We’ve had the latest purchasing managers indices for the UK and it’s another dismal outcome. The services PMI now stands at 47.2, down from 49.5 and that’s lower than had been expected by economists. There’s little doubt from the accompanying S&P Global press release that the economy is weakening, and the comments on the jobs market stand out in particular. The survey indicates that employment is now falling at the fastest rate since October 2009, when you exclude the volatility during lockdowns. And prices charged by firms are increasing less ...

European Central Bank chief economist Philip Lane said on Thursday high levels of inflation are a very negative force for an economy, as he declined to speculate what lies next for his bank’s monetary policy. “Inflation is horrible, it’s really costly, people hate it,” Lane said in an appearance in New York. He said the ECB’s objective is to hit its 2% target in the medium term. Source: Reuters (Reporting by Michael S. Derby; Editing by Sandra Maler)

A closely watched central bank survey is likely to show Japan’s business confidence improved slightly in the three months to September, according to a Reuters poll, suggesting the economy is weathering headwinds from slowing global growth for now. The survey is also expected to show corporate spending appetite remains firm, according to the poll, which may heighten the case for the Bank of Japan (BOJ) to phase out its massive monetary stimulus. “Big manufacturers’ sentiment likely improved, mainly among automakers. The service-sector mood is also expected to have brightened,” thanks ...

Further Federal Reserve interest rate increases are “not off the table” with inflation still not clearly contained, Boston Federal Reserve President Susan Collins said in remarks on Friday backing the current central bank outlook for interest rates to remain “higher, and for longer.” Collins tempered her outlook by saying that the current environment required “considerable patience” from policymakers to be sure they get the right signal from data they are studying to be confident inflation is on a steady downward track back to their 2% target. On that front recent ...

Sustainable inflation targeting is not yet in sight The BoJ’s statement maintained most of the wording from before and kept its forward guidance unchanged. Firmer-than-expected inflation is not yet enough for the BoJ to tilt its policy stance. In the statement, the BoJ expects inflation to decelerate and said core inflation has been around +3% because of pass-through price increases. At the press conference, Ueda said, “if inflation, accompanied by the wages goal is in sight, then the BoJ will mull an end to the YCC and a rate shift”. ...

Labour has promised to hand increased powers to the UK’s economic watchdog if it wins the next general election. Liz Truss’s mini-budget, with no Office for Budget Responsibility (OBR) analysis, a year ago, led to market chaos and a fall in the pound’s value. Under Labour’s plan, the OBR would be free to publish forecasts and analysis alongside any tax and spending changes. Sir Keir Starmer said the aim was to bring “stability for so many families” hit by “that disaster of a budget”. “Huge damage was done to our ...

The euro zone economy is likely contract this quarter and won’t return to growth anytime soon, a survey showed, as the dampening effect of central banks’ long campaign of interest rates rises becomes clearer. HCOB’s flash euro zone Composite Purchasing Managers’ Index (PMI), compiled by S&P Global and seen as a good gauge of overall economic health, rose to 47.1 in September from August’s 33-month low of 46.7. The reading was still below the 50 mark separating growth from contraction, however, and Hamburg Commercial Bank said the bloc’s economy would ...

Republicans in the U.S. House of Representatives on Friday turned to a new strategy in a long-shot bid to prevent the fourth government shutdown in a decade, as time runs short ahead of a Sept. 30 deadline. Republicans have so far failed to advance legislation that would keep the government running when the new fiscal year starts on Oct. 1. Instead, they will prepare four separate spending bills, most of which reflect the deep cuts sought by the party’s right flank. Those are certain to be rejected by the Democratic-controlled ...

The U.S. central bank needs to raise interest rates further to control inflation in a “timely way,” Federal Reserve Governor Michelle Bowman said on Friday in remarks that sketched out a hawkish argument based on a potential rise in energy prices and a possibility the inflation battle may take years to complete. “Inflation is still too high, and I expect it will likely be appropriate for the (Federal Open Market) Committee to raise rates further and hold them at a restrictive level for some time to return inflation to our ...

The war in Ukraine has reduced European economic growth and “considerably” pushed up inflation across the continent, the Swiss National Bank said in a study published on Friday, with worse effects still to come. Since Russia invaded Ukraine in February 2022, Europe has seen a surge in energy prices, financial market turmoil and a sharp contraction in the economies of both Russia and Ukraine, the report said. Examining the war’s economic impact on Germany, Britain, France, Italy and Switzerland, the study said output would have been between 0.1% and 0.7% ...

Britain’s economy displayed clear recession signals on Friday, a day after the Bank of England called a halt to its long run of interest rate increases that have turned the tide on inflation but at the expense of a hit to businesses. A business survey, which the BoE factored into its decision to keep rates on hold, showed companies endured a much tougher September than feared, marked by growing unemployment. The preliminary reading of the UK S&P Global Purchasing Managers’ Index (PMI) for the services sector sank to its lowest ...

U.S. business activity showed little change in September, with the vast services sector essentially idling at the slowest pace since February, and overall new order activity slipping to the lowest level this year, a survey published Friday showed. S&P Global said its flash U.S. Composite PMI index, which tracks the manufacturing and service sectors, dipped to a reading of 50.1 in September from a final reading for August of 50.2. September’s result was negligibly above the 50 level that separates expansion and contraction. The survey’s composite new orders index slid ...

Turkey’s central bank raised its key interest rate by a lofty 500 basis points to 30% on Thursday, marking a second month of aggressive tightening after President Tayyip Erdogan set aside his long opposition to tight policy. The bank reiterated it is ready to raise rates further as needed to rein in inflation that leapt to nearly 59% in August and is expected to rise into next year. It has hiked rates by 2,150 basis points since June. The lira slipped to 27.105 to the dollar after the decision, just ...

With oil prices at their highest this year and eyeing $100 a barrel again, the last thing U.S. consumers, businesses and policymakers need is another inflationary headache. The fledgling auto workers strike, if it lasts and broadens out, could be just that. Most economists reasonably focus on the temporary blow to U.S. economic output or payrolls from a lengthy strike across the sector. And the economy could contract almost one full percentage point in the fourth quarter, according to Morgan Stanley economists, which would cut their full-year 2023 GDP growth ...

Goldman Sachs economists said they now expect the U.S. Federal Reserve to begin its interest rate-cutting cycle in the fourth quarter of next year, later than an earlier forecast of a cut in the second quarter. The Fed on Wednesday kept its benchmark interest rate unchanged in the 5.25% – 5.5% range and its projections showed that it now expected to cut only by 50 basis points next year, down from a full percentage point cut estimated earlier. “Today, participants appeared to move away from the view that monetary policy ...