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BOJ to maintain recovery view despite pandemic gloom – sources

The Bank of Japan is expected to roughly maintain its view the economy will gradually recover later this year from the virus-led downturn, sources familiar with its thinking told Reuters, even as fears of a second wave of infections cloud the outlook. The central bank’s views, from its quarterly report due next week, will heighten the chances it will keep monetary policy steady at a review on July 14-15, after having ramped up stimulus in March and April. But the BOJ’s report is expected to warn that risks to the ...

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Big Four told to ring fence auditing in Britain by June 2024

PwC, Deloitte, KPMG and EY should ring fence auditing in Britain as a separate business by June 2024, their regulator said on Monday in one of the most sweeping changes to the sector globally to improve audit quality. Corporate failures at builder Carillion and retailer BHS led to three government-backed reviews that recommended a shake-up of auditing, but the government has yet to introduce legislation to mandate change, partly due to Brexit and, more recently, the COVID-19 pandemic. The Financial Reporting Council (FRC) had already begun seeking voluntary changes to ...

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U.S. Releases Names of Biggest PPP Borrowers

The Trump administration Monday disclosed the names of more than 650,000 businesses that received loans under the Paycheck Protection Program — information officials say will show the emergency fund helped firms across the economy weather the pandemic. The data dump will name borrowers receiving loans of more than $150,000. In all, about 4.9 million small businesses have taken out the forgivable loans, totaling about $521 billion as of June 30, according to the Small Business Administration. Ahead of the data release, the administration Monday released a new analysis concluding the ...

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Virus crisis expected to ‘level down’ UK economy

The coronavirus crisis could “level down” the UK economy with London and the South East expected to bounce back more quickly than Hull and Bradford. Sectors such as finance and construction will be worst affected by the pandemic, a report from the Social Market Foundation think tank warned. Initially, that means London and the South East would be worst hit, but other areas face a slower recovery. The Treasury said it was committed to “levelling up” every region of the UK. The worst-affected areas in the short-term: • Camden and ...

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Moderate rebound in German industry orders points to slow recovery

Orders for German industrial goods rose by 10.4% in May, rebounding from their biggest drop since records began in 1991 the previous month, data showed on Monday, as demand picked up after lockdown measures to fight the coronavirus were lifted. The increase was weaker than a Reuters forecast for a rise of 15% and the Economy Ministry said a return to pre-crisis levels will be slow even though the economy is recovering. The Statistics Office data showed that domestic orders rose by 12.3% while orders from abroad were up 8.8%. ...

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One fifth of German firms fear for their survival amid pandemic: Ifo

Around one fifth of German companies (21%) believe their survival is threatened by the coronavirus crisis, Germany’s Ifo institute said on Monday, with travel agents, hotels and restaurants particularly concerned. “We could see a wave of insolvencies in the coming months,” Ifo researcher Stefan Sauer said. Source: Reuters (Reporting by Michelle Martin; Editing by Scot W. Stevenson)

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UK will face consequences if it rules China is a hostile country – envoy

Britain will have to bear the consequences if it treats China as a hostile country when deciding whether to allow Huawei to be involved in the country’s telecommunications networks, the Chinese ambassador to Britain said on Monday. “We want to be your friend. We want to be your partner. But if you want to make China a hostile country, you will have to bear the consequences,” Liu Xiaoming told reporters. British Prime Minister Boris Johnson said last week he would proceed carefully on making a decision on Huawei because the ...

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Japan’s Nishimura: Agreed with experts to expand economic activity from July 10

Japanese Economy Minister Yasutoshi Nishimura said on Monday the government agreed with members of a new panel to expand economic activity from July 10 based on the premise of taking thorough steps to prevent coronavirus infection. Nishimura also said the government agreed with panel members that the response to the coronavirus outbreak would be different from in April when the country issued a state of emergency, which urged people to stay home and businesses to close. Source: Reuters (Reporting by Hiroko Hamada, writing by Kaori Kaneko, editing by Chris Gallagher)

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The coronavirus-hit inflation data will rear its ugly head eventually

The coronavirus-led demand slump has pushed the global economy into recessionary mode. Excess spare capacity is keeping inflation muted, until the world fully reopens. Of course, demand has also fallen across the board, resulting in lower inflation. Average inflation in advanced economies dropped about 1.3 percentage points since the end of 2019, to 0.4% (year-over-year) as of April 2020, the International Monetary Fund (IMF) said in its latest economic outlook report. In emerging market economies, inflation fell 1.2 percentage points to 4.2%, the report said. “Inflation projections have generally been ...

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French economy probably bouncing back faster than expected – central bank

The French economy is pulling out of the slump induced by the coronavirus outbreak at least as fast as expected a month ago, and maybe even a little faster, Bank of France Governor Francois Villeroy de Galhau said on Sunday. The central bank estimated last month that the euro zone’s second-biggest economy would be operating 12% below normal levels by the end of June, up from a 32% reduction at the start of France’s coronavirus lockdown in late March. The Bank of France is due to update its estimate on ...

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German Manufacturing Orders Rebound in May as Lockdown Eases

German manufacturing orders rebounded on month in May, federal statistics office Destatis said Monday. Manufacturing orders increased 10.4% in May in adjusted terms after a downwardly revised 26.2% decline in April, according to Destatis. Economists polled by The Wall Street Journal had expected orders to grow at a higher rate of 15% from the previous month. On an annual basis, orders fell 29.3%, adjusted for calendar and price effects. Despite the improvement, new orders in May were 30.8% lower in seasonally and calendar adjusted terms compared with February, the month ...

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The economy is not looking too bad

Based on sharp falls during the lockdown and due to the widespread misconception that equated the fiscal stimulus to the promised new expenditure of about 1 per cent of GDP, market analysts and international agencies are forecasting negative growth rates for India in 2020-21. But the demand stimulus is the excess of expenditure over taxation. As revenues shrink, this will be much larger than 1 per cent. The Central plus State fiscal deficit is widely expected to be in excess of 10 per cent of GDP, even as the RBI’s ...

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U.S. trade groups urge China to increase purchases of U.S. goods, services

The U.S. Chamber of Commerce and over 40 trade associations on Monday urged top U.S. and Chinese officials to redouble efforts to implement a Phase 1 trade agreement signed by the world’s two largest economies in January despite pandemic-related strains. In a letter to U.S. Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, the group said they were encouraged by the progress so far, but called for a significant increase in China’s purchases of U.S. goods and services. The groups said combating the ...

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Goldman Sachs raises forecast of U.S. economy contraction to 4.6 pct in 2020

Global investment management firm Goldman Sachs lowered its forecast for the U.S. economy in a report published Saturday, saying it would grow at 25 percent in the third quarter of this year rather than its previous forecast of 33 percent. Goldman Sachs Group Inc. economists said this would cause the U.S. economy to slump 4.6 percent this year, worse than the 4.2 percent previously predicted. “A combination of tighter state restrictions and voluntary social distancing is already having a noticeable impact on economic activity,” the economists said. In the meantime, ...

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OECD annual inflation slowed to 0.7% in May 2020, driven by energy prices; food prices inflation continued to rise

Annual inflation in the OECD area slowed to 0.7% in May 2020, compared with 0.9% in April and 1.7% in March, on the back of the largest fall in energy prices since September 2009. Energy prices declined by a further (minus) 13.4% in May, following the contraction of (minus) 12.2% in April. By contrast, food price inflation picked up to 4.5%, compared with 4.2% in April, the largest annual increase since December 2011. Excluding food and energy, OECD inflation was stable at 1.6% in May 2020. Estimates for the OECD ...

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