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How the Bank of England could start to reverse its huge stimulus

The Bank of England could this week shed light on how – and when – it might throw its decade-long stimulus programme into reverse, even as it continues for now to buy bonds as part of its 895-billion-pound quantitative easing programme. The BoE has been working since February on how to start tightening policy. It is expected to be among the first of the world’s main central banks to begin the process of weaning its economy off stimulus support. The BoE has said its review of how to coordinate or ...

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Growth Risks To The Economy Intensify

Mask mandates now are a reality in many parts of the country. That can’t be good for economic growth in Q3. The first pass at Q2 GDP came in light, with growth of +6.5% where the consensus was north of 8%. Despite that disappointment, markets seemed to like the number, even as Amazon, the poster-child company for pandemic America, disappointed. Growth Some street economics departments are now seeing Q3 and Q4 with jaundiced eyes, as we do. Goldman Sachs, for example, has recently put the year’s second-half growth projection in ...

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U.S. labor revival in doubt as Delta raises worries about ‘back to school’

In April, almost a year after she was laid off from her hospitality firm due to the pandemic, Sara Gard was still barely finding her feet with a new full-time job in financial services that she juggled alongside managing her daughter’s remote schooling. So when her six-year-old daughter’s school, just north of Atlanta, Georgia, that month gave parents the option to choose in-person classes for their children when the new school year started in August, Gard signed up, and felt good about her decision. Until, that is, a recent surge ...

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The digital economy provides new chances for China-Europe cooperation in the global process of digitization

In Europe, we have been strongly impressed by the rapid expansion of China’s digital economy since the beginning of the century and the emergence of global Chinese digital players. Today, China is perceived as the trendsetter in groundbreaking areas such as e-commerce, fintech, artificial intelligence and robotics. Chinese companies have a major advantage over their European counterparts, including the huge volume of big data generated by internet use and transactions by more than one billion users. However, this perception does not necessarily fully correspond with reality. According to a 2020 ...

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Trade upgrade key to US engagement with ASEAN

US Secretary of State Antony Blinken is set to attend several virtual meetings with officials from the Association of Southeast Asian Nations (ASEAN) from Monday to Friday, Reuters reported on Saturday, citing a senior state department official. These meetings include the US-ASEAN, East Asia Summit, ASEAN Regional Forum, Mekong-US Partnership, and Friends of the Mekong ministerial meetings. Blinken’s agenda of virtual meetings with Southeast Asian officials comes at a time when the Biden administration has apparently attached increasing importance to the Southeast Asia through intensive diplomatic engagement. US Deputy Secretary ...

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China: PMI shows a policy-driven economy that continues to slow

Slower growth The official manufacturing PMI was recorded at 50.4 in July, down from 50.9 in the previous month. The same happened in the non-manufacturing sector, where the PMI was 53.3, down from 53.5 in June. For the manufacturing PMI, major sub-indices mostly fell. This is worrying, especially as new orders dropped 0.6 points and there was a fall in new export orders too. This combination means demand was not as good as before, and therefore we expect the production sub-index for August to be just above 50. Policy actions ...

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Combining Holiday Destinations With Remote Work Is A Growing Trend, As Travel Bans Ease And The Starved Tourism Industry Offers Discounted Stays And Dedicated Workspaces

Drawn by sun, sea and speedy Wi-Fi, remote workers are converging on Europe’s southernmost islands to try “workcationing” before employers order them back to the office, giving battered tourism businesses a welcome boon. Olga Paul, 34, came to the Spanish island of Gran Canaria in May to work remotely for the first time, after long pandemic months cooped up in her flat in Munich, where she is a business analyst for one of Germany’s largest car manufacturers. “I think I’m more productive now,” she said, delighted with the sea view ...

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Asia July industries weaken in battle against COVID-19 Delta variant

Manufacturing activities in southeast Asia took a heavy hit in July amid various forms of lockdowns in place across countries in the region, while industry expansion in China and South Korea slowed down amid continued supply chain disruptions. With the region battling against the highly infectious COVID-19 Delta variant and the restrictions remaining in place, business conditions may not improve soon. Most Asian economies registered lower readings in July Purchasing Manufacturers’ Index (PMI), indicating a deterioration in business operating conditions in the region. ASEAN plunged deeper into contraction territory in ...

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UK inflation to hit 3.9% in early 2022, NIESR forecasts

British consumer price inflation will reach 3.9% early next year, almost double the Bank of England’s target, but should fall back to 2% the year after if the BoE begins to raise interest rates, a leading think tank forecast on Monday. The National Institute of Economic and Social Research (NIESR) also revised up its growth forecast for 2021 by 1.1 percentage points to 6.8% – broadly in with the most recent forecasts from the BoE and the International Monetary Fund. After suffering its biggest economic slump in over 300 years ...

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Q1FY22 earnings: Input costs, low sales crimp India Inc’s profits

The aggregate results were boosted by strong numbers from producers of metals. Vedanta’s consolidated ebitda increased 9% q-o-q led by sharp sequential volume growth, a recovery in prices. Analysts seem to have got ahead of themselves going by the string of disappointments in the June quarter earning season. From Biocon, Maruti Suzuki, Nestle, Dr.Reddy’s Labs and TVS Motors to a host of smaller companies like Crompton Greaves and Rallis, results for Q1FY22 have barely met the Street’s expectations. However, producers of metals like JSW Steel have seen their profits soar ...

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U.S. construction spending inches higher in June

U.S. construction spending rose by 0.1% in June, the Commerce Department said on Monday, as an increase in private projects was offset by a fall in public sector building. Construction spending, which accounts for less than 4% of U.S. gross domestic product, increased by 8.2% on a year-on-year basis in June after falling 0.2% in May, data showed. Economists polled by Reuters had forecast construction spending rising by 0.4% in June. Spending on private construction projects climbed 0.4%, with outlays on residential projects increasing 1.1%. Single-family homebuilding spending surged 1.8%, ...

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Why an atypical recession has seen a typical recovery: Morning Brief

The first look at second quarter growth figures out last week had some good news and bad news. The bad news was that the economy grew slower than expected in the second quarter. The good news was that gross domestic product (GDP) — for the first time — eclipsed pre-pandemic levels. But in a note to clients published Friday, Oxford Economics’ senior economist Bob Schwartz argued that this rebound to pre-COVID levels isn’t exactly the flattering economic data point that it might seem at first blush. “The rapid first-half growth ...

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Indian Factory Growth Rebounded In July, Hiring Resumed After 15 Months

Factory activity in the country bounced back in July as demand surged both at home and abroad, prompting companies to create new jobs for the first time since the onset of the pandemic, a private sector survey showed on Monday. The Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, jumped to 55.3 last month from 48.1 in June, well above 50-level separating growth from contraction. “Output rose at a robust pace, with over one-third of companies noting a monthly expansion in production, amid a rebound in new business and the ...

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The City has a duty to prevent people from lower socio-economic backgrounds falling behind

With traditional ways of working being upended by the pandemic, employers and employees across all industries are looking to reinvent their sector and address historic challenges. For the financial and professional services sector, a key part of this journey has to be achieving a more diverse and inclusive workplace. Focusing on increasing diversity in the industry is not new and there has been clear progress over the last few years. But what is equally obvious is there are still challenges, especially in ensuring people from lower socio-economic backgrounds are able ...

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Financial regulators urgently need to get a grip on ‘Big Tech’ – BIS

Central banks and financial regulators urgently need to get to grips with the growing influence of ‘Big Tech’, according to top officials from central bank umbrella group the Bank for International Settlements (BIS). Global watchdogs are increasing wary that the huge amounts of data controlled by groups such as Facebook (NASDAQ:FB), Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Alibaba (NYSE:BABA) could allow them to reshape finance so rapidly that it destabilises entire banking systems. In a paper led by its head Agustin Carstens, the BIS pointed to examples such as China where ...

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