The Bank of England could move more aggressively to cut interest rates if inflation pressures continue to weakenbut conflict in the Middle East could push up oil prices, Governor Andrew Bailey said. Bailey told the Guardian newspaper the BoE could become “a bit more activist” and “a bit more aggressive” in its approach to lowering rates, if there was further welcome news on inflation for thecentral bank. Sterling – which has strengthened recently as investors saw fewer interestrates cutsin Britain than in other countries – wasdown by more than a ...

In 2010, it was hard to imagine the day when Greece’s banking sector would be fully privatised and thriving. That was the year the government founded the Hellenic Financial Stability Fund (HFSF) to prop up ailing lenders. Perhaps even more surprising is that Athens now looks set to reach that milestone well ahead of economies like Germany, Britain and the Netherlands. The success is down to continuous state support and a revival of Greek investment. The HFSF, run since 2021 by former banker and government adviser Ilias Xirouhakis, said on ...

Euro zone business activity slipped back into contraction last month although the downturn was not as steep as initially thought, according to a survey that also showed inflationary pressures had eased. HCOB’s composite Purchasing Managers’ Index for the bloc, compiled by S&P Global and seen as a good gauge of overall economic health, dropped to 49.6 in September from August’s 51.0. That was below the 50 mark separating growth from contraction for the first time since February but was significantly above a preliminary 48.9 estimate. A PMI covering the euro ...

The number of Americans filing new applications for unemployment benefits rose marginally last week, but the devastation unleashed by Hurricane Helene in the U.S. Southeast and strikes at Boeing BA.N and ports could distort the labor market in the near-term. The report from the Labor Department on Thursday showed the labor market gliding at the end of the third quarter, a state of affairs that could allow the Federal Reserve to be in no rush to deliver large interest rate cuts. “For the moment, the labor market looks steady as ...

Euro zone inflation is increasingly likely to ease back to the European Central Bank’s 2% target, ECB board member Isabel Schnabel said, dropping her long-standing warning about the difficulty oftaming price growth and likely boosting rate cut bets. Inflation dipped under 2% last month and the 20-nation currency bloc is skirting a recession,so markets are already betting that the ECB will have tospeed up interest rate cuts with its next move seen on Oct. 17. The comments from Schnabel, an outspoken conservative, or policy hawk in central bank parlance, will ...

Greece concluded on Thursday the re-privatisation of its lenders with the sale of a 10% stake in National Bank (NBG) amid strong demand from investors, the bank bailout fund said. The sale raised 690 million euros ($760.93 million), which will be used to help Greece reduce its pile of public debt, the euro zone’s biggest as a percentage of economic output. The Greek state-controlled bank bailout fund HFSF sold 91.4 million shares in National Bank, Greece’s second largest by market value, for 7.55 euros per share, through a book-building process ...

If you think Federal Reserve interest rate cuts could overly spur an already briskly growing U.S. economy, consider the other side of the equation: the income drag. A counterintuitive twist on the Fed’s unfolding easing cycle is that it should zap cash income from the banking system in the same way it flattered those same deposits when it rapidly hiked rates two years ago. Given that the latter appears to have blunted the negative effects of higher borrowing costs on the aggregate economy, then the reverse may curtail any economic ...

China’s stimulus plans to fill consumer pockets to meet its 2024 growth target breaks away from a decades-old policy playbook, but making household demand a sustainable driver of development instead of investment is a long path paved with tough choices. Reuters reported last week that Beijing plans to issue sovereign bonds worth about 2 trillion yuan ($284 billion) this year, in part to subsidise consumer goods purchases and child support, effectively transferring funds to households. That marks a shift towards stimulating consumption that many economists have called on Beijing to ...

The International Monetary Fund is “too polite” when it comes to criticizing China’s economic policies and should more fully disclose financing assurances given by China and some other countries to support IMF loan programs, a senior U.S. Treasury official said on Tuesday. Neiman, the Treasury’s deputy undersecretary for international finance, said the IMF has failed to apply enough analytical rigor to China’s industrial policies. WHY IT’S IMPORTANT Speaking at an event hosted by the OMFIF financial think tank, Neiman offered unusually pointed criticism of the IMF’s approach to China ahead ...

The impact of a political backlash against environmental, social and governance-related (ESG) issues in the United States is overstated and having little bearing on the country’s burgeoning green economy, a JPMorgan executive said on Tuesday. While some companies and investors were saying less about sustainability, they were still moving money in a similar way to peers in Europe, Chuka Umunna, JPMorgan’s global head of sustainable solutions, told the Reuters Energy Transition conference in London. “If you peel away all the noise and look at what investors are doing, it isn’t ...

Prime Minister Shigeru Ishiba said Japan is not in an environment for an additional rate increase, in an apparent effort to shake off his reputation as a monetary hawk, after a meeting with Bank of Japan Governor Kazuo Ueda on Wednesday. “I do not believe that we are in an environment that would require us to raise interest rates further,” Ishiba told reporters on Wednesday night in the most explicit remark to date from a prime minister pushing back against further rate hikes. The yen weakened after Ishiba’s remarks as ...

The Harvard Center for International Development is launching a new research initiative, China and the Global Economy, which aims to foster a deeper understanding of the Chinese economy and its implications for the global economic landscape. The initiative is co-led by CID Faculty affiliates Jie Bai, associate professor of public policy at Harvard Kennedy School; Jaya Wen, assistant professor of business administration at Harvard Business School; and David Yang, professor of economics at Harvard Faculty of Arts and Sciences. “China and the Global Economy is the first cross-Harvard research initiative ...

Euro zone growth could be weaker in the near term than the European Central Bank now expects but the recovery should still pick up pace later on, ECB Vice President Luis de Guindos said on Wednesday. “We expect the recovery to strengthen over time, as rising real incomes and the gradually fading effects of restrictive monetary policy should support consumption and investment,” de Guindos told a conference. He added that improved exports and a rebound in particularly weak productivity growth could also lift the economy. Source: Reuters

Donald Trump is using the destruction of Hurricane Helene to boost his presidential bid against Kamala Harris, political analysts said on Tuesday, after the Republican candidate spread falsehoods about the federal response during a visit to a storm-hit city. Trump is leveraging the potential political danger of the hurricane to the presidential campaign of Democrat Harris, his 2024 White House rival, the analysts said. Trump visited the city of Valdosta in the battleground state of Georgia on Monday and falsely stated that Democratic President Joe Biden had been unresponsive to ...

Citigroup said that it now expects the European Central Bank (ECB) to cut interest rates by 25 basis points in its Oct. 17 meeting, according to a note on Tuesday. The brokerage said this revision comes after ECB President Christine Lagarde in her hearing at the European Parliament said that the Council’s confidence in a timely return of inflation to target had increased, and that the Council will take that into account in its next policy meeting this month. The brokerage further expects subsequent cuts in December and through the ...