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China vows to control debt despite fresh stimulus for cooling economy

China’s state planner pledged on Wednesday to keep debt levels under control even as Beijing rolls out fresh stimulus to support the stumbling economy as a trade war with the U.S. deepens. The comments by the National Development and Reform Commission (NDRC) came a day after China reported surprisingly weak data that showed investment growth has slowed to a record low. To stabilise business conditions and weather the trade war, Beijing is stepping up infrastructure spending and injecting more funds into the banking system, which is lowering borrowing costs. New ...

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U.K. Inflation Accelerated in July

Annual inflation in the U.K. accelerated in July, suggesting inflationary pressures persist in its economy despite disappointing wage growth. Consumer prices rose 2.5% on the year in July, the Office for National Statistics said Wednesday, up from a 2.4% annual gain the previous month. The pickup in inflation was driven by price increases for gasoline, food and video games, the ONS said. Major central banks are slowly stepping back from the easy-money policies of the past decade as accelerating growth revives long-dormant inflation. The BOE raised its benchmark interest rate ...

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UK inflation rises for first time in 2018, seen falling soon

Britain’s inflation rate rose in July for the first time in 2018, keeping the squeeze on many households’ budgets, but there were signs that the pick-up was a blip and inflation might fall faster than the Bank of England thinks. Consumer price inflation rose at an annual rate of 2.5 percent in July after holding at 2.4 percent in the previous three months, matching economists’ forecasts in a Reuters poll. It was the first time since November that inflation gained pace, slowing the recovery in spending power for consumers. “These ...

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Draghi Racing, Turkey Turmoil, Indonesia Rate Decision: Eco Day

Welcome to Wednesday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help get your day started: -The race to replace Mario Draghi could become a bit clearer with the ECB’s next appointment -iPhone ban. Erdogan’s boycotting U.S. electronics as a dispute with Trump heats up and amid the plunge in the lira -Brace yourselves. Turkey’s just a test case for the real reckoning during the quantitative tightening to come -Heat is on. Russia’s already feeling the suffering, with the Turkey-led turmoil adding to pressures, including U.S. sanctions ...

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Billionaires Druckenmiller, Soros Throw Weight Behind Oil Rally

The recovery in the oil industry is attracting some of the most recognized billionaires in money management. Stanley Druckenmiller’s Duquesne Family Office bought 1.68 million shares in VanEck Vectors Oil Services ETF in the second quarter, the third-biggest addition to its portfolio in the period, a regulatory filing showed Tuesday. It also added the Energy Select Sector SPDR Fund. George Soros’s hedge fund bought energy stocks including Chevron Corp. The global energy industry is extending a recovery from the worst crude crash in a generation, with benchmark U.S. oil prices ...

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Lira rallies after Turkey raises tariffs on US imports

Turkey’s move to increase tariffs on US imports has helped boost its weakened currency. A decree signed by President Recep Tayyip Erdogan raised the tariffs on cars to 120%, on alcoholic drinks to 140% and on leaf tobacco to 60%. The US doubled tariffs last week over Turkey’s refusal to free a US pastor who is imprisoned there. The lira rose 3%, also helped by measures aimed at deterring foreign investors speculating on the lira. Despite the rise, Turkey’s currency has lost almost a third of its value against the ...

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UK inflation rate rises for first time since November

UK inflation rose to 2.5% in July, after holding steady at 2.4% in the previous three months, as the cost of transport and computer games increased. It was the first jump in the Consumer Prices Index (CPI) measure since November and was in line with forecasts. Meanwhile the Retail Prices Index (RPI) measure of inflation fell to 3.2%. The Department for Transport uses the RPI figure to set the maximum annual increase for regulated rail fares. Despite the rise for CPI, wage growth is still outstripping inflation. On Tuesday, the ...

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US economy is expected to accelerate this year, then slow in 2019: CBO

U.S. economic growth will probably accelerate this year before slowing in 2019 to well below the Trump administration’s 3 percent target as a fiscal stimulus fades, congressional researchers projected on Monday. In an updated economic outlook, the nonpartisan Congressional Budget Office (CBO) projected that inflation adjusted or real gross domestic product (GDP) would grow 3.1 percent this year, exceeding 2.2 percent growth in 2017 due to lower income taxes, increased government spending and private investment. The government slashed corporate and personal income taxes in January in a $1.5 trillion package ...

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UK unemployment at lowest since 1975

UK unemployment fell by 65,000 to 1.36 million in three months to June – the lowest for more than 40 years, official figures from the Office for National Statistics (ONS) show. They also show a rise in productivity, but a slowdown in wage growth. Wages, excluding bonuses, grew by 2.7% in the three months to June, compared with a year ago. The ONS figures also showed the number of European Union nationals working in the UK fell by a record amount. The fall was the largest annual amount since records ...

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The threat Turkey’s crisis poses to the world

Turkey is just the latest developing economy to plunge into chaos. The Turkish lira has shed more than 40% since January, while the country’s stock market has been cut in half. The turmoil follows a similar currency crash in Argentina that led to a rescue by the International Monetary Fund. In recent days, the Russian ruble, Indian rupee and South African rand have also tumbled dramatically. Investors are waiting for the next domino to fall. They’re on the lookout for signs of a repeat of the 1997-1998 Asian financial crisis ...

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What China Needs to Understand About Trump

It was late November 2016, and my Chinese counterpart, Vice Premier Wang Yang, was visiting Washington, D.C. Over the course of my tenure as U.S. Secretary of Commerce, the vice premier and I had developed a warm and candid relationship. Since this was to be our last official meeting, I decided to do something a bit different: take him to rural Virginia for a traditional Thanksgiving meal. While we were surrounded by our usual phalanx of security, we effectively sat alone, with the exception of our two closest aides. Shortly ...

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Why India Is The Most Expensive Asian Market

For index investors in Asia, India’s Sensex has been the best bet this year even as emerging markets face multiple headwinds. The 30-share S&P BSE Sensex has returned 11.05 percent so far this year. While that may pale in comparison to the 28 percent surge in 2017, it has outperformed Asian peers. And that pushed the index’s 12-month forward price-to-earnings multiple to 19 times, making it the most expensive in the region. While the broader markets lagged, the Sensex was in large part helped by domestic flows worth $10 billion ...

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As economy cools, China sets deadline for local government special bond sales

China’s Finance Ministry told local governments on Tuesday to speed up issuance of special bonds used to fund infrastructure projects, as Beijing looks to boost investment amid slowing economic activity and trade headwinds with the United States. Local governments in China issue those bonds for special purposes such as highway projects and shanty town redevelopment. In guidance posted on its website, the ministry said local governments should complete no less than 80 percent of their special bond issuance quota by end-September, adding that the rest should be sold mainly in ...

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Stronger Euro-Area Economic Growth Defies Trade War Threats

The euro-area economy grew faster in the second quarter than initially reported, suggesting some of the worries about the outlook at the start of the year may have been overdone. Expansion was revised up to 0.4 percent from 0.3 percent, Eurostat said Tuesday, and a jump in investor confidence hints at less gloomy prospects for the second half. Growth in Germany and the Netherlands gathered pace in the three months through June, keeping solid momentum in the overall currency region despite global trade tensions and disappointing performances in France and ...

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Turkey Takes Aim at Media Reporting on Country’s Currency Crisis

Turkey signaled a clampdown on news and social media, with officials including the public prosecutor warning that criticism may be viewed as “economic attacks” on the country. Authorities have begun investigating people who “carry out actions threatening security” as well as news reports and social media posts that would “serve as economic attacks,” the state-run Anadolu news agency said on Monday, citing a statement by the Istanbul prosecutor’s office. It tied the news reports to “forces behind the July 15 coup attempt,” referring to a 2016 failed putsch that Turkey ...

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