis-steps, and struggled to recruit staff.
The SFO is currently embroiled in a lawsuit with Eurasian Natural Resources Corporation, formerly the target of an investigation, that could see the agency forced to pay potentially millions of pounds to the mining group in compensation.
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Ephgrave said the SFO was “disappointed” by the court’s decision over its liability in the case and “will enter into the quantum negotiations resolutely”, but declined to comment further while the litigation is still live.
Ephgrave is also pushing to introduce payment for whistleblowers in the UK, which may require new legislation.
While he has yet to discuss the plans directly with new government, he said he hoped such an initiative would be introduced during his five-year tenure.
His comments come the day after the chair of the UK’s financial regulator faced calls to resign over his mishandling of whistleblower details.
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Ashley Alder from the Financial Conduct Authority refused to quit on Thursday despite protest groups criticising him after an internal review that cleared him of wrongdoing for forwarding messages from two whistleblowers inside the business.
Millions of households could be in line for cost-of-living payments worth up to £3,225 this winter.
For those under financial pressure, several schemes offering support to help you get through the cold period.
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Millions of households are eligible for cash support this winterCredit: Getty
With additional heating costs, not to mention Christmas expenses, the winter months can mean additional financial pressure.
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For some this will be exacerbated by the government’s decision to limit the number of people who receive the £300 winter fuel payment from this year.
The support available includes the following…
Warm home discount – worth £150
The £150 warm home discount is available to pensioners and those on low incomes.
Those who qualify for the discount will have £150 deducted from their energy bills by the end of March 2025.
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You’ll be eligible if you receive the guarantee credit element of Pension Credit, or are on a low income and have high energy costs.
The discount should be automatically deducted from your energy bill this winter if your eligible, but those on low-incomes living in Scotland need to apply through their energy providers.
If you were eligible for the payment last winter and did not receive it, contact your energy supplier.
If your energy supplier is unable to help write to the warm home discount scheme on 110552 Warm Home Discount Scheme, PO Box 26965, Glasgow, G1 9BW.
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What is the energy price cap?
Winter fuel payment – £300
This year winter fuel payments will only be made to retirees on Pension Credit and several other means-tested benefits.
Under the new rules, all households claiming the following benefits will automatically receive this year’s winter fuel payment, unless they live abroad:
Only those living abroad and meeting certain conditions must apply for the cash this winter.
If you do not live in the UK, you’re only eligible for the winter fuel payment if:
You moved to an eligible country before January 1, 2021
You were born before September 23, 1958
You have a genuine and sufficient link to the UK – this can include having lived or worked in the UK and having family in the UK
You only need to claim winter fuel payment if you’ve not received it since you moved abroad.
To claim by post, you’ll need to fill in the winter fuel payment claim form and post it to the Winter Fuel Payment Centre.
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This will be available at www.gov.uk/winter-fuel-payment/how-to-claim from September 30.
Cold weather payment – £25 a week
Cold weather payments are made to eligible residents in areas where the temperature is recorded at zero degrees Celsius or below, for seven consecutive days.
A £25 payment will be made for each seven day period of very cold weather between November 1 2024 and March 31 2025.
You may be eligible for the payments if you receive:
The bonus isn’t available to those who receive Universal Credit only but someone on Universal Credit who also receives one of the qualifying benefits will receive it.
Household Support Fund – up to £740
Struggling households can access a range of support to help with the cost of living via the Household Support Fund.
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The fund has recently has been extended for the sixth time, with £421million set to be made available to regional councils to distribute from October 2024.
The support you can access depends on where you live, but funds can be paid out as shopping or fuel vouchers, cash payments or other means.
Under the previous round of funding households in Leicester could apply to receive £300 payments to help with utilities and essential costs.
In Plymouth eligible residents could receive a maximum of £740 in vouchers.
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This included £240 in supermarket vouchers, £200 in energy vouchers as well as an essential item of household furniture or white goods or £300 of clothing vouchers.
Schemes vary across the country, but every council will receive funding to distribute.
To see what’s on offer where you live contact your local council.
Energy grants – up to £2,000
Energy firms are handing out up to £2,000 to help those struggling with energy costs to cover bills.
From reducing energy consumption to effectively heating your home The Sun’s guide can help you cut costs.
How to save on your energy bills
SWITCHING energy providers can sound like a hassle – but fortunately it’s pretty straight forward to change supplier – and save lots of cash.
Shop around – If you’re on an SVT deal you are likely throwing away up to £250 a year. Use a comparion site such as MoneySuperMarket.com, uSwitch or EnergyHelpline.com to see what deals are available to you.
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The cheapest deals are usually found online and are fixed deals – meaning you’ll pay a fixed amount usually for 12 months.
Switch – When you’ve found one, all you have to do is contact the new supplier.
It helps to have the following information – which you can find on your bill – to hand to give the new supplier.
Your postcode
Name of your existing supplier
Name of your existing deal and how much you payAn up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won’t be interrupted in that time.
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Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
Without children, it meant we could avoid the long waits for character meets, skip the Disney dining and not worry about limiting wine.
And having opted for the Premier Access Ultimate, I realised you can easily do both of the parks in one day, if you are savvy.
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The pass, admittedly an extra £83 on top of the park entrance fee, can be used once on several rides, usually those with the biggest queues.
My sister couldn’t quite stomach Hyperspace Mountain, known for hitting speeds of 71kmph.
Didn’t matter to me, I hopped through the fast queue and rejoined her barely five minutes later.
Also worth the queue jump are Big Thunder Mountain Railroad, where wait times can be more than an hour, and Buzz Lightyear Laser Blast.
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I’m not sure how, but I ended up with 60,000 points after frantically zipping and zapping the villain Zurg, much to my sister’s chagrin.
The photo at the end may have caught us grappling with each other as we tried to block the other’s laser gun.
The huge new £4.3billion attraction right on the beach that claims it will ‘rival Disneyland’ with rides and resorts
The pass can be used on other long-wait rides including Indiana Jones and the Temple of Peril, one of the scarier roller-coasters, as well as the laid-back driving Autopia ride.
But there is also the second park, Walt Disney Studios, to make the most of too.
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Home to both Toon Studios and Avengers Campus, our competitive nature was tested once again on the Spider-Man W.E.B. Adventure ride.
Similar to Buzz, this time we had to fling “webs” using our arms to stop the multiplying Spider-Bots.
My winning streak ended here, and I was smashed on the scoreboard by my very smug sibling.
I cheered myself up with a glass of champagne from a cart back on Main Street.
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Unique to Disneyland Paris, it comes with a €20 price tag although you get to keep the souvenir cup.
Continuing our “hooray no kids” theme, our evening carried on at the Disney Hotel New York – The Art of Marvel, a five-minute walk from the park gates.
We made the most of joyously late dinners at the Manhattan Restaurant with huge plates of pasta, followed by drinks at the Skyline Bar.
Firework show
That rollercoaster adrenaline hadn’t worn off, so after watching the final firework show in the park, we opted for a late night at the Disney Village.
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With some bars open until 2am, we danced and sang to live pop and country music at Billy Bob’s.
It was our aching feet that brought us back to the hotel after racking up 32,000 steps.
We gorged on turkey legs, creamy tartiflette and sickly sweet Darth Vader waffles to keep us going throughout the day
Kara
Our only day-time respite was at the hotel’s Metro Pool, brisk at first but with a warmer hot tub to help our sore toes.
The park is currently undergoing a transformation ahead of the new Frozen land, so expect some closures and boarded-up areas.
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Thankfully all the important stops were open – and by that I mean the food stands.
We gorged on turkey legs, creamy tartiflette and sickly sweet Darth Vader waffles to keep us going throughout the day, before packing a Mickey cookie for the train home.
We’ll just pretend the bickering on the Eurostar about who gets to keep the ride photo didn’t happen…
GO: Disneyland Paris
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Eurostar tickets from London St Pancras to Lille start from £39. See eurostar.com
Lille to Disneyland Paris (Marne-la-Vallée Chessy) tickets start from £8.87. See trainline.com.
One-day adult tickets with access to two parks start from £74.99. Disney Premier Access Ultimate passes start from £83.33. For more info see disneylandparis.com.
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Thailand has begun rolling out a $14bn stimulus programme this week to distribute cash to millions of citizens, but the much-anticipated scheme may not be enough to turn around years of sluggish growth in south-east Asia’s second-largest economy.
The ruling Pheu Thai party has promised to give 45mn people a handout of 10,000 baht ($300), pitching it as the centrepiece of an economic plan to boost growth, which has lagged regional peers due to high household debt, weak exports and a slump in tourism revenue.
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Since taking office in August last year, the party has struggled to implement the policy amid opposition from some politicians and the central bank as well as concerns about the cost and financing of the programme.
To get it off the ground, new Prime Minister Paetongtarn Shinawatra is introducing it in phases, with the government estimating that the first phase alone should boost growth by 35 basis points this year.
In the first tranche, the government will distribute funds to about 14.5mn people, including some of the most vulnerable sections of the population. Initially intended to be distributed through a digital wallet, the handout will now be directly transferred to the recipients’ bank accounts.
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“[The cash handout] will truly benefit the people, help distribute economic opportunities to the people,” Paetongtarn said at a launch event this week. “There will be many more stimulus policies following this one. The government will continue and move forward with the digital wallet project.”
About 36mn Thai people have registered for the handouts, but economists warn they will have a limited, one-off impact and will do little to repair an economy burdened by structural issues and political instability. The Thai economy grew 1.9 per cent last year, lagging regional peers such as Indonesia, south-east Asia’s biggest economy, which grew 5 per cent.
Thailand is grappling with high household debt, which has held back consumer spending and, at more than 90 per cent of GDP, is one of the highest in Asia. The economy has also been hit by weak exports and a slowdown in tourism since the Covid-19 pandemic.
“The digital wallet scheme indubitably benefits near-term consumption . . . the concern remains that without accompanying structural reforms, this could simply be a temporary boost, rather than a long-term solution to the country’s deeper economic issues,” said Luca Castoldi, senior portfolio manager at Reyl Intesa Sanpaolo.
Paetongtarn is the 38-year-old daughter of the influential former premier Thaksin, who was removed in a coup in 2006. Yingluck Shinawatra, Thaksin’s sister, was impeached by parliament in 2015 for alleged mismanagement of a rice subsidy scheme, another populist programme.
Fast turnover of prime ministers, through military coups or the judiciary, has also hurt investor sentiment, economists said.
Former premier Srettha Thavisin, whose dismissal by the Constitutional Court in August paved the way for Paetongtarn to take over, failed to implement the digital wallet programme due to backlash against his initial plan to fund it through borrowing and warnings from the national anti-corruption agency that the scheme could violate Thai laws on fiscal discipline.
Thailand’s central bank has also cast doubts on the programme’s benefits and called it a fiscally reckless initiative. The bank has been under pressure from the government to cut interest rates to bolster growth, which economists say could happen this year due to the baht’s recent strength.
OCBC’s senior Asean economist Lavanya Venkateswaran said the economic benefit from the first tranche would quickly fade, forecasting the programme would lift GDP by 100 basis points if it were fully implemented.
“Is the boost to growth going to last? Is this the best way to spend funds? Is it actually going to help address any of the structural issues that the Thai economy faces? Those concerns have not gone away,” she said.
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