Some of the world’s biggest investors are so worried about the future of the global economy that they have taken the extraordinary step of paying for governments to look after their cash.

They are nervous about a no-deal Brexit and the ongoing trade war between the US and China, as well as signs of a slump in demand in Germany, Europe’s economic powerhouse.

In times of crisis, investors usually flock to so-called safe-haven assets like gold, government bonds or good old fashioned cash.

But for big investors, like pension funds, cash isn’t practical and gold is considered risky.

That has driven them toward government bonds and, unusually, investors are paying to hold them.

What are bonds?

In order to raise cash – to pay for everything from big infrastructure projects to covering the cost of their own debt – governments borrow money.

One of the ways they do that is to issue fixed-term bonds, under which companies and individuals lend a set amount of money to the government, which promises to pay interest every year until it returns the total amount borrowed on a pre-agreed date in the future.

Or, at least, that how it’s supposed to work.

Countries that are considered to be good borrowers, like Germany, will pay less interest than risky debtors, like Argentina, which is considered more likely to renege on its IOU (I owe you).

Some big investors, such as pension funds, are limited to how much money they can put into riskier assets, which – twinned with a negative interest rate in Europe – has made bonds issued by the likes of Germany, France, Switzerland and Japan a very attractive purchase.

For example, the overwhelming demand has sent the interest paid on 10-year German bonds crashing to minus 0.65%, meaning investors will make a loss if they lend money to Berlin.

What does a negative bond yield mean?

In effect, investors are paying governments to borrow their money – and that does not bode well for those hoping for economic growth.

It means that people who make a living from predicting what economies will do in the future, are betting on interest rates remaining negative for at least ten years.

And, worse, the 0.14% yield on 30-year German bonds suggests that investors are expecting interest rates to stay in the red for the next three decades.

Tristan Hanson, who invests in bonds for M&G, says the current German bond price shows a “high degree of risk aversion” in Europe, where investors would rather accept a loss on holding their money than buy an apartment or invest it in stock markets.

“They are saying: ‘I’d rather have a guaranteed small loss than risk a big loss in some other asset class’,” Mr Hanson explained

Why not stick to cash?

For big institutional investors, cash is costly because they can’t just put it under the mattress, according to Hargreaves Lansdown analyst, Laith Khalaf.

“I could build a massive secure basement and keep all my cash in that,” he said.

“But actually that’s quite expensive and if interest rates return to normal, I’m going to have an empty basement.”

He said the negative bond yields reflected broader economic woes.

Are investors panicking?

Will Hobbs from Barclays’ investment arm believes investors’ worries are overblown, saying the economy “doesn’t look that bad”.

He said the fortunes of the global economy were tied to the US, which “looks healthy”.

“All economies are perfectly capable of starting a fight in an empty room.

“But the big recessions they tend to be driven by the US economy and what happens there,” he said.

He said the negative bond yields had driven some investors to buy up gold, pushing prices to a six-year high.

But the investment boss warned people to be careful of buying the precious metal.

He said it’s “very difficult to value”, adding, “there’s a huge amount of emotion invested in the price”.

A YouTube star, famous for his reviews of chicken shops, has criticised the government’s decision to feature knife crime warnings on takeaway boxes.

Elijah Quashie – better known as the Chicken Connoisseur – told BBC’s Wake Up to Money that the approach was too simplistic to solve a complex problem.

“I can see the racist connotation. I’m not sure if I’d say racist, or stereotype but it’s in that bracket.”

The government said its chicken shop adverts were part of a wider campaign.

Earlier this month, the government said more than 321,000 takeway chicken boxes printed with anti-knife slogans would replace standard packaging as part of its #KnifeFree campaign.

It said it chose chicken shops because research by the agency that produced the campaign showed 70% of their customers were aged 16 to 24, an age group it wanted to target.

But Mr Quashie said the approach didn’t make sense: “There should be someone who has a deeper train of thought than: ‘Black people, they eat chicken we can intersect the black people who kill each other at a chicken shop, with the chicken boxes.”

“I don’t know what they think that’s really going to do.”

Mr Quashie rose to fame through his YouTube series the Pengest Munch, which has had 50 million views. Started in 2015, it features reviews of chicken shops in London assessing every detail from the seating, to the chips and how the burger is put together.

In each episode, he visits a different restaurant but always orders exactly the same thing: a chicken strip burger, wings and a portion of chips.

He now has more than half a million followers on YouTube and is the star of Channel 4’s new show Peng Life.

“There’s no particular diplomacy. If it’s good, it’s good if it’s not – I make sure people know,” the 26-year-old says.

‘Bossman doesn’t need to do anything’

He is just as direct in his assessment of the businesses behind the anti-knife crime campaign. Three of the UK’s biggest chicken chains are involved – Morleys, Dixy Chicken and Chicken Cottage.

“For a chicken shop to be recognised by a government body like the Home Office. They’re in the newspapers now. Maybe they weren’t before. The more marketing the merrier.”

“From their perspective it’s very easy. Just switch a box that’s it. Bossman doesn’t need to do anything different,” he said.

The agency behind the campaign, All City Media Solutions, said the chicken box campaign intended to resonate with “young people of all races and religions”.

“Making the presumption that any one strategy alone, however big or small can tackle an endemic problem such as knife crime is naive at best, and politicising an issue that’s ripping the heart out of this country is misplaced and counterproductive,” it said in a statement.

“If even one young vulnerable person is helped by this campaign, this would’ve all been worth it.”

‘It’s just a chicken box’

But Mr Quashie believes the government could do more.

“If something real happens, the chicken box unfortunately is not really going to weigh up.

“They would have at least thought maybe there’s a reason why people are doing it. Let’s look into the reason why.

“Or the circumstances people who commit knife crime are in and maybe we can do something to stop it at its infancy. It’s not really treating the symptoms either.

“It’s just a chicken box.”

PR stunt?

Earlier this month, the government announced an extra 10,000 prison places would be created with stop-and-search powers expanded as well. It said the £2.5bn programme showed it was “serious about fighting crime”.

So where does the Chicken Connoisseur see #KnifeFree chicken boxes fitting in.

“If it was a PR stunt that would work because the conversation begins. Or the conversation gets louder,” he says. “That is working.”

“But the aim was not the conversation. It seems like the aim was for the chicken boxes to make a difference in the streets.”

He shakes his head and laughs at the thought of it.

“Wow…chicken boxes.”

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When Roger Klug told his employer he was retiring, there was a shiver of panic among the bosses. Now 70 years old, Mr Klug is in his 47th year at Alexandria Industries, an aluminium company in rural Minnesota.

After almost five decades manufacturing industrial products for such diverse industries as solar power and defence, the company could ill-afford to lose Mr Klug’s expertise.

Like a number of US states, Minnesota has a labour shortage – specifically a skills shortage – and seeing his valuable experience disappear overnight would have left Alexandria’s management with big shoes to fill.

According to the US Department of Labour, since March 2018 US monthly job vacancies have outnumbered unemployed job seekers. As the baby boomers reach retirement, it seems there are not enough millennials in the jobs pipeline ready to step in.

“We have a labour shortage and it’s going to be a problem for the next couple of decades as the boomers leave the workforce,” says Mark Zandi, chief economist at Moody’s Analytics.

So, one answer for companies struggling to find staff is to ask workers like Mr Klug to put off retirement. He did.

“I only work two days a week, and I wanted to do something after I retired and it was just a no-brainer to stay. It’s not about the money. I enjoy the work,” he says.

Mr Klug still turns out high precision parts at Alexandria, and also fills in on other jobs at the company when necessary. But a key role is to pass on his skills to a new generation of staff at the company. It’s a trade-off that suits both sides. Mr Klug gets to stay active; Alexandria Industries gets valuable training for new workers.

It does mean, though, that companies have to incentivise their mature employees through flexible hours, healthcare benefits, and keeping wages competitive.

“Our biggest challenge is the ability to staff the organisation so we can grow the business,” says Lynette Kluver, Alexandria Industry’s director of organisational development.

But it’s not just the skills shortage that has extended the job prospects for ageing workers. Some employers seem to prefer them.

At Johnson & Sons, a florist in Saint Paul, Minnesota, Tom Johnson employs people ranging from ages 16 to 86.

He has nothing but praise for the older workers, even running job adverts targeted at the baby boomer generation. For a start, Mr Johnson says, older employees are more reliable.

“They don’t have kids to take care of or hectic social lives,” he says. And his elderly new recruits bring with them valuable experience from other fields.

Johnson & Sons’ oldest employee is Tom Slagerman, who does a variety of maintenance roles and helps wrap the flower bouquets. Aged 86, he used to own a print shop, but could not continue after suffering cancer.

Mr Slagerman said it took four to five years for him to feel well enough to return to work. His wife thought he was crazy for applying for a job at his age. But the work is fun and “keeps me active”.

He and Mr Klug are far from unique. The US Bureau of Labor Statistics (BLS) estimates people aged 55 and older are expected to have the fastest growing labour force participation rate – that is, in work or actively seeking work – over the next five years. And within this age group, those aged 65 and above are expected to see the fastest expansion.

But despite the growth in opportunities for older workers, it’s not just about “staying active” or companies’ wanting to retain skills. Regardless of the expanding US economy, the reality is that many baby boomers who wish to retire simply cannot afford to.

Andreé Flageolle, 74, another elderly Johnson & Sons employee loves the job, but admits that she’s there because she needs the money.

Ms Flageolle, a nurse for many years, says her social security payment is enough to cover her rent, but leaves her little to pay for utilities and other monthly expenses.

She supplements her income with another part time job, at a company helping the elderly to remain independent and stay in their homes.

Still, the jobs are a labour of love, and Ms Flageolle particularly likes being around the younger workers at Johnson & Sons.

“I think that the mix really energises things and keeps you on your toes. Plus, I’ve found they teach me things, and I teach them. So, it’s reciprocal,” she said.

And that touches on another benefit of keeping elderly people in the workforce. “We know that multiple generations working together can lead to more creative thinking and innovation”, says Cal Halvorsen, assistant professor at the Boston College School of Social Work.

But it’s not just a benefit for companies and the wider economy, he says. Research shows that it’s good for people personally – and that has got to be good for society in general.

Investors have pumped another $325m into e-cigarette market leader maker Juul Labs despite growing health concerns and fresh legal action.

The money will be used to finance the US company’s global expansion at a time of increased regulatory scrutiny on its home turf.

Juul, 35%-owned by Marlboro maker Altria, has been accused of targeting its vaping devices at children.

On Monday, Bloomberg reported the company faced another lawsuit.

A 19-year-old claimed in court filings in Chicago that he became addicted to nicotine and suffered worsening asthma symptoms after he began using Juul’s device at the age of 16.

He alleges that Juul and Philip Morris (owned by Altria) violated the Racketeer Influenced and Corrupt Organizations Act, adopting the tobacco industry’s past use of catchy advertising campaigns aimed at children. Several other individuals have already started legal action against Juul.

Juul recently launched its products in South Korea, the Philippines and Indonesia, and has stepped up marketing in the UK.

But in the US, the company faces increased scrutiny, including from the Food and Drug Administration.


The US Surgeon General has called vaping an “epidemic”, and the Centers for Disease Control and Prevention said on Saturday it is looking into a cluster of 94 possible cases of severe lung illness associated with vaping in 14 states.

In June, San Francisco banned the sale of e-cigarettes and online deliveries to addresses in the city.

The company has tried to tackle use by children, including withdrawing from sale its popular sweet and fruit flavours.

Juul has also shut its Facebook and Instagram account after being accused by critics of marketing to young people. The company’s early adverts featured bright colours and young models.

In July, the boss of Juul apologised to parents whose children were vaping. “I’d tell [parents] I’m sorry their child’s using the product. It’s not intended for them,” Kevin Burns said in a television documentary aired by CNBC.

The BBC contacted Juul for comment but had yet to receive a response.

Chancellor Sajid Javid has said he has no plans to make house sellers rather than buyers pay stamp duty tax.

“I wouldn’t support that,” the chancellor said in a tweet on Sunday.

His comments came after the Times reported on Saturday that Mr Javid was considering the idea, to save first-time buyers from paying the tax.

“I know from the Ministry of Housing, Communities and Local Government that we need bold measures on housing – but this isn’t one of them,” Mr Javid said.

Stamp duty – a purchase tax paid in England and Northern Ireland on properties worth more than £125,000 – was abolished in 2017 for first-time buyers spending up to £300,000 on a house.

Forcing home sellers rather than buyers to pay the stamp duty tax would have made house purchases cheaper for those buying their first home or people trying to upgrade to larger homes, but could have made owners of larger homes reluctant to downsize.

The latest housing figures suggest that both house prices and sales are losing momentum amid Brexit uncertainty.

Key aspects of the housing market were “pretty much flatlining”, the Royal Institution of Chartered Surveyors (Rics) said earlier this month.

In the interview with the Times, Mr Javid refused to give details of his plans to reform the tax system, instead saying “wait and see for the Budget” which is due to take place in the autumn.

Mr Javid said he had not yet decided whether to hold the Budget before 31 October, the date the UK is expected to leave the EU.

Lidl’s Irish business has reminded British suppliers they are expected to pay any EU import tariffs imposed on goods crossing borders after Brexit.

Currently, as both countries are member states, no tariffs are paid.

But Lidl’s current contracts with suppliers contain a clause saying goods must be delivered with tariffs paid.

The supermarket said it had held workshops with British suppliers to make sure they had the necessary information to “avoid any disruption”.

“We have been working closely for over two years with external consultants, not only to get our business Brexit ready, but also to ensure our valued suppliers are as prepared as possible.

“All existing Lidl contracts contain a DDP (Delivered Duty Paid) clause. In an effort to understand the level of preparedness of key UK suppliers we are communicating proactively with them and working together to resolve any potential barriers to supply,” the supermarket said in a statement.

The “delivered duty paid” clause means that the cost of transporting goods, including tariffs on EU exports, are the responsibility of the supplier.

In the event of a no-deal Brexit, tariffs on EU exports would come into force automatically, according to World Trade Organization rules.

EU tariffs on food can be both high and complex.

On some types of beef it is 12.8% plus 265 euros per 100kg for meat from outside the EU. The average for dairy products is more than 35%.

Suppliers told the Times newspaper that other supermarkets are also likely to enforce deals similar to Lidl’s agreement.

A supermarket source told the newspaper that the potential costs were too high for all suppliers to be able to cover them.

Prime Minister Boris Johnson has said that the UK will leave the UK with or without a deal on 31 October.

While he has committed to cutting tariffs on foreign goods being imported into the UK, tariffs for goods exported from the UK to the EU are outside of his control.

The days of lime and soda are over. “Sugary, carbonated or fruit-based juice drinks just won’t do” for those seeking a booze-free alternative.

At least, that is the view of Seedlip, which claims to be making the world’s first distilled non-alcoholic spirits.

“We exist to solve this dilemma. What do you drink when you’re not drinking?” says Ben Branson, founder of the Chilterns-based business.

It is a conundrum that traditional drinks firms are also trying to crack.

Diageo, the world’s largest spirits maker, has just bought most of Seedlip. And industry experts say it is not alone in trying to find ways to tap into the non-alcohol sector.

Rival Pernod Ricard, for instance, has done a deal to distribute non-alcoholic spirit Ceder and last month launched Celtic Soul, a non-alcohol blend of dark spirits.

Two years ago, Campari launched Crodino in the UK, its non-alcoholic aperitif named after a small town in north-west Italy.

The firm says Crodino is the most-consumed drink of its kind in Italy since first being produced 55 years ago.

Nico von Stackelberg, analyst at Liberum, says: “There’s a significant rise in alcohol-free drinking across the western world, including the US. In terms of economics, it absolutely makes sense to be involved.

“Younger people do not want to be seen as drunk on social media. Heavy episodic drinking is not deemed to be cool. Importantly, the industry does not want excessive consumption and spends millions to avoid such behaviour,” he adds.

Research shows that the young are drinking less. A report in the medical journal BMC Public Health and carried out by University College London showed that the proportion of 16 to 24-year-olds who do not drink alcohol has increased from 18% in 2005 to 29% in 2015.

It points out that it is difficult to pinpoint a single factor that has caused the decline in alcohol consumption.

But it is not a just a UK phenomenon. The research showed a fall in drinking in North America and elsewhere in Europe, although in Canada, rates of binge-drinking increased from 1996 to 2013. In the UK, while rates are falling, young people remain the most likely group to be binge-drinking

Dr Linda Ng Fat, lead author of the study, told the BBC that the findings suggested cultural change was leading to a reduction in drinking, and that health reasons could also be a factor.

Alex Smith, consumer industry analyst at Shore Capital, says the push into the non-alcohol sector is consumer-led. “Younger people are consuming less alcohol, so alcohol companies have to hedge their bets”.

The beer market has been offering non-alcoholic versions for some time. In the 1980s, Kaliber from Guinness was one of the best-known, but more and more are being launched, such as Heineken 0.0% and Budweiser Prohibition Brew.

The number of products on offer is growing. According to Nielsen research there were 40 non-alcoholic brands on the market two years ago. That has risen to 65 brands this year.

Seedlip’s founder, Mr Branson, has said his own inspiration to create a non-alcoholic sprit came after he was given a “sickly sweet pink mocktail”. After experimentation on his family’s farm, he launched his venture in 2015.

He began using a small copper still and herbs from his garden to create a distilled non-alcoholic spirit – not a gin, as that would require juniper.

There are three blends: one based on peas, another on bark and citrus, and another on orange, lemongrass and ginger.

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The rise of non-alcoholic drinks Source: Nielsen Scantrack (June 2018 – June 2019)

Diageo has put Seedlip in its so-called Reserve portfolio – its luxury division – and the recommended retail price for 70cl is £27.99. That’s about £7 more than the same amount of Bombay Sapphire gin.

One pub chain offers Seedlip Grove – one of its three variants – for £4.95, which is £1 more than other non-alcohol cocktails on its menu, while a glass of coke is £3.05. An alcoholic cocktail – a mojito – is £8.50.

Gemma Cooper, Nielsen client business partner, says shoppers are prepared to “pay more for great-tasting alcohol-free alternatives”.

There is no duty or tax on such products, so profits should be higher too.

Seedlip is the first non-alcoholic investment by Distill, an investment vehicle supported by Diageo which backs start-ups and has put more than £60m into 15 different new products.

Diageo has also created its own non-alcohol products in-house, such as Gordon’s low-alcohol gin, launched in 2018, and Malta Guinness, a non-alcoholic unfermented beer popular in Nigeria.

It does not provide a breakdown of sales and profits from non-alcohol products, nor has it disclosed how much it paid for its majority stake in Seedlip, which lost £4m in the year to May 2018, according to accounts at Companies House.

But Diageo’s John Kennedy has described it as a “game-changing brand in the one of the most exciting categories in our industry”.

The drinks company has also said that is “tracking what is happening” – though not yet expanding – in another industry that might take sales away from alcohol: the decriminalisation of cannabis.

Hong Kong seemed an obvious place for co-founders Jamie Wilde and Taylor Host to set up their artificial intelligence start-up.

They had lived there for several years and knew the financial hub well.

“It’s a business-friendly jurisdiction, easy to build a professional team and it’s easy to raise financing here,” British-born Mr Wilde says.

The co-founders set up Miro in Hong Kong in 2017. The firm uses artificial intelligence and computer vision to gather data for sportswear companies to enable them to target consumers more effectively.

Business was looking up, sales were growing and investors from the US were keen to invest in the start-up.

But then Hong Kong got hit by a double whammy: it became caught in the cross-fire of the US-China trade war, and months of street protests tarnished the territory’s reputation as an investment destination.

“We found we were often challenged by potential investors about why we are based in Hong Kong,” says Mr Wilde.

“The perception driving a lot of these investment decisions in the US was that Hong Kong is getting closer to China. The risk of staying here has gone up.”

The firm lost out on two potential investments, with its Hong Kong base given as one of the reasons behind the decision.

Mr Wilde and Mr Host have decided to move their company’s headquarters from Hong Kong to the US, but are keeping some operations in the city.

They’re not alone in re-evaluating their strategy about whether to keep their business in Hong Kong.

‘Is Hong Kong safe?’

Months of political unrest in Hong Kong is threatening the city’s global status as a major financial hub. Protests against an extradition bill have broadened into a pro-democracy movement concerned about China’s growing influence in the city.

Those protests led to sweeping flight cancellations earlier this week. Hong Kong-based airline Cathay Pacific said the disruption had affected more than 55,000 passengers, with a total of 272 departures and arrivals cancelled.

Businesses are seeking advice on Hong Kong’s safety and are being advised to come up with contingency plans in the face of further protests.

Increasingly, many companies are considering bypassing Hong Kong altogether.

Dan Harris, managing partner of law firm Harris Bracken, said that over the past three months businesses have been asking: “Is Hong Kong safe? Should I send our people there?”

He is based in the US and advises clients on their strategy in China and Hong Kong.

“What we are mostly getting is clients saying they will not be setting up in Hong Kong, or just asking our opinion on what they should do to lower their footprint in Hong Kong.”

Is Hong Kong’s star status at risk?

Hong Kong has long been the premier destination for doing business in Asia – a gateway to China, and the rest of the region.

Its stock market ranked as the third largest in Asia in 2018 and fifth largest in the world in terms of market capitalisation, according to the Hong Kong Trade Development Council.

The recent protests have grown to reflect wider demands for democratic reform ahead of a 2047 deadline.

That’s the year when Hong Kong’s Basic Law agreed between Britain and China, guaranteeing a special level of autonomy for the territory, ends.

But while protesters are fighting for the kind of rights that first gave Hong Kong its business appeal, some worry it is that fight that is now threatening the city’s livelihood.

The latest growth figures show that Hong Kong’s economy grew by 0.5% in the second quarter of 2019 from a year earlier, its weakest pace since the global financial crisis of a decade ago.

Julian Evans-Pritchard, senior China economist at Capital Economics, says there is “a growing risk of an even worse outcome if a further escalation triggers capital flight”.

Reflecting this gloomy outlook, the Hong Kong government has lowered its growth forecast for this year to 0%-1% from 2%-3% previously. It has also announced a $2.4bn (£2bn) economic stimulus package to shore up growth in the territory.

What’s the business impact so far?

More than two months of protests have already taken a toll on Hong Kong.

Bank branches near protests were temporarily shut in June, while one analyst estimates that the recent airport disruption has cost the Hong Kong economy some 300 million Hong Kong dollars ($38m; £32m).

“If the disturbance [lasts] a longer period of time, definitely the confidence of international investors and international passengers in the normal operation of the Hong Kong airport and aviation industry would be very much tarnished,” said Dr Law Cheung-Kwok, director of policy and research at the Chinese University of Hong Kong.

He said the aviation sector as a whole contributed about 8% to Hong Kong’s gross domestic product.

Tourism too has also been hit by the turmoil, with preliminary figures showing a “double-digit decline” in the number of visitor arrivals in the second half of July.

Anecdotal evidence shows people are increasingly considering jumping ship. Inquiries about residency and citizenship elsewhere have increased, while private banking clients are making inquiries about moving accounts to Singapore.

And that’s the conundrum that Miro’s co-founders are now facing – whether or not to leave a place they have long called home.

Initially peaceful protests have become increasingly violent, with some saying unwarranted force by the police has escalated tensions.

“We have been having more difficult conversations considering physical relocation, for the safety of the team,” says Mr Wilde. His office is based in the heart of the busy Wan Chai district, near where many of the protests have taken place.

“We don’t want to leave this city, but if things continue to escalate, we may have no choice.”

Trading in the biggest shares listed on the London Stock Exchange was delayed for more than an hour, in the longest outage in more than eight years.

Shares in the FTSE 100 and FTSE 250 indexes were affected, although smaller stocks traded as normal at 08:00.

Trading resumed at 09:40 – the longest closure since February 2011, when it was shut for more than four hours.

The last time the market opened late was in June 2018, when it was delayed by an hour.

The LSE said trading was delayed while it investigated a “potential trading services issue”.

When trading eventually began, the FTSE 100 – which had fallen to a six-month low on Thursday – rose, and finished up 0.7% to 7,117.15.

The London Stock Exchange said it had “experienced a technical software issue this morning that affected trading in certain securities, including FTSE 100 and FTSE 250 stocks”.

“Following resolution of the issue regular trading in all securities commenced at 09:40,” a spokesperson for the exchange said.

The chief executive of Hong Kong flag-carrier Cathay Pacific has quit after the airline became embroiled in the controversy over protests there.

Rupert Hogg said he was taking responsibility as these had been “challenging weeks” for the airline.

Some of its employees took part in the protest, but China ordered the airline to suspend staff who did so.

Cathay’s chairman, John Slosar, said it was time to put “a new management team in place who can reset confidence”.

Paul Loo is also leaving as chief customer and commercial officer.

Mr Hogg said: “These have been challenging weeks for the airline and it is right that Paul and I take responsibility as leaders of the company.”

Growing pressure

Last week, Cathay Pacific had told its staff it would not stop them joining the pro-democracy demonstrations currently sweeping Hong Kong.

But on Monday, Mr Hogg warned staff they could be fired if they “support or participate in illegal protests”.

Cathay faced pressure online after China’s state-run press fuelled a #BoycottCathayPacific hashtag, which trended on Chinese social media.

Beijing’s aviation regulator, the Civil Aviation Administration of China (CAAC), required Cathay to submit lists of staff working on flights going to the mainland or through its airspace.

It also had to submit a report on planned measures to “strengthen internal control and improve flight safety and security”.

Cathay Pacific said that Mr Hogg had been replaced by Tang Kin Wing Augustus and Mr Loo by Ronald Lam.

The airline is currently majority-owned by the Swire investment company, while Air China has a 30% stake. Qatar Airways also owns a stake.

Cathay’s new chief executive Mr Tang was the head of Hong Kong Aircraft Engineering Company, which is also owned by Swire. Mr Lam was head of Cathay’s low-cost service Hong Kong Express.

Mr Slosar said that while Mr Hogg and his team had carried out a three-year turnaround plan, “recent events have called into question Cathay Pacific’s commitment to flight safety and security and put our reputation and brand under pressure”.

“This is regrettable as we have always made safety and security our highest priority,” he said.

The new bosses “have the experience and depth of knowledge of aviation and our people to be strong and effective leaders of Cathay Pacific at this sensitive time”, he added.

Meanwhile, Hong Kong’s richest man, Li Ka-shing, has taken out a series of full-page newspaper ads in an attempt to calm rising tension within the territory, urging people to “love China, love Hong Kong and love yourself”.

But the Chinese star of the upcoming Disney live-action remake of Mulan has expressed support for Hong Kong police in the wake of the pro-democracy protests.

In a post on the Chinese social media platform Weibo, actress Liu Yifei wrote: “I support Hong Kong police. You can attack me now,” adding in English: “What a shame for Hong Kong.”

Hong Kong International Airport has been closed at times this week in the wake of the massive anti-government protests that have paralysed one of Asia’s key transport hubs.

The airport is one of the world’s busiest, and the Airport Authority has obtained a temporary injunction banning protesters from entering certain areas.

The protests began over plans that would have allowed extradition from Hong Kong to mainland China, but they have broadened into a pro-democracy movement concerned about China’s growing influence in the city.

Mr Slosar said Cathay was “fully committed to Hong Kong under the principle of ‘one country, two systems’ as enshrined in the basic law”.

This is a reference to the fact that despite being part of China, Hong Kong receives “a high degree of autonomy, except in foreign and defence affairs”.

“We are confident that Hong Kong will have a great future,” he added.

Mr Hogg was born in Portsmouth, has a degree from Edinburgh University, and joined John Swire & Sons – part of the Swire conglomerate of businesses – in 1986. He has worked in Sydney, Hong Kong and South East Asia.