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☆ ECB, BOE Raise Rates by Half a Percentage Point
▼ + stars: | 2022-12-15 | by ( Tom Fairless | Paul Hannon | ) www.wsj.com time to read: 1 min

The central banks of the U.K., eurozone and Switzerland increased interest rates by 0.5 percentage point, following the Federal Reserve in slowing the pace of increases as inflation edges lower across advanced economies. The European Central Bank said in a statement it would raise its key rate to 2% from 1.5%, as expected, the highest level since 2009. In a hawkish twist, the ECB said it expected “to raise [rates] significantly further, because inflation remains far too high and is projected to stay above the target for too long.” The bank also said it would reduce its multitrillion-dollar bondholdings starting in March, by €15 billion, equivalent to $16 billion, a month on average at first.

☆ BOE Raises Rates by 0.5 Point, Slowing Pace of Tightening
▼ + stars: | 2022-12-15 | by ( Tom Fairless | Paul Hannon | ) www.wsj.com time to read: 1 min

The Bank of England increased interest rates by 0.5 percentage point to 3.5%, following the Federal Reserve in slowing the pace of increases as inflation edges lower. The BOE’s decision follows a similar move by the Swiss National Bank on a busy day for Europe’s most influential central banks. Investors expect the European Central Bank to announce 0.5-point rate increase later Thursday. Both the BOE and the ECB have been battling all year with inflation that has spiraled to multidecade highs, partly fueled by a surge in energy prices following Russia’s invasion of Ukraine.

☆ Swiss Central Bank Follows Fed With 0.5-Point Rate Rise
▼ + stars: | 2022-12-15 | by ( Tom Fairless | Paul Hannon | ) www.wsj.com time to read: 1 min

The Swiss National Bank said it would increase interest rates by 0.5 percentage point to 1%, following the Federal Reserve in slowing the pace of increases as inflation edges lower. The SNB’s decision kicks off a busy day for Europe’s most influential central banks. Investors expect the Bank of England and European Central Bank to announce 0.5-point rate increases later Thursday. Both have been battling all year with inflation that has spiraled to multidecade highs, partly fueled by Russia’s invasion of Ukraine.

☆ Europeans Cut Back on Spending, Pointing to Recession Ahead
▼ + stars: | 2022-12-05 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Europe has seen a 1.8% drop in retail sales from September, the largest fall since July 2021. Europeans cut back sharply on their spending on goods during October, a sign that high prices at the start of a period of increasing energy usage are pushing the region’s economies toward recession. Consumer prices have surged since Russia’s invasion of Ukraine, and the Kremlin’s decision to weaponize the country’s vast stores of energy to undermine European support for Kyiv.

☆ Eurozone Inflation Eased in November, but Further Rate Rises Likely
▼ + stars: | 2022-11-30 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

The annual rate of inflation in the eurozone fell in November for the first time since mid-2021 as energy prices dropped. However, the slowdown isn’t likely to stop the European Central Bank from increasing interest rates further, economists warned. Consumer-price inflation across the 19 countries that share the euro has increased since Russia’s invasion of Ukraine, and the Kremlin’s decision to weaponize the country’s vast stores of energy to undermine European support for Kyiv.

☆ Global Economy Slows, but Seems Set to Avoid Recession
▼ + stars: | 2022-11-23 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

The global economy is slowing as a turbulent 2022 draws to a close, but economists don’t expect it to slide into recession, even if some of the world’s biggest countries do. Business surveys released Wednesday pointed to declines in output across Europe’s largest economies in November, cementing expectations that high energy prices are likely to push them into contraction during the final quarter of this year and the first quarter of next.

☆ Global Economy Slows, but Seems to Be Faring Better Than Feared
▼ + stars: | 2022-11-23 | by ( Paul Hannon | Sarah Chaney Cambon | ) www.wsj.com time to read: 1 min

The global economy continued to deteriorate as 2022 draws to a close, but not as severely as economists previously feared, raising the possibility the world could avoid a deep slump next year. Business surveys released Wednesday pointed to declines in output across the U.S. and Europe’s largest economies in November. But the figures and other economic readings pointed to a mixed outlook, with some parts of both economies continuing to show resilience despite high inflation and rising interest rates.

☆ ECB Must Narrow Interest-Rate Gap With Fed, OECD Says
▼ + stars: | 2022-11-22 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Alvaro Pereira, the OECD’s acting chief economist, said that ‘fighting inflation has to be our top policy priority right now.’The European Central Bank will have to raise its key interest rate much further if it is to bring down persistently high inflation, the Organization for Economic Cooperation and Development warned Tuesday. Inflation rates have surged since Russia’s invasion of Ukraine pushed energy and food prices sharply higher. While there have been some recent signs that these rates are at or close to their peaks, the Paris-based research group said inflation is unlikely to fall back quickly to the 2% level targeted by many central banks.

☆ U.K. Unveils Largest Tax Increases and Spending Cuts in a Decade
▼ + stars: | 2022-11-17 | by ( Max Colchester | Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—The U.K. government announced sweeping tax increases and spending cuts on Thursday, becoming the first major Western economy to start sharply limiting its spending growth after years of ramped-up fiscal stimulus during the pandemic and recent energy subsidies. The measures mark a second major shift in U.K. economic policy in just a matter of months, after previous British Prime Minister Liz Truss spooked financial markets by pledging to jump-start growth with tax cuts funded by more borrowing. Her successor Rishi Sunak is now taking economic policy in the other direction, trying to convince investors the U.K. is serious about eventually taming rising government debt. His challenge will be to regain market confidence without causing major damage to an economy widely expected to enter a recession.

☆ U.K. Unveils Tax Increases and Spending Cuts in a Decade to Shore Up Finances
▼ + stars: | 2022-11-17 | by ( Paul Hannon | Max Colchester | ) www.wsj.com time to read: 1 min

The U.K. government announced the largest tax increases and spending cuts in a decade on Thursday, becoming the first major Western economy to start sharply limiting its spending growth after years of ramped-up fiscal stimulus during the pandemic and recent energy subsidies. The measures mark a second major shift in U.K. economic policy in just a matter of months, after previous British Prime Minister Liz Truss spooked financial markets by pledging to jump start growth with tax cuts funded by more borrowing. Her successor Rishi Sunak is now taking economic policy in the other direction, trying to convince investors the U.K. is serious about eventually taming rising government debt. His challenge will be to regain market confidence without causing major damage to an economy widely expected to enter a recession.

☆ U.K. Unveils Tax Increases and Spending Cuts to Corral Debt
▼ + stars: | 2022-11-17 | by ( Paul Hannon | Max Colchester | ) www.wsj.com time to read: 1 min

The U.K. government announced the largest tax increases and spending cuts in a decade on Thursday, becoming the first major western economy to start sharply limiting its spending growth after years of ramped-up fiscal stimulus during the pandemic and recent energy subsidies. The measures mark a second major shift in U.K. economic policy in just a matter of months, after previous British prime minister Liz Truss spooked financial markets by pledging to jump start growth with tax cuts funded by more borrowing. Her successor Rishi Sunak is now taking economic policy in the other direction, trying to convince investors the U.K. is serious about eventually taming rising government debt. His challenge will be to regain market confidence without causing major damage to an economy widely expected to enter a recession.

☆ U.K. Inflation Hits 41-Year High as Recession Looms
▼ + stars: | 2022-11-16 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Consumer prices have been rising sharply in the U.K.LONDON—The U.K.’s annual rate of inflation rose to a fresh 41-year high in October on surging energy prices, but a government price cap on energy and a looming recession means any further increases to inflation in coming months are likely to be more modest. Consumer prices were 11.1% higher than a year earlier, a faster rate of inflation than the 10.1% recorded in September and the highest since October 1981, the Office for National Statistics said Wednesday.

☆ U.K. Economy Shrank in Third Quarter, Sliding Toward Recession
▼ + stars: | 2022-11-11 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

The U.K. economy contracted in the three months through September, as high energy prices and rising interest rates mark the beginning of what policy makers expect will be a long-lasting recession that is likely to spread across Europe in coming months. The country’s gross domestic product was 0.7% lower on an annualized basis in the third quarter compared with the three months through June, the U.K.’s Office for National Statistics said Friday. That was the first decline in output since the first three months of 2021, when large parts of the economy were in lockdown to contain a surge in Covid-19 infections.

☆ Bank of England Raises Key Interest Rate by 0.75 Point
▼ + stars: | 2022-11-03 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

The Bank of England raised its key interest rate by 0.75 percentage point on Thursday, its largest rise since 1989, as it fights a surge in inflation from rising energy prices even as the U.K. economy slides into an expected recession. The central bank raised its benchmark lending rate to 3% from 2.25%, taking it to the highest level since November 2008. Higher borrowing costs will hurt an already weak economy as consumers brace for a difficult winter of falling real incomes and rising prices.

☆ Eurozone Inflation Rate Rises to 10.7% as Recession Looms
▼ + stars: | 2022-10-31 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Consumer prices have risen sharply since Russia’s decision to throttle natural gas supplies to Europe. The annual rate of consumer-price inflation in the eurozone increased to double digits in October, reaching a fresh high and highlighting the challenges facing the European Central Bank after it signaled a coming slowdown in the pace of its rate increases. The broad measure of consumer prices has risen sharply since Russia’s invasion of Ukraine and Moscow’s decision to throttle natural gas supplies to Europe to undermine Western support for Kyiv. By mid-September, Russia had cut its supplies to 80% of their year-earlier total.

☆ Russian Economy Expected to Shrink Under Weight of Sanctions
▼ + stars: | 2022-10-28 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

The Bank of Russia left its key interest rate unchanged for the first meeting since March. Russia’s central bank expects the Russian economy to shrink by up to 3.5% this year, with economists forecasting a gloomy future as the country’s huge energy sector struggles to recover from the loss of its lucrative European markets and the windfall of higher oil-and-gas prices starts to fade. The Russian economy is suffering from the impact of sanctions and the withdrawal of Western businesses in the wake of the invasion of Ukraine in February. While Russia has benefited from soaring energy prices this year, economists expect revenue to fall sharply as the global economy slows and the West finds substitutes for Russian energy.

☆ U.K. Prime Minister Rishi Sunak Calms Markets—for Now
▼ + stars: | 2022-10-26 | by ( Paul Hannon | Chelsey Dulaney | ) www.wsj.com time to read: 1 min

LONDON—New U.K. Prime Minister Rishi Sunak has managed to help calm financial markets by convincing investors that he won’t jeopardize the country’s financial stability. But he now faces the more daunting task of convincing them, and ordinary Britons, that he can steer the economy through stagflation and a looming winter of discontent. Mr. Sunak faced Parliament on Wednesday for the first time as prime minister after delaying the announcement of his government’s spending plans to Nov. 17 from Oct. 31 to give him more time to run through the numbers with Treasury chief Jeremy Hunt .

☆ Rishi Sunak Wins Vote to Become U.K.’s Next Prime Minister After Liz Truss Resigns
▼ + stars: | 2022-10-24 | by ( Max Colchester | Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—Former Chancellor Rishi Sunak , who warned that Liz Truss ’ economic plans for Britain were a “fairy tale,” won the contest to succeed her as prime minister on Monday, taking over the world’s sixth-biggest economy at a time of deep financial and political turbulence. Mr. Sunak will formally enter Downing Street after his only remaining rival for the job, former defense minister Penny Mordaunt , said on Twitter she would drop out of the contest. “Rishi has my full support,” she wrote. Mr. Sunak is expected to be formally appointed prime minister by King Charles as soon as Monday afternoon.

☆ Rishi Sunak Wins Vote to Become U.K.’s Next Prime Minister
▼ + stars: | 2022-10-24 | by ( Max Colchester | Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—U.K. Prime Minister Liz Truss ’s resignation is a stark reminder of how high inflation and rising interest rates have changed the game for politicians and narrowed their room to maneuver. For the past decade, low inflation and ultralow interest rates gave governments around the world room to spend more and pile on debt without alarming investors. Those days are over.

☆ U.K. Inflation Reaches 10.1% as Government U-Turns Cloud Outlook
▼ + stars: | 2022-10-19 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

The U.K.’s annual rate of inflation returned to double digits in September, cementing expectations of another rise in the Bank of England’s key interest rate early next month even as the medium-term outlook for prices has been clouded by changes in government policy. The sharp rise in world energy prices since Russia’s invasion of Ukraine has pushed the U.K.’s inflation rate to four-decade highs, and prompted the BOE to raise its key interest rate more aggressively than it had planned before the war.

☆ Bank of England Pushes On With Plan to Start Selling Bonds
▼ + stars: | 2022-10-18 | by ( Paul Hannon | Anna Hirtenstein | ) www.wsj.com time to read: 1 min

The Bank of England is preparing to pivot rapidly from buyer to seller of U.K. government bonds, in a bet that recent market turmoil sparked by the government’s fiscal plans has waned sufficiently for the central bank to start unwinding some of the extraordinary support it provided at the height of the pandemic. Pushing ahead would mark the second time this month that the British central bank has resisted market pressure. On Friday it ended a short bout of emergency bond purchases despite calls from pension funds and others for an extension of that program, which was aimed at soothing markets after the government’s plans to cut taxes sparked a mounting selloff in gilts.

☆ U.K. Treasury Chief Jeremy Hunt Reverses Nearly All Tax Plans to Reassure Markets
▼ + stars: | 2022-10-17 | by ( Max Colchester | Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—New U.K. Treasury Chief Jeremy Hunt said Monday he was reversing nearly all the government’s proposed tax cuts and would pare back an energy price cap as he moves to reassure markets about the stability of the nation’s finances. Mr. Hunt, who took over on Friday after Prime Minister Liz Truss fired his predecessor Kwasi Kwarteng, has acted quickly in his first days on the job to try to repair the damage to Britain’s standing among investors by taking steps to shore up public finances after weeks of turmoil on U.K. financial markets.

☆ U.K. Reverses Nearly All Tax Plans to Reassure Markets
▼ + stars: | 2022-10-17 | by ( Max Colchester | Paul Hannon | ) www.wsj.com time to read: 1 min

LONDON—New U.K. Chancellor Jeremy Hunt said Monday he is reversing nearly all the government’s proposed tax cuts and will pare back an energy price cap as he moves to undo Prime Minister Liz Truss ’s debt-fuelled growth plan in an effort to reassure markets about the stability of the nation’s finances. Mr. Hunt, speaking ahead of an emergency statement to parliament on the economy, said “the most important objective for our country right now is stability,” as he announced a revised plan he said would raise around £32 billion a year, equivalent to $36 billion, for the government exchequer.

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