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UK 2018 economic growth weakest since 2012, as Brexit and global worries weigh



A British Union flag, also known as a Union Jack, flies beside a European Union (EU) flag during ongoing pro and anti Brexit protests outside the Houses of Parliament in London, U.K., on Tuesday, Jan. 22, 2019.

Bloomberg | Bloomberg | Getty Images

A British Union flag, also known as a Union Jack, flies beside a European Union (EU) flag during ongoing pro and anti Brexit protests outside the Houses of Parliament in London, U.K., on Tuesday, Jan. 22, 2019.

“GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining,” ONS statistician Rob Kent-Smith said.

For 2018 as a whole, growth dropped to its lowest since 2012 at 1.4 percent, down from 1.8 percent in 2017. Exports suffered from global weakness and consumers and businesses grew increasingly concerned about the lack of a plan for when Britain is due to leave the European Union on March 29.

Last week the BoE chopped its forecast for growth this year by 0.5 percentage points to 1.2 percent, which would be the weakest year since the 2009 recession.

The final months of 2018 saw concerns about a global slowdown hurt growth across major economies, due in part to trade tensions between the United States and China, and Brexit has remained an added challenge for Britain.

Monday’s data showed net trade lopped more than 0.1 percentage points from the fourth quarter growth rate. Falling business investment did similar damage.

Looking at December alone, the economy contracted by 0.4 percent, the biggest fall since March 2016.

Less than seven weeks before Britain is due to leave the EU, Prime Minister Theresa May has so far failed to win parliament’s backing for the plan she agreed with Brussels to avoid reimposing checks on goods exported from Britain.

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Bugatti’s $18.7M La Voiture Noire makes US debut at Pebble Beach



Bugatti’s La Voiture Noire

Source: Bugatti 2019.

The world’s most expensive new car makes its North American debut this week at the world’s premier luxury auto show, the Pebble Beach Concours D’Elegance, which kicks off Tuesday in Monterey, California.

Bugatti debuted its one-of-a-kind $18.68 million La Voiture Noire, which translates to The Black Car, at the Geneva International Motor Show in March. The car pays homage to the art deco design of the Type 57SC Atlantic, one of the most coveted classic cars in the world. Designed in 1934 by Jean Bugatti, eldest son of company founder Ettore Bugatti, only four were made. Three are accounted for while the fourth one, which was lost in World War II, would be valued at well over $100 million if found today.

The new La Voiture Noire packs 1,500 horsepower and 1,180 pound-foot of torque that propels it from 0 to 60 mph in 2.5 seconds. It has a quad turbo W-16 engine with a top speed of 261 mph.

“We produced a true one-off, a single unit car that we call automotive haute couture,” said Achim Anscheidt, Bugatti’s design director. “It’s not just a car anymore, it’s really more like a piece of art in line with the highly exclusive fashion and luxury brands in France.”

Bugatti’s La Voiture Noire

Source: Bugatti 2019.

Bugatti limited the La Voiture Noire’s top speed to give it more touring refinement. The company’s previous limited-run model, the Divo, also traded top speed for a focus on cornering.

“High-speed mode was not relevant for these cars because they had a much different focus. The Divo is made for corners and La Voiture Noire is a Grand Turismo,” said Tim Bravo, a Bugatti spokesperson.

The car at Pebble Beach has already been purchased, but Bugatti isn’t saying who owns it. Rumored buyers have included soccer star Cristiano Ronaldo and Ferdinand Piech, former chairman of the Volkswagen, which owns Bugatti.

“As soon as a customer makes a public claim, then we can refer to that, but other than that we will honor a customer’s anonymity and he will decide whether or not he wants to remain anonymous,” said Bravo.

Whoever it is, he won’t be driving the car any time soon. Bravo said Bugatti still needs about 2½ years to finish and deliver the car.

Bugatti’s La Voiture Noire

Source: Bugatti 2019.

Bugatti has been making one-of-a-kind and custom-made cars for its ultra-wealthy clients for more than 100 years. The average Bugatti buyer owns roughly 42 vehicles, five homes, three private jets, three helicopters and a yacht, according to Bugatti.

“When you’re wealthy, the thing that you want most after your wealth is to feel special and unique — and someone who pays $18 million for a car gets to claim ‘I bought the most expensive car ever, see how special I am,'” said Karl Brauer, an analyst for Autotrader.

After becoming a part of the VW Group in 1998, the company scrapped custom models in favor of more mass produced, but still incredibly limited, super cars.

In the years that followed, the company produced 450 Veyron super cars launched in 2005 and recently completed 200 of 500 planned Bugatti Chirons, which start at $3 million.

The French super car maker envisioned something more exclusive than that for its loyal customers and returned to its coach building roots to offer the Bugatti Divo at the 2018 Pebble Beach Concours.

That $5.8 million super car, which was based off the Chiron, was shown to a select group of Chiron customers at Pebble Beach last year. The limited production of 40 Divos sold out that same day, Bugatti said at the time.

“I think it’s brilliant on their part because they’re making a claim that they’re going back to their roots and once upon a time when cars came out they were almost all coach built and they were hard to afford and it was a fairly premium experience,” said Brauer.

Bugatti’s La Voiture Noire

Source: Bugatti 2019.

La Voiture Noire represents another step in the return to that ultra exclusive heritage.

How exclusive? Well, Bugatti only approached one customer with the sketches and idea for the car.

The company says he bought it on the spot.

“The idea of La Voiture Noire was 100% born within Bugatti, it doesn’t come from the customer. However, with it being a one of one, the customer enjoys the freedom to create specific detailing with us,” said Anscheidt.

Some of those specifics include the car’s six tailpipes, the same as the Type 57SC, a detail recommended by the buyer’s wife.

Bugatti’s La Voiture Noire

Source: Bugatti 2019.

The buyer also had total design control over is the interior.

Notably, the show car revealed in Geneva sported blacked out windows obscuring the interior. The French carmaker says it’s because the car doesn’t have one yet.

“As to the interior, we wanted to make sure the customer that decided to buy that car could really create the interior to his own gusto,” said Anscheidt. “So, our designers are working hand in hand with the customer to make that interior just 100% like he wants,” he continued.

Bugatti’s La Voiture Noire

Source: Bugatti 2019.

Despite the price tag, custom car building is a sound business strategy according to analysts like Brauer, since it minimizes the risks associated with designing new models. Put simply, if the buyer is already known, there’s no speculation for what demand for it might be.

“These guys didn’t have to spend hardly anything. It was a phone call and some sketches to a customer to say ‘how about $18 million for this.’ Before they ever had to fire up a metal production machine or hand-stitch the leather, they had a sale,” said Brauer.

Hans Wurl, a specialist at classic car auction company Gooding, called it a “shocker of a valuation.” For collectors, valuing a car like La Voiture is difficult because it’s one of a kind and has never been publicly auctioned before, making it hard to estimate how much someone would pay for it.

“I think that if it came to an open auction today, there’s a very good chance it would not reach the number that it sold for new,” he said. “But that doesn’t mean it’s not a great investment over a period of decades.”

Bugatti’s La Voiture Noire

Source: Bugatti 2019.

The company showed the new Bugatti at Geneva and the Concorso d’Eleganza Villa d’Este in Italy in May. But this is the first time it’s being displayed in the U.S.

The Concours at Pebble Beach is the industry’s most prestigious car show with automakers often using the six days in Monterey to debut their priciest new cars and concept vehicles.

It also may be one of the few times La Voiture Noire isn’t the most expensive car on the lot.

A 1962 Ferrari 250 GTO was sold at last year’s Pebble Beach car week for a record $48.4 million.

Bugatti’s La Voiture Noire

Source: Bugatti 2019.

“As ridiculous as it may sound to a normal person like you and me, La Voiture Noire is a very reasonably priced car,” said Bravo.

Bugatti has plans to roll out at least four more custom-built cars in the coming years, with another super car rumored to be somewhere between the Divo and La Voiture Noire expected to be revealed at this year’s Pebble Beach Concours.

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Joshua vs Ruiz title fight in Saudi Arabia will ‘change boxing forever,’ promoter says



Andy Ruiz Jr knocks down Anthony Joshua in the WBA, IBF, WBO and IBO Heavyweight World Championships title fight at Madison Square Garden, New York.

Nick Potts – PA Images | PA Images | Getty Images

The decision to hold the world heavyweight rematch between U.K. boxer Anthony Joshua and current world champion, Andy Ruiz, in Saudi Arabia has been defended by the fight’s promoter.

Managing director of Matchroom Boxing, Eddie Hearn, told CNBC that hosting the fight in Diriyah, Saudi Arabia will “change boxing forever,” dismissing concerns over the country’s human rights record.

“This is a decision we didn’t take lightly, we knew it would come with criticism,” said Hearn at the official first press conference in London on Monday.

“A lot of it has been untrue in terms of the event. All men and women will be welcome to attend.”

Hearn and former champion Joshua are on something of a rebuilding mission since his disastrous U.S. fight debut at Madison Square Garden in June. On that noisy New York night, Ruiz shocked the boxing world by beating the previously undefeated Brit to take the WBA, IBF and WBO Heavyweight titles.

Negotiations as to where the compulsory rematch would take place have been protracted ever since, with Cardiff and Las Vegas previously stated as the preferred choice of Hearn, before the surprise Saudi Arabia announcement.

“He (Ruiz) got part of his wish to not do it in the U.K.,” continued Hearn. “There’s the most amazing venue being purpose-built for this event. This is going to be an iconic moment for the sport and a major change for the sport.”

The decision to take a fight of such magnitude to the Middle East has not been welcomed by human rights organizations, who have urged Joshua to question the motives of the Saudi authorities. Amnesty International has said it believes the country is responsible for “sportswashing” in an effort to deflect attention from allegations of an oppressive regime.

Shortly after the fight was announced, Amnesty International’s Felix Jakens said Joshua should “inform himself of the human rights situation and be prepared to speak out about Saudi Arabia’s abysmal human rights record.”

Hearn was keen to point out that not only will anyone purchasing a ticket be automatically issued with a 30-day visa to use in the country, it’s also not the first major sporting event in the Arab state.

World Wrestling Entertainment (WWE), golf’s European Tour and motorsport’s Formula E have all hosted major events in Saudi Arabia during the past year. In the case of WWE, none of its female roster of wrestlers were allowed to compete in the country and Hearn was vague over any possible restrictions affecting the event’s undercard for December 7.

“They are ongoing discussions. The fighter we would have there is (Unified Lightweight Champion) Katie Taylor. She’s due to fight in November though, so I’m not sure if that’s going to fit with her schedule,” said Hearn.

The promoter also confirmed this fight will be the most financially lucrative he’s ever put on and will provide each fighter with their biggest payday to date.

It’s been estimated it took as much as $100 million from local Saudi Arabian backers to take the fight to Diriyah, although Hearn claimed there were other offers from elsewhere in the Middle East which were worth more.

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Italian lawmakers set for crunch talks on government crisis



Italy’s senate will convene Tuesday to set a timetable for a vote of no confidence in its coalition government.

Parliamentary group leaders met in the senate on Monday but failed to agree on when to debate the motion, prompting the full senate to be recalled from its summer break.

Matteo Salvini, deputy prime minister and leader of the anti-immigration Lega party, called for the vote and a new general election last week after declaring his party’s coalition with the anti-establishment Five Star Movement (M5S) unworkable.

The coalition, overseen by non-affiliated law professor Guiseppe Conte, who was appointed by both parties to serve as the country’s prime minister, has been on unsteady ground since it first came to power in June 2018.

On Monday, M5S leader Luigi di Maio said Italians would make Lega pay for the “stab in the back” against Italy, and ruled out a deal with former prime minister Matteo Renzi’s opposition Democratic Party (PD).

The senate will meet at 6 p.m. local time in Rome to set the initial timeline and next steps for the no-confidence motion in Conte.

Chaotic timing

Di Maio has called Salvini’s triggering of a government crisis “foolish and dangerous” while Renzi told an Italian news outlet that an election when the government is due to begin preparations for the 2020 budget would be “crazy.” Conte has also voiced staunch opposition to the move.

Salvini’s push for snap elections comes at an opportunistic time for his party, with Lega currently polling ahead of all other Italian parties despite coming to power as the junior coalition partner. M5S has fallen in popularity to poll third, according to recent data.

However, he will need support from other parties in the no-confidence motion and beyond, which does not seem to be forthcoming. Lega controls a relatively small number of seats in parliament and faces mounting resistance to the push for snap elections.

Brunello Rosa, CEO and head of research at Rosa & Roubini Associates, told CNBC Monday that Salvini’s acceleration of the crisis is a bid to scupper a vote on constitutional reform, which would see the number of MPs and senators in Italy cut by 345, and is intended by M5S and the PD to be passed before new elections.

“The fourth reading of this legislation was scheduled to take place on September 9, and if that had happened, then you would need to allow at least three months for a confirmative referendum to take place, and then a few more months to reform the electoral law and redesign the constituencies,” Rosa told CNBC’s “Squawk Box Europe.”

“So effectively as of September 9, you would have to count at least nine months or more before being able to go to elections — way too much time for Salvini to wait, and so he had to accelerate the crisis.”

Caretaker coalition

Renzi has instead called for a caretaker government to be installed with cross-party support in order to steward the country through its 2020 budget. Italy has long endured friction with the EU over its fiscal position.

His surprise offer to form an “institutional government” with M5S has deepened existential divides within both parties. While Di Maio has made his staunch opposition to Renzi known, other senior party officials have appeared willing to consider such an option to avert the possibility of snap polls this year.

“Leaving aside the deep mutual mistrust that exists between Renzi and the M5S, the parliamentary arithmetic means that it could become a realistic option only if all the M5S and PD lawmakers support this teaming up between the two parties,” Wolfango Piccoli, co-president of global CEO advisory firm Teneo, said in a note Tuesday.

Additional support from smaller parties or individual lawmakers would still be needed to establish majority control of the senate, but the formation of an anti-Salvini coalition, which would have to navigate a tough budgetary situation almost immediately, may provide a popularity boost to Lega, Piccoli suggested.

Prime Minister Giuseppe Conte during his communications in Rome ahead of a European Summit.

Mondadori Portfolio | Mondadori Portfolio | Getty Images

Salvini, who has accused his opponents of scheming to keep him out of power, is expected to withdraw the Lega ministers from the cabinet in order to place further pressure on Conte to resign hastily. However, Conte could still attempt to cling on and bring the crisis to parliament. The senate meeting Tuesday will set out the initial timeline and next steps for the process.

“All in all, the likelihood of a new government that could take Italy to elections in the spring of 2020 (or later, especially if the reform to cut the number of lawmakers is passed) rather than this fall is low (30%),” Piccoli added.

The break up between the coalition parties only becomes official with a formal act — such as a no-confidence motion in parliament, a prime ministerial resignation or the withdrawal of ministers from the Cabinet.

After that, Italian President Sergio Mattarella needs to decide whether an election takes place immediately or if he appoints a caretaker government to pass the 2020 budget in the fall.

Investors flee

Italian stocks fell sharply last Thursday upon Salvini’s call for fresh elections and have seen a further sell-off since, with the FTSE MIB down 3% over the past week.

Lorenzo Codogno, founder and chief economist of LC Macro Advisors, told CNBC Friday that early elections would take at least 60 days from the moment that parliament is dissolved, meaning the timing could not be worse.

“The big question mark here is whether Italy will go to elections quickly enough to have enough time for the new government to deliver a budget by year end. This is the most important factor also for financial markets, which seem to be reacting negatively by now, probably more because of the messy situation than because of the actual prospect of a change in government,” Codogno added.

The country’s already beleaguered banks, including Unicredit, Ubi Banca and Banco BPM, have seen share prices fall since Salvini’s comments last Thursday. Italy’s FTSE MIB index was down a further 0.43% on Tuesday afternoon, having fallen over 9% over the past month.

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