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☆ China vows commitment to growth as pressure on economy mounts
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +5 min

Renewed COVID lockdowns are weighing heavily on China's business activity, consumer confidence and financial markets, adding to a sharp downdraft on the global economy from surging inflation and rising interest rates. OPEN-DOOR POLICYYi Gang, governor of the People's Bank of China (PBOC), said China will continue to deregulate its markets. With China's zero-COVID policy expected to remain in place through at least the winter, or longer, its near-term growth outlook is bleak. After surprisingly high gross domestic product growth of 3.9% in the third quarter, Nomura expects growth to drop again, with zero or even negative sequential growth from the previous quarter. "We maintain our GDP growth forecast of 2.8% year-on-year for the fourth quarter with a corresponding sequential growth forecast at 0.0%."

☆ How 'trickle-down economics' backfired on Britain's shortest-serving prime minister
▼ + stars: | 2022-10-25 | by ( Karen Gilchrist | ) www.cnbc.com time to read: +1 min

On October 20th, 2022 — after just 44 days in office — British Prime Minister Liz Truss resigned. Trickle-down economics, a term most closely associated with Ronald Reagan and Margaret Thatcher. So just why did the U.K. try to revive trickle-down economics? Watch the video above to find out why the U.K. attempted to revive trickle-down economics and how it caused the country's fiscal strategy to implode. Disclaimer: CNBC conducted the interviews in this feature prior to Liz Truss' resignation on October 20.

☆ Lawmakers will try to oust UK PM Truss this week, Daily Mail reports
▼ + stars: | 2022-10-16 | by ( ) www.reuters.com time to read: +1 min

Oct 16 (Reuters) - British lawmakers will try to oust Prime Minister Liz Truss this week despite Downing Street's warning that it could trigger a general election, the Daily Mail reported. Britain, engulfed in a political crisis, has lost three prime ministers since it voted to leave the European Union in 2016. Separately, The Times reported that some lawmakers have held secret discussions on replacing Truss with a new leader. Truss, who won the Conservative Party leadership last month after promising to slash taxes, is fighting for her political survival after ditching key parts of the programme. read moreThe chaos has fuelled discontent in the party, which is falling behind the opposition Labour Party in opinion polls.

London CNN Business —UK Prime Minister Liz Truss has fired finance minister Kwasi Kwarteng and ditched a big part of her discredited economic strategy in a desperate bid to rescue her month-old premiership. “It was right, in the face of the issues we had, that I acted decisively to ensure that we had economic stability,” Truss said Friday. Kwarteng presented a “mini budget” just three weeks ago, promising tax cuts worth £45 billion ($50 billion) and increased borrowing with the hope of boosting UK economic growth. “Liz Truss’ reckless approach has crashed the economy, causing mortgages to skyrocket, and has undermined Britain’s standing on the world stage,” he said. Kwarteng had flown back from the IMF meeting in Washington, D.C., overnight for discussions with Truss.

☆ This exec helped raise $100 million to fund Latino-owned startups: It's 'a smart economic strategy'
▼ + stars: | 2022-10-14 | by ( Morgan Smith | ) www.cnbc.com time to read: +1 min

As the U.S. slides closer to a potential recession, economists and business leaders are racking their brains for ways to improve the country's financial health. For Solomon "Sol" Trujillo, the answer is simple: Invest in Latino-owned businesses. In 2019, Trujillo, 70, founded L'Attitude Ventures, a venture capital (VC) firm that exclusively invests in Latino-owned businesses. Trujillo is a general partner at L'Attitude Ventures alongside former United Airlines CEO and chairman Oscar Munoz, Kennie Blanco, Laura Moreno Lucas and Gary Acosta, who is also a co-founder of the firm. "We want people to see that there are a lot of companies that can create growth and stimulate our country's GDP with the right support."

London CNN Business —UK Prime Minister Liz Truss will hold a news conference Friday amid widespread speculation that she’s getting ready to ditch a big part of her economic strategy unveiled just three weeks ago. Kwarteng flew back from the IMF meeting in Washington, D.C., on Friday for discussions with Truss about the plan. Under pressure, Kwarteng has already brought forward his full budget statement to Oct. 31, more than three weeks earlier than planned. But investors may not be prepared to wait that long for reassurance about the state of Britain’s public finances. — Luke McGee and Zahid Mahmood in London, and Xiaofei Xu in Paris contributed to this article

"The mortgage crisis is going to be bigger than energy now," said Richard Murphy, professor of accounting practice at Sheffield University, warning of a drop in house prices that could leave many with debt greater than the value of their home. This comes on top of a cost of living crisis driven by rising food and energy prices which is already biting many hard. CALL FOR CALMBeyond the immediate squeeze this will have on consumers' ability to spend, rising borrowing costs also have the potential to send the years-long house market rally into reverse: HSBC analysts predict house price falls of 7.5% into next year. Some top mortgage lenders are calling for calm, stressing they are still signing mortgage deals and that the pullback in lending among smaller rivals is in no way indicative of a broader, exodus of lenders from the mortgage market. Chris Huddleston, chief executive of international brokerage company FXD Capital, said he expected the mortgage market to remain in limbo in coming weeks as investors watch currency markets and how the Bank of England reacts.

The BoE said it would temporarily buy long-dated bonds - linked most closely to workers' pensions and home loans - in light of a surge in 30-year UK bond yields above 5%, their highest since 2002. Register now for FREE unlimited access to Reuters.com RegisterEuropean government bonds got a lift from the surge in gilts. "The surge in bond yields threatens the housing market and broader economy. Wall Street opened higher, with the S&P 500 Index (.SPX) up about 1% after it fell to a two year low on Tuesday. Scott Wren, Senior Global Market Strategist at Wells Fargo Investment Institute, said markets may already be pricing in future pain.

The BoE said it would temporarily buy long-dated bonds - linked most closely to workers' pensions and home loans - in light of a surge in 30-year UK bond yields above 5%, their highest since 2002. The pound briefly fell by as much as 1% after the BoE's announcement, while UK stocks cut losses, which in turn helped the broader European equity market avoid deeper falls. "The surge in bond yields threatens the housing market and broader economy. The IMF and the U.S. Treasury waded in yesterday in fear of global contagion from gilts to other markets," he said. European government bonds got a lift from the surge in the value of UK gilts.

☆ London stocks slide amid economic "tug-of-war"
▼ + stars: | 2022-09-28 | by ( Johann M Cherian | ) www.reuters.com time to read: +2 min

The blue-chip index (.FTSE) dropped 1.6%, while the more domestically oriented FTSE 250 (.FTMC) shed 2.5%. The International Monetary Fund (IMF) and ratings agency Moody's criticised Britain's new economic strategy, with the latter warning that unfunded UK tax cuts would be "negative" for the country's credit standing. read more"There is an economic tug-o-war taking place between the Bank of England and the government," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. Burberry Group (BRBY.L) rose 4.1% after announcing Daniel Lee would be its new chief creative officer, replacing Riccardo Tisci, who is stepping down. read moreRegister now for FREE unlimited access to Reuters.com RegisterReporting by Johann M Cherian in Bengaluru; editing by Uttaresh.V and Savio D'SouzaOur Standards: The Thomson Reuters Trust Principles.

"We are really a government in waiting and we have a chance to set out our ideas for the country. Labour is positioning itself as the party of fiscal responsibility and say it stands for "sound money". Almost half of voters say that Labour has not produced a clear set of policy ideas, according to polling from Savanta ComRes. In the most recent poll, Labour now has a six-point lead. But Curtis said the Conservatives still lead on the crucial question about who is best placed to make voters and the country wealthier.

☆ Morning Bid: Mini budget, major turmoil
▼ + stars: | 2022-09-28 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Henry NichollsA look at the day ahead in European and global markets from Anshuman DagaWhat was meant to be a mini-budget is still thundering across financial markets. read moreAsian stocks markets and currencies extended their downward journey, burdened by the gloomy growth outlook, while dollar bulls pushed the currency to yet another two-decade high. "Indeed a recession in Europe in particular is already well anticipated, with 92% of our European Fund Manager survey respondents expecting one in the coming 12 months," BofA said. Elsewhere, the energy crisis in Europe intensified as European authorities investigated what Germany, Denmark and Sweden said were attacks which had caused major leaks into the Baltic Sea from two Russian gas pipelines. The energy crisis between Europe and Moscow has already battered major Western economies, sent gas prices surging and sparked a hunt for alternative supplies.

The blue-chip index (.FTSE) slipped 0.3% after dropping as much as 2.1% earlier in the session, while the more domestically focused FTSE 250 (.FTMC) eased 1.4%. The Bank of England said it would buy as many long-dated government bonds as needed between now and Oct. 14 to stabilise financial markets. read moreThe battered pound briefly dropped as much as 1% against the dollar, before paring some losses. Retailers (.FTNMX404010) slipped 0.5%, with online fashion retailer Boohoo Group (BOOH.L) slumping 6.4% after it cut its full-year outlook. read moreBurberry Group (BRBY.L) rose 4.3% after announcing Daniel Lee would be its new chief creative officer, replacing Riccardo Tisci, who is stepping down.

☆ Stocks pull off 2020 lows, Bank of England steps in to calm UK bond market
▼ + stars: | 2022-09-28 | by ( Amanda Cooper | Harry Robertson | ) www.reuters.com time to read: +5 min

A general view of the Bank of England (BoE) building, the BoE confirmed to raise interest rates to 1.75%, in London, Britain, August 4, 2022. The BoE said it would temporarily buy long-dated bonds - linked most closely to workers' pensions and home loans - in light of a surge in 30-year bond yields above 5%, their highest since 2002. "The surge in bond yields threatens the housing market and broader economy. The MSCI All-World index was last down 0.5%, having pulled off a session trough that marked its lowest since November 2020. "The Bank of England is restoring some calm to the markets.

The Bank of England is seen, in London, Britain, September 26, 2022. REUTERS/Peter Nicholls/File PhotoLONDON, Sept 27 (Reuters) - The Bank of England is likely to deliver a "significant policy response" to finance minister Kwasi Kwarteng's huge tax cuts but it should wait until its next scheduled meeting in November before making its move, BoE Chief Economist Huw Pill said. "I do want to flag clearly at this point that in my view the combination of fiscal announcements that we've seen will act as a stimulus," Pill told the Barclays-CEPR International Monetary Policy Forum in London on Tuesday. Some investors and economists have said the British central bank should hold an emergency meeting now to deliver a big interest rate hike to prop up the value of the pound and avoid further inflation pressure. The pound was higher against the dollar on Tuesday, a day after hitting a record low.

☆ UK's finance minister says his economic strategy is not a gamble - BBC
▼ + stars: | 2022-09-23 | by ( ) www.reuters.com time to read: 1 min

The Chancellor of the Exchequer Kwasi Kwarteng speaks during the Government's Growth Plan statement at the House of Commons, in London, Britain, September 23, 2022. UK Parliament/Jessica Taylor/Handout via REUTERSLONDON, Sept 23 (Reuters) - Britain's new finance minister Kwasi Kwarteng said on Friday that the government's changes to tax, stamp duty and spending were not a gamble. "What was (a gamble) in my view, was sticking to the course we were on," he told the BBC in an interview after setting out the mini-budget earlier in the day. Register now for FREE unlimited access to Reuters.com RegisterReporting by Muvija M; Editing by Kate HoltonOur Standards: The Thomson Reuters Trust Principles.

☆ Vladimir Putin’s Energy War With Europe Seems to Falter
▼ + stars: | 2022-09-18 | by ( Stephen Fidler | ) www.wsj.com time to read: 1 min

Vladimir Putin’s economic campaign to force European governments to abandon support for Ukraine by sharply curbing their natural-gas supplies looks to be faltering as gas prices fall, Russian government finances deteriorate and the continent sets plans to ease the pressure on households and businesses. Russia’s long-term success in the economic fight with Europe is seen as critical by both sides in deciding the outcome of the conflict in Ukraine. But signs that Mr. Putin’s economic strategy is struggling are coinciding with serious reverses on the battlefield as Ukrainian forces regain swaths of Russian-occupied territory and as the Russian president has been forced to acknowledge the concerns of the Chinese and Indian leaders about the invasion.

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