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REUTERS/Remo CasilliLONDON, July 18 (Reuters) - The world is baking under extreme heat - with Asia, Europe and the United States all dealing with scorching temperatures. LESS OBVIOUS RISKSAir pollution also poses a health risk, with serious potential effects from wildfire smoke including inflammation and tissue damage. Dr Vikki Thompson, Climate Scientist, Royal Netherlands Meteorological Institute, said extreme heat often contributes to poorer mental health, as well as a rise in car crashes and drownings. Location matters, too; people are at higher risk in places where they are not used to such heat, including parts of Europe. It is also important to check on the vulnerable, including older and isolated people, they said.

Persons: Remo Casilli, Liz Stephens, Dr Vikki Thompson, Modi Mwatsama, Heatstroke, Jennifer Rigby, Kate Turton, Catherine Evans Organizations: REUTERS, Remo Casilli LONDON, WHO, heatwaves, Britain's University of Reading, Royal Netherlands Meteorological Institute, Wellcome, Public, Thomson Locations: Italy, Rome, Asia, Europe, United States, London

NO CANCELLATIONS YETDemand for travel has soared again this summer as tourists leave behind years of pandemic restrictions, and travel companies say the heat hasn't caused many cancellations - yet. Stories of tourists being airlifted off Italian beaches or ferried away in ambulances from Athens' Acropolis have flooded European media in recent weeks. Italy's Environment Ministry warned in a report this year that foreign tourists would in future travel more in the spring and autumn and choose cooler destinations. Greek authorities closed Athens' ancient Acropolis during the hottest part of the day on Friday to protect tourists. In Spain, high vacation demand is expected in coastal destinations in the north of the country and on Spanish tourist islands, where summer temperatures tend to be cooler, according to a report from national tourism association Exceltur.

Persons: Miguel Sanz, Anita Elshoy, Elshoy, Sean Tipton, Sanz, Dalphna Niebuhr, Daniel Otero, Rebeca Vazquez, Renee Maltezou, Elisa Anzolin, Angelo Amante, Corina Rodriguez, Catherine Evans Organizations: Travel Commission, EUROPE Tourists, Reuters, Ministry, Thomson Locations: ROME, Europe, Czech Republic, Denmark, Ireland, Bulgaria, Norway, Rome, Sicily, Athens, EUROPE, American, Greece, Mykonos, Spain, Bilbao, Italy, Madrid

☆ What is aspartame and what do the new WHO rulings mean?
▼ + stars: | 2023-07-13 | by ( ) www.reuters.com time to read: +4 min

Discovered in 1965 by American chemist James Schlatter, aspartame is about 200 times sweeter than regular table sugar. One group of experts, the International Agency for Research on Cancer (IARC), said aspartame is a "possible carcinogen". For aspartame, this limit is 40 milligrams of aspartame per kilogram of body weight per day. Aspartame's use in food products has been debated for decades and has also prompted some companies to remove the compound from their products. PepsiCo (PEP.O) removed aspartame from Diet Pepsi in 2015 but brought it back a year later.

Persons: James Schlatter, Gunter Kuhnle, Mills, Yoplait, JECFA, Elissa Welle, Savyata Mishra, Deborah Sophia, Caroline Humer, Catherine Evans Organizations: World Health, U.S . Food, Drug Administration, WHO, International Agency for Research, Cancer, FAO, United Kingdom's University of Reading, PepsiCo, Pepsi, FDA, IARC, National Library of Medicine, Thomson Locations: Diet, saccharin, United Kingdom, Spain, France, Italy, Denmark, Germany, Australia, New Zealand, New York, Bengaluru

Aspartame is one of the world's most popular sweeteners, used in products from Coca-Cola diet sodas to Mars' Extra chewing gum. In its first declaration on the additive, announced early on Friday, the Lyon-based International Agency for Research on Cancer (IARC) said aspartame was a "possible carcinogen". Several scientists not associated with the reviews said the evidence linking aspartame to cancer is weak. There was also some limited evidence that aspartame has some chemical properties that are linked to cancer, the IARC said. Scientists with no links to the WHO reviews said the evidence that aspartame caused cancer was weak.

Persons: Francesco Branca, " Branca, JECFA, Branca, Mary Schubauer, Paul Pharaoh, Pharaoh, Kate Loatman, Frances Hunt, Wood, Richa Naidu, Caroline Humer, Catherine Evans Organizations: World Health Organization, WHO, Agency for Research, Cancer, Food, Agriculture Organization, FAO, Reuters, Cedars Sinai Medical Center, International Council of Beverage Associations, International, Thomson Locations: Lyon, Geneva, United States, Europe, Cedars, Los Angeles

Reuters reported last month that the cancer research arm of the World Health Organization (WHO), known as the International Agency for Research on Cancer (IARC), was set to make that declaration on July 14, according to two sources with knowledge of the process. The designation as "possibly carcinogenic to humans" will provide an incentive to fund more rigorous research into the safety question, toxicology and cancer experts say. "We have been pushing for an IARC review for many years now." But no action was taken until 2022, after aspartame was again nominated for review by CSPI and Melnick in 2019. The research body has said "new evidence" prompted its aspartame review, without giving any details.

Persons: Andy Smith, Smith, Coke, Peter Lurie, Lurie, James Huff, Ron Melnick, CSPI, There's, Samuel Cohen, Erik Millstone, Millstone, Jennifer Rigby, Michele Gershberg, Catherine Evans Organizations: Reuters, World Health Organization, WHO, International Agency for Research, Cancer, MRC, Unit, University of Cambridge, Cola's, Regulators, for Science, Joint Food and Agriculture Organization, U.S . National Institutes of Health, University of Nebraska Medical Center, University of Paris, Britain's University of Sussex, Thomson Locations: United States, U.S, France

In mid-2020 Rome secured the lion's share of a 724-billion-euro kitty aimed at helping EU members emerge from COVID greener and more tech-friendly. Italy's 191.5 billion euros ($210 billion) of cheap loans and grants, to be received in tranches through 2026, was intended for productive investments in the bloc's most chronically stagnant economy. MICRO-PROJECTSMore than half the EU money is meant to go on digitalisation and ecological transition, with the rest devoted to sustainable transport, education, social cohesion and health. The government is still awaiting a 19-billion-euro tranche of the EU funds blocked in March over missed policy targets stemming from 2022. It brings Italy's byzantine rules closer to EU standards, but Gobbato said people will initially find it hard to adapt.

Persons: Flavio Lo Scalzo, Rome, Roberto Perotti, Giorgia Meloni, Mario Draghi, Giuseppe Conte, Carlo Messina, Intesa, Vittorio Soldavini, Davide Carlucci, It's, Gustavo Piga, Rome's, Ilaria, Dentons, Gobbato, Catherine Evans Organizations: REUTERS, Milan's Bocconi University, Treasury, European Central Bank, Technology, Tor Vergata University, Reuters, Thomson Locations: Milan, Italy, ROME, MILAN, tranches, Brussels, Italy's, Italian, Parma

[1/3] A selection of injector pens for the Wegovy weight loss drug are shown in this photo illustration in Chicago, Illinois, U.S., March 31, 2023. It highlights the challenge Novo and rivals face in convincing European governments to pay for obesity drugs, which analysts say is likely to slow their take-up there. Germany's health ministry told Reuters there were no plans to change the law to cover weight loss drugs. DIFFERENT PICTUREIn the United States, the federal Medicare health plan for older Americans is prohibited from covering weight-loss drugs. Many health plans paid for by large employers will cover Wegovy, although they may require that patients try a rigorous diet programme or cheaper drugs first.

Persons: Jim Vondruska, Wegovy, Martin Merkel, Merkel, Duane Mellor, Novo, Lars Fruergaard Jorgensen, Michael Wirtz, Terence McManus, Phil McEwan, they've, McEwan, Patricia Weiss, Josephine Mason, Catherine Evans Organizations: REUTERS, Novo Nordisk, Wegovy, Europe's, pharma, European Union, Endocrinology Society, Aston University in, Reuters, Bellevue Asset Management, Barclays, Thomson Locations: Chicago , Illinois, U.S, Germany, FRANKFURT, Aston University in Birmingham, England, Wegovy, Europe, Danish, Berlin, Norway, Denmark, Britain, United States, Switzerland, Bellevue, EU, Cardiff , Wales, Frankfurt

Yellen is due to meet with Chinese Vice Premier He Lifeng -- her direct counterpart as China's top economic official -- on Saturday, a U.S. Treasury official said. MARKET REFORMSYellen also took aim at China's planned economy, urging Beijing to return to more market-oriented practices that had underpinned its rapid growth in past years. "A shift toward market reforms would be in China's interests," she told the AmCham event. Yellen dismissed the idea of decoupling the U.S. and Chinese economies, nothing that China's enormous and growing middle-class provided a big market for American goods and services. A Treasury official said the vibrant U.S. business community in China was "a living embodiment that we are not decoupling."

Persons: Yellen, Li, Janet Yellen, Li Qiang, Washington, Liu He, Xi Jinping, Yi Gang, Mark Schiefelbein, Yellen's, Michael Hart, BIDEN, Joe Biden, Xi, Antony Blinken, John Kerry, Andrea Shalal, Joe Cash, David Lawder, Catherine Evans, Heather Timmons, Alistair Bell Organizations: China, . Treasury, U.S, Treasury, American Chamber of Commerce, of, People, REUTERS U.S, Economic Cooperation, Thomson Locations: U.S, BEIJING, China, Beijing, United States, Washington, New Delhi, Asia, San Francisco, Ukraine

VW, which relies on gallium and germanium for automotive products, said it was "ready to take measures together with its partners if necessary" but did not elaborate. The metals will play a role in future autonomous driving functions, a spokesperson for the German automaker said. Germanium is used in high-speed computer chips, plastics, and in military applications such as night-vision devices, as well as satellite imagery sensors. But if prices rise as restrictions take hold companies would have another reason to shift supply chains. NXP makes some chips for the auto and communications sectors using gallium or germanium.

Persons: Yellen, Janet Yellen, Alastair Neill, Imelda Medina, Liao Chien, Taiwan's TSMC, chipmaker, NXP, Josephine Mason, Matt Scuffham, Catherine Evans Organizations: VW, WIN, Treasury, Beijing Pentagon, Volkswagen, U.S, Critical Minerals, U.S . Defense Department, REUTERS, Capital Securities Corp, WIN Semiconductors, Reuters, Apple, Nvidia, Thomson Locations: Beijing, TAIPEI, China, Puebla, Mexico, Germany, Japan, Taiwan

☆ China's chipmaking export curbs 'just a start', Beijing adviser warns before Yellen visit
▼ + stars: | 2023-07-06 | by ( ) www.reuters.com time to read: +6 min

Shares in some Chinese metals companies rallied for a second session as investors bet that higher prices for gallium and germanium, which Beijing's export restrictions target, could boost revenues. China is the world's biggest producer of rare earths, a group of metals used in EVs and military equipment. Asked about the metals export curbs, Chinese foreign ministry spokesman Wang Wenbin said on Wednesday the government's actions were reasonable and lawful. WARNING SHOTSome larger chip manufacturers view China's export controls on gallium as more of a warning shot about what economic pain the country could inflict. China's germanium ingot was priced at 9,150 yuan per kg on Tuesday, also flat on the day and on the week, Refinitiv data showed.

Persons: Janet Yellen, Wei Jianguo, Wei, Yellen, Biden, China's, Wang Wenbin, Wang, Gecamines, Belgium's Umicore, Xi Jinping, Eikon, Brenda Goh, Amy Lv, Tian, Nick Carey, Muralikumar Anantharaman, Jacqueline Wong, Catherine Evans Organizations: Treasury, Thursday Analysts, Washington, Commerce, China Daily, China Center for International Economic, Independence, Analysts, Micron, Global Times, Union, Benchmark Mineral Intelligence, AMS, Democratic, Shanghai Cooperation Organisation, Shanghai Metal Exchange, Beijing, Thomson Locations: Beijing, China, BEIJING, SHANGHAI, U.S, Japan, Netherlands, United States, Swiss, Teck Resources, North, Democratic Republic of Congo, Russia, Washington, Yunnan, London

☆ Factbox: Companies respond to China's curbs on gallium and germanium exports
▼ + stars: | 2023-07-06 | by ( ) www.reuters.com time to read: +2 min

Following are responses from some companies to the announcement of curbs from Aug. 1 on Chinese gallium and germanium exports. The German automaker said gallium and germanium played a role in future autonomous driving functions. * Taiwan's TSMC (2330.TW), the world's largest contract chipmaker, said it did not expect any direct impact on its production but would continue monitoring the situation. * Microchip Technology (MCHP.O) said its initial assessment is that there will not be a material impact. * Stellantis (STLAM.MI) Chief Executive Carlos Tavares said the restrictions on gallium and germanium exports should not push Western companies to "decouple" from China.

Persons: chipmaker, Carlos Tavares, Tavares, Catherine Evans, Josephine Mason Organizations: Volkswagen, Nasdaq, Intel, Infineon, European Union, Navitas Semiconductor Corp, Thomson Locations: China, United States

VW, which relies on gallium and germanium for automotive products, said it was "ready to take measures together with its partners if necessary" but did not elaborate. The metals will also play a role in future autonomous driving functions, a spokesperson for the German carmaker said. The export curbs are likely to further strain U.S.-China relations as the countries vie for dominance in semiconductor and defence technologies. But if prices rise as restrictions take hold companies would have another reason to shift supply chains. Chipmaker NXP Semiconductors (NXPI.O) sees no material impact on its business.

Persons: Imelda Medina, Yellen, Janet Yellen, carmaker, Liao Chien, Taiwan's TSMC, chipmaker, NXP, Josephine Mason, Catherine Evans Organizations: Volkswagen, REUTERS, VW, WIN, Treasury, Capital Securities Corp, WIN Semiconductors, Reuters, Apple, Nvidia, Thomson Locations: Puebla, Mexico, Beijing TAIWAN, China, Beijing, U.S, Germany, Japan, Taiwan

☆ What are Gallium and Germanium and which countries are producers?
▼ + stars: | 2023-07-04 | by ( ) www.reuters.com time to read: +5 min

Germanium ores are rare and most germanium is a by-product of zinc production and from coal fly ash. Gallium is found in trace amounts in zinc ores and in bauxite, and gallium metal is produced when processing bauxite to make aluminium. U.S. imports of gallium metal and gallium arsenide (GaAs) wafers in 2022 were worth about $3 million and $200 million, respectively, according to USGS. U.S.-based Indium Corporation also produces germanium, while Belgium's Umicore (UMI.BR) makes both germanium and gallium. "Zinc selenide and germanium glass substitute for germanium metal in infrared applications systems, but often at the expense of performance."

Persons: Belgium's, Eikon, Dominique Patton, Mai Nguyen, Melanie Burton, Pratima Desai, Tom Hogue, Himani Sarkar, Catherine Evans, David Evans Organizations: Alliance, . Geological Survey, WHO, Teck Resources, Shanghai Metal Exchange, Thomson Locations: China, Canada, Finland, Russia, United States, Europe, Japan, U.S, South Korea, Germany, Kazakhstan, Teck, North America, British Columbia, Beijing

☆ Analysis: Bond markets reckon a central bank policy error is on the cards
▼ + stars: | 2023-07-03 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +6 min

"We are positioned for a very big bond rally, and we think that risky assets are completely underestimating the risk of a recession or something nasty happening," he added. (.MERW0G1)An early sign that the bond outlook is improving came last week with data showing euro zone business growth stalled in June. In response, German bond yields, which move inversely to prices, posted their second biggest daily drop since March. But highlighting how hard economic data has become to read, higher-than-expected U.S. first quarter growth and German inflation sent yields surging on Thursday. Major central banks fighting a surge in inflation have collectively raised borrowing costs by over 3,750 bps since September 2021.

Persons: Jason Reed, Mike Riddell, Viraj Patel, Vanda's Patel, BoE, Urban, Jill Hirzel, Dhara Ranasinghe, Harry Robertson, Catherine Evans Organizations: U.S . Federal, REUTERS, Bond, U.S, Federal Reserve, European Central Bank, Bank of England, Reuters, Allianz Global Investors, Vanda Research, Deutsche Bank, General Investment Management, Insight Investment, Thomson Locations: Washington, hawkish, Canada, Britain, Norway, Sintra, Germany, United States, U.S

☆ Euro zone inflation falls again in June as energy prices tumble
▼ + stars: | 2023-06-30 | by ( ) www.reuters.com time to read: +3 min

FRANKFURT, June 30 (Reuters) - Inflation in the euro zone extended its decline in June as the cost of fuel tumbled, more than offsetting an acceleration in prices for services, a preliminary reading showed on Friday. The data, pointing to only the smallest drop in underlying inflation, was unlikely to sway the European Central Bank, which has pencilled in a ninth consecutive rate hike for July and is eyeing one in September too. "Inflation is still high and sticky but momentum is moderating," said Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management. The euro zone unemployment rate remained at an historic low of 6.5% in May, Eurostat reported separately on Friday. Big differences remain between euro zone countries, with June headline inflation falling to as little as 1.6% in Spain and Belgium and 1.0% in Luxembourg while staying in double digits in Slovakia (11.3%) and close to them in the Baltics.

Persons: chalking, Frederik Ducrozet, Ulrike Kastens, Christine Lagarde, Neil Shah, Francesco Canepa, Catherine Evans Organizations: European Central Bank, Pictet Wealth Management, ECB, DWS . Services, Eurostat, Edison Group, Thomson Locations: FRANKFURT, Germany, Europe, Italy, Portugal, Spain, Belgium, Luxembourg, Slovakia, Baltics

☆ Analysis: Dutch pension fund reform spells investment rethink
▼ + stars: | 2023-06-30 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +6 min

The idea is that pension funds will allocate more risk to younger cohorts and less to those nearer retirement. The new rules also mean pension funds can be less strict in protecting against swings in interest rates and exchange rates using derivatives like swaps. Commerzbank expects a "seismic" change to the market, where Dutch pension funds are key players. Pension funds are surveying their members to understand how much risk different age groups are willing to take. Ultimately, interest rates determine how much risk pension funds need to take to generate future payments.

Persons: Eva Plevier, Wim Barentsen, Frank Vinke, Vinke, Jaap Teerhuis, Commerzbank, Onno Steenbeek, PGGM's Vinke, Achmea's, Gerard Moerman, Yoruk Bahceli, Dhara Ranasinghe, Catherine Evans Organizations: REUTERS, ABN AMRO, European, Achmea Investment Management, European Central Bank, Asset Management, Reuters Graphics, Aegon Asset Management, Thomson Locations: Amsterdam, Netherlands, AMSTERDAM

Kenyan shipments of tea - its major export - have fallen by a fifth over the last year, according to the local regulator. The spike in global interest rates has already tipped Sri Lanka and Ghana into defaulting. Reuters GraphicsBLACK MARKETAlthough the dollar's share as a global reserve currency has dropped to 59% from 70% over a decade, it continues to dominate global trade. Nigeria has long had a web of multiple exchange rates which it is now trying to untangle, having also devalued its naira currency again last week. A plunge of around 70% in Bolivia's reserves has spawned queues at banks and currency exchange shops as some merchants stopped accepting local currency.

Persons: Wilson Muthaura, KTDA, Charlie Robertson, Muthaura, David Willacy, Ojo, Chaucer, Ronal, Luiz Inacio Lula da Silva, Kristalina Georgieva, William Ruto, Duncan Miriri, Marc Jones, Macdonald Dzirutwe, Monica Machicao, Mayela Armas, David Sherwood, Catherine Evans Organizations: Bank, FIM Partners, Reuters Graphics, Workers, REUTERS, La Paz, West, Reuters, JPMorgan, Monetary Fund, IMF, Fund, Thomson Locations: NAIROBI, LONDON, Pakistan, COVID, Russia, Ukraine, London, Islamabad, Egypt, Sri Lanka, Ghana, Tunisia, teetering, Nigeria, Kenya, StoneX, Nigeria's, Lagos, British, Cuba, Venezuela, Githunguri, Kiambu County, United States, Lebanon, Turkey, Ethiopia, China, India, Johannesburg, Saudi Arabia, Africa, Argentina, Nairobi, La Paz, Caracas, Havana

☆ ECB forum: more tightening to come, top central bank chiefs warn
▼ + stars: | 2023-06-28 | by ( ) www.reuters.com time to read: +2 min

[1/2] The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. U.S. Federal Reserve Chairman Jerome Powell did not rule out further hikes at consecutive Fed meetings while European Central Bank President Christine Lagarde confirmed expectations the bank will raise rates in July, saying such a move was "likely". "Policy hasn't been restrictive enough for long enough," Powell told an annual gathering of central bankers hosted by the ECB in the Portuguese mountain resort of Sintra. "We are not seeing enough tangible evidence of the fact that underlying inflation, particularly domestic prices, are stabilising and moving down." While headline inflation was above 3%, the BOJ was keeping monetary policy easy because underlying inflation remained below its 2% target, Ueda said.

Persons: Kai Pfaffenbach, Jerome Powell, Christine Lagarde, Powell, Lagarde, Andrew Bailey, BoE, Bailey, Kazuo Ueda, Ueda, Balazs Koranyi, Francesco Canepa, Mark John, Catherine Evans Organizations: European Central Bank, REUTERS, . Federal, ECB, Bank of England, Bank of Japan, Thomson Locations: Frankfurt, Germany, SINTRA, Portugal, Sintra

The cost of certain goods is retreating in some places, but that doesn't include live music. Concert tickets have surged in price, to the point where economists are noticing. While ticket prices have increased, he said, mid-year figures haven't shown an appreciable rise since May 2022, when U.S. inflation was 8.6%. In India, fans are happy to pay a premium for quality entertainment, according to Owen Roncon, chief of business for Live Entertainment at BookMyShow. In Britain, about 150,000 music fans paid 340 pounds ($431)for a ticket to June's Glastonbury festival to see Elton John and hundreds of other acts.

Persons: Taylor Swift, Bruce Springsteen, haven't, Mario Ihieme, Paul Donovan, Harry Styles, Joel Barrios, Carolina Candelas, Andy Gensler, Pollstar, TD Cowen, Stephen Glagola, Elton John, Jason Cairnduff, Bruno Mars, Coldplay, Fairuz Zahari, Ed Sheeran, Owen Roncon, Eventbrite, Michael Rapino, Beth Cook, Dawn Chmielewski, Danielle Broadway, Sachin Ravikumar, David Milliken, Sharon Kimathi, Rozanna, Radhika Anilkumar, David Gaffen, Catherine Evans Organizations: LOS ANGELES, National Statistics, UBS Global Wealth Management, Stubhub, Ticketmaster, REUTERS, U.S . Labor Department, Backstreet, Live Entertainment, Backstreet Boys, Entertainment, Thomson Locations: Asia, U.S, GLASTONBURY, England, London, Seattle, Mexico City, Los Angeles, Europe, Barcelona, Glastonbury, Somerset, Britain, Malaysia, Australia, India, Leeds, Kuala Lumpur, Bangalore

The cost of certain goods is retreating in some places, but that doesn't include live music. Concert tickets have surged in price, to the point where economists are noticing. Event prices in UK inflation data are based on when shows take place, not when tickets are bought. While ticket prices have increased, he said, mid-year figures haven't shown an appreciable rise since May 2022, when U.S. inflation was 8.6%. The U.S. Labor Department does not specifically measure inflation for concert prices, but the inflation rate for live performing admission events is currently 2.6 percentage points more than U.S. headline inflation.

Persons: Taylor Swift, Bruce Springsteen, haven't, Mario Ihieme, Paul Donovan, Harry Styles, Joel Barrios, Carolina Candelas, Andy Gensler, Pollstar, TD Cowen, Stephen Glagola, Bruno Mars, Coldplay, Fairuz Zahari, Ed Sheeran, Owen Roncon, Eventbrite, Michael Rapino, Elton John, Beth Cook, Dawn Chmielewski, Danielle Broadway, Sachin Ravikumar, David Milliken, Sharon Kimathi, Rozanna, Radhika Anilkumar, David Gaffen, Catherine Evans Organizations: LOS ANGELES, National Statistics, UBS Global Wealth Management, Stubhub, Ticketmaster, U.S . Labor Department, Backstreet, Live Entertainment, Backstreet Boys, Entertainment, Thomson Locations: Asia, U.S, GLASTONBURY, England, London, Seattle, Mexico City, Los Angeles, Europe, Barcelona, Malaysia, Australia, India, Britain, Leeds, Glastonbury, Kuala Lumpur, Bangalore

At present, minimum reserves are remunerated at the ECB's deposit rate, now 3.5% after a string of interest rate hikes to tame inflation. The sources said some staff advocate leaving an adjustment of the corridor until the ECB ends its current tightening cycle, with the final move a change in the deposit rate. The ECB has given itself a year-end deadline to decide, the sources said, although details could take longer to work out. Now, the deposit rate effectively sets an interest rate floor, similar to the way U.S. Federal Reserve rates function and the sources indicated this was likely to remain the case. Such a "demand driven floor-system" would let the ECB add excess liquidity as needed as opposed to running a permanently oversized balance sheet.

Persons: Isabel Schnabel, Catherine Evans Organizations: Staff, Senior European Central Bank, Reuters, Market, ECB, Federal, Bank of England, Thomson Locations: Helsinki, SINTRA, Portugal, Sintra, Finland

☆ UK shoppers boost spending again despite inflation's squeeze
▼ + stars: | 2023-06-23 | by ( William Schomberg | ) www.reuters.com time to read: +3 min

But Friday's retail sales figures showed that, at least for now, British consumers were weathering the cost-of-living storm. "But our view is still that the growing drag on activity from higher interest rates will eventually tip the economy into recession, generating a 0.5% peak to trough fall in real consumer spending." The statistics agency said the one-off holiday to celebrate the king's coronation was not factored into its seasonal adjustments, meaning it helped to boost the sales volumes reading. Retail sales volumes in May were 2.1% lower than a year earlier. The Reuters poll of economists had pointed to a fall of 2.6% in sales volumes on an annual basis.

Persons: Sterling, King Charles, Ruth Gregory, Samuel Tombs, Heather Bovill, William Schomberg, William James, Catherine Evans Organizations: Bank of, Bank of England, U.S ., Office, National Statistics, Capital Economics, ONS, Reuters, Thomson Locations: Britain

WHY HAVE UK MORTGAGE RATES SOARED? There are two main types of mortgage rate - variable and fixed. Fixed rate mortgages lock in a particular interest rate upfront, usually for a period of two to five years. Banks say they have to reflect these market moves to avoid pricing mortgages at a loss. Critics say banks could do much more, particularly as they have passed rate rises through to savers much more slowly than mortgage rates have risen.

Persons: BoE, Banks, Nicholas Mendes, John Charcol, Mendes, Jeremy Hunt, Hunt, Roger Gewolb, Sinead Cruise, Iain Withers, Catherine Evans Organizations: Soaring, Bank of, WHO, Finance, ASK, Labour, Fair Finance, Reuters, Thomson Locations: Britain, Bank of England, States

☆ Euro holds ground on world stage despite Russia slashing use -ECB
▼ + stars: | 2023-06-21 | by ( ) www.reuters.com time to read: +3 min

The euro kept or even increased its share of the world's foreign exchange reserves (20.5%), international debt (22%) and loans (27.6%), as well as foreign exchange turnover last year, the report said. But the rouble's usage on the SWIFT system collapsed after Russian banks were disconnected from that network, the world's largest. It cited evidence from Europe itself, where the euro has replaced the dollar as an invoicing currency in countries neighbouring the euro zone since it was launched in 1999. "International currency status should not be taken for granted," ECB President Christine Lagarde said in a statement accompanying the report. The report also showed London remained the main venue for foreign exchange trading in euros and that Britain's importance for international financial activities in euros had not changed materially since Brexit.

Persons: renminbi, SWIFT, Christine Lagarde, Fabio Panetta, Francesco Canepa, Gareth Jones, Catherine Evans Organizations: European Central Bank, U.S ., European Union, London, Thomson Locations: FRANKFURT, Russia, China, India, Brazil, Ukraine, Europe

☆ Explainer: Why is inflation so high in the UK?
▼ + stars: | 2023-06-21 | by ( William Schomberg | ) www.reuters.com time to read: +4 min

Although down from 11.1% last October, it left the country with the highest inflation rate among the Group of Seven advanced economies. Higher core inflation is seen as a sign that price growth is more likely to remain persistently high. Another gauge of underlying price pressure that is watched closely by the BoE - services price inflation - also rose. WHY IS FOOD INFLATION SO HIGH IN THE UK? Industry data published on Tuesday showed British grocery inflation eased slightly for the third month in a row in June.

Persons: BoE, BoE Governor Andrew Bailey, William Schomberg, Catherine Evans Organizations: Bank of England, Reuters, Britain, Food and Agriculture Organization, United Nations, European Union, OF, Investors, Thomson Locations: United States, Europe, Germany, Britain, China, Japan, Ukraine, London, Brussels

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