article_text
stringlengths 294
32.8k
⌀ | topic
stringlengths 3
42
|
|---|---|
- An announcement Wednesday on refunding, entailing the size of Treasury auctions as well as the duration mix of the debt that will be issued, is expected to draw more market interest than usual.
- Investors got a preview of the Treasury's direction Monday, when the department said it will be auctioning off $776 billion of debt in the final quarter of calendar 2023.
- The key variables markets will be watching are the actual sizes of the auction as well as the maturities mix.
Auctions of government debt, normally routine events for the Treasury Department, have suddenly become very important to financial markets.
With debt, deficits and bond yields all surging, investors are watching closely how the government will go to market with its borrowing needs.
Both bond and stock markets have been volatile amid fears of oversupply at a time when the Federal Reserve is keeping monetary policy tight, and as investors are demanding a premium for interest rate risk and geopolitics is posing various wild cards.
That's why an announcement Wednesday on refunding, entailing the size of auctions as well as the duration mix of the debt that will be issued, is expected to draw even more market interest.
"The reality is, there is a supply-demand mismatch in the market today, and that is what has led to this move in bond yields," said Josh Emanuel, chief investment officer at Wilshire. "Some have said that the issuance is almost more important than what the Fed says or what the Fed does, but I actually think both in combination are really important here."
Indeed, the two entities are both pivotal in determining how the U.S. is going to manage its mammoth debt load. That symbiotic relationship will be on full display this week when the Treasury Department makes its refunding announcement Wednesday at 8:30 a.m. ET, and the Fed follows with its decision on interest rates that same day at 2 p.m. ET.
Investors got a preview of the Treasury's direction Monday, when the department said it will be auctioning off $776 billion of debt in the final quarter of calendar 2023, a bit below market expectations. Treasury said it will auction another $816 billion in the first quarter of 2024.
Further details on those auctions will be provided on Wednesday.
"You might see sufficient demand step up into the market here with, frankly, real yields at around 2½%," Emanuel said. "At a period of time when there is a heightened degree of risk more broadly, in terms of equity valuations, there is a high degree of geopolitical risk that has developed here over the course of the past month or so. I do think that market participants have to be in tune to all of that. So you might actually find some demand."
The key variables markets will be watching are the actual sizes of the auction as well as the mix between shorter-term Treasury bills against "coupon" issues, as strategists term longer-duration notes and bonds.
"We think the US Treasury's upcoming quarterly refunding meeting might deliver a surprise relative to market expectations — in which the Treasury might decide to increase coupons at a lower pace than what its 'regular and predictable' strategy might have suggested in August," Guneet Dhingra, head of U.S. interest rate strategy at Morgan Stanley, said in a note to clients.
The Treasury's reluctance to refinance its shorter-term debt into longer maturities back when rates were at rock bottom drew the ire recently of Stanley Druckenmiller, the billionaire founder of Duquesne Capital.
Speaking at an event for the Robin Hood Foundation, Druckenmiller said Treasury Secretary Janet Yellen should have been issuing more debt at 10- and 30-year durations but opted instead to focus on the shorter end of the curve.
"I literally think if you go back to Alexander Hamilton, it is the biggest blunder in the history of the Treasury," he said during a chat with fellow titan Paul Tudor Jones, in a video circulated Monday on X, formerly known as Twitter. "I have no idea why she's not called out on this. She has no right to still be in that job."
Treasury officials did not immediately respond to a request for comment.
For now, markets are expecting some tweaks to the past schedule of Treasury auctions.
Dhingra said he anticipates the auction size to be raised by $2 billion a month for 2-, 3-, 5- and 10-year notes, while auctions for 20-year bonds will be unchanged. As far as T-bill issuance, he expects it to rise to about 22% as a share of marketable debt outstanding, higher than Treasury's 15%-20% standard range.
The total auction size announced Wednesday for the following week should be around $112 billion, according to Jefferies economist Thomas Simons. He sees the auction sizes in November breaking down as a $2 billion increase of 2-year notes and $1 billion each for 3-, 5- and 7-year notes, $2 billion for 10-year new issues and reopenings, $1 billion for 20-year bonds and $2 billion for 30-year bonds. | Bonds Trading & Speculation |
The northern section of the HS2 high speed rail line looks set to be scrapped by Rishi Sunak, Sky News understands.
It comes as a number of Sunday newspapers reported that any decision would be announced before next weekend's Conservative Party conference.
Sky News political correspondent Tamara Cohen said: "The widespread view in Westminster is that the prime minister is set to scrap the northern leg of the High Speed 2 rail line - the bit that was due to go between Birmingham and Manchester - because of concern about the cost.
Read more:
HS2 explained: What is it and why are parts being delayed?
Why are so many people upset with HS2 rail project?
"We've had several reports that the crunch meeting between the prime minister and chancellor to make the final decision could happen as soon as next week and be announced to Conservative MPs.
"This would be a big U-turn if it goes ahead."
On Saturday two former premiers warned Mr Sunak about "delivering a mutilated HS2".
Boris Johnson said suggestions the Birmingham to Manchester route could be chopped over cost concerns were "desperate" and "Treasury-driven nonsense".
And David Cameron has also privately raised significant concerns about the prospect that the high-speed rail line could be heavily altered, according to The Times.
An ally quoted by the newspaper said it was "unusual" for the former prime minister, who resigned after the Brexit referendum result in 2016, to intervene in politics but felt HS2 was "different".
Ministers have looked to sidestep questions about the future of the Manchester destination this week and Chancellor Jeremy Hunt said on Thursday that HS2's budget was "getting totally out of control".
Mr Sunak has refused to guarantee it will reach Manchester despite £2.3bn having already been ploughed into stage two of the national line.
Cohen said recent comments from Jeremy Hunt in a radio interview showed the chancellor was concerned with costs spiralling.
"It's being reported the costs may be overrunning by at least £8bn on the section from London to Birmingham alone since last year - although the government has not commented on those figures."
The planned railway - announced by the last Labour government but backed by successive Tory administrations - is intended to link London, the Midlands and the North of England but has been plagued by delays and rising costs.
A budget of £55.7bn for the whole of HS2 was set in 2015 but some reports suggest the bill has surpassed £100bn, having been driven up by recent inflation.
Ministers have already moved to pause parts of the project and even axed sections in the north.
The eastern leg between Birmingham and Leeds was reduced to a spur line which is due to end in the East Midlands.
It was confirmed in March that construction between Birmingham and Crewe would be delayed by two years and that services may not enter central London until the 2040s.
Transport Secretary Mark Harper announced that work at Euston would be paused for two years as costs were forecast to almost double to £4.8bn.
A government spokesman said: "The HS2 project is already well underway with spades in the ground, and our focus remains on delivering it." | United Kingdom Business & Economics |
Subscribe to Here’s the Deal, our politics
newsletter for analysis you won’t find anywhere else.
Thank you. Please check your inbox to confirm.
Christopher Rugaber, Associated Press
Christopher Rugaber, Associated Press
Leave your feedback
WASHINGTON (AP) — Wages and benefits grew at a slightly faster pace in the July-September quarter than the previous three months, a benefit for workers but a trend that also represents a risk to the Federal Reserve’s fight against inflation.
Compensation as measured by the Employment Cost Index increased 1.1 percent in the third quarter, up from a 1 percent rise in the April-June quarter, the Labor Department said Tuesday. Compared with a year ago, compensation growth slowed to 4.3 percent from 4.5 percent in the second quarter.
Adjusted for inflation, total compensation rose 0.6 percent in the third quarter compared with a year earlier, much slower than the second-quarter increase of 1.6 percent.
By some measures, average pay cooled, economists pointed out. Wages and salaries for private sector workers, excluding those who receive bonuses and other incentive pay, rose 0.9 percent in the third quarter, down from 1.1 percent in the previous period.
Fed officials consider the ECI one of the most important measures of wages and benefits because it measures how pay changes for the same mix of jobs, rather than average hourly pay, which can be pushed higher by widespread layoffs among lower-income workers, for example.
Growth in pay and benefits, as measured by the ECI, peaked at 5.1 percent last fall. Yet at that time, inflation was rising much more quickly, reducing Americans’ overall buying power. The Fed’s goal is to slow inflation so that even smaller pay increases can result in inflation-adjusted income gains.
Fed Chair Jerome Powell has indicated that pay increases at a pace of about 3.5 percent annually are consistent with the central bank’s 2 percent inflation target.
While higher pay is good for workers, it can also fuel inflation if companies choose to pass on the higher labor costs in the form of higher prices. Companies can also accept lower profit margins or boost the efficiency of their workforce, which allows them to pay more without lifting prices.
Support Provided By:
Learn more | Inflation |
Tomasz Konicz, Originally published in jungle world on 06/01/2023
More and more countries in Latin America, Africa and Asia are over-indebted or even facing bankruptcy. As a lender, China is also affected by this crisis and has had to grant emergency loans to protect its own banks from payment defaults.
The interest rate hikes by Western central banks to combat stubborn inflation – the key rate is now 5 to 5.25 percent in the U.S., and 3.75 percent in the euro zone – have already led to the collapse of three regional banks in the U.S. and are dampening economic growth on both sides of the Atlantic. But this turbulence is nothing compared to the shocks facing many economically weaker countries. As it becomes more and more expensive to take out new loans, they are finding it increasingly difficult to service their foreign debts, most of which are denominated in U.S. dollars.
Link: https://exitinenglish.com/2023/07/26/the-debt-crisis-is-becoming-multipolar/
Particularly in Africa, Asia, Latin America and the Middle East, more and more countries are finding themselves in a classic debt trap, in which economic stagnation, recession and rising borrowing costs fatally interact. The situation has already been compared to the “Volcker shock” of 1979, when the then chairman of the U.S. Federal Reserve, Paul Volcker, raised key interest rates in the U.S. to over 20 percent at times to combat many years of stagflation, triggering a debt crisis particularly in countries in South America and Africa.
In mid-April, the Financial Times, citing a study by the NGO Debt Justice, reported that the foreign debt service of a group of 91 of the world’s poorest countries would consume an average of 16 percent of their government revenues this year, with that figure expected to rise to 17 percent next year. The last time a similar figure was reached was in 1998. The hardest hit, according to the report, is Sri Lanka, whose debt service this year is equivalent to about 75 percent of projected revenues, leading the Financial Times to expect the island nation to “default on payments” this year.
Zambia, which, like Sri Lanka, went through a sovereign default last year, is also in acute danger. The situation is similarly dire in Pakistan, where 47 percent of government revenues will have to be used to service foreign loans this year. The consequences for the people of these and many other countries are already dramatic: Governments are no longer able to pay salaries, for example, or finance imports of energy or food, and the fall in the value of their currencies is exacerbating inflation, poverty and hunger.
But it is not just the poorest countries that are threatened. In Argentina, for example, where the central bank is printing money to finance the budget deficit, inflation has reached 109 percent and threatens to turn into devastating hyperinflation. Like many other states in crisis, Argentina has signed an emergency program with the International Monetary Fund (IMF) that includes $44 billion in loans in exchange for austerity measures. In mid-May, Argentine President Alberto Fernández called for renegotiations with the IMF in light of a drought-induced crop failure for wheat, Argentina’s most important export. Vice President Cristina Fernández de Kirchner called the agreement “scandalous” and a “fraud.”
China, which has become one of the world’s largest lenders in recent years, plays a special role in the current debt crisis. Under the global development program of the Belt and Road Initiative alone, also known as the “New Silk Road,” at least $838 billion in loans and transactions had been made by the end of 2021, mostly to finance infrastructure and other major projects in Africa, Asia and Latin America. Most of the loans were made by Chinese banks. China wanted to lay the foundation for future economic hegemony.
But since then – after the Covid 19 pandemic and the Russian invasion of Ukraine, the global surge in inflation and a slowdown of growth in China itself – Chinese banks have become more reluctant to lend to poorer countries. According to a study by the Rhodium Group, as early as 2021, about 16 percent of loans made abroad from China, worth about $118 billion, were at risk of default and would have had to be renegotiated.
Just one year later, the Chinese foreign debt crisis had already expanded considerably, according to a study by the Kiel Institute for the World Economy (IfW). According to the study, 60 percent of loans were already at risk of default in 2022, prompting Beijing to grant 128 emergency loans totaling $240 billion to 22 debtor countries. In most cases, the debtor countries are only granted a deferral by issuing new loans to repay due payments, which allows for an “extension of maturities or payment terms”; a cancellation of debts occurs “only extremely rarely,” according to the IfW.
Most of these refinancing loans were granted by the Chinese central bank, which effectively rescues the Chinese banks that originally granted the loans. The authors of the IfW study therefore compared China’s current actions to the granting of so-called rescue loans to Greece and other southern European countries during the euro crisis, which also involved rescuing banks that were threatened with default.
Crisis and bridging loans flow mainly to “middle-income countries” because they account for 80 percent of China’s foreign credit volume and thus represent “major balance sheet risks for Chinese banks,” according to the IfW. Low-income countries, on the other hand, have received very little in the way of crisis loans, as their sovereign bankruptcies would be unlikely to jeopardize the Chinese banking sector. Moreover, the average interest rate on Chinese crisis loans is said to be five percent; the IMF standard is two percent. Debtor countries that have received crisis loans include countries such as Sri Lanka, Pakistan, Argentina, Egypt, Turkey and Venezuela.
The IfW also noted that for a large part of the rescue loans, the modalities and scope of the loan programs are not publicly available. As a result, “the international financial architecture is becoming more multipolar, less institutionalized and less transparent.” This lack of transparency also affects loans previously made by Chinese banks, they said. In a recent in-depth report on the debt crisis, the Associated Press (AP) news agency cited findings from a study by the research group Aid Data that found at least $385 billion in Chinese loans in 88 countries through 2021 alone that were “hidden or inadequately documented.”
Many of the poorest countries in Africa or Asia readily accessed Chinese money at the height of the global liquidity bubble between 2010 and 2020, using it to finance infrastructure and prestige projects that are increasingly turning into investment ruins during the current crisis surge. For these countries, secrecy is now a serious problem because, in the event of default, the affected country’s international creditors will have to agree on who will defer loans or waive repayments, and to what extent. However, Western lenders and institutions such as the IMF or the World Bank are currently refusing emergency programs in many cases because the modalities of China’s loan programs are unclear and they cannot reach an agreement with China. Some poor countries are therefore in a “state of limbo,” writes AP, because China is unwilling to accept losses, while the IMF refuses to grant low-interest loans if they are only used to pay off Chinese debts.
The lenders’ negotiations are further complicated by the intensifying global political competition between Western countries and China. The increasing fragmentation of the global economy makes it “more difficult to resolve sovereign debt crises, especially when there are geopolitical divisions among major sovereign lenders,” IMF Managing Director Kristalina Georgieva warned in January.
Western countries, meanwhile, are hoping to use China’s foreign debt crisis to roll back the influence China has built up through its lending in many regions of the world. EU Commission President Ursula von der Leyen said in May that there was now an “opportune moment” for the G7 countries and their partners after “many countries in the Global South have had bad experiences with China” and found themselves in “debt crises,” while Russia had only “mercenaries and weapons” to offer. If the West acted quickly, she said, it could form mutually beneficial partnerships with these countries. Companies and banks could be involved in developing “comprehensive packages” that would also shift parts of production chains to developing countries. She said the EU wants to promote “not only the extraction of raw materials, but also their local processing and refinement.” Von der Leyen is thus speculating with a bad memory of her potential “partners” in the Global South, who have already had painful experiences with Western credit programs since the 1970s.
Originally published in jungle world on 06/01/2023 | Banking & Finance |
An indictment was unsealed today in federal court in Brooklyn charging Braden John Karony, Kyle Nagy, and Thomas Smith with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy for their roles in defrauding investors in a decentralized finance digital asset called “SafeMoon” (SFM) that was issued by their company SafeMoon LLC. As alleged, the defendants lied to SFM investors concerning whether SFM’s use of ‘locked’ liquidity was inaccessible to the defendants, as well as their personal holding and trading of SFM. As SFM’s market capitalization grew to more than $8 billion, the defendants fraudulently diverted and misappropriated millions of dollars’ worth of purportedly “locked” SFM liquidity for their personal benefit. Earlier today, Karony was arrested in Provo, Utah, and Smith was arrested in Bethlehem, New Hampshire. Nagy remains at large.
Breon Peace, United States Attorney for the Eastern District of New York; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); and Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York Field Office (IRS-CI), announced the arrests and charges.
“As alleged, the defendants deliberately misled investors and diverted millions of dollars to fuel their greedy scheme and enrich themselves by purchasing a custom Porsche sports car, other luxury vehicles and real estate,” stated United States Attorney Peace. “As fraudsters increasingly use digital assets to mislead investors and misappropriate funds, our Office will be at the forefront of pursuing them and their ill-gotten gains. We will continue our focus in the digital asset space and bring those who defraud investors in this area to justice.”
Mr. Peace expressed his appreciation to the U.S. Securities and Exchange Commission for its assistance with the case.
“As alleged, SafeMoon’s executives grew their company value to over $8 billion, but instead of rewarding their clients as promised, their insatiable greed led them to spend millions of dollars on their own lavish desires. Today, no luxury vehicles or sprawling real estate can protect them from the consequences of such crimes,” said Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations, New York. “HSI New York will relentlessly pursue individuals who seek to exploit investors and the American financial system for their own gain.”
“Although this fraud scheme may be complex, the end result is simple—theft. Investors were assured their money would be safe while the defendants allegedly misled investors and diverted millions of dollars to line their pockets and their driveways. Through cryptocurrency tracing and good old-fashioned police work, IRS-CI New York’s Cyber and J5 groups worked with our investigative partners to track the millions in diverted funds and arrest the perpetrators of this con,” stated IRS-CI Special Agent-in-Charge Fattorusso.
Background on SFM
As alleged, SFM tokens were digital assets first issued in March 2021 by SafeMoon LLC on a public blockchain. Through the operation of SFM’s smart contracts, every transaction in SFM was automatically subject to a 10% tax, meaning, for example, that if a holder of SFM transferred 10 SFM to another user, 1 SFM would automatically be retained from the transfer as a tax, and the remaining 9 SFM would be received by the other party. As marketed to SFM investors, the proceeds of SFM’s 10% tax were split into two 5% tranches, the proceeds of which were supposed to benefit holders of SFM in specific ways. The first 5% tranche of the tax proceeds would be “reflected” back to, and distributed among, all SFM holders, in proportion to their current SFM holdings and thereby increase the total quantity of SFM held by every SFM investor automatically. The remaining 5% tranche of SFM tax proceeds would be deposited into designated SFM liquidity pools. The larger the SFM liquidity pool, the greater the liquidity in the market for SFM. In the months after its launch in March 2021, SFM grew to have more than one million holders and a market capitalization of more than $8 billion.
The Defendants’ Fraudulent Scheme
As alleged, the defendants misrepresented to investors various material aspects of the SFM offering, including that SFM relied on “locked” liquidity pools that would automatically increase in size due to a 10% tax imposed on every SFM transaction; that the “locked” SFM liquidity pool prevented the defendants and other insiders at SafeMoon from being able to “rug pull”—a type of crypto fraud—SFM investors by removing liquidity from the SFM liquidity pool; that tokens in the liquidity pool would not be used to enrich the SafeMoon developers, including the defendants; that the defendants would manually add token pairs to the SFM liquidity pool when transactions of SFM occurred on specific centralized exchanges; and that the developers were not holding and trading SFM for their benefit.
In reality, the defendants allegedly retained access to the SFM liquidity pools and they used that access to intentionally divert and misappropriate millions of dollars’ worth of tokens from the SFM liquidity pools for their personal benefit. In addition, although they publicly denied that they personally held or traded SFM, the defendants repeatedly bought and sold SFM for their personal benefit, including at the height of SFM’s market price, which generated millions of dollars in profits. The defendants masked their movement of the fraudulent proceeds via numerous private un-hosted crypto wallet addresses, complex transaction routing, and pseudonymous centralized exchange accounts. The defendants used some of these proceeds to purchase luxury vehicles and real estate in New Hampshire, Utah, and Florida. Smith, for example, using cryptocurrency addresses he controlled, sent 2,900 Binance Coin (BNB) worth more than approximately $860,000 and traceable to the SFM liquidity pool to a third party’s cryptocurrency address in order to purchase a custom Porsche 911 sportscar and non-fungible token.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Drew G. Rolle, Matthew R. Galeotti and John O. Enright are in charge of the prosecution with assistance from Paralegal Specialist Jacob Menz.
The Defendants:
BRADEN JOHN KARONY (also known as “John Karony” and “CPT HODL T MUN”)
Age: 27
Provo, Utah
KYLE NAGY (also known as “Safemoon Dev”)
Age: 35
Vero Beach, Florida
THOMAS SMITH (also known as “papa”)
Age: 35
Bethlehem, New Hampshire
E.D.N.Y. Docket No. 23-CR-433 | Crypto Trading & Speculation |
- The U.K.'s Metro Bank will likely struggle to raise fresh capital to shore up its balance sheet, according to analysts, who outlined bleak prospects for the beleaguered bank.
- Shares of the bank were briefly suspended from trading twice on Thursday after it confirmed it was looking to raise new capital.
- Rival banks including HSBC, Lloyds Banking Group and NatWest Group are now being sounded out to buy around a £3 billion chunk of its mortgages, according to reports.
LONDON — The U.K.'s Metro Bank will likely struggle to raise fresh capital to shore up its balance sheet, according to analysts, who outlined bleak prospects for the beleaguered bank.
A number of ratings agencies and investment banks have downgraded the bank's stock following a turbulent 24 hours in which its shares were briefly suspended from trading twice after plunging more than 29% from Wednesday's close.
The turmoil came amid reports that the embattled bank was seeking to raise up to £250 million ($305 million) in equity funding and £350 million of debt. Metro Bank confirmed in a statement early Thursday that it was considering "how best to enhance its capital resources."
Late Thursday, reports emerged that the bank was in talks to sell a third of its mortgage book. Rival banks including HSBC, Lloyds Banking Group and NatWest Group are now being sounded out to buy around a £3 billion chunk of its mortgage book, according to sources who spoke to Sky News and the FT.
Selling the assets would reduce the bank's earnings but also sharply reduce the amount of capital it is forced to hold.
Metro Bank did not immediately respond to CNBC's request for comment on the reports; nor did any of the rival banks cited.
However, analysts said the bank's fund-raising prospects did not look good.
Investment bank Stifel on Friday downgraded the stock from "hold" to "sell," saying it thinks there are "no easy solutions for the bank and risks to the bonds remain skewed to the downside." It noted that the bank could be nationalized under the Bank of England's resolution scheme and then sold on, either as a whole or in parts.
"We think at this point the bank is in a difficult position, with capital needs potentially of up to a billion over the next two years," the analysts said, adding that the bank is just about breaking even or marginally profitable under "currently benign market condition."
Barclays Bank also downgraded the stock to underweight on Friday.
Meanwhile, Fitch Ratings on Thursday placed the bank on "ratings watch negative" based on its assessment that "short-term risks to the UK challenger bank's business model stabilization, capital buffers and funding have risen."
The developments mark the latest phase in an ongoing saga for Metro Bank, which launched in 2010 with a pledge to challenge traditional banking in the wake of the financial crisis.
Last month, the Bank of England's main regulator, the Prudential Regulation Authority, suggested that it was unlikely to allow the lender to use its own internal risk models for some mortgages.
The bank's chair Robert Sharpe was called in on Thursday to meet officials from the central bank's regulatory authority, as well as the Financial Conduct Authority (FCA), according to the FT, which cited people briefed on the situation.
The sources said it was the latest in a series of contacts between regulators and the bank over the past month as its share price almost halved.
When contacted by CNBC, the Bank of England declined to comment on the meeting.
Shares of Metro Bank have lost around two-thirds of their value since the middle of February. The bank was valued at £87 million as of the Wednesday close, according to Reuters.
Given its relatively low market cap, ratings agency DBRS Morningstar, which holds no rating on the bank, said in a note that Metro Bank's ability to access external financing will be "highly constrained."
However, it added that the bank's difficulties were unlikely to have a broader impact on the U.K.'s financial sector due to its size and idiosyncratic issues.
In 2019, the bank reported a serious miscalculation of its risk-weighted assets, damaging its reputation and resulting in fines of £10 million and £5 million from the FCA and the PRA, respectively.
In the meantime, short sellers have been tapping into the bank's misfortunes. Investors betting against the bank have gained £4.8 million so far in 2023, and £2.5 million in October alone, according to financial analytics firm Ortex.
"The short interest in Metro is very high," it said in a note. "ORTEX currently estimates that 9.35% of the freely tradable shares are on loan and most likely shorted." | Banking & Finance |
AU SFB - Merger With Fincare SFB To Enable Steady Growth While Ensuring Regulatory Compliance: Motilal Oswal
Gearing for the next leap; aiming for Rs 2 trillion loan book over next three years
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
We attended AU Small Finance Bank Ltd.’s analyst meet wherein the management highlighted its rationale for merger with Fincare SFB and the outlook for the merged entity as bank aspires to reach a balance sheet of Rs 2 trillion over next three years.
The merger will improve the bank’s geographical diversification and improve AU’s branch presence across the country. New business verticals like mciro finance institution and gold loans will improve its lending yields and open new avenues for growth.
Moreover, since Fincare is a rural-focused SFB with 85% of its advances qualifying under the priority sector (56% of MFI and 30% of overall book being SMF eligible), the merger will enable AU SFB to not only meet its priority sector lending target, but also generate PSLC income in the long run.
While its execution prowess to consummate the merger will be vital, we believe that the merger will enable AU SFB to further strengthen its position and deliver all-round growth.
We reiterate 'Buy' on the stock with a target price of Rs 780 (3.6 times FY25E book value of standalone bank).
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Banking & Finance |
Businesses across the supply chain are warning of “significant disruption” in the holiday trading period because producers in the Continent are either unaware of or unprepared for post-Brexit border changes coming into effect later this year, according to a new survey.
The government’s new trade strategy, the Border Target Operating Model, will bring a new round of controls on goods from the EU from 31 October 2023.
But a new Cold Chain Federation survey of EU food producing companies that supply goods to the UK showed more than one-third (39%) were not even aware of the new rules and timeframes proposed by the government earlier this year.
In a key change under the new post-Brexit import rules, consignments carrying goods considered medium or high risk, such as some meat, dairy and fish, will require vet-signed export health certificates.
But 41% of EU businesses surveyed said they did not have plans in place to ensure compliance with this crucial requirement.
“It is deeply worrying that well over a third of these food producing businesses supplying into the UK are not aware that these significant changes are looming,” said Cold Chain Federation CEO Shane Brennan.
“Communications from UK government to these businesses has not been good enough and it is the food retailers, hospitality businesses and consumers here in the UK who will pay the price with disruption, delays, and losses.”
The majority of the companies that took part in the survey traded either meat, dairy or fish products, which will face the highest level of checks when the TOM rolls around.
There are concerns among traders that this could result in delays in deliveries or shortages of foods like pigs in blankets. Meats including chicken, pork and beef, as well as cheese, are some of the UK’s top imports from the EU, Q1 2023 data from the Food & Drink Federation shows.
Companies have also warned of the risks to imports of eggs, particularly liquid eggs that are vital for baking and other types of food manufacturing.
The CCF survey showed only 60% of businesses planned to continue supplying to the UK with the same frequency after the new border checks are implemented.
Ten per cent of respondents plan to reduce the frequency and range of UK-based customers they serve, 7% plan to stop altogether and 22% said they didn’t know at this stage.
The CCF has therefore asked ministers to move back the October deadline to 31 January 2024 in order to avoid major disruption during Christmas.
“Government must use the extra time to deliver a much wider and better resourced communications campaign, starting now, to increase awareness among EU businesses in enough time for a full implementation on 31 January next year,” Brennan said.
“By then the UK should also have a fully staffed border inspection team, enforcing the new rules but also providing support and advice for these EU importers.
“With so much stress, cost inflation and other pressures in the food supply chain this year, this marginal change in the implementation plans could make a big difference.”
In addition to health certificates and customs declarations, consignments carrying medium and high-risk goods will also be eligible for physical border checks from January next year.
The CCF study of nearly 300 EU-based food producing companies also revealed nearly 80% believed costs to their UK customers will increase as a result of the new rules.
The trade body warned these costs will be passed onto UK retailers and, ultimately, shoppers.
Food businesses had previously warned that the government’s new border strategy – and the tight timeline given by Defra to UK importers and European exporters – was likely to cause border delays and push food prices up.
Independent wholesalers and deli retailers are set to be particularly affected by the new requirements, The Grocer has reported.
“Clearly the expense and red tape involved in current groupage requirements would be a considerable deterrent to small and medium-sized businesses from sending frequent consignments,” said Provision Trade Federation director general Rod Addy.
”They may well switch trade from GB to EU member states, with a resultant loss of choice for UK consumers. If they persist, the supply chain will face higher transport and border costs. It’s hard to see, with other costs faced by the food chain, how some of these cost increases will not be passed on to consumers.” | Consumer & Retail |
It's one of the toughest questions facing workers: How much do you need to retire? Americans with retirement accounts say there is a magic number, and it's a big figure: an average of $1.8 million.
That's according to a new survey from Charles Schwab, which asked 1,000 people with 401(k) plans offered by a range of providers what they believed they will need to have socked away to retire comfortably. The savings figure is up from a year earlier, when respondents said they.
Workers are raising their estimate for what they need for retirement after the impact of searing inflation and market volatility, noted Marci Stewart, director of communication consulting and participant education for Schwab Workplace Financial Services. But it also underscores the so-called "retirement gap" — the often yawning chasm between what people have saved and what they'll actually need in retirement.
"There's no doubt that there can be a gap in between what individuals say they need and what they have today," Stewart told CBS MoneyWatch.
The average U.S. retirement account held $113,000 last year, according to data from Vanguard. Even among people who are of retirement age, or 65 and older, are lagging, with an average account of $233,000, Vanguard data shows.
While $1.8 million in retirement savings may seem extravagant when compared with the typical account balance, it doesn't necessarily translate into a lavish lifestyle. Using the rule of thumb to withdraw 4% of savings each year in retirement, a person with $1.8 million who retires at 65 would have $72,000 annually in retirement income.
Inflation hit
The past year's triple-whammy of high inflation, rising interest rates and sharp market swings have taken a toll on workers' confidence that they are on track to meet their retirement savings goals, Schwab found. About 37% said they were very likely to save what they need for retirement, a 10 percentage-point drop from 2022, according to the survey.
"There are two main factors that are concerning people today, and one is inflation and the other is the volatility in the market," Stewart added. "Yes, inflation numbers have come down, but people still have pressure on their paychecks ... and with interest rates being a bit higher, borrowing money is [also] more expensive."
Despite those pressures, workers haven't pared back how much of their income they're stashing away, Schwab noted. In both 2022 and 2023, Americans said they're putting almost 12% of their pretax income into their 401(k)s, the study found.
That is "encouraging because it's showing us that people are continuing to prioritize their retirement savings," Stewart said.
for more features. | Personal Finance & Financial Education |
Former President Donald Trump’s three oldest children are set to testify next week in the $250 million civil fraud lawsuit by New York Attorney General Letitia James.
The lawsuit accuses the former president and other defendants of committing massive fraud in New York for years by repeatedly inflating Trump’s wealth by hundreds of millions of dollars to get better terms for loans and insurance policies while building his real estate empire.
Prior to the trial, Judge Arthur Engoron ruled that Trump as well as the other defendants were liable for fraud and that the trial would determine how much of a penalty Trump should pay. The judge canceled Trump’s business licenses, but an appeals court paused that part of the judge’s order.
While Trump’s control of the companies may still be in jeopardy, there's no immediate requirement for him to dissolve the legal entities he uses to manage his properties, The New York Times reported.
After more than four weeks of the trial, James is planning to call Trump’s sons and his daughter Ivanka to the witness stand. Donald Trump Jr. is set to testify next Wednesday, Eric Trump on Thursday and Ivanka Trump on Nov. 3, but her lawyers may appeal to try to block her testimony. Trump himself is set to testify Nov. 6.
To date, sixteen witnesses have provided their testimonies in the trial. However, Gregory Germain, Syracuse University law professor, told Salon that he doesn't expect that the testimony of the Trump children to contribute to the primary issue under consideration by the judge — a central issue that revolves around determining the extent to which the Trump Organization may have benefited unjustly by using inflated financial statements to secure loans and insurance policies.
“I suspect that they will say that Donald was advised by experts in everything he did, and they will try to justify their valuations as statements of opinion that are not actionable,” Germain said.
But, for Trump, this case is not just about the remaining legal issues, he added.
“It's also about publicity and politics, and trying to show in the court of public opinion that the decision the judge already made was wrong and unfair,” Germain said. “So his sons' testimony is likely to be a political spectacle rather than anything relevant to the remaining legal issues.”
The former president himself has participated in different spectacles since the trial began. Last week, he abruptly left the trial in frustration when Engoron issued an unfavorable ruling. Trump also lashed out on his social media platform Truth Social, posting about how Ivanka was initially released from this case and complained about how he is a victim of a "Trump-hating" judge.
“[B]ut this Trump Hating, Unhinged Judge, who ruled me guilty before this Witch Hunt Trial even started, couldn’t care less about the fact that he was overturned,” Trump wrote. I also won on Appeal on Statute of Limitations, but he refuses to accept their decision. I truly believe he is CRAZY, but certainly, at a minimum, CRAZED in his hatred of me…”
Within the first week of trial, Engoron issued a limited gag order against Trump, prohibiting him from making comments about individuals working on the judge's team on social media. The order came after Trump had posted an image of the judge’s clerk, Allison Greenfield, with Chuck Schumer, the Senate majority leader, and mocked her as “Schumer’s girlfriend.”
We need your help to stay independent
While Trump’s post was deleted on Oct. 3, a version of it was displayed on the ex-president’s campaign website until last week. Engoron called the post a “blatant violation” of his gag order and fined Trump $5,000.
Engoron fined Trump another $10,000 after he left the courtroom on Wednesday and proceeded to tell the media that Engoron is partisan and so is the person who’s “sitting alongside him. Perhaps even much more partisan than he is,” appearing to go after Greenfield again.
Even though Trump tried to defend himself and said his remark wasn't about the clerk, the judge called his testimony "not credible.” Trump has paid the $15,000 in fines, but is expected to appeal the gag order, according to a court filing Friday.
Want a daily wrap-up of all the news and commentary Salon has to offer? Subscribe to our morning newsletter, Crash Course.
Now, as Trump’s children are being asked to testify, things are beginning to heat up again.
"The fact that Ivanka was originally a defendant and is now being called as a witness might indicate some form of cooperation, but it remains to be seen what form that cooperation may take — it may be minimal, and I wouldn't expect any explosive revelations from Trump's own daughter,” Jamie White, an attorney who handles criminal defense and civil rights cases, told Salon.
James, who is an experienced prosecutor, would not issue “frivolous subpoenas, or bring people to the witness stand knowing they'll simply take the 5th,” White added, explaining that it would be a “waste of the prosecutor's resources.”
"Because Judge Engoron has already ruled that Trump is liable for fraud by falsely inflating the value of his company's properties, all that remains is to decide the penalties,” White said. “So there's no reason for Letitia James to bring the Trump children to the stand simply for purposes of showmanship. The only real question is establishing damages, and it is not unreasonable to assume that Ivanka or the other Trump children who were involved in running the family business may have that information."
Read more
about Trump's fraud trial
- Judge rejects Trump's attempt to dodge Ivanka's testimony at fraud trial
- Trump calls fraud trial judge "grossly incompetent" in latest Truth Social freak-out
- Trump melts down on Truth Social after judge says his denial "rings hollow and untrue"
- Legal analyst: Trump "stormed out like a baby" after Michael Cohen "stumped" his lawyers in court
- Trump storms out of court chased by Secret Service after being slapped with a second fine | Real Estate & Housing |
Liz Truss today backed a plan to tear up workers’ rights, freeze the minimum wage and attack paid holidays.
The former Prime Minister hailed a 101-page report from the Growth Commission which authors claimed would fire-up the economy. Speaking exclusively to the Mirror, the ex-Conservative leader said: “I think it’s a very important exposition of what needs to happen to grow the British economy.” Pressed on the recommendations over workers’ rights, she added: “I think it’s an important part of the debate.”
Ms Truss launched the Commission in July - nine months after her 49-day premiership came crashing down following her disastrous mini-Budget which included £45billion of unfunded tax cuts and sent mortgage rates spiralling. Experts were tasked with drawing up plans to overhaul the economy, focusing on supply side measures such as ripping up red tape, improving infrastructure and making it easier for people to find jobs.
Publishing its Growth Budget 2023 today - a week before Chancellor Jeremy Hunt’s Autumn Statement - it lashed out at a host of employees’ protections. “Of course, labour protections to prevent abuse and exploitation are necessary, but the data suggests that the UK’s comparatively poor scores in this area are holding back its economy, and the balance between labour protections and voluntary exchange in the provision of labour services is more restrictive in the UK than is optimal,” it claimed. "Returning the UK to a better balance could unlock significant amounts of GDP per capita.”
It cited “paid annual leave”, “notice period for redundancy dismissal”; “severance pay for redundancy dismissal”; “restrictions on overtime work”; and the minimum wage as areas to tackle. The Government plans for the minimum wage for over-23s - currently £10.42 an hour - to hit 66% of median earnings by 2024. But the Commission wanted it frozen then downgraded to 61%.
Commission co-chairman Shanker Singham said: “There’s nothing wrong with the minimum wage - what matters in terms of competition is where it’s set. What we’re intending to do in the UK is move it to 66% of median wage - that’s far higher than any other OECD (Organisation for Economic Co-operation and Development) by next year and will be a significant drag on the economy. We are suggesting freezing it and targeting it down to 61%.”
Fellow co-chairman Douglas McWilliams claimed: “The minimum wage at its current level is actually destroying jobs because employers can’t afford to take people on. We calculate that about 900,000 jobs are currently being made uncompetitive by the existence of the minimum wage.”
However, figures released today by the Office for National Statistics show 957,000 vacancies in the economy which need filling. An estimated 152,000 of those are in social care where many workers receive the minimum wage. Lifting their pay is widely seen as key to tackling the sector’s recruitment crisis.
The study also called for income tax cuts for the highest earners, greater rail privatisation and welfare reform - particularly around sickness benefits. Mr McWilliams told the Mirror: “One needs to be quite careful about what one accepts as a sickness claim, and that is a matter of carefully looking at claims of this kind.” While he stressed the need for helping people whose illnesses currently prevented them from working, he added: “Some people with health claims may be stretching it a bit; with other people, the probability is that they need assistance if they’re ever going to get back to work.”
In the latest broadside to Prime Minister Rishi Sunak, who as Chancellor hiked corporation tax from 19% to 25%, the Commission demanded it be slashed to 15%. "We’ve seen it work in Ireland, why should the Irish gain? Why should it not be us?” said Mr McWilliams.
The Commission insisted implementing all its measures would deliver 23% more growth by 2043 - handing every Briton £11,300 or each household £26,000. Failing to follow its plan would, the Commission suggested, mean GDP will hover at 1% for the next 20 years.
Ms Truss, who attended today's launch along with former Business Secretary Sir Jacob Rees-Mogg and ex-Brexit Minister Lord David Frost, is understood to believe implementing the proposals would be “politically very difficult”. | Workforce / Labor |
A program in San Francisco to hand out money to low-income transgender-identifying people favored Black and "Latinx" recipients and even sets race targets for recipients, new documents show.
Judicial Watch obtained more than 1,700 pages of documents from the City of San Francisco related to the Guaranteed Income for Transgender People (GIFT) program, which was announced by Mayor London Breed last year.
The pilot program provides low-income transgender residents with payments of up to $1,200 each month for up to 18 months with the goal of providing "economically marginalized transgender people with unrestricted, monthly guaranteed income as a way to combat poverty." It uses pre-paid debit cards due to participants potentially not having bank accounts. The amount someone can receive is capped at $4,000.
Program documents, including those on its public website, say it prioritizes enrollment by race as well as those who engage in "survival sex trades," those who have been in prison, and illegal immigrants.
"The program will prioritize enrollment and retention of BIPOC [Black, Indigenous People of Color] trans and nonbinary people who also engage in survival sex trades, living with disabilities, elders, living with HIV/AIDS, undocumented, monolingual Spanish speakers, formerly incarcerated, and unhoused and marginally housed," one document says.
The documents also state that the enrollment will ensure that the 55 participants are 66% BIPOC — or Black, Indigenous People of Color — as well as "at least 30% Black Trans Women and at least 20% Latinx Trans Women."
"These disturbing new documents confirm how, among other leftist extremist policies, San Francisco is abusing tax dollars to give cash to individuals based on race and transgender quotas," Judicial Watch President Tom Fitton said in a statement.
The documents also state how the wrap-around services being provided include "gender-affirming primary medical and holistic care," mental health services and "gynecological and sexual health care" as well as financial literacy training and workforce development services. Emails from the government, obtained by the conservative group, also show officials discussing how the city needs to allow participants to use a chosen name rather than a legal name that may be on an ID.
The program is one of a number of programs designed to help out residents in the city — including a program launched in 2020 to offer income assistance for "Black and Pacific Islander mothers and pregnant people during and after pregnancy."
"Our Guaranteed Income Programs allow us to help our residents when they need it most as part of our City’s economic recovery and our commitment to creating a more just city for all," Breed said in a statement last year. "We know that our trans communities experience much higher rates of poverty and discrimination, so this program will target support to lift individuals in this community up."
The program is set to run until June 2024, and the website says a new round of applications will open up in 2024 if city funding is extended beyond the current timeframe. Fox News Digital previously reported on how the program has over 130 gender, sexuality and pronoun options — including "Zie/zim/zis," "Fae/faer/faers" and "Tey/ter/ters." | Nonprofit, Charities, & Fundraising |
Government progress on meeting its net zero commitments is “worryingly slow”, a new report from the independent Climate Change Committee has found.
In its 15th annual progress report to parliament, the committee said its confidence in government being able to achieve its 2030 emissions reduction target has “markedly declined from last year.”
The report said that slow progress on targets, coupled with “backtracking” on fossil fuel commitments such as on the new Cumbria coal mine and new oil and gas licensing, had cost the UK its “clear global leadership position” on climate change.
The UK, the committee said, is sending “confusing signals” to the international community with such initiatives.
“A key opportunity to push a faster pace of progress has been missed”, the report states, adding: “Time is now very short to achieve this change of pace”.
“Glimmers of the net zero transition can be seen in growing sales of new electric cars and the continued deployment of renewable (power) capacity, but the scale up of action overall is worryingly slow.”
The report also cites a lack of progress on decarbonising heat in homes with technology like heat pumps, too much reliance on untested technology like carbon capture and insufficient tree planting are among the policy areas singled out for criticism.
Committee chairman Lord Deben said: “We’ve slipped behind. The government has lost the leadership role it did have and carried through in the Glasgow COP26 summit.
“There’s no doubt that Britain was leading the world… since then we’ve done a number of things which have run counter to that. We are still dithering about onshore wind, we haven’t got the (electricity) grid even on its way to being right.
“We are still building homes that are not fit for the future. Right across the political spectrum, there is an unwillingness to lead”.
This is the final annual report to be published by Lord Deben, and the former Conservative environment secretary said he was “sad” that his final pronouncement had to be so gloomy.
“Everything we hold most dear is threatened by climate change… we can’t let these chances go… because they won’t come again and our children and grandchildren will ask us how it was that we let them down”, he closes.
Shadow climate and net zero secretary Ed Miliband was scathing, calling the annual update evidence of “catastrophic negligence” from ministers and “by some distance the most damning indictment of a government since the CCC was established in 2008.”
Green Party MP for Brighton Pavilion, Caroline Lucas, said: “This report could hardly be more damning.
“We’re going backwards more than we are forwards. This government’s dangerous dither and delay has driven a coach and horses through the UK’s previous reputation as a global climate leader.”
Defending the government’s record, energy minister Graham Stuart said: “About 76% of the energy of the most decarbonized major economy in the world, us, comes from fossil fuels today.
“There is no button I can press that turns that off tomorrow. And as we will be dependent on oil and gas for decades to come, even as we move to net zero, it makes sense that we should produce it here”, he continued.
Philip Dunne, the Conservative MP and chair of the environmental audit committee, said: “The CCC’s latest report makes for concerning reading and should serve as a wake-up call to Ministers. While the Government has indicated the ‘what’ it intends to deliver, there remain gaps in the ‘how’ to achieve through policy levers”.
He added: “Snappy, soundbite intent of ‘installing 600,000 heat pumps annually’, or ‘planting 30,000 hectares of trees a year’ sound impressive, but the detail on delivery and progress remains lacking”. | Renewable Energy |
They may be richer than you are, but they don’t feel rich.
A survey conducted by Bloomberg of 1,000 Americans making at least $175,000 a year — putting them in the top 10% of US tax filers — revealed that 25% say they are either “very poor,” “poor” or “getting by but things are tight.”
The outlet surveyed people who have good jobs — including lawyers, construction company owners, doctors and franchise bosses — and who own their homes and have savings for retirement.
Still, only 50% described themselves as “comfortable” and only a quarter said they felt “rich” or “very rich.”
Some of the respondents making upwards of $5 million were among those who said they felt broke, according to Bloomberg.
Nearly 60% of the high-earning respondents said they worry about money, and about 25% don’t think they’ll be better off financially than their parents.
Aside from inflation, which has made everything from groceries and college tuition to travel, car payments and taking out a loan more expensive, Bloomberg attributed the responses to social media, which encourages users to compare their lifestyles with others.
Many of those in search of feeling wealthier have considered ditching their real estate in expensive cities like New York City, Los Angeles and Miami in favor of parts of the US with lower taxes and costs of living, such as South Carolina, Texas and West Virginia, Bloomberg reported.
The Post utilized Bloomberg’s comparison tool — which was created using data from the Census Bureau — to show how richer or poorer earners would be in a different part of the US.
A professional making $200,000 in the New York metro area — a salary that’s more than 89.6% of households in the US — would feel a whopping $41,772 richer decamping to Myrtle Beach, S.C., thanks to a 17.3% savings on cost of living and a nearly $10,000 decrease in housing costs.
And if that same well-paid worker moved from New York to Houston, Texas, they could expect to feel about $30,000 richer as the cost of living is 13% lower and annual housing costs are about $6,100 less in the southern city.
In general, a New Yorker’s cost of living would be reduced tremendously if they moved out of Manhattan — where the average overhead is 137.6% above the national average, according to SmartAsset.
Many high-earning Manhattanites have ditched the Big Apple’s exorbitant rents and taxes for the sun-soaked beaches of Miami in a pandemic-fueled exodus.
Though the demand for the Sunshine State has edged real estate prices higher, Bloomberg found that New Yorker’s bringing in $200,000 per year would still feel $8,553 richer if they moved to Miami, where the cost of living is only 22.8% above the national average.
Annual housing costs in the Miami-Fort Lauderdale area are about $4,000 less than in its northeastern counterpart.
Anecdotes from objectively wealthy individuals revealed why so many people raking in six figures and living in elaborate abodes still feel financial pressure.
Debra Corbin, a 67-year-old retiree who lives in a home worth more than $1.3 million in Naples, Fla., told Bloomberg: “I still worry about money. I think rich is subjective. When I’m in southern Illinois where we’re from I feel rich. When I’m in Naples, I feel blessed. Down here it’s hard to feel rich because there are billionaires down here.”
Meanwhile, James Bramble, a 53-year-old attorney in Salt Lake City who makes about $350,000 annually, said that to feel rich would “no longer having to depend on money — like if you didn’t work, you’d still be okay for the rest of your life, and I’m not there.” | Consumer & Retail |
British people are "living the dream" in Spain - that's "until the wheels fall off the bus," Euronews was told.
When Margot Campbell-Parton's husband died in an accident in 2006, her dream of a carefree life in Spain was shattered.
After police officers knocked on her door one Sunday morning with the grim news, the 65-year-old Glaswegian was left completely alone, having had to identify his body herself.
“It was just a horrible time,” she told Euronews. “No one asked me how I was. I didn't see anyone.”
Her sons soon arrived to support their mum, but more nightmarish problems befell the family.
Margot and her husband Alec had borrowed money to set up a business in Port de Sóller, Majorca, with a third person who promptly “buggered off”, leaving her lumbered with a €250,000 loan.
In the months that followed, heartbreak turned to severe depression, as she struggled to sell her house, clear the debt and process her husband's passing - all without the option of returning to Scotland as she had sold her home there.
“I was never a hard person. I was always someone who would cry very easily. But everything that happened made me really cold,” she said.
“It was a very lonely time. A very sad time.”
‘Things are much harder than at home’
Some 307,000 British citizens live in Spain as of 2022, according to figures from epdata.
A vast majority tend to be older, heading south to spend the later stages of life somewhere that is cheaper - and certainly sunnier - than Britain.
She details a textbook scenario where "healthy" Brits move to Spain in their 50s or 60s to areas with high concentrations of other British people and do not learn Spanish because they either "struggle or don't need to" - despite “good intentions” at times.
"They're quite happy for some time," Dr Hall tells Euronews. "But then something happens, say a partner dying or health problem, that puts them in a very precarious position and can trigger a whole host of mental health problems, like loneliness and isolation."
Earlier in November, the British Embassy in Spain warned that many of the 72,000 Britons living on the Costa del Sol - home to the largest community of Brits in Spain - could find themselves isolated and alone.
A central issue is that many British ex-pats do not speak Spanish, meaning they can struggle to access support services when needed.
“Spain’s a big country, there are lots of organisations helping people, but people can sometimes get a bit lost," adds Neil Hesketh of Support in Spain, a non-profit website helping British expats inside the country.
Another issue he points to is that Spain’s social care system is not as big as Britain's, with Spanish families expected to provide more support for sick or elderly relatives, compared to a “more individualistic” UK.
Even in normal times, language barriers and the fact of being geographically far from friends and family can cause issues.
“People get lonely everywhere," explains Hesketh. "But obviously in Spain it's different because they aren’t in their native country. Traditional cultural reference points, like the pub, aren’t English-speaking."
“Someone’s son or daughter can’t just pop round for a cup of tea, you know.”
Part of this is down to the British. Some don't "bother to integrate”, meaning many problems can remain undetected or unaddressed, according to Hesketh.
“It can be very frustrating and perplexing for Spanish people when they find a poor English person with dementia in their garden.”
His organisation works to support British people who get into vulnerable situations in Spain, pointing them towards services and support they can access inside the country. It has around 8,000 users a month, he says.
‘Not enough thinking ahead’
For Hesketh, an important problem is that British expats can fail to plan for what he calls the “nasty things in life”.
"Everyone comes over to Spain to live a dream," he tells Euronews. "They've got some money, they buy a house in the countryside. Where people get into trouble is when they have made the move without really planning what might happen if things go wrong.
"They're living the dream until the wheels fall off the bus," he continues.
Brexit has also thrown a spanner into the works, impacting the lives of many Brits in Spain.
Dr Hall notes many of those living off "really low incomes", especially state pensions, were hit hard by the depreciation of the pound following Britain's decision to leave the European Union.
"They can't afford to go meet their friends in the restaurant or bar... as their disposable income has disappeared so has their social life," she says, highlighting cases where elderly people have ended up sleeping on the beach because they are unable to pay their rent.
Since the 2016 Brexit vote, the pound has lost 20% of its value, according to analysis by CNN.
But help is on hand.
Britain's embassy in Spain has called on experts and public authorities to assist their compatriots, though when asked by Euronews to detail exactly what it was doing it did not provide information.
"The British Embassy works to protect and promote British interests in Spain. As part of that, we provide support and advice to British people visiting or living in Spain," it said in a statement.
Consular services are "overstretched" in Spain, according to Dr Hall.
Town councils are working on innovative ways to create community and provide care to their British residents, however.
One of those is the Town Hall of Mijas which - through APEMEX (The Programme of Help for Elderly Foreigners) - has developed associations connecting the elderly so that they do not feel alone.
"British people who came to Spain when they were completely autonomous made the decision to live away from their families and social networks, they are a prototype of independent and free people, so when they reach old age people do not change," said Professor of Social Work and Social Services at the University of Jaén, Yolanda María de la Fuente.
"Perhaps we should apply a kind of gerontological pedagogy and make them realise that with a little support and help they could live much better and, above all, design their own life plan with a certain amount of guidance," she added.
For those considering making the move, Hesketh of Support in Spain urged Brits to “integrate as much as possible, learn the language and understand how the Spanish system can help. | Real Estate & Housing |
The BBC will receive a below-inflation increase to the licence fee, the culture secretary, Lucy Frazer, has in effect confirmed after Rishi Sunak said he welcomed cuts made by the corporation to its spending and services.
The £159 annual fee has been frozen for two years, and if it were to increase in line with inflation it would go up by about £15. During an interview round on Monday, Frazer said this was unlikely to happen.
“We as a government have been really concerned about the cost of living for people across the country, and have taken a number of steps across the board to make sure that those costs are down,” she told Sky News.
“It [the licence fee] is due to rise but we want to make sure that it rises by an appropriate amount that people can afford.”
Asked about the idea of a with-inflation rise, taking the annual total to £173, Frazer said: “I’m concerned that’s a very high level and it’s a decision that I’m looking at at the moment. We will be making an announcement on this very shortly.”
Asked if she was, in effect, confirming a lower increase, Frazer said only: “I’m concerned about that level of rise.”
A below-inflation increase would require further cuts to staffing and programmes, such as last week’s decision to halve the staffing levels on Newsnight, the BBC’s flagship weekday current affairs programme, which involves getting rid of all its in-house reporting and moving the show to a discussion-only format.
Asked by reporters about such cuts on his way to the Cop28 climate summit in Dubai, Sunak said: “First thing to say is, I think it is welcome that the BBC are looking at making savings and efficiencies in how they operate.
“It’s really important that when things are difficult, everyone is doing what they can to ease the cost of living on families. That’s certainly what I have done over the last year and made a bunch of decisions that haven’t been easy. But that’s helped to bring inflation down to ease the burden and the cost of living.”
Frazer, when asked in a subsequent interview on BBC One’s Breakfast programme if she was considering whether a £15 rise would be too great, responded: “Absolutely.”
She said the corporation must look to a post-licence fee future, one expected to be set out in the ongoing review of its charter.
“I want to make sure that the BBC remains sustainable and continues to provide the amazing service,” she said.
“In broader terms overall my department is looking at how we fund the BBC going forward. It is unsustainable because 400,000 people did not renew their licence fee over the course of the last year. The media landscape is changing.
“We’re not consuming the BBC like we used to consume it, so I’m also looking at a broader review of how do we make the licence overall fairer to licence fee payers, and how do we maintain the amazing service that the BBC provides.”
A BBC spokesperson said: “The government and BBC agreed a six-year licence fee settlement in January 2022, which froze the licence fee for two years with increases in line with inflation from 2024.
“As is usual practice the government sets and confirms the cost of a licence each year and this remains unconfirmed for 2024/25. The BBC will continue to focus on what it does best: working to deliver world-class content and providing great value for all audiences.” | Inflation |
A bitter legal battle could blow a hole in the Green Party of England Wales's general election campaign funds.
The BBC understands courts could force the party to pay between £200,000 and £400,000 if it loses a case against former deputy leader Dr Shahrar Ali.
The party's financial auditors note the case has left "uncertainty" about its ability to keep running normally.
The Greens are proposing a 50% increase in membership fees to build funds.
If voted through at the Green Party Conference next week, the cost of being a member will rise from £3.33 a month to £5 a month, with a £6 a year fee for concessions.
Dr Ali, an academic who was joint deputy leader of the party between 2014 and 2016, is a prominent critic of the Green Party's official stance on gender issues.
He has stood unsuccessfully for the leadership three times, but claims senior Green Party figures "collaborated" to force him out of his post as policing spokesman for the party, due to his "gender critical" views.
The Green Party claim he was removed because he had become a "divisive force" in the party.
A spokesperson for the party declined to give a figure on how much the court case is expected to cost. But the court documents say the party has said it will take every action available to recover the legal costs it has and will continue to incur from Dr Ali.
The BBC understands several other Green Party activists who hold similar views are planning legal action against the party off the back of Dr Ali's case.
The UK's political parties are in full fund raising mode, with a general election expected as early as next spring.
The Green Party made big gains at this year's local elections and has ambitions to double or even treble its current tally of one MP at Westminster.
But it has told members it needs the resources to match its ambitions.
According to its latest accounts the party was left with cash shortfall last year, having spent £80,000 more than the £3.15m it raised.
As the party has increased its income - up from £366,000 in 2007 - it has steadily taken on debt, currently holding more liabilities than assets.
Major parties having no savings and "spending more than they generate" in any one year is "actually very common" according to party finance expert Prof Justin Fisher, Director of Policy Unit at Brunel University.
There is a risk, however, the party will progress in a diminished form, creating a vicious circle of a lower-profile leading to less income.
Less income means the party "would be less likely they could put up as many candidates," Dr Fisher said.
All general election candidates require a deposit of £500, which they get back if they win more than 5% of the total votes in the constituency.
The Green Party of England and Wales has strict rules around "ethical business fundraising" - refusing money from donors involved in polluting industries, the arms trade or pornography.
This means "it is always a challenge to keep us going" according to Baroness Jenny Jones, a Green Party peer in the House of Lords.
"We don't get money from big business or anywhere like that," she said.
"We've been offered a lot of money in the past and we've turned it down."
Legal challenges
Other parties have faced legal challenges in recent years, but the Greens do not have a large pool of institutional donors that other national parties can rely on.
Labour is fighting a legal battle with former employees from the Corbyn-era, which the BBC understands could cost between £3m to around £4m. At the last election, Labour was able to raise £5.4m in donations - 25 times more than the Green Party managed.
A Green Party spokesperson said: "Like many organisations, the Green Party is facing some challenging financial times, however it is wrong to suggest that the party has anything other than a very bright future and strong public support.
"We are confident that we will be in a better position than ever before as we go into the next general election.
"We have seen an increase in significant donations in recent months from people backing our work to get the next generation of Green MPs elected to build a fairer, greener future.
"We hugely value the work of our local parties and all our activists who are the face and voice of the Green Party in their communities and we continue to support them through our staff team and central party resources.
"On the case we are currently defending in court, we are confident of our position and will not be commenting further while proceedings are ongoing."
Commenting on the legal case brought by Dr Ali, the party said it "remains proud of its focus on equality and human rights for all and our support for the trans community". | Nonprofit, Charities, & Fundraising |
A mum claims she's been "palmed off" and "out of pocket" after she failed to receive her National Lottery winnings.
Gemma Murray has told how she used the app to play the lottery for herself and her mum, and struck lucky in October last year winning £30.
But Gemma, from Kirkby, says she's been left in limbo and is yet to receive the winnings.
The mum-of-one said: "Every month when we get paid, me and my mum put the lottery on for the month. She won three numbers - £30 - so I withdrew it from the account and we were told we'd get it by November 2, but we still haven't had it.
"I've spoken to the lottery and they said the bank could trace it but the bank can't find any trace through any of my statements and National Lottery keep fobbing me off. They told me last Friday it must be there but the bank has no evidence of it."
The National Lottery said the money has been successfully returned to Gemma's account, and that the company which handles its debit card transactions has confirmed this. But to trace the payment, Gemma's bank would need to contact them in writing - something her bank has said it can't do.
Gemma said that she has been constantly calling but is getting "palmed off" and she added that now it is just about the principle rather than the money.
"It's been an absolute nightmare, we've been back and forth and I'm constantly calling them and they are palming me off. I must've called 100 times and I'm at the point now where it's not even the money, it's the principle," she told the Liverpool Echo.
"Imagine if it was £800, I do the hot picks so what if it was my three numbers? We've had no problems in the past but it's doing my head in. I've had to give it my mum so now I'm out of pocket. My point I'm trying to make to them is surely they have a better way to deal with these issues."
A spokesperson for the National Lottery reportedly said Gemma will be contacted by the customer care team, who will do everything they can to help her sort out the situation.
They continued: "In the very small number of cases that we see [like this], the funds are finally located at the bank’s end." | Banking & Finance |
H&M has admitted it needs to do more to improve consistency in clothes sizing, after it faced a backlash to its new returns fee for online items.
After the BBC revealed the fee last week, many shoppers reacted angrily, saying if sizing was more consistent, they would need to return less.
One shopper said the difference between same-size garments was "staggering".
When asked about the issue by the BBC, H&M's boss said: "There's always improvement to make."
Helena Helmersson insisted that the retailer had "lower returns than many others".
But she said the firm was taking proactive steps to ensure that "whatever customers buy, they want to keep", for instance by improving H&M's size guides for customers.
Under its new fee, H&M customers must pay £1.99 to return items bought online, with the cost taken from their refund. Previously all returns were free.
The news prompted many shoppers to vent their frustration about inconsistent sizing online and on social media.
"If retailers could all get their sizing correct and consistent, there would be far less returns to begin with! The difference between the same size garments is ridiculous," one told the BBC.
"Returns are not always the customer's fault," said another. "When manufacturers tighten up their quality control and standardise sizes then we'll have fewer returns!"
Concern about inconsistent sizing appears to go wider than just H&M, although some shoppers said the retailer had a particularly bad track record.
"Among big retailers H&M is particularly bad at sizing. Their M can be anything from XS to XXL," one shopper told the BBC.
Another urged H&M to open more High Street shops with changing rooms, so that shoppers can try on items in person.
Catherine Shuttleworth, a retail expert, said inconsistent sizing is "a real shopper bug bear".
"One of the biggest reasons to return clothes is poor fit," she told the BBC. "So it's commercially sensible for clothing retailers to work on the communicating of sizing."
Ms Shuttleworth said one way retailers could do that was by using online tools, powered by artificial intelligence, which asked customers questions about their height, weight, age, gender and body shape to help find the perfect clothing fit.
Initially the fashion giant said it planned to charge for online items returned both by post and in store. But after the BBC's reporting, H&M backtracked on its decision to charge for in-store returns, claiming the information on its website had been "inaccurate".
Rival retailers such as Zara, Boohoo, Uniqlo and Next already charge for online returns.
On Wednesday, H&M's head of investor relations, Joseph Ahlberg, said the retailer had introduced the fee "to remind consumers to be mindful of making returns due to the climate impact".
Speaking on a conference call with the media and investors, Mr Ahlberg said: "It's a win for the consumer, helping them to make good choices, it's a win for the environment, with less transport and emissions, and it also will benefit our model I think over time.
"We have an omni-model and this is part of the advantage of offering our fashion both in stores and online."
Demand for online shopping has risen sharply since the pandemic, but it has also led to a big increase in the number of items being returned because they do not fit, or are not as expected.
Traditionally big retailers have offered free returns for online purchases to attract customers, but they can be costly due to the work involved in processing returned stock.
Many shoppers are also becoming more aware of the environmental impact of deliveries and returns. Fewer postal returns means fewer delivery vehicles travelling up and down with parcels. | Consumer & Retail |
Sainsbury's has followed its rival Tesco in cutting the price of its milk.
The supermarket said it was reducing the price of its four-pint own brand bottle to £1.55 on Thursday, after Tesco did the same on Wednesday.
Unlike Tesco, who said it made the move because its costs for buying in milk had fallen, Sainsbury's did not give a reason for its decision.
Both supermarkets regularly battle on food prices and face stiff competition from discounters Aldi and Lidl.
The move from Sainsbury's and Tesco comes at a time when food inflation is at its highest level since 1978 and latest figures show that food prices increased 18.2% from February 2022 to February this year.
Milk alone has risen by 43% in price over the same period, one of many staples, including cheese and eggs, which have surged in cost and squeezed household budgets.
But some analysts have suggested that supermarkets reducing their prices is a possible sign that hikes in the cost of a weekly shop could be starting to ease.
As well as the four-pint bottles, Sainsbury's has match Tesco's move in cutting two pints by 5p to £1.25 and a single pint to 90p.
Sainsbury's said with "costs going up, we are working hard to keep prices low, especially on the everyday essentials people buy the most".
A spokesperson added: "Our customers can be confident that they will receive great deals when they shop with us and do not need to go anywhere else to get the best prices on their weekly shop."
Both supermarkets said the reductions in price will not affect how much they pay farmers.
Meanwhile, Asda has announced a shake-up to its reduced items on sale.
Following a trial in 140 stores, Asda said it would now have price cuts on products twice a day, rather than three times previously, but that the markdowns would be greater than before.
Recent research revealed nine out of 10 shoppers reported feeling concerned about rising food prices, according to Barclays.
Around 62% said they were finding ways to reduce the cost of their weekly shop, a report showed.
Separately, Sainsbury's has announced a major restructuring of how its logistics operations work, affecting around 7,000 staff throughout the country.
The company said that no one would lose their job or get moved to worse contractual terms. | Consumer & Retail |
Homeownership has long been regarded as an integral part of the American dream, symbolizing independence, financial security and prosperity — aspirations shared by many.
But renowned real estate investment guru Grant Cardone challenges this notion. In an Instagram post earlier this month, he wrote, “Buying a home without a doubt is the WORST investment people can make, yet it’s also the most common one.”
Cardone, also known as Uncle G, aims to alter this perspective and change the trajectory of people’s financial decisions. Rather than plunging into deep debt to purchase a home, he advocates for alternative approaches. What does Uncle G find problematic with buying a home? He shares his reasons in the Instagram post.
Cardone presents a scenario where you spend $576,000 on a home and keep it for 10 years. In addition to the initial cost, he highlights the various expenses you would incur over the decade:
12% ($69,120) in broker fees
10% ($57,600) in maintenance fees
20% ($115,200) in property taxes
70% ($403,200) to the bank
The additional costs amount to $645,120, which, when added to the original price of the home, totals $1,221,120. Uncle G asserts, “A $576,000 home will have to be sold for $1.2 million in 10 years. You’re not going to sell it for that, to break even.”
He characterizes this investment as “dead money,” a term used to describe an investment that shows minimal value appreciation or remains tied up for an extended period with limited returns.
Recent reports show 78% of Americans still strongly link homeownership with the cherished concept of the “American dream,” and 65% of people view owning a home as a strategic approach to constructing intergenerational wealth.
Although the financial advantages of homeownership hold significant weight, the impact of becoming a homeowner extends beyond financial considerations. According to Mark Fleming, chief economist for First American Financial Corp., purchasing a home is not solely a financial decision but also a lifestyle choice. This perspective sheds light on the enduring fixation with homeownership as the embodiment of the revered “American Dream.”
But according to Cardone, individuals pursuing homeownership are serving a master by borrowing money from institutions like Bank of America Corp. They may build a small retirement account that ultimately funds Wall Street. He perceives this as part of a larger game.
Cardone goes on to emphasize the need for a $100,000 down payment, referring to the 20% down payment historically required by lenders to avoid mortgage insurance.
What does Cardone propose as an alternative?
Rather than buying a house, he suggests renting your residence and using the $100,000 saved for a down payment to invest in real estate that generates passive income.
He endorses multifamily real estate, which has maintained its strong fundamentals amid recent economic turmoil, unlike other segments of commercial real estate such as offices, hotels and retail.
Investing in real estate doesn’t necessarily require purchasing a rental property outright or dealing with the challenges of being a landlord. Cardone highlights the option of investing in residential real estate investment trusts (REITs), publicly traded companies that collect rent from tenants and distribute it to shareholders as regular dividends.
Another avenue he supports is real estate crowdfunding, which enables everyday investors to pool their money and collectively purchase property or shares of property as a group (even with as little as $1,000). Cardone has raised over $1 billion through crowdfunding for his company Cardone Capital, which primarily invests in class A multifamily properties.
Regardless of your chosen path, Cardone stresses the importance of generating cash flow, which can be reinvested and grown until enough funds are accumulated to overcome the financial challenges of homeownership.
“I just don’t need to own a home on the way up,” Cardone said. “I need to own assets that pay me on the way up. And once I have enough cash flow from the assets, then if I want to go buy a house or a watch or a car, I buy it out of the passive income.”
By focusing on assets that provide ongoing returns, individuals can accumulate enough cash flow to fulfill their desires and aspirations, whether it be owning a home, purchasing luxury items or enjoying financial freedom.
In the pursuit of financial security and independence, understanding the power of passive income and aligning investments accordingly can pave the way for greater flexibility and fulfillment of long-term goals.
Read next:
Image source: Screenshot from "Grant Cardone Proves why personal homes are BAD Investments" on YouTube
Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.
This article 'The Worst Investment You Can Make' That Americans Are Obsessed With: How To Avoid The 'Dead Money' Trap, According to Billionaire Financial Guru Grant Cardone originally appeared on Benzinga.com
.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. | Real Estate & Housing |
Same-sex couples are still having to pay thousands of pounds before they can access NHS fertility treatment, BBC News has found.
In England, the NHS will fund in-vitro fertilisation (IVF) for heterosexual couples who have been trying for a baby unsuccessfully for at least two years and meet certain other criteria such as age and weight.
But same-sex couples are often expected to demonstrate their infertility before the NHS will fund IVF - and to do so must pay privately for between three and 12 rounds of artificial insemination.
Couples say they have spent more than £20,000 on the treatment.
Last year, the government promised fairer access to NHS fertility treatment for same-sex couples and single women, saying they would no longer need to privately fund rounds of artificial insemination before becoming eligible.
But after BBC News contacted all 42 Integrated Care Boards (ICBs) in England - which make the final decision about who can have NHS-funded IVF in their local area - its analysis found:
- Only four offer fertility treatment to same-sex couples who have not already paid privately for artificial insemination
- A further 10 are currently reviewing their policies
- For those couples, same-sex and heterosexual, who qualify for IVF, the number of attempts they can access varies by location - some ICBs offer up to three cycles, others only one
Campaigners have called the need to privately fund rounds of artificial insemination a "gay tax" and urged the government to follow through on its promise to "remove financial barriers".
The Department for Health and Social Care (DHSC) says there is a 10-year plan to improve how the health system listens to women and girls.
But while campaigners and policymakers wrangle over the details, there is a real-life impact for couples dreaming of starting a family.
- In-vitro fertilisation (IVF) - the process during which an egg is removed from a woman's ovaries and fertilised with sperm in a laboratory. The fertilised egg, called an embryo, is then returned to the woman's womb to grow and develop
- Intrauterine insemination (IUI) - a fertility treatment that involves directly inserting sperm into a woman's womb
Shauna Mansbridge, 30, has always wanted to have a baby. But when she and her partner, Faye Hawkins, went to see their GP, in Dorset, they were told they would only qualify for IVF on the NHS if they had already self-funded 12 unsuccessful cycles of artificial insemination.
The cost varies but Shauna and Faye, 33, discovered it would cost them at least £30,000 for 12 rounds of intrauterine insemination (IUI).
"It's the one time in my life I've felt discriminated against," Faye says, "and I didn't think it would be by the NHS."
Although a cycle of artificial insemination is cheaper than a cycle of IVF, the chances of success are lower and it can involve paying for tests, medication and sperm.
And most sperm banks will ship to registered fertility clinics only, leaving most same-sex couples with no choice but to have treatment there.
Given the cost of IUI, and the likely emotional toll of repeated attempts, Shauna and Faye decided their money would be better spent paying privately for IVF instead of trying to meet the criteria for NHS-funded treatment.
And the couple have now spent their life savings - £22,000, what might have been a deposit on a house or paid for a wedding - in pursuit of their dream of starting a family.
"We had to make a lot of sacrifices," Shauna says, "but this is our only route to motherhood."
They have undergone two IVF cycles and the process is taking its toll on them.
"There's all these stages [of treatment] - and you get to one stage and you're disappointed, you get to another stage, you're a little bit more disappointed, and you just don't have control over the outcomes," Shauna says. "It's tough on both of us."
Contacted about Faye and Shauna's case, NHS Dorset told BBC News it would consider couples who had had six rounds of IUI. But BBC News has seen a letter from the NHS that incorrectly states Faye and Shauna would need 12.
Scotland is the only place in the UK that provides donor insemination to same-sex couples without requiring them to have private treatments first.
Northern Ireland and Wales have similar requirements to England - and access varies by locality.
Surrogacy for same-sex couples is not available on the NHS in any area of the UK.
No way we could make it work in UK
Kate Davies gave birth to Luca earlier this year, after she and her wife, Keri, spent more than £17,000 on artificial insemination and IVF.
The couple, both teachers, moved to China and worked there for a couple of years to save more money for their future.
Kate says current policies are pricing lesbians out of having children.
"There's no way we would have been able to make it work in the UK," she says. "We've got friends who are having to get loans to try and start a family. And then if that's not successful, you're left with a big loan and no baby. It's a vicious cycle and it's devastating."
They would have expected to pay something towards treatment, they say, but the existing rules are like a "gay tax".
Kerri says: "We've chosen to start a family - but we didn't choose to be gay."
Laura-Rose Thorogood founded LGBT Mummies after she and her wife discovered how complicated it was to find out what fertility support was available and how much it cost.
She says existing policies are leading some LGBT people to put themselves at risk obtaining sperm from a "known donor", someone they are friends with or related to - or have met online.
"Home insemination has really worked for some people - and they have a great relationship with their donor, which is wonderful, but for others it can be dangerous," Laura-Rose says. "Some who don't get access to fertility funding are going down alternative routes where they're having some donors online saying, 'We'll donate to you if you do it in the natural way, if you have intercourse with me.'"
As well as health risks, if people do not use registered banks or clinics to obtain sperm, there is also the possibility a donor could later try to claim parental rights over a child.
Laura-Rose says she receives hundreds of enquiries from people who are "despairing" and do not have 10 years to wait for the rules to change.
"Having a family and a child, we feel, is a human right," she says. "And that human right has been taken away from people in our community,"
The Department of Health says it expects the variations in NHS-funded fertility services to start improving this year.
"Our Women's Health Strategy for England sets out our 10-year ambitions for boosting health and wellbeing and improving how the health and care system listens to women and girls," it said.
An NHS official said: "While these decisions are legally for local health commissioners, it is absolutely right that they provide equal access to services according to the needs of people within their areas - and the NHS nationally is supporting them to do this." | Consumer & Retail |
What's Driving Vodafone Idea Stock Rally? It's Not Business Fundamentals
While the telecom operator's ability to continue as a going concern is at risk, the only thing driving its share price is 'hope'.
Shares of Vodafone Idea Ltd. have doubled in the past six months even as its debt obligations have ballooned with no funding in sight. While the telecom operator's ability to continue as a going concern business at risk, the only thing driving its stock is hope.
The shares have gained 107% in the past six months and 24% in the past one month. That compares with Bharti Airtel Ltd.'s that has gained 17.27% in the last six months and has largely remained flat in the last 30 days.
The company stock performance almost disregards concerns about its total debt is more than Rs 2.12 lakh crore as of Sept. 30, and lack of support from U.K.-based promoter Vodafone Plc., which has no hope of salvaging its Indian joint venture. But optimism among largely retail and high-net-worth shareholders is driven by government ownership and hope of funding by existing investors, and a the tax refund that is likely to receive soon.
Vodafone Idea will be able to conclude discussions with equity investors in the October–December quarter, Akshaya Moondra, chief executive officer, said earlier. Based on this equity funding, the banks “will process the request for bank funding and process their internal approval”.
Kumar Mangalam Birla, chairman at Aditya Birla Group, said at the 7th India Mobile Congress that Vodafone Idea will begin investing in rolling out the 5G network and promoting 4G in the "coming quarters". The company also announced in August that a promoter group has promised to infuse Rs 2,000 crore, if required.
While Vodafone Group owns 18.1%, the Aditya Birla Group holds 32.3% stake. The Indian government is the carrier's largest shareholder at 33% holding, which it picked after converting interest dues of Rs 16,133 crore, valuing the company at Rs 48,887 crore.
False Hope?
Government buying stake in Vodafone Idea “reassures people that it's not going to die in a hurry”, said Mahesh Uppal, head of Com First India, a consulting company specialising in regulatory issues surrounding telecom and the internet.
“The government is the largest equity holder, and therefore, for optical reasons, it would not like the company to pack up,” he said.
However, on a closer look, that comfort may be flawed.
About 90% of the company’s debt is owed to the government as part of its deferred payment liabilities towards spectrum and dues arising from the AGR judgement.
While the government has said that it will prevent telecom industry become a duopoly, it is unclear if it is willing to convert more of Vodafone Idea's debt into equity, in case the company defaults.
Investors may be assuming that if Vodafone Idea defaults, the government may convert those dues into equity as well.
The government picked up 33.4% stake in the debt-laden company in February in lieu of conversion of interest dues of Rs 16,133 crore, theoretically valuing the company at Rs 48,887 crore.
However, the dilution of equity if the government decides to convert the principal would be too high, a telecom analyst said on the condition of anonymity as he is not authorised to talk to the media. Such a conversion would set a bad precedent for other corporations, the analyst said.
Momentum Rally
The belief of a turnaround story in a stock also plays a role. There are multiple mid-cap stocks even with weaker fundamentals that have rallied. Nifty Mid Cap 50 has gained 30.21% in last six months and the Small Cap has risen 41% in the same period.
That may have partly driven the rally in Vodafone Idea's stock. More so as the double-digit share price would have generated interest among retail investors.
Still, some analysts see company’s troubles as “financial”. The company’s services are “fairly decent,” Rajashree Murkute, head-infrastructure ratings at CARE Ratings, said. “What it's lacking is financial wherewithal."
"Once that (funding) comes through, perhaps things may not be too difficult, but it's already lost a lot of time at this point of time,” she said.
However, Vodafone Idea has already missed the bus on 5G. Reliance Jio Infocomm Ltd. and Bharti Airtel may already have a hold of customers by the time Vodafone Idea’s new funding comes in and the 5G investment is complete.
Vodafone Idea Ltd.'s net subscriber churn has started stabilising after it lost 40 lakh at its peak in September 2022. The carrier has cumulatively lost over 5.7 crore wireless subscribers since January 2021.
The 5G delay could make acquiring customers from other networks even more difficult for the company. | Stocks Trading & Speculation |
The IRS is introducing new income limits for its seven tax brackets, adjusting the thresholds to account for the impact of inflation. That could provide a break to some taxpayers on their taxes in 2024.
The tax agency said it's adjusting the tax brackets upwards by 5.4%, relying on a formula based on the consumer price index, which tracks the costs of a basket of goods and services typically bought by consumers. The 2024 limits come after the IRS last year expanded its tax brackets by a historically large 7%, reflecting last year's high inflation.
The IRS adjusts tax brackets annually — as well as many other provisions, such as retirement fund contribution limits — to counter the impact of inflation. That can help avoid so-called "bracket creep," or when workers are pushed into higher tax brackets due to cost-of-living adjustments or raises even though their standard of living may have remained the same.
Workers can also get a break if more of their taxable income falls into a lower bracket as a result of the higher thresholds. Taxpayers will file their 2024 taxes in early 2025.
Tax brackets
The IRS increased its tax brackets by about 5.4% for each type of tax filer for 2024, such as those filing separately or as married couples.
There are seven federal income tax rates, which were set by the 2017 Tax Cuts and Job Act: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
Taxation in the U.S. is progressive, which means that tax rates get higher the more you earn. However, there's a common misconception that a worker will pay the highest tax rate they're subject to on every dollar of their income — that isn't the case. Instead, each tax rate is applied to your income that falls within each bracket.
Your so-called marginal rate is the highest tax rate paid on your income, but your effective tax rate — a combination of the rates you pay on various parts of your income — reflects your actual tax rate.
For instance, take a single taxpayer who will earn $110,000 in 2023, using the current tax year's brackets as an example. She'll take a standard deduction of $13,850, lowering her taxable income to $96,150, which makes her marginal rate 24%. However, her effective rate is much lower. She'll pay a:
10% tax on her first $11,000 of income, or $1,100 in taxes12% tax on income from $11,000 to $44,735, or $4,04822% tax on the portion of income from $44,735 up to $95,375, or $11,14024% tax on the portion of her income from $95,374 to her limit of taxable income, $96,150, or $775
All told, she would owe the IRS $17,063 in taxes, which amounts to an effective tax rate of 17.7% on her taxable income. | Inflation |
Rishi Sunak should cut taxes, reduce benefit increases, raise the retirement age and delay net-zero commitments, his predecessor Liz Truss is set to say.
In a speech, the former prime minister will also vehemently defend the policies she tried to enact during her chaotic 44 days in office.
She will acknowledged that she tried to do things in a rush.
But the Tory MP will argue that she could not deliver her plans due to the "political and economic establishment".
Her speech at an event held by the Institute for Government think tank comes almost a year after her government unveiled a series of economic measures - described as a mini-budget - that included £45bn of tax cuts alongside support for people struggling with rising energy bills.
The plans triggered weeks of economic turmoil and just a few weeks later Ms Truss was forced to scrap almost all of the measures.
Her premiership did not survive the massive U-turn and she resigned less than a month after the mini-budget.
The speech will be one of the few occasions she has spoken in public about her tenure and she is expected to say: "Some people said we were in too much of a rush.
"And it is certainly true that I didn't just try to fatten the pig on market day - I tried to rear the pig and slaughter it as well. I confess to that.
"But the reason we were in a rush was because voters wanted to see results.
"I knew with the level of resistance and the lack of preparation time that things weren't going to be perfect."
She is expected to say that communication "could have been better and the operation better honed" but also that she was unable to implement her plans because there was a "powerful force comprising the economic and political elite, corporatists, parts of the media and even a section of the Conservative parliamentary party" opposed to her ideas.
She will also argue that her tax cuts were not unfunded as they would have increased revenue in the long term.
In addition to reflecting on her time in office, Ms Truss will use her speech to urge the government to reinstate VAT-free shopping for tourists and abolish the windfall tax on oil and gas firms.
"We need to get a grip on the ballooning welfare and pensions bill. This means slowing the rate of increases to benefits and tougher work requirements. It also means raising the retirement age further," she will say.
Responding to her speech, the Liberal Democrat's deputy leader Daisy Cooper said: "Liz Truss giving a speech on economic growth is like an arsonist giving a talk on fire safety."
Conservative MP and former minister Damian Green said: "It's been a year since Liz wrote a Budget. I'm glad she's not responsible for this year's."
Meanwhile Labour have called on the prime minister to block Liz Truss's resignation honours list. Labour's shadow paymaster general Jonathan Ashworth argued that "those who crashed the economy" should not be rewarded. | United Kingdom Business & Economics |
Almost a million households can now start applying for government help towards their energy bills, which was promised to help them through the winter.
Most households have been getting £400 in energy support, paid in monthly instalments since October.
But those in park homes, care homes and living off-grid have not yet seen a penny. Some say they feel "forgotten".
The government says it knows this is a difficult time for families.
It says it is working to serve these additional households.
But it could still take weeks for these households to receive the payment.
Sue Marshall has lived in her park home near Mansfield in Nottinghamshire for nine years. She is one of 85,000 park home owners in the UK.
She lives in her home all year round and pays council tax in the usual way, but when it comes to her energy bills she pays via the park home owner and does not have a direct relationship with the supplier. This means she has to apply for the rebate and has not received it automatically.
"I feel as if we have been forgotten," says Sue. "Nothing at all has come to fruition."
John Halfpenny and Linda King are also residents on the site. They say they were initially told they would be able to apply in December, but are only now putting their applications in for their rebates - five months after the first automatic payments began.
Some 900,000 households can apply, including those who live in houseboats or have a communal electricity supply.
It will be open until the end of May and the payment will arrive in one lump sum, although it could take up to six weeks,
The BBC understands that once an application has been made, the information will be passed to the local council for verification, which could include a home visit.
"Everyone else has got theirs, it just makes you feel like you're second class," says Linda.
The money was promised to help households through the winter, but as John points out, "we've already paid for our winter."
Sue adds that if the site's residents had received the rebate sooner, they would not have been so worried about using the oven, or gas.
"People on their own and with ill health need the heating on, but they daren't do it because they're scared of the big bills," she says.
And there are others who are still owed money.
Patrick Raven lives in the middle of Chesterfield, but his home does not have mains gas. Instead, he uses bottled gas and the price of it is not capped.
"The price a year ago was £105 for two [bottles of liquid petroleum gas], now it's £168," says Patrick. "In the winter it lasts about four weeks."
Because residents like Patrick are paying more for their energy, households which use alternative fuels such as heating oil, LPG or biomass are due an additional £200 payment.
It should arrive as credit on their electricity bill, but if not, households will have to apply on the government website.
Patrick's payment has not arrived yet. "[I feel] a bit peeved. I think it's crazy. Most likely we will get it eventually but it may be summer when we least need it, because we need it now. We've needed it during the winter, for the cold spells."
The Alternative Fuels Payment application on the government website is due to open by the end of February.
A government spokesperson said: "We know this is a difficult time for families which is why the government has been paying for half of the typical household's energy bill this winter.
"These are complex schemes to administer and needs a separate approach from the Energy Bills Support Scheme." | Energy & Natural Resources |
Dollar Funding Markets Are Showing Signs Of A ‘Muted’ Year-End
US dollar funding markets are looking sanguine about year end, especially as demand continues to outstrip supply.
(Bloomberg) -- US dollar funding markets are looking sanguine about year end, especially as demand continues to outstrip supply, according to JPMorgan Chase & Co.
Trading of overnight general collateral repurchase agreements for the last trading day of the year is steady, while in times of turmoil activity would surge as banks pare their balance sheets. Cross-currency basis swaps — the cost of swapping euros and yen for dollars, the world’s preferred currency in times of stress — are stable, after widening out at the end of September. At the same time the gap between financial commercial paper and overnight index swaps has only widened slightly.
The end of the year tends to bring market dislocations as banks pull back on providing overnight financing for bond purchases and other transactions to shore up their balance sheets for regulatory purposes. But this year, banks don’t necessarily have to pull back as much on offering that funding: their reserves are relatively plentiful, after they’ve been paying higher rates to help stem deposit outflows. And the Federal Reserve has been draining its reverse repo facility, which has also resulted in money getting pushed off its balance sheet and into the banking system. That’s helped mitigate some strategists’ concerns that short-term funding markets would face pressure and spreads would widen there.
Short-term funding markets have also been helped by the relatively high rates on assets ranging from Treasury bills and repos to commercial paper, where yields are over 5%. The short duration for these instruments are a haven for investors concerned about dropping prices in other markets.
Balances at the Fed’s reverse repurchase agreement facility, where money-market funds can earn interest on overnight cash, have been dropping faster than expected, with over $1 trillion yanked out since the beginning of June. That’s actually pushed more money back into the banking system and helped bank reserves remain relatively high even as the Federal Reserve has been shrinking the money supply and quantitatively tightening over the course of more than a year.
In fact, balances at the Fed rose by nearly $65 billion to $3.35 trillion in the week through Oct. 18, Fed data show. That’s higher than where they were in May 2022 before the Fed started cutting its bond holdings.
JPMorgan strategists also acknowledged that most companies that fund in the commercial paper market are ahead of where they usually are in terms of securing funding through the turn of the year. The strategists estimate that about 60% of bank commercial paper and certificates of deposit outstandings aren’t maturing until 2024, a higher percentage than in the last few years. Also, issuers of asset-backed commercial paper have 37% of outstanding debt maturing over the turn of the year, higher than this time in 2022, and tier 2 issuers — companies with a lower short-term credit rating — are also well ahead in securing funding over year-end relative to the past two years.
Yet the strategists estimate banks still have about $570 billion of unsecured CP and certificates of deposit that still need to be rolled into 2024, nearly half of which are concentrated among Japanese, Canadian and French banks.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Banking & Finance |
BOE Keeps Rates Unchanged For First Time In Almost Two Years
The central bank held its key rate at 5.25%, ending a series of 14 successive hikes since December 2021, when rates were just 0.1%.
(Bloomberg) -- The Bank of England halted for now the most aggressive cycle of interest-rate rises in more than three decades as concerns about inflation gave way to signs the economy is slipping into a recession.
The central bank held its key rate at 5.25%, ending a series of 14 successive hikes since December 2021, when rates were just 0.1%. Five members of the Monetary Policy Committee voted to leave rates unchanged and four wanted to raise them to 5.5%. Governor Andrew Bailey, who had the casting vote, chose to hold.
The BOE, however, signaled that policy was only on pause and it would respond if inflation, which remains more than three times above the 2% target, doesn’t fall as expected. The MPC forecasts consumer-price inflation to hit the target in the second quarter of 2025.
“Inflation has fallen a lot in recent months and we think it will continue to do so,” Bailey said Thursday in statement released with the decision. “That’s welcome news. But there is no room for complacency. We need to be sure inflation returns to normal and we will continue to take the decisions necessary to do just that.”
Investors and a growing number of economists are betting that UK rates may already have peaked. The pound fell to the weakest since March against the dollar as traders trimmed bets on further interest-rate hikes. Markets were split before the decision, betting on a roughly 50% chance of a vote to hold, after data showed inflation unexpectedly fell in August.
Traders are now pricing in less than a full quarter-point increase of further tightening over the coming months. Goldman Sachs and Nomura said on Wednesday that rates won’t rise again in this cycle. Sterling traded as much as 0.9% weaker at $1.2239, taking a slide over the past month to around 4%, the biggest decline across Group-of-10 peers.
What Bloomberg Economics Says ...
“The Bank of England is probably done with lifting interest rates. While its guidance continues to suggest more hikes could yet come if signs of greater inflation persistence emerge, the data has turned in a dovish direction and is unlikely to cause enough alarm for the central bank to hike again. We now expect interest rates to remain on hold until the second half of 2024.”
—Dan Hanson and Ana Andrade, Bloomberg Economics. Click for the REACT.
The decision will come as a relief to millions of households facing the threat of even higher mortgage costs and indebted businesses. It will also be welcomed by Prime Minister Rishi Sunak, who has promised to ease the inflation crisis and improve living standards ahead of an election expected next year.
Chancellor of the Exchequer Jeremy Hunt told Bailey in a letter than the MPC has his full support. “The tough action taken by the MPC to squeeze inflation out of the system is working,” Hunt said, adding that the government needed to show fiscal discipline to bolster the bank’s actions.
Repeating its former guidance, the committee said rates would be “sufficiently restrictive for sufficiently long” and “further tightening in monetary policy would be required if there were evidence of more persistent pressures.” Like other major central banks, the implication is that rates would remain high for longer.
“We are starting to see the tide turn against high inflation, but we will continue to do what we can to help households struggling with mortgage payments,” Hunt said in a statement from the Treasury. “Now is the time to see the job through. We are on track to halve inflation this year and sticking to our plan is the only way to bring interest and mortgage rates down.”
A halt to the quickest series of rate hikes in three decades is a relief for businesses and consumers, who have seen borrowing costs rocket since the end of 2021, bringing to an abrupt halt an era where the cost of loans was near historic lows.
“Many small firms have suffered financially, with margins and cash reserves battered by both the phenomenon the Bank tried to control, inflation, and the ‘cure’ it applied, leading to higher borrowing costs and dampened consumer demand,” said Martin McTague, chair of the Federation of Small Businesses.
The MPC has been laying the ground to pause policy as the UK’s economic outlook darkened in recent weeks. Bailey said this month that rates were “much nearer now to the top of the cycle” and Deputy Governor Jon Cunliffe said the bank was close to a turning point.
The MPC expressed concerns that the economy was stalling after output in July contracted 0.5%, a sharper fall than expected, and official figures showed unemployment rising and job vacancies dropping. The committee also noted that business activity data is contracting, while raising questions about official measures that show wage growth is accelerating.
The BOE cut its GDP growth forecast for the third quarter to 0.1% from 0.4%, the minutes showed. Underlying growth in the second half of 2023 is also likely to be weaker than the 0.25% expected in August.
The bank said past rate hikes were having an impact: “There are increasing signs of some impact of tighter monetary policy on the labor market and on momentum in the real economy more general.”
As the economy slows, inflation was expected to drop below 2% “in the medium term.” In the short term, the bank expects a “significant” fall in inflation “despite the renewed upward pressure from oil prices” due to declining energy and goods inflation.
Higher rates have been punishing homeowners, who face a £15 billion repayment crunch, according to the Resolution Foundation, much of which has yet to come through. Several MPC members have been warning that policy lags mean the BOE was already at risk of overtightening.
Swati Dhingra, an external member has been voting to hold since December last year. She was joined by Bailey, Deputy Governors Ben Broadbent and Dave Ramsden and Chief Economist Huw Pill. Cunliffe and external members Megan Greene, Catherine Mann and Jonathan Haskel voted to raise rates by a quarter point to 5.5%.
Other central banks are signaling that cycle is over, too. The ECB raised rates to 4% last week and said “sufficient contributions” had been made to return inflation to target. The US Federal Reserve on Wednesday held rates in the 5.25%-5.5% range, but did suggest further increases were on the cards and ruled out any imminent rate cuts.
The BOE also stepped up the pace of quantitative tightening as it seeks to reduce the size of its balance sheet as quickly as possible to provide headroom for potential future financial stability interventions.
Over the 12 months from October, it plans to reduce its gilt portfolio by £100 billion to £658 billion. Last year, it unwound £80 billion. That implies £50 billion of active gilt sales on top of the £50 billion of maturing assets. The gilt portfolio peaked in 2022 at £875 billion.
--With assistance from Eamon Akil Farhat, Constantine Courcoulas, Irina Anghel and Greg Ritchie.
(Moves up BOE rates guidance.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Interest Rates |
Net zero: Direct costs of climate policies aren't a major barrier to public support, research reveals
Amid headlines of wildfires raging across Europe and Africa and flooding in China, the UK government took the bewildering choice to expand fossil fuel extraction.
Prime minister Rishi Sunak declared that more than 100 new oil and gas drilling licenses would be granted for the North Sea in 2023, sparking widespread criticism and incredulity from climate experts, business leaders and some within his own party. The latest announcement follows other indications that the UK government is reviewing its climate commitments, spurred by a byelection victory that was won in part by opposing London's ultra-low emission zone (Ulez).
Much of this backsliding relies on dubious logic: that the economic costs of green policies, and how they affect people's lives, make them damaging for the UK and will always lose votes. As researchers who study public attitudes towards such policies, we are quite sure these arguments from the government don't hold water.
First, inaction on climate change costs more than action, as established nearly two decades ago in the landmark Stern review. The economic case has only strengthened since, with this year's Skidmore review making clear the considerable opportunities for the UK in a net zero transition, including the potential creation of almost half a million green jobs.
Second, the government's reluctance to intervene in people's lives with climate policies does not reflect public opinion. There is actually UK-wide support for net zero policies—including those that would involve lifestyle changes. Crucially, the public wants and needs the government to show clear and consistent leadership on climate change.
Behavior changes are essential
Scientific assessments, including the latest report by the Intergovernmental Panel on Climate Change (IPCC) and analyses by the UK's statutory advisers on climate policy, the Climate Change Committee, show that new technologies alone will not be sufficient for the country to hit its carbon targets.
Most measures to reach net zero require people to make at least some changes to their daily routines, including limiting car use, eating less red meat and dairy, buying electric vehicles and heat pumps, and reducing waste. Likewise, businesses will need to change their behavior too.
While the scale of the necessary lifestyle changes is not well understood by the public, people are willing to play their part in a net zero transition. Polling shows public concern about climate change has remained high throughout the pandemic and the cost of living crisis. Most people worldwide agree that changes to our behavior are necessary to tackle climate change.
Our research also shows that the UK public is broadly on board with net zero, including measures that would involve lifestyle changes. With the market research company Ipsos, we polled more than 5,000 people across the UK on their attitudes to a range of net zero policies. Our findings indicated high levels of public support (in both 2021 and 2022) for most of them, with support strongest for frequent flyer levies, changing product prices to reflect environmental impacts, phasing out gas boilers, and electric vehicle subsidies.
How to maintain public support
It's true that support drops when people are asked to consider the costs of climate policies. For example, while 68% support the general idea of charging frequent flyers more for each additional flight they take in a year, when the financial costs to the individual are spelled out, support falls to 32% (and opposition rises from 16% to 33%).
This is perhaps no surprise. Previous research showed that even mentioning a very modest cost can make people less likely to support a policy, including climate measures.
On the other hand, emphasizing the effectiveness or wider benefits of climate policies can increase support for them. One study conducted across 24 countries showed that highlighting additional benefits, such as cleaner air or stronger social cohesion, increased a person's motivation to take action on climate change.
Even more important for public acceptance is how fair a policy is seen to be, as revealed both by our research and other studies. Indeed, fairness was a key topic in the Ulez debate during the Uxbridge byelection, where drivers of older vehicles were seen by some as being unfairly penalized and inadequately supported, for instance through scrappage schemes.
The fact that fairness can mean different things to different people highlights the need for the government to engage with the public when designing climate policies. Deliberative processes such as climate assemblies can help with this.
There are other important factors. Workshops we held across the UK showed that public support for net zero policies remains high as long as people feel they still have personal choice, their freedoms are protected, and they trust those who are implementing the policies. We found only very restrictive policies are opposed, such as mandating meat-free diets, no flying or a car-free lifestyle.
Win-win policies
The fluidity of public support for climate action highlights the importance of a clear vision and consistent leadership from the government. Instead of rolling over at the first hint of controversy, political leaders should present a vision of a sustainable future that everyone can work towards, involving a stable climate, cleaner air, and healthier lifestyles. Licensing new oil and gas drilling obviously runs counter to this.
While the UK government may shy away from promoting climate-friendly behavior changes because they equate them with sacrifice, in fact, people with low-carbon lifestyles tend to be happier than those who consume more. And at a time of economic hardship, the UK government could focus efforts on measures that at once reduce energy bills and also cut emissions—for example, through support for home insulation.
Making behavior change policies convenient and affordable requires governments to intervene with regulations and incentives. A clearly communicated vision to keep the public on board, and a program of public engagement that creates an honest, society-wide dialog on net zero and a sense of collective effort, is essential to their success.
Provided by The Conversation | Renewable Energy |
- There’s a winner for the $1.6 billion-plus Mega Millions jackpot.
- All six numbers matched a ticket sold in Florida.
- It's the game's biggest prize ever, sailing past the last record of almost $1.54 billion from October 2018.
- Experts cover some of the winner's possible pitfalls to watch out for.
There's finally a winner for the massive Mega Millions jackpot — but the lucky ticketholder may face unexpected pitfalls, experts say.
A single ticket sold in Florida matched all six numbers on Tuesday night, marking the game's largest prize in history, according to Mega Millions. The winning numbers were 13, 19, 20, 32 and 33, and the gold Mega Ball 14.
After final sales counts, the jackpot is worth $1.602 billion, beating the previous record of $1.537 billion from October 2018.
The lucky winner has two payout choices: a one-time lump sum of $794.2 million or 30 annuitized payments totaling the $1.6 billion-plus. Both options are pre-tax estimates.
Whether the winner picks the lump sum or annuity payments, both options come with a sizable tax bill, which is one pitfall to consider.
While Florida doesn't tax lottery winnings, there's an upfront 24% federal tax withholding that goes to the IRS. If the winner chooses the $794.2 million lump sum, they'll owe nearly $190.6 million up front. But with the winner hitting the 37% federal income tax bracket, the final bill will likely be millions more.
In addition to taxes, the Mega Millions winner will likely encounter other obstacles, experts say.
"Let's just say the curse of the lottery is real," said Andrew Stoltmann, a Chicago-based lawyer who has represented several lottery winners.
Many people playing the lottery don't have the infrastructure of financial advisors or other professionals they can easily tap for guidance when they win. "And they don't have the knowledge base to handle a large sum of money," he said.
Common blunders may include bad investments, overspending and relatives asking for more money, Stoltmann said.
The winner will also have several estate-planning challenges, according to Warren Racusin, a wealth planning attorney and partner at Lowenstein Sandler.
"When you get a billion and a half dollars, Uncle Sam becomes your 40% partner in that," he said.
For 2023, the federal estate tax exemption is $12.92 million, or double for married couples filing together. Without changes from Congress, those thresholds will drop by roughly one-half after 2025 when provisions sunset from the Republicans' 2017 signature tax overhaul.
The top 40% federal estate tax rate may apply to assets above those thresholds, depending on several factors.
Of course, there are a number of planning techniques, which may include certain types of trusts, that can help the lottery winner achieve their legacy goals while minimizing the estate tax bill.
"This is something that can be a blessing or a curse," Racusin said. "If you handle it right, it can be a blessing."
Tuesday's Mega Millions drawing comes roughly three weeks after a single ticket sold in California won Powerball's $1.08 billion jackpot. That game's top prize is back down to $170 million, with roughly 1 in 292 million odds of winning the jackpot. | Personal Finance & Financial Education |
Learn how to bet on the Kentucky Derby 2023 online in our beginners guide, which covers everything you need to know, including the different types of bets, how to understand the odds, and tips and strategies for finding the winner.
Create your new wagering account with TwinSpires.com and earn a $200 sign up bonus! Must use promo code on registration to be eligible. Valid for one use per household. $200 bonus cash will be credited in increments of $100 for every $400 wagered. To earn the full $200 bonus players must wager $800 within 30 days of creating a TwinSpires account. Completed wagers mean that the race has run and the results are official. This sign up offer cannot be combined with any other registration bonus offer. Certain exclusions apply.
Gambling Problem? Call 1-800-GAMBLER. Hope is here. GamblingHelpLineMA.org or call (800)-327-5050 for 24/7 support (MA). Call 1-877-8HOPE-NY or Text HOPENY (467369) (NY). 21+ and reside in CO, IL, IN, LA, MD, MA, MI, NY, OH, PA, VA, WV, WY. Offer valid on first Derby win wager. Verified FD Racing account required. Refund issued in non-withdrawable Racing site credit that expires on 6/12/23. Restrictions apply. See terms at racing.fanduel.com. Offer not available in AZ, CT, IA, KS, NJ, or TN. Gambling Problem? Call 1-800-GAMBLER or visit FanDuel.com/RG (CO, IA, MI, OH, PA, IL, VA), 1-800-9-WITH-IT (IN), visit http://www.mdgamblinghelp.org (MD), 1-800-522-4700 (WY), or visit http://www.1800gambler.net (WV).
How to bet on the 2023 Kentucky Derby: The Guide
- Most common Kentucky Derby bets
- Kentucky Derby Exotic bets
- How do Kentucky Derby odds work
- How to bet on Kentucky Derby FAQs
- Upcoming Horse Racing Schedule
- How to watch the Kentucky Derby
- How to research Kentucky Derby bets
- Kentucky Derby betting tips & tricks
Most Popular Kentucky Derby 2023 Wagers
Win
The most straightforward bet you can place on the run for the roses in 2023. If your horse wins then you win the bet, if it doesn’t you lose, simple as that. The win market for the Kentucky Derby 2023 currently looks like this:
Kentucky Derby Place
“Place” is the term used for a horse finishing second. For this wager, you’re picking a horse is going to finish first or second in the Kentucky Derby 2023 meaning you’re paid out if your horse finishes first or second.
Kentucky Derby Show
“Show” is horse racing vernacular for finishing in the first three in the Kentucky Derby. You would win this wager if your horse finishes in first, second or third place.
Kentucky Derby Across the board bet
Bettors can also place a “across the board” bet on a horse, which means they are putting a dollar amount on that horse to either win, finish second or third in the Kentucky Derby.
If the horse wins, the bettor gets paid out on all three positions. If the horses finish second, you win on the place and show spots. A third-place finish will win you just the show money.
Kentucky Derby 2023 Betting: Everything you need
- Get the Twinspires Offer Code
- Read the Kentucky Derby 2023 Betting Guide
- Check out the top Kentucky Derby betting sites
Kentucky Derby Exotic bets
Exacta
Another very popular bet among regular Kentucky Derby bettors and casuals, is an “exacta.”
An Exacta requires the player to select two horses that he or she thinks will finish first and second in the exact order you place them.
For example, say you want to bet the No. 5 Tapit Trice to win the Kentucky Derby and also think the No. 9 Skinner will come in second.
You would put the wager in as a 5-9 exacta in that order. If the No. 5 horse wins and the No. 9 horse finishes second, you would win the exacta bet. Any other combination – including if the 6 wins and the 2 finishes second – loses.
Exacta Box
An exacta box wager gives the bettor a little more insurance on an exacta bet. If you are playing an exacta box, you need to select at least two horses. If any combination of those horses come in first and second, you win.
So let’s say you like the No. 1 Hit Show, No. 7 Reincarnate and No. 10 Practical Move in the Kentucky Derby. You could place an exacta box wager on them and if two of those horses finish first and second (i.e. No. 7 wins and No. 10 finishes second), you win.
That way, you have all your horses covered on the order of finish. You have to double your wager amount for this bet, so it’s more costly but worth the risk.
Trifecta
Similar to the exacta, a trifecta bet is also quite a popular wager among Kentucky Derby bettors and folks who bet only bet the ponies a few times a year.
For this wager, the bettor tries to correctly predict the exact order of finish for first, second and third place in the Kentucky Derby.
Example: You think the No. 4 Confidence Game will win the Kentucky Derby, the No. 14 Angel of Empire will place (finish second) and the No. 3 will Two Phil’s (finish third) and, you would like to make a $1 wager on a 4/14/3 trifecta. The payout is would usually be large should that exact combination finish first, second, and third.
Trifecta Box
Like with exactas, bettors can also box their trifecta bets. Meaning, if you select three horses and they finish 1-2-3 in any order, you win the bet.
Superfecta
This wager is like the exacta and trifecta, but the bettor is picking the exact order of finish for the top four runners in a particular race.
Although not as popular as exactas or trifectas, some bettors love the high-risk, high-reward nature of Superfecta bets. Obviously, picking four horses to finish in the exact order is nearly impossible, so the odds for Superfecta bets can get quite high.
Additionally, many tracks and racebooks offer $0.10 superfecta wagering for the Kentucky Derby, which can be more attractive for the novice or casual player to get involved in this kind of market at a relatively low cost.
Superfecta Box
Like with exactas and trifectas, punters can also box their superfecta wagers, which means that your horses can finish 1,2,3,4 in any combination to win.
Why Kentucky Derby exotic wagers are so popular
One reason that Kentucky Derby bettors enjoy exactas, trifectas and superfectas is because it allows them to have some money on horses with long shot odds without needing them to win.
For example, if you think a horse at 30/1 will finish better than its odds suggest, you can include that horse in your exacta, trifecta or superfecta and if that horse hits the board, your payout could grow substantially.
Vertical Wagers
Derby Day Daily Double
This type of bet requires the bettor to correctly pick the winner in back-to-back races on Derby day.
The minimum stake for this type of bet is usually $1, but you can increase your play as you see fit.
Daily doubles are not offered for every race on a card, but most places have plenty of them on any given day and plenty of racetracks will offer a Kentucky Derby daily double.
Kentucky Derby Day Pick 3 and Pick 4
These are multi-race bets where a bettor tries to correctly pick winners of either three or four consecutive races on the first Saturday in May, usually culminating with the Kentucky Derby.
This bet is quite hard to win and can get expensive, but the payouts can be very large if you catch the right horses in the wager. It is another bet where punters can get exposure to horses at big prices.
Kentucky Derby Day Pick 5 and Pick 6
Most horse racing tracks will also offer Pick 5 and Pick 6 wagers for the Kentucky Derby, which can lead to massive payouts.
These are once-in-a-lifetime type of wins and the payouts reflect that. It is not uncommon to see winning tickets bring in tens and hundreds of thousands of dollars to the lucky bettor.
Of course, in order to hit something of that magnitude you’ll have to include — and connect on — some longshots.
How do Kentucky Derby Odds work
Horse Racing uses fractional odds instead of decimal or American odds. If you’ve bet on sports before, you will be familiar with odds such as -110, or +200. For fractional odds, these would be 10/11 and 2/1. These are best displayed as such.
Kentucky Derby bets use the Pari-Mutuel system
The wagers on the Kentucky Derby in the USA use a pari-mutuel system. This means that all bets go into a pool with the amount of money bet on each horse determining their odds, meaning the favorite is the horse that’s had more bets placed on it than any of its rivals.
The pool operator takes a slice of money off the top (takeout) and after that the remaining cash is paid out to the bettors who have won on the race.
This means the odds change frequently under pari-mutuel system. So while you may have made a bet on a horse at 10-1, they may go off at 5-1 if the have been heavily bet subsequently.
If your horse is pulled out of the Kentucky Derby before the race has begun, this is known as the horse being ‘scratched’. If the horse you bet on is scratched, you will receive a refund.
Reading the Kentucky Derby Odds
As you’ll be seeing fractional and decimal odds when betting on horse racing, it’s best we explain how they work.
Fractional odds represent the ratio of the profit won to the stake. For example, a fractional listing of 6/1 (six-to-one) odds would mean that you win $6 against every $1 you wager, in addition to receiving your dollar back (i.e., the amount you wagered).
In other words, this is the ratio of the amount (profit) won to the initial bet, which means that you will receive your stake ($1) in addition to the profit ($6), resulting in a total payout of $7. Therefore, if you stake $10 at 6/1 and win, you get a total payout of $70 ($60 profit + $10 stake).
Here are the payouts from a $2, with the following odds written in fractional format.
How to bet on the Kentucky Derby 2023 FAQs
How does wagering on the Kentucky Derby differ from Sports Betting?
The wagering pools for the Kentucky Derby are pari-mutuel, which differs from sports betting in the sense that bettors aren’t trying to beat the house but instead are trying to beat the public at large.
The key to long-term success in betting the ponies is being disciplined in identifying value in the pools.
Where can you bet on the Kentucky Derby?
Online horse racing betting sites are now legal in many US States and you can find some of our favorites in this piece.
Some state racing associations (like NYRA) offer a betting app for users to place bets on the Kentucky Derby. Some states also have OTBs (Off-Track Betting shops) in specific locations.
You can also go to any horse racing track and bet on races around the country (even if they’re taking place at a different track). Some states, like New York, allow certain bars to have OTB kiosks, as well.
Where is online betting on the Kentucky Derby legal?
As of 2023, you are legally able to bet on the Kentucky Derby online in the following states:
Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
Upcoming Horse Racing Schedule
How to watch the Kentucky Derby
The 2023 Kentucky Derby will take place on Saturday, May 6 at 6:57 p.m. ET. The race will air on NBC.
How to research Kentucky Derby bets
As with any sports betting, it’s important to do some research before placing any bets. There are plenty of statistics and form websites where you can research horses, trainer, jockey, previous races, form and styles.
We’ve picked out some of the best sites to help craft your Kentucky Derby bets.
Kentucky Derby Betting Tips & Tricks
The nature of horse racing means the field is wide open, and it’s not easy to pick a winner. The Post gives you some tips for placing your horse racing bets, with the most important factors to consider.
Don’t back the inside track
Horse drawn in stalls one, two or three have produced one winner from 103 runners in the the Kentucky Derby since 1987. Hit Show (1), Verifying (2) and Two Phil’s (3) are tasked with defying that statistic.
Double figure draws are nothing to fear
Since the year 2000, twelve of the 23 Kentucky Derby winners ran from post 13 or higher, suggesting the likes of highly-touted outsider Forte (15) aren’t likely to suffer much from a higher draw.
Johnny V is the man
John Velazquez is the winningest Kentucky Derby jockey still in the saddle having won the Kentucky Derby in 2011, 2017 and 2020.
He was also aboard the subsequently disqualified winner Medina Spirit in 2021 and partners Messier for the 2022 edition. | Stocks Trading & Speculation |
Boris Johnson has called on the Government to “urgently” speed up planning reform to build more homes in a challenge to Michael Gove.
The former prime minister urged the Housing and Levelling Up Secretary to accelerate progress on a range of policies that he had first introduced during his time in Downing Street.
A target of building 300,000 new homes a year, which was included in the 2019 Conservative manifesto, has since been referred to by Mr Gove as “advisory” rather than “mandatory”.
Speaking in the House of Commons, Mr Johnson told him: “Given that the UK is one of the most regionally imbalanced of all the major economies and given the massive potential that is waiting to be unleashed, is it not time to accelerate the Levelling Up Bill, now stalled, and push forward urgently with Northern Powerhouse Rail, planning reform, devolution, secure affordable supply, gigabit broadband and all the other Levelling Up measures that will make this the strongest and most prosperous economy in Europe?”
Thanking him for his “leadership on this issue”, Mr Gove replied: “The Levelling Up White Paper would not have been published without his determination to ensure that at the heart of government are 12 clear missions, which will ensure that this country achieves its full potential.
“It was to my mind interesting that the Leader of the Opposition – as he currently is and will long remain – decided that the way in which he could endear himself to this country was to have five missions.
“As ever, he had nothing like the same scale of ambition and vision as my right honourable friend when it came to making this country great.”
Mr Johnson, who was making his first intervention in the Commons since he called for Ukraine to be admitted to Nato last month, added to pressure on Mr Gove and Rishi Sunak to deliver on a number of flagship schemes he set in motion while at Number 10.
On becoming prime minister, he promised to do with Northern Powerhouse Rail “what we did for Crossrail in London” by directly connecting Manchester and Leeds via train, only to scale the plans back in 2021 amid mounting pressure on the public finances.
Standing on the steps of Downing Street the day after the last general election, Mr Johnson promised to “unite and level up” the country and committed to “unleashing the potential of the whole country, delivering opportunity across the entire nation”.
Two years later, he renamed the former housing ministry the Department of Levelling Up, Housing and Communities, rolling out a £4.8 billion Levelling Up fund aimed at helping communities that have traditionally failed to benefit as much from central government funding and national economic growth.
Mr Johnson also pledged to provide the whole of the UK with full-fibre broadband by 2025, only for this to be watered down to 85 per cent of the country the following year.
Race to retain the Red Wall
Northern and Midlands constituencies in the so-called Red Wall, which traditionally backed Labour but were won over by Mr Johnson, were seen as key to the Tory landslide victory.
However, polling by Redfield & Wilton Strategies carried out last week showed Labour held a lead of 17 percentage points in these constituencies, with separate polling suggesting Sir Keir Starmer’s party could win back every Red Wall seat that turned blue in 2019.
Mr Johnson’s remarks came after Mr Gove made a fresh bid to speed up house building by threatening to strip planning approval powers from the Peak District National Park as well as nine councils.
He wrote to the chief executives of the local authorities after they were found to have repeatedly failed to meet targets for decisions on planning applications. | Real Estate & Housing |
Portugal Rating Upgraded Two Levels By Moody’s
The country’s economy is expected to slow this year, after bouncing back following the pandemic, the government plans to keep lowering the debt burden.
(Bloomberg) -- Portugal’s government bond rating was raised two levels by Moody’s Investors Service, which cited the economy’s “solid” medium-term growth outlook.
The rating was revised to 'A3' from 'Baa2', with a 'stable' outlook, the New York-based credit rating company said in a statement on Friday. Moody’s in May had raised the outlook to positive.
The upgrade “reflects the sustained positive credit effects over the medium term of a series of economic and fiscal reforms, private sector deleveraging and ongoing strengthening of the banking sector,” Moody’s said in the statement.
While the country’s economy is expected to slow this year, after bouncing back following the pandemic, the government plans to keep lowering the debt burden. Portugal had the third-highest debt ratio in the euro area in 2022 and the European Commission projected earlier this week that it will be ranked sixth in 2023, as its debt-to-gross domestic product ratio drops below the levels of France, Spain and Belgium.
Portuguese Prime Minister Antonio Costa unexpectedly resigned last week amid a probe into possible influence peddling in government. President Marcelo Rebelo de Sousa then called an early election for March 10, adding that the prime minister’s resignation will formally take effect in early December to allow lawmakers to approve the outgoing government’s 2024 budget.
Moody’s said the resignation and the corruption investigation “may slow progress in investment and reforms,” though “the evidence so far is that Portugal’s institutions allow the country to address the issue effectively.”
“The fact that this decision by Moody’s was taken after early elections were scheduled demonstrates that the economy’s fundamentals are robust and confirms that Portugal conquered a place among the group of countries with greater credit quality and greater international credibility,” Finance Minister Fernando Medina said in an emailed statement.
Budget Surplus
The 2024 budget includes income tax cuts and targets a surplus of 0.2% of gross domestic product, smaller than the surplus projected for 2023. Costa has been premier since 2015.
A change in government may not necessarily lead to a major shift in budget policy. With the debt ratio above 100% of gross domestic product and with a slowing economy, fiscal discipline will likely remain central to any administration.
The Bank of Portugal sees growth of 2.1% this year and 1.5% in 2024, down from 6.8% in 2022. Moody’s said it expects the economy to grow about 2% a year in the next five years.
Portugal’s 10-year bond yield was at 3.25% on Friday, compared to about 3.2% six months ago. It peaked at 18% in 2012 at the height of the euro region’s debt crisis.
Portugal last had an A-range Moody’s rating in 2011. Fitch upgraded Portugal one step to A- in September, while the country has a BBB+ rating with a positive outlook at S&P Global Ratings.
“Portugal now has A-level ratings from three rating agencies (Moody’s, Fitch and DBRS), which opens the door to a very wide set of investors in Portuguese government debt,” the finance minister said.
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
Everstone Plans To Raise $1 Billion For Its Largest Asia PE Fund
The Singapore-based firm that invests largely in India, has begun sounding out investors about the potential fundraise.
(Bloomberg) -- Everstone Capital Asia Pte is seeking $1 billion for its latest private equity fund for India and Southeast Asia, according to people familiar with the matter.
The Singapore-based firm that invests largely in India, has begun sounding out investors about the potential fundraise, the people said. The company plans to start a formal pitch early next year, said the people, who declined to be identified citing confidential information.
The new fund would be the largest ever for Everstone if it meets the target, even as private equity groups globally struggle to raise fresh funds amid soaring interest rates and slowing economic growth. Carlyle Group Inc.’s top executive said this week he was not pleased with the pace of fundraising this year.
India’s not immune to the slowdown, with just $1.7 billion raised by buyout and venture funds in the first seven months of this year, down from a record $8.5 billion in 2022, according to data from Preqin Ltd.
“So far, 2023 has been a tough year, with both deal-making and fundraising bearing the full brunt of these macroeconomic headwinds,” Preqin said in a recent report.
The new fund would be more than three times bigger than its predecessor fund, Everstone Capital Partners IV, which collected about $300 million last year, the people said. Everstone refers to the fourth fund as an “interim” or “bridge” fund as it waited for the macro-economic environment to improve for a larger fund, they said.
Everstone declined to comment on its fundraising plans.
The firm, started by former Goldman Sachs Group Inc. executives Sameer Sain and Atul Kapur in 2006, wrapped up its first fund with $425 million in 2006, followed by $580 million for a second fund in 2010 and $730 million for a third fund in 2016.
Investors in Everstone’s prior funds include International Finance Corp., the World Bank’s private-sector arm, which committed $60 million to the fourth fund.
Everstone pivoted from taking minority stakes in businesses to taking control of firms from its second fund. Since its third, the company has been following a “buy and build” model, which involves buying a mid-sized business and making acquisitions to help the business grow, the people said. The firm invests in digital tech services in India, along with healthcare, industrial, consumer and financial services companies.
Last year, the firm acquired Cprime Inc., a US digital technology consulting and solutions company, alongside Goldman Sachs Asset Management. It recently exited its stake in SJS Enterprises Ltd., an auto parts company in India.
©2023 Bloomberg L.P. | Banking & Finance |
Welfare reforms aimed at encouraging more people into work could save as much as £4bn in a boost for Jeremy Hunt as he prepares for the Autumn Statement.
Under proposals currently under consultation that are likely to be confirmed in the Chancellor’s fiscal update next week, it will become harder for people to claim disability benefits and more new claimants will be required to show they are trying to find a job.
The changes to the Work Capability Assessment may leave some recipients on universal credit alone, rather than receiving an additional £390 per month.
The changes are expected to save the Government as much as £4bn over four years, in a development first reported by the BBC.
The savings would come at a vital time for the Chancellor, as he plans his Autumn Statement against a backdrop of extremely tight public finances.
Mr Hunt has promised to do more to encourage people into work rather than staying on benefits. 2.6 million people of working age are currently classed as economically inactive – neither in work, nor looking for work – citing long-term sickness as the cause.
It is feared that this is holding back the economy, which is struggling to grow as employers labour to fill almost 1 million vacancies.
The Department for Work and Pensions opened a consultation on changes to the Work Capability Assessment in September, which ran until the end of October.
When setting out its proposed reforms, the Department for Work and Pensions said: “Being in suitable work is good for people’s physical and mental health, wellbeing, and financial security. However, too many disabled people and people with health conditions are stuck on incapacity benefits, without the support they need to access work.”
It argued that guidelines set out a decade ago are no longer suitable at a time when more jobs can be performed flexibly and a larger share of the population can work from home, making it easier for people in poor health to find employment.
It is understood that the aim is to apply the changes to new claimants as the scheme is phased in, rather than those already in receipt of the cash.
A spokesman from the Department for Work and Pensions said the consultation responses are still being assessed, so reports of a final decision on Work Capability Assessments are “purely speculation”.
The spokesman said: “The structural reforms set out in the Health and Disability White Paper, which will improve the experience of the benefits system for disabled people, will be rolled out gradually from 2026 and transitional protection will ensure nobody experiences a financial loss as a result of moving onto the new system.” | Workforce / Labor |
Rishi Sunak Says U.K. ‘Debt Is Falling,’ But That’s Still Years Away
Prime Minister Rishi Sunak claimed victory in one of the five metrics he wants UK voters to judge him by, saying in a campaign-style video posted to social media on Tuesday that “debt is falling.”
(Bloomberg) -- Prime Minister Rishi Sunak claimed victory in one of the five metrics he wants UK voters to judge him by, saying in a campaign-style video posted to social media on Tuesday that “debt is falling.”
That’s a stretch by any measure, though. Even his more equivocal position Parliament on Tuesday — that “debt is set to fall” and “on track to fall” — is still years away from playing out.
Trailing Keir Starmer’s opposition Labour Party by about 20 points ahead of a UK general election expected next year, Sunak is under huge political pressure to show he can deliver on what he promised soon after becoming prime minister just over a year ago. He also staked his administration on integrity and professionalism, to contrast his predecessors Boris Johnson and Liz Truss.
The problem is that according to the latest forecasts from the Office for Budget Responsibility in March, debt as a share of the size of the economy is only due to fall between 2026-27 and 2027-28, in line with the government’s self-imposed fiscal rules. Meanwhile data from the Office for National Statistics shows underlying government debt rose to 89.3% of GDP at the end of September, compared to 83.4% a year earlier.
“It’s not accurate to say that debt is falling,” Ben Zaranko, senior research economist at the Institute for Fiscal Studies think tank, told Bloomberg when asked about Sunak’s video claim. “Public sector debt is currently rising in cash terms, real terms, and, most importantly, as a percent of national income.”
Sunak’s spokesman, Max Blain, had no immediate comment during a regular briefing with reporters, when asked about Sunak’s “debt is falling” language. Pressed to clarify, a Conservative official later said the point is that the government is on track with its plan to get debt falling.
Parliament rules can force a minister to correct the record or risk further sanction if they make a statement that is deemed to be inaccurate.
Along with cutting the national debt, Sunak also promised to grow the economy, stop small boats crossings, halve inflation and cut National Health Service waiting lists. In his video, Sunak said his government is delivering on all of them, though he said there’s more to work to do on NHS waiting lists. They have continue to hit record highs, while Bloomberg analysis also shows the economic is probably already in a recession.
“Today the results are clear,” he said. “Inflation is down, easing the burden of the cost of living. The economy is growing and debt is falling.”
On debt, there is one measure that could generously be interpreted as showing a fall, according to the IFS. Total debt including Bank of England liabilities may have stabilized in cash terms at around £2.6 trillion at the September, according to the ONS data. That means it probably fell slightly as a share of the economy — but the IFS also said it is affected by various measures including Bank of England loan schemes, which are unrelated to the government’s fiscal plans.
©2023 Bloomberg L.P. | United Kingdom Business & Economics |
Sam Bankman-Fried’s legal defense tried to convince a judge “nothing improper or impermissible occurred” last week when the disgraced crypto founder leaked former Alameda Research CEO and on-again-off-again girlfriend Caroline Ellison’s personal diary to The New York Times. The former FTX CEO’s defense says the leaked documents weren’t intended to “discredit a witness,” as the DOJ alleges, but was instead an attempt to respond to a “toxic media environment” he complains constantly casts him as a villain.
In a colorful court filing submitted Monday, Bankman-Fried’s attorneys admitted their notorious blabbermouth of a client shared “certain documents” about Ellison to a Times reporter during a recent visit to his home.
“We vigorously contest the Government’s allegation that Mr. Bankman-Fried attempted to taint the jury pool or influence a witness, or that the Government has been prejudiced in any way,” Mark Cohen, one of SBF’s attorneys, wrote in the letter. “None of what occurred was improper.”
Bankman-Fried, better known by his initials SBF, faces a litany of criminal charges including wire fraud and conspiracy to commit securities fraud for his involvement in FTX’s sudden implosion last year.
The diary, parts of which were published in a Times story last week, includes entries of Ellison discussing her contentious relationship with SBF and admitting she felt unqualified to lead Alameda. SBF’s attorney characterized the article as “favorable to Ms. Ellison and negative toward [SBF]” even though it repeatedly described instances of Ellison doubting her professional capacity and expressing concern over her ability to navigate her position while simultaneously dating SBF.
“Running Alameda doesn’t feel like something I’m that comparatively advantaged at or well suited to do,” Ellison wrote in the journal. The Alameda Research CEO, who pleaded guilty to criminal charges earlier this year, is expected to testify against SBF as a star witness during his criminal trial later this year.
The testy letter came days after U.S. Attorney Damian Williams boldly accused SBF of attempting to discredit Ellison and taint a jury pool in his fraud trial by releasing the documents. Willaims claimed SBF violated civil procedure rules which bar lawyers or their agents from releasing non-public information about criminal cases if there’s “a substantial likelihood that such dissemination will interfere with a fair trial.” Other rules prohibit the sharing of documents that could harm the credibility or testimony of potential witnesses. SBF’s attorneys countered that by saying some of the sentiments expressed in Ellison’s leaked dreary were already public knowledge and previously noted the government’s indictment against SBF.
SBF claims the reporter reached out to him in regards to a story in the works about Ellison and that he handed over Ellison’s personal writings “in an effort to give his side of the story.” Presumably, the documents also give her side of the story. The former crypto darling claims he obtained those documents prior to his arrest last December in the Bahamas.
SBF, his attorney’s letter continues, was well within his rights to air out Ellison’s dirty laundry, in order to respond to a deluge of “almost uniformly negative” media coverage about him in the press. The defense claims that the string of unfavorable coverage has been exacerbated by SBF’s major detractors, including acting FTX CEO John Ray who has routinely criticized the crypto founder in public filings and hearings. SBF’s defense alleged the DOJ “stood silent” as Ray “routinely and gratuitously” attacked their client.
“Mr. Ray’s repeated ad hominem attacks on Mr. Bankman-Fried—which have very little do with his role recovering assets for FTX creditors and seem more directed towards publicly vilifying Mr. Bankman-Fried—have, along with other negative coverage, created a toxic media environment that has left Mr. Bankman-Fried with little choice but to respond,” SBF’s attorneys wrote in the letter. “[SBF], who has asserted his innocence despite these public attacks, has a right to counter that public narrative by making fair comment in the media.”
Incredibly, SBF’s defense went on to say they would gladly agree to the DOJ’s proposed order limiting the sharing of extrajudicial materials with the press, but only if the government agreed to abide by that same standard for Ray and any other potential witnesses. The DOJ and SBF’s legal team did not immediately respond to Gizmodo’s request for comment. | Crypto Trading & Speculation |
The Home Secretary made a statement (from 16:31:53) to the House of Commons this afternoon about the government’s plans to reduce net migration, mainly by separating families. It’s yet another five point plan and is due to come into force in Spring 2024:
- People on health and care visas will no longer be able to bring family dependants and care firms must be regulated by the Care Quality Commission in order to sponsor workers.
- The skilled worker salary threshold will be increased by a third to £38,700, the care sector will be exempt.
- Ending the 20% salary discount for roles on the Shortage Occupation List and reforming the list. The Migration Advisory Committee have been asked to review the occupations on the list in light of the new higher skilled worker salary threshold. A new immigration salary list (Appendix Immigration Salary List?) with a reduced number of occupations will be published in coordination with the MAC.
- The minimum income requirement for family visas for British citizens and those settled here will also be raised to £38,700.
- The Home Secretary has asked the MAC to review the graduate route to “prevent abuse and to protect the integrity and quality” of the higher education sector.
The government expects these changes to result in a 300,000 drop in net migration. Of course if that does turn out to be true, it is entirely possible that this fall will take place under a Labour government, as it will take some time for these changes to take effect and to then be reported. In the meantime, this is a very dark day for many families who will be unable to meet the more than doubled new minimum income requirement and health and care workers who will be expected to come to the UK without the ability to bring their family members. Presumably there will be transitional provisions for those already in the routes, however we await written details of the changes. | Workforce / Labor |
SEBI Looking To Set Up Performance Validation Agency To Verify Claims Of Intermediaries
The proposed move would facilitate these intermediaries to showcase their validated performance to investors in a bid to boost their credibility in the eyes of investors and to help grow the reach of their services.
Capital markets regulator SEBI, on Friday, came out with a proposal to set up a Performance Validation Agency (PVA) to validate any claims of performance by registered intermediaries including investment advisers, research analysts and portfolio managers.
The proposed move would facilitate these intermediaries to showcase their validated performance to investors in a bid to boost their credibility in the eyes of investors and to help grow the reach of their services.
At present, Asset Management Companies (AMCs) calculate the performance of mutual fund schemes. Similarly, portfolio managers have been permitted to report their performance vis-a-vis certain benchmarks. The claims made by these intermediaries are mostly self-verified and currently there is no dedicated agency to validate such claims.
"Intermediaries/other entities need to showcase their performance to attract more clients and grow and continue to do business. However, in the rush for more clients some of these entities may indulge in making inflated claims of their performance or recommendations to investors, thereby misleading the investors," SEBI said in its consultation paper.
Accordingly, the regulator has proposed to create an independent body called Performance Validation Agency (PVA) to validate the claims related to investment advice, 'buy,sell,hold' recommendation, mutual fund scheme, portfolio management service, algorithm, by registered intermediaries such as investment advisers (IAs), research analysts (RAs), portfolio managers AMCs and stock brokers.
It has been suggested that PVA should be a wholly-owned subsidiary of market infrastructure institutions (MIIs) or a jointly supported entity by multiple MIIs, whose purpose would be to enable intermediaries to market their products based on validations made by the PVA.
"Recognition of PVA shall be based on the eligibility of the parent entity, for which the eligibility criteria shall be prescribed by SEBI," the regulator suggested.
Under the proposal, the agency would be required to process the data and claims or performance of intermediaries including privacy of customer data on strategies.
Performance claims should be validated by the agency based on specified parameters such as returns, risk, volatility and other suitable parameters.
Further, the agency should validate claims concerning actual profit made by clients, performance claims of intermediaries as well as algorithms, performance of recommended stock and any other performance claims. For this purpose, PVA can collaborate with other knowledge partners such as credit rating agencies.
Also, PVA should be responsible to maintain confidentiality of the information received by it during this process.
In order to ensure smooth functioning, the agency should be required to put in place systems for maintaining data, grievance redressal and sharing of information with SEBI. Also, it should be permitted to charge a reasonable fee for its services.
The Securities and Exchange Board of India (SEBI) has sought comments from the public till Sept. 21 on the proposals. | Banking & Finance |
Trouble cleaning out your closet? Why product 'purgatories' can help clear clutter
Researchers from Seattle University's Albers School of Business and Economics, and the Indian School of Business have published a report that provides novel insights about how consumers make decisions about keeping or disposing of possessions they no longer need.
The article, "Bracing for the sting of disposal: Product purgatories encourage mental simulation of the disposal process," recently published in the Journal of Consumer Psychology, is authored by Matthew S. Isaac, and Poornima Vinoo.
Spring cleaning, moving homes and decluttering closets can be fraught with difficult decisions about what to keep and what to discard. Marie Kondo, a famous tidying consultant recommends keeping an item only if it sparks joy—easier said than done for many people.
"It's not just clinical hoarders who end up with too much stuff," the authors write. "Even otherwise well-functioning adults have the tendency to retain products that have outlived their usefulness."
The research team offer a strategy to help consumers avoid the accumulation trap and finally jettison no-longer-needed items. The researchers found that moving an item to a "purgatory" or transitional space, such as a storage unit or a basement, facilitates the process of disposal.
In one behavioral experiment, the researchers asked participants to think of an infrequently used item in their kitchen. One set of participants sent researchers a photo of the item in its current location. The other group was asked to move the item to a storage space or basement and send a photo of the item in this new location. When researchers then offered to connect all participants with an organization that would help them dispose of the product, participants who had moved the item to a purgatory were much more likely to dispose of the item than those who had not.
In two additional studies, the authors found that moving an item to a transitional space led consumers to mentally envision its permanent removal, which made it easier to ultimately let go. In other words, imagining disposal allowed consumers to psychologically brace themselves for the eventuality of parting with the item forever.
Previous research explored ways to make product owners feel less attached to their items so that they would be more open to giving them up. This new work offers another way to move from mentally envisioning disposal to making it a reality.
The authors conclude that "by helping them declutter, product purgatories might even be able to improve consumers' psychological well-being and spark their joy."
More information: Mathew S. Isaac et al, Bracing for the sting of disposal: Product purgatories encourage mental simulation of the disposal process, Journal of Consumer Psychology (2023). DOI: 10.1002/jcpy.1342
Journal information: Journal of Consumer Psychology
Provided by Society for Consumer Psychology | Consumer & Retail |
You did it. You saved your prized collection of comic books from all the usual hazards that tend to do them in. Your parents didn't give them away to neighborhood kids when you went to college. You didn't store your longboxes of comics near a hot furnace or a basement that flooded. And even when you were struggling with rent, you didn't bulk-unload your books at a pawn shop for a fraction of what they're worth.You beat the odds! But now you'd like to move on from collecting comics or at least prune the pile. Perhaps you now prefer to read new comics digitally and don't want to devote the space to so many print editions. Or you could just want to unload some of the more valuable collectibles for some extra cash while keeping the rest.Whatever the reason, there are several ways to liquidate your comics library, whether it's by trying to sell individual comic books or by seeing if there's a taker for the whole lot.Before we go over your options, there's a few things you should know. While there've been some spikes in the sales of very old and rare comic lots in recent years, you shouldn't expect to get rich if your comics collection doesn't go back much further than the 1980s or '90s. Even if you still have a 1993 first-printing copy of The Death of Superman, you still might only get $10 to $20 by selling, unless it's in nearly perfect condition or it's signed and certified.Also, the deck is very stacked toward professional comics dealers who more readily have access to comics-grading services that can determine the value of a comic, and who will want to turn around whatever you sell them for a profit.But if you're still interested, here's some ways to embark on a comic-seller's hero journey.How to Assess Your CollectionIf you're staring at years' worth of comics boxes that have never been organized, you may feel daunted at first. If you don't even know or remember exactly what you have, how can you determine what it's worth?Luckily, the digital age has made cataloging comics and figuring out a ballpark figure for their value much, much easier. If you intend to keep collecting comics after you sell some, now's a good time to make an inventory of your entire collection. Apps such as iCollect Comic Books, CLZ Comics, and Key Collector Comics can make it easy to build a database of what you have by allowing you to enter in titles or scanning barcodes to access metadata, comic value, and information on variant-cover comics you might own. I've had good luck with the Comic Geeks app, which allowed me to enter custom information or create manual entries as I slowly went through and added in all my comics.If you're more interested in figuring out the pricing for individual comics or series you want to sell, the Comics Price Guide is a good place to start. If you want a second, or third, or fourth opinion, there's also GoCollect, Comic Book Realm, and PriceCharting, all of which offer comics pricing information for free.And yes, the old Overstreet Comics Guide is still around and in print, but getting pricing information on their online platform, Overstreet Access, costs $3 a month or more.You'll want to have an idea of the condition of the comics or series you're trying to sell and how they might be graded. If they were bagged and boarded from the time you bought them and were not damaged or handled roughly, they're probably in Fine, Very Fine, or Near Mint condition if they were read carefully. If you suspect a comic is valuable, you'll want to make sure it's a first printing. When popular comics sell out, they are redistributed as second printings, third prints, and so on. A first printing will be much more valuable than subsequent ones, which sometimes have different covers to distinguish them. The copyright block of text on the inside title page usually tells you what printing you're holding.And that brings us to the sometimes controversial art of professional grading. Certified Guaranty Company, or CGC as it's known, will assign a number grade to a comic for a fee. If you've seen comics encased in plastic with a big number grade on the top left, those were probably done by CGC. CGC offers a $25-a-year membership and then charges $20 or more per comic to be graded, depending on its value, whether you want it in the plastic case, and how quickly you want it assessed. It could take weeks or months including shipping time back and forth. You can get comics graded at comics shows and through a member dealer without some of those fees. An alternate grading service, Comic Book Grading Service (CBGS), is also available as an option and does similar work.If you have comics in your collection that could be priced well above $100, grading could be worth the time and cost; CGC-graded comics tend to sell for much higher prices than the same comics that have not been professionally vetted.How and Where to Sell Your ComicsNow comes the big decision: Where will the comics you've given a good home to go?If you've decided to sell an entire collection or a big pool of comics, you could consider listing it on a comic collector site, on eBay, or on social media markets like Facebook Marketplace if you want to sell directly to another collector. Keep in mind that if it's a big collection and you're not selling locally, you could wind up with prohibitive shipping costs, and you'll need to package them very carefully to avoid damage en route. Make sure to factor that into your asking price.You could take your collection to a comic-book shop and see if they'd be interested in taking the whole collection off your hands or cherry-picking series and valuable issues. You're more likely to maximize your profits this way if you've already cataloged and sorted your comics so that the retailer can quickly determine what they're willing to offer.If it's a collection that includes rarities or original comic art that you feel is more valuable than a retail dealer should handle, you could try to sell through an auction house such as Heritage Auctions or Sotheby's.If you're more interested in selling a series, say Matt Fraction and David Aja's run of Marvel's Hawkeye or all the Spawn comics you fawned over in the '90s, you could list those online for eBay auction or direct sale. But again, keep in mind that popular comics might not be worth as much as you'd expect, and you'll need to consider shipping costs and packaging hassles.Because these could be hard-to-replace collectibles, make sure you use shipping tracking and secure-payment options in whatever business dealings you're doing with unfamiliar dealers or collectors. | Consumer & Retail |
A landmark research study has revealed the excruciating extent of food poverty across Britain, where one in seven went hungry last year.
The study by the Trussell Trust, which is an NGO and charity that works to end the need for food banks in the United Kingdom, reveals that 14% of all UK adults or their households experienced food insecurity in the 12 months leading to mid 2022, affecting an estimated 11.3 million people.
This would imply that at some point during this period they ran out of food or were unable to afford food, ate less, went hungry, or lost weight, due to lack of money.
The study further notes that despite the growth in the number of food parcels provided by food banks and independent providers, more than two thirds of people experiencing food insecurity did not receive food aid.
According to the Trust, the latest findings are just the tip of the iceberg and the shortage of money is not limited to just hunger pangs among the impoverished Britons.
So I think if you look at last year, if you look at it overall, we saw the highest need ever for food banks, so we gave out 3 million food parcels.
That was a 37% increase on the year before, more than a million for children for the first time.
So if you look at it overall, even with every bit of support that was put in, we were still seeing a lot of people in really dire hardship.
Helen Barnard, Director of Policy, Trussell Trust
The Trussell Trust report also says that working age adults are much more likely to need to turn to a food bank than pensioners. This is particularly the case with single adults living alone and those not currently in paid work.
Furthermore, families with children are at high risk of food insecurity. Nearly half (47%) of all households experiencing food insecurity include children under the age of 16.
It said the impact of poverty leads to worrying social isolation and loneliness, spiraling debt, and, a decline in physical and mental health.
It has been argued that food banks, like the Trussell Trust, are fulfilling a need that the government is supposed to satisfy.
Food banks are a community led response to need, so they're stepping into the gap in the absence of effective government policy.
It isn't sustainable in the long term, food banks are only meant to be a short term intervention so families, so high schools, can get back up on their feet again.
But unfortunately, we're in a position where, I guess as a result of the lack of policies that prioritize people that are on the edges of society, food banks had to step in and provide.
Jonny Currie, Northern Ireland Network Lead, Trussell Trust
Furthermore, a paper by the department of Development Studies at the University of Sussex reveals that nearly a quarter of the population of Britain experienced hunger as the new normal.
According to the study, a decade ago the number of food banks in the UK was fewer than 100. However, in 2021, the number increased to over 2000 with 9.7 million people suffering food poverty as of last September.
We have also found that even when people have been in receipt of the general cost of living payment, the disability cost of living payment, and, their full benefit entitlement, they have still had to make profoundly difficult choices about whether they can afford their essentials.
So in our recent survey we found that 26% of people with a learning disability who responded reported not turning the lights on, 85% reported skipping meals, and, 38% had not used their heating when they were cold.
So I think that just indicates that hardship for people with a learning disability has persisted even with the cost of living payments.
Maddy Rose, Policy Specialist
Recent data released by Britain's National Health Service, NHS, shows the cost of living crisis in the country has taken a heavy toll on the mental health of children and youngsters.
According to the data, a record 1.4 million children and young people sought help for mental problems in 2022, the second year in a row the referrals surpassed 1 million.
Mental health issues among school aged children have undergone an explosion since the year 2019, partially due to the Coronavirus pandemic.
Meanwhile, the Young Minds charity which has analyzed and reported on the NHS data says its own numbers show young people are facing a unique combination of challenges, mostly due to worries about money.
The UK and many other Western countries are grappling with record inflation, mainly triggered by the Ukraine war and sanctions on Russia, which has led to major disruptions to global energy and food supplies.
New data from the Office for National Statistics in the UK shows that the consumer price index has remained at 8.7%, unchanged from April to May.
The retail industry is facing growing pressure over the soaring cost of living after official figures showed the annual inflation rate for the UK remains unchanged apart from the price shocks triggered by the war in Ukraine.
Many believe that UK is on a path to long term decline, as Brexit has reduced trade and economic growth, harmed the NHS and key industries with a staffing shortages and that's pushed up costs for businesses and consumers.
Some six and a half years after Brexit and it looks like we haven't a clue what we're doing about anything, including inflation control.
I mean, frankly, it's pretty, pretty disturbing that we keep on having so many repeated negative surprises.
And as I'm sure you've heard others talking about, if you actually look at core inflation as to its historic purposes as a lead indicator where overall inflation is going.
In the UK it appears to be going up and to be honest, somebody that is so immersed in pulling the weeds around and throughout all this data, on one level is a bit hard to really understand why it's just so bad for us.
And guess what, as you imply with that question, it's yet another sign of the ongoing consequences of Brexit.
Jim O’Neil, Former Goldman Sachs Asset Manager
The UK voted to exit the EU on June 23rd, 2016. In early 2021 the country also left the European single market.
Amid the protracted and cumbersome redrawing of trade rules that followed these decisions, the British economy has stagnated. | Inflation |
The number of civil servants earning more than £100,000 a year has nearly doubled, as new data suggest that Whitehall has been using a loophole to get around pay freezes.
Official figures show there are now 2,050 mandarins who take home six figures. That is an increase of 88 per cent from 1,090 in 2016, and 195 are now on an annual salary of above £150,000.
At the same time, the number of officials in the bottom wage brackets, which typically include front-line workers such as prison officers, has declined by more than 11 per cent.
The TaxPayers’ Alliance, which carried out the analysis, highlighted the discrepancy as evidence that promotions have been used to get around Whitehall pay constraints.
The figures come despite nearly half of civil servants working from home in some departments, with concern that there has been a fall in productivity.
Ministers capped wage rises for mandarins at 1 per cent between 2016 and 2018 and froze salaries altogether in 2021 to try to bring the cost of Whitehall down.
But new figures show that, despite those decisions, median pay has risen by 26 per cent over the past seven years, with the number of officials on more than £75,000 almost tripling.
In its report, the TaxPayers’ Alliance said: “The reason salaries increased by so much more than the pay awards is principally because of grade inflation. The growth in the top three grades far exceeded that in the lower levels.
“Moving up to a higher grade entails moving up to a higher salary band. The result is that the numbers being paid in the higher bands have increased significantly through the period.”
The figures also show that the total Whitehall workforce has ballooned by 101,440 since 2016. That is a 24.2 per cent increase, marking the biggest growth in half a century – despite repeated pledges to cut bureaucracy.
Work from home under fire
Rishi Sunak, the Prime Minister, was urged by senior Tory MPs to respond to the statistics by introducing an immediate recruitment freeze until numbers are back under control.
Sir Jacob Rees-Mogg, a former business secretary, told The Telegraph: “The Civil Service is like Topsy – it just grows.
“To stop this, ministers need to enforce controls, including freezes on hiring and approving any new contracts.
“The clear inefficiency of working from home means that more people are doing less work.”
Sir John Redwood, a former head of Margaret Thatcher’s No 10 Policy Unit, said ministers should “impose an immediate ban on all new external recruitment”.
He added: “The Civil Service is far too top-heavy and the big increase in top management has coincided with a big decline in productivity.
“You certainly wouldn’t run a private sector organisation like this and an increase of 100,000 over the past few years does look excessive.
“We need fewer people to deliver more, which should be quite possible given the huge difference in productivity growth between the public and private sectors.”
Figures show that the expansion in the Civil Service has been “top-heavy”, with the staff in the highest three pay grades accounting for 87 per cent of the overall increase.
There are now 7,385 officials at the top Senior Civil Service level, which includes mandarins who directly advise ministers – a rise of almost 50 per cent.
The only bracket to shrink was administrative officers and assistants, which typically includes the most public-facing staff and is down by 17,234 to 136,600.
As a result, half or more of the mandarins working at departments including the Treasury, the Department for Levelling Up, Housing and Communities, and the Department for Culture, Media and Sport (DCMS) are now in the top two pay grades.
The TaxPayers’ Alliance calculated that higher wages and a larger workforce has added £6 billion to the Civil Service wage bill, pushing it up from £9.7 billion in 2016 to £15.5 billion now.
The explosion in top civil servants has come amid a rise in working from home, with many ministries still failing to get more than six in 10 staff into the office.
Government figures show that the Department for Levelling Up has an average attendance rate of 67 per cent for this year. The Treasury has filled 65 per cent of desks and the DCMS has got 61 per cent of staff in.
The Wales Office, which has the highest proportion of top-grade civil servants of any Whitehall department, has one of the lowest attendance rates in 2023, at just 52 per cent.
The rise in the number of officials has been attributed to Brexit and the pandemic, both of which led to a significantly increased workload in Whitehall.
‘Scrap unnecessary jobs’
Last year, Boris Johnson, the former prime minister, promised to cut the Civil Service by 91,000 back down to its pre-2016 level, but that pledge was quietly scrapped by Mr Sunak.
Sources insisted that the Government had made £8 billion in Whitehall efficiency savings in the last two years.
Steve Barclay, the Health Secretary, has fronted efforts to cut down bureaucracy by axing one in six mandarins at his department since taking over last year.
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “With the tax burden at near-record levels, taxpayers are paying through the nose for the boom in public sector employment.
“What’s more, there is a growing sense that public services are worse than before the hiring spree, not better.
“Only once politicians start to be honest about what the state can reasonably be expected to do can we wind down functions and scrap unnecessary jobs.”
The Institute for Government think tank has said that, despite the recent growth in wages, pay constraints since 2010 mean wages have fallen in real terms.
It calculated earlier this year that Whitehall salaries are 12 per cent lower at junior levels and 23 per cent lower at senior ranks than if they had kept up with the rate of inflation.
A Cabinet Office spokesman said: “As you’d expect, during temporary and exceptional events, such as the pandemic, staff numbers increased to help tackle Covid, including the world-leading vaccine programme.
“We are committed to efficiency and have made nearly £8 billion in savings in the last two financial years.” | Workforce / Labor |
- Michael Cohen is set to resume testifying in the $250 million business fraud trial of former President Donald Trump and his company.
- Trump and his attorneys attacked Cohen's credibility as a witness during his first day on the stand.
- Trump will be in the courtroom staring down his former personal attorney and fixer.
Michael Cohen, the former personal attorney and fixer for Donald Trump, is facing a barrage of attacks on his credibility as he prepares to resume testifying Wednesday in the $250 million business fraud trial of the former president and his company.
Trump, who will be in the courtroom, and his lawyers spent much of the previous trial day targeting Cohen's criminal history, attempting to paint him as a "serial liar" whose word could not be trusted.
Cohen is "totally discredited already," Trump claimed after the court adjourned Tuesday afternoon.
On the stand, Cohen had accused Trump of directing him and another Trump Organization executive to falsely inflate the values of his assets on financial statements.
Trump "would look at the total assets and say, 'I'm actually not worth $4.5 billion. I am really worth more like $6 billion,'" Cohen testified under oath.
But Trump's attorney Alina Habba grilled Cohen on cross-examination, highlighting his 2018 guilty plea on charges including lying to Congress. Habba asked him if he lied to the judge in that case during his plea hearing, and Cohen replied that he had.
Cohen has implicated his former boss in the crimes that he himself pleaded guilty to, including making secret hush-money payments to women who said they had extramarital affairs with Trump, and lying about his business dealings with Russia. Trump has pleaded not guilty in a separate New York criminal case charging him with falsifying business records related to the hush-money payments.
Cohen, Trump's once-loyal aide, is now a star witness against him in New York Attorney General Letitia James' civil trial in Manhattan Supreme Court. Cohen's 2019 testimony to Congress about Trump's allegedly fraudulent business practices is what led James to open her sweeping investigation.
The AG's case accuses Trump, his two adult sons, the Trump Organization and top executives of engaging in a decade-long pattern of falsely inflating the values of Trump's real estate properties and other assets in order to get tax benefits and better loan terms.
James seeks around $250 million in damages, and she wants to bar Trump and his co-defendants from ever running a business in New York.
Judge Arthur Engoron, who will deliver verdicts in the no-jury trial, has already found Trump liable for fraud and ordered the cancellation of the defendants' New York business certificates. The trial, which is expected to stretch into late December, will resolve James' six remaining claims.
Trump, who stared down Cohen in court on Tuesday, repeatedly attacked his former lawyer in between the proceedings. He called Cohen a "proven liar," a "felon" and a "disgrace" outside the courtroom.
He launched more attacks on social media, writing Tuesday evening that Cohen "was a complete and total disaster" in the trial.
"Lie after lie, and getting caught each time," claimed Trump.
Cohen declined CNBC's request for comment ahead of his testimony Wednesday, noting in an email that Engoron has directed him not to discuss the case while he is a witness.
An attorney for Cohen did not respond to a request for comment.
This is developing news. Please check back for updates. | Real Estate & Housing |
(Bloomberg) -- Binance is reeling under the impact of increased regulatory scrutiny, with the exchange platform’s market share languishing near a one-year low, according to data from research firm Kaiko.
Most Read from Bloomberg
Binance’s spot trading market share was little changed at 56% through June 19 from each of the two months prior, Kaiko data showed. That’s the lowest since August, when it fell to 53.7%, Kaiko said. The world’s largest cryptocurrency exchange suffered a blow after the US Securities and Exchange Commission filed a lawsuit against the firm and its founder Changpeng Zhao on June 5.
Its daily market share plunged to as low as 47% on on April 6, just after a separate lawsuit from the US Commodity Futures Trading Commission. The pressure on crypto exchanges like Binance has also increased after deep-pocketed traditional finance players like BlackRock Inc. applied for permission to start offering spot Bitcoin exchange-traded funds, seeking to lure investors looking for regulated institutions.
“Centralized exchanges will find themselves in a squeeze between decentralized exchanges and traditional-finance players entering the market,” said Alex Svanevik, chief executive officer of crypto intelligence firm Nansen.
Read more: Why Crypto Flinches When SEC Calls Coins Securities: QuickTake
US-based Coinbase, which is also being sued by the SEC, has seen its market share fall to 6.8% in June from 7.6% in January. Binance’s US entity lost almost all its market share after the lawsuits from the CFTC and the SEC, according to Kaiko. Binance’s share of trading in euro pairs has also tumbled, Kaiko data showed.
Binance’s market share has also been hurt after it halted a popular zero-fee promotion in March. The exchange recently announced a new promotion for stablecoins, including True USD, BUSD, Tether’s USDT and Circle’s USDC, starting June 30.
A spokesperson for Binance said the company will “continue to maintain our strong financial performance. Our primary objective is to deliver for our users by maturing our products and services and continuing to invest in compliance processes for a new era of regulatory certainty.”
Binance is far from the only centralized exchange hurting. Overall global trading volume has shrunk across crypto exchanges as the regulatory onslaught dented investor sentiment.
“The regulatory risk applies to all centralized exchanges. Binance is bearing the brunt of regulatory actions,” said Cici Lu, founder of blockchain adviser Venn Link Partners. “It’s going to be challenging times ahead for Binance to regain market share while meeting compliance requirements.”
Regulatory Woes
The onslaught of regulatory and banking hurdles has forced Binance to exit several countries. The company announced its exit from the Netherlands on June 16, citing a failed registration attempt. It was also probed by French authorities earlier this month, after it established the country as its European base. On June 23, Belgian authorities ordered Binance to cease operations there.
In April, the Australian Securities and Investments Commission canceled Binance’s license for its derivatives business. Local banks and payment partners later halted their services to Binance Australia. And last month Binance said it was going to exit Canada after the country began rolling out new crypto regulations.
Size Advantage
Yet even after losing market share for most of 2023, Binance remains bigger than all other crypto exchanges combined. That gives Zhao’s firm an added advantage of offering deeper market liquidity and trading.
Binance is also the biggest holder of customer tokens with reserves of $59.2 billion, according to crypto data provider DefiLlama.
“Without other sounder alternatives available currently, investors might still see Binance as the go-to exchange for transaction purposes, as it has the track record of providing the highest liquidity and market depth for trading which could limit the downside to their market share,” Lu of Venn Link Partners, said.
--With assistance from Sidhartha Shukla.
(Adds comment from Binance in seventh paragraph.)
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
- Big retailers have sent mixed messages on the threat they face from retail theft.
- In January, Walgreens said it may have overstated concerns about theft and impact on retail "shrinkage," with its CFO James Kehoe telling analysts, “Maybe we cried too much last year."
- But in the more recent Home Depot and Target earnings for the just-finished quarter, both big-box companies cited a rising trend of retail theft and the industry is supporting the Combatting Organized Retail Crime Act to give the Department of Homeland Security more power to help.
It's been hard to get an exact read on the rise in retail theft. Best Buy sounded alarm bells back in November 2021 when it said thieves were traumatizing employees. Walgreens was vocal on the issue too, but then its chief financial officer James Kehohe did an about-face, telling analysts in January that the company may have overstated the issue and its impact on sales. “Maybe we cried too much last year," he said on the January earnings calls.
But this quarter's batch of retail earnings have brought the theft issue to the forefront again. Both Home Depot and Target cited rising retail theft.
"The country has a retail theft problem," Home Depot CFO Richard McPhail said on a call with CNBC on Tuesday after its earnings. "We're confident in our ability to mitigate and blunt that pressure, but that pressure certainly exists out there."
Home Depot's vice president of asset protection had told CNBC in March crime is increasing at double-digit rates.
Target said organized retail crime will reach $500 million more in stolen and lost merchandise this year compared with a year ago. On its earnings call, Target CEO Brian Cornell said retail theft is "a worsening trend that emerged last year."
If the threat is moving in severity from one retailer to another, the industry remains convinced it has the numbers to say the crime trend is rising, and that this is not a shoplifting issue reflecting tougher economic times for Americans but increasingly the work of organized retail crime networks.
The National Retail Federation says organized retail crime is the main reason for retail "shrink" — a mismatch between actual inventory and what is on the books — which reached $94.5 billion in 2021, an increase of almost $4 billion year over year.
Its president Matt Shay told CNBC on Thursday that the issue isn't going away. "Conversations we've had with members over the last several years indicate it is getting to be a really acute and serious problem," and as far as the annual numbers, remains "growing."
While theft is "manifesting itself in stores with acts of violence," Shay stressed that in-store, individual crime is not the biggest scope of the problem. "It's not people shoplifting an individual item for personal use," he said.
But shoplifting is a big part of organized crime. Target chief financial officer Michael Fiddelke had said after its earnings in November 2022 that shoplifting jumped about 50% year over and year, resulting in over $400 million in losses in the fiscal year, and Walmart's CEO Doug McMillon issued another warning about the rising threat on CNBC in December.
"This is very sophisticated local, state, national and transnational organizations, organized not just to steal at the store level, but throughout the entire supply chain ... on the docks, on trucks, off ships, through containers, on the railways. This is a really persistent problem and it's across the supply chain," Shay told CNBC on Thursday.
That matches CargoNet data recently provided to CNBC by insurance company Travelers, which has a special investigations group and works with law enforcement to recover stolen goods. It found food and beverage coming into port or in a warehouse is No. 1 on the list of products being targeted by freight thieves who are increasing their criminal activity across the national supply chain, with household goods and electronics still high on the list of cargo thieves.
Physical theft is still the No. 1 method used by thieves in the supply chain, but they are getting more sophisticated, creating fictitious pickups through use of identity theft — pretending to be trucking companies, including infiltrating online freight management systems and freight brokerage phone lines.
"A lot of times, they will get away with it," Scott Cornell, transportation lead and crime and theft specialist at insurance provider Travelers, recently told CNBC. It has tracked a 600% increase in this form of cargo crime.
Cargo theft is occurring at multiple points in an item's journey, with the NRF finding that theft "en route from distribution centers to stores" was the top target, at 47.4%; followed by cargo theft at stores, at 42.1%, and cargo "en route from manufacturers to distribution centers," at 35.1%.
While the losses have gone up in total dollar amounts, years 2020 and 2021 were also a boom time for retail sales fueled by the pandemic stimulus and other Covid-related factors. In fact, the NRF data shows that the median and average amount of retail shrinkage hasn't changed much in recent years. The average inventory shrink of 1.4% in 2021 was the same in 2016; the median inventory shrink of 1.2% in 2022 was the same in 2016. And it's been at a similar level in all of the years in between.
Retailers surveyed by the NRF do attribute the greatest portion of shrink (37%) to external theft, including organized retail crime. And even though organized retail crime is the biggest component in theft, retailers surveyed do say violence against workers has risen even more. Over thee-quarters (77.6%) say guest-on-associate violence has increased in the past five years, compared to 70.7% saying organized retail crime has increased. Notably, no retailers surveyed by the NRF said organized retail crime has decreased.
The Walgreens CFO said in January that after spending a "fair amount" on private security companies, the results were "largely ineffective."
"We've put in incremental security in the stores in the first quarter. Actually, probably we put in too much. We might step back a little bit from that," Kehoe said.
But the majority of retailers (just under 70%), as of the 2022 NRF data, said they do not have an organized retail crime team in place. This staffing issue contributes to the issue of accurately tracking the theft. Retailers with a dedicated organized retail crime response team were almost twice as likely to report an increase as those without an in-house ORC team, the NRF found.
The National Retail Federation is lobbying for the Combatting Organized Retail Crime Act, which would create a function within the Department of Homeland Security to elevate the theft issue to "a national issue," Shay said.
It would allow the Department of Homeland Security to coordinate with law enforcement across the country, provide resources, and report to Congress.
"If this were a retail problem exclusively, retail would have solved it by now," Shay said. | Consumer & Retail |
- The Inflation Reduction Act, as well as local, state, lender and utility incentives have made residential solar energy systems more attractive improvement projects for homeowners.
- The cost of solar panels and battery storage of energy is declining, too.
- But the home economics of renewable energy remain complicated, especially as issues like net metering remain politically charged and can significantly alter the payback equation, and higher interest rates raise the cost of home energy loans.
To avoid rising energy costs and benefit from increasing renewable energy incentives and tax breaks, more homeowners may be considering a home solar system. Last year, the growth of residential solar in the U.S. boomed. Even as overall growth of solar installations, including commercial and utility-scale projects, decreased year over year, residential solar projects grew by a "staggering" 40%, to just under six gigawatts, according to the Solar Energy Industries Association. That growth came across a record 700,000 U.S. homeowners who installed solar in 2022.
There are a host of complicated issues in the solar market, including some contentious politics. Battles remain over foreign sourcing of solar energy components and tariffs on imports from China — President Biden recently vetoed a bill that would have re-imposed tariffs and likely driven up costs throughout the solar supply chain. Net metering, a primary way homeowners can be repaid by the grid for generating their own energy, took a big hit in California — the nation's biggest solar market — last year, and that is expected to lower overall growth of residential projects this year. And lending conditions throughout the credit market are tighter today due to Federal Reserve interest rate hikes, driving up loan rates for solar projects.
Financing may be necessary or at least well worth considering for most homeowners interested in upgraded their home energy with solar. The national average for a 10 kilowatt solar panel installation in 2023 is around $20,000 after taking into account a 30% federal solar tax credit, according to EnergySage, a marketplace that connects consumers with energy companies. Loans have boomed as a way to finance solar, and even as low and in some cases zero-interest rate offers disappear, higher retail utility bills continue to make lending rates reasonable. According to energy consulting firm Wood Mackenzie, the loan segment's record share of the residential solar market reached roughly 70% of projects in 2022. It won't repeat that in 2023, but will remain a large part of the solar market.
Starting with the basics is the best way for homeowners to start wrapping their heads around solar power financial decisions. Here are some key things to consider before making the decision to move ahead with a residential project.
Do your research on state-by-state solar costs
"Before you investigate how you are going to pay for it, it's easy to find out what you might want to buy and what it might cost," said Joel Rosenberg, a member of the special projects team at Rewiring America, a nonprofit focused on electrifying homes, businesses and communities.
He recommends using EnergySage to find competing solar quotes. This will give homeowners a better idea — beyond nationwide averages — based on real-life factors such as the size of the system. This is important to understand before they start considering how to pay for it, he said.
Seek out local energy financing programs
Once homeowners are ready to dig more into financing options, their state's energy office and a local electric utility can be good places to start because both may offer solar financing programs.
"They may not be directly involved, but often they can flag things that may be worth looking into," said Madeline Fleisher, an Ohio-based environmental and energy lawyer who runs a clean-energy website.
Ohio, for example, has a state program that offers a reduced rate on a solar loan with certain lenders.
Get solar loan quotes from multiple lenders
Consumers should seek quotes from three to five sources, being sure to pay careful attention to terms and conditions, said EnergySage CEO Vikram Aggarwal.
Potential lenders can include a homeowner's local bank, credit union, national bank or a specialized institution known as a green bank that focuses on loans for environmentally friendly projects.
Green banks may have even more robust offerings, Fleisher said. Using a simple Google search for "green bank" and your state may yield options. To find potential lenders, homeowners can also consult broader industry sources such as the Green Bank Network or the Coalition for Green Capital.
Consider solar installation company offers carefully
Most installers offer loans for a duration of 15, 20 or 25 years, while banks may offer short-duration loans at lower interest rates and for lower fees, Aggarwal said. Interest rates can vary widely depending on factors such as the loan amount, duration and the strength of the borrower's credit. Typical loan amounts are $1,000 to $100,000, and annual percentage rates for people with excellent credit can range from around 6% to about 36%, according to a recent analysis by Nerdwallet.
"Installers are great at installing solar, but they may not be experts at finance or banking," said Jason MacDuff, president of greenpenny, a virtual and carbon-neutral bank focused on financing sustainable projects.
He said any homeowner considering a loan through an installer should make sure to speak directly to the financer. Homeowners should seek to fully understand the financial arrangement they are entering into, he said. For instance, will it be a fixed or variable rate? What are the upfront financing costs? And what is the projected monthly payment?
It's also worth noting that installers don't always mention the fees, so be sure to ask about the installation cost if paying cash versus financing, Aggarwal said. Prepayment fees aren't likely, but it's worth asking and confirming in the loan documentation, just to make sure, he said.
Scrutinize fees, terms and conditions on solar debt
Consumers should always ask what fees are associated with the loans being offered, in addition to the interest rate, since fees could amount to thousands of dollars.
Homeowners should also be familiar with other terms, conditions and options that may be available. For example, some loans allow the borrower to amortize once to reduce the amount. To illustrate, if a homeowner takes a $10,000 loan and then receives a tax credit of $3,000, the money can be used to pay the lender and bring down the loan to $7,000. Generally, this option, when available, can be used once within the first 12 to 18 months of the loan, Aggarwal said.
Home equity loans and HELOCs could be a good option for homeowners who have built sufficient equity in their home. These options could also work well for homeowners whose credit doesn't allow them to qualify for a personal loan with a favorable rate, according to Bankrate.
Be careful about lending risks that can lead to home foreclosure
The last thing any homeowner should do is let a green finance loan lead to foreclosure. That has been a concern for the Federal Trade Commission and the government's consumer watchdog, the Consumer Financial Protection Bureau. Property Assessed Clean Energy (PACE) loans, secured by a property tax lien on the borrower's home, have been used over the past decade to finance renewable energy home improvements like solar power and were particularly popular several years ago.
The CFPB has worried about lenders that aren't operating on the level, and these loans leading borrowers to fall behind on mortgage payments, and to a deterioration in credit worthiness. A new proposal from the CFPB seeks to protect homeowners from "unscrupulous companies" offering "unaffordable loans with exaggerated promises of energy bill savings," according to a recent statement from CFPB Director Rohit Chopra.
The solar finance market is dominated by a handful of players
While there are many options for loans in the residential solar market, the data shows that total lending volumes are dominated by five players that financed 71% of the entire residential market in 2022, according to Wood Mackenzie. That was similar to 2021's lending market. GoodLeap (26% of the residential solar market) was No. 1 overall.
Sunrun and Sunnova together captured 79% of the third-party-owned market for home solar. This brings up another key decision for homeowners: should they finance and own the system themselves or lease the rights to their solar energy generation?
Solar leasing is poised to be more popular, but has downsides
Leasing options exist and may be attractive to some homeowners as a way to avoid the upfront costs of equipment and installation. Another benefit is that the homeowner isn't responsible for maintenance. Leasing to homeowners is expected to become more popular this year, according to Wood Mackenzie, because of additional credits leasing companies can receive under the Inflation Reduction Act. These "adders" beyond the core 30% tax credit make the economics more attractive to companies that lease solar systems to homeowners.
But there are downsides for homeowners.
Leasing is generally more expensive for homeowners and they won't be eligible for the 30% tax credit, Aggarwal said. Leasing can also present several challenges when homeowners decide to sell their house, so it's important to weigh the pros and cons carefully, Aggarwal added.
If considering this route, homeowners should be sure to understand the specifics about the lease process, MacDuff said. They should, for example, know how the lease payments compare with their existing utility payment and what the repair process will be if issues arise.
Solar prices continue to drop, so rushing isn't the right decision
The tax credit that was extended and increased as a result of the Inflation Reduction Act makes the cost of solar installation more palatable for consumers, Rosenberg said. But if it's still out of reach financially, even with a loan, check back from time to time because prices continue to drop and homeowners have 10 years to qualify for the IRA incentive.
"You can get a quote in 2023 and a quote in 2026 and it might be two-thirds of the cost and you can still get the tax credit," he said. | Renewable Energy |
More than half a million people a year are missing out on reclaiming hundreds of pounds in overpaid income tax, according to “staggering” figures obtained by i.
Every year around five to seven million people who overpay income tax receive a “P800” letter from HM Revenue & Customs (HMRC) telling them how to request a rebate by bank transfer.
But if they don’t respond to this letter within 21 days, HMRC automatically sends a cheque to the address on the taxman’s file. It sent more than five million last year, but as of the start of November, 615,383 cheques – worth a total of £217m – have not been cashed, working out as an average of around £350 per person.
However, this just the average, meaning some people will actually be missing out on thousands of pounds.
The figures, obtained via freedom of information request, are similar for previous years. For the 2021 to 2022 tax year, 593,367 cheques were sent out worth £187m that remain uncashed, and for the 2020 to 2021 tax year there are 640,245 worth a combined £215m.
Dan Neidle, a tax lawyer and founder of Tax Policy Associates told i that the taxman should not be issuing cheques. “It feels like a model from 20 years ago. In the modern world cheques are somewhere between a hassle and a security risk,” he said.
Instead, he said HMRC should adjust the PAYE coding for an employed person, or credit against the next year’s tax for self-employed people.
This way a worker would automatically see the money automatically refunded. “These changes could be made right now,” Mr Neidle added. “There’s no reason for the money to just stick around pointlessly.”
Nimesh Shah, CEO at tax and accounting advisory Blick Rothenberg told i that the number of unclaimed cheques was “staggering,” and that it’s likely a key reason for this is HMRC has old addresses for people on file, as workers are not updating their new addresses with the taxman when they move.
Another reason may not be that people are cautious about making a claim is that they “may be nervous about the genuineness of the correspondence from HMRC in light of an increasing number of scams” from organisations pretending to represent the taxman, he added.
“It does seem like a very onerous process for HMRC and the taxpayer in a digital age,” said Mr Shah. “There has to be a better, simpler and more efficient way for HMRC to return overpaid tax to their customers.”
There are several reasons that may cause someone to overpay incomes tax, including switching jobs and being paid by both employers in the same month, and being put on the wrong tax code because HMRC has incorrect information about your income.
How you can you claim overpaid income tax
If HMRC sends you a P800 – which it usually does from around June following the end of the tax year in April – it will tell you to request a refund via a bank transfer known as BACS. This can be done by logging into your Government Gateway account. If you don’t have one of these, you can set one up using the Government website.
If you do not have respond within 21 days, a cheque will be issued to your address. This needs to be cashed within six months.
If you do not cash it within six months, HMRC says it can be replaced on request. You can contact it online, or by phone, on 0300 200 3300.
There’s technically no time limit on doing this, but after nine years, it becomes harder for HMRC to verify if you’re owed a refund, so it’s best to request a new cheque before this date.
The figures are revealed as official forecasts show that the overall level of taxes is still set to rise to its highest level since the Second World War despite Jeremy Hunt taking an axe to national insurance contributions (NICs).
Despite Mr Hunt cutting employee NICs by two per cent for 27 million people alongside other changes, the overall tax burden will still rise every year to a “post-war high of 37.7 per cent of GDP by 2028-29”.
This is largely driven by so-called “fiscal drag”, which will pull more people into higher tax brackets as thresholds for different rates have been frozen at a time of high inflation and high earnings growth.
Overall, frozen income tax thresholds will drag four million more workers into paying income tax, three million more workers into paying the higher 40p rate, and 400,000 into paying the top 45p rate.
An HMRC spokesperson said: “The quickest and most secure way for a customer to receive their repayment is to request a direct payment to their bank account. If a customer receives a cheque, because they chose not to have the money paid to their bank account, it’s their responsibility to cash it.”
In the future, i understands that HMRC does plan to move away from automatically issuing cheques in the future when they receive no response from customers to the P800 and will instead ask taxpayers to actively confirm whether they would prefer a digital payment or cheque. | Personal Finance & Financial Education |
Once upon a time, a few mistakes ago, Michael Cohen was a partner at a mid-sized New York law firm who had operated and then sold a taxi medallion business. But when he successfully handled a board dispute in his luxury apartment building, he caught the eye of its developer: Donald Trump.
Leave that “sleepy old firm,” Trump implored him, according to Cohen’s testimony before a New York court on Tuesday. And so in 2007, Cohen joined the Trump Organization as an executive vice president and “special counsel” to Trump personally, launching what we’ve come to know as the Michael Cohen/Donald Trump opera.
Of course, what happened over the next decade-plus is now the stuff of lore. Cohen, who was so loyal to Trump that he infamously boasted he would take a bullet for the man, was left lying on the cold, hard ground — ultimately going to prison and losing his law license — after participating in a variety of unlawful schemes to protect and promote Trump.
But Cohen has never been charged, much less punished for his role in the scheme at issue at this trial. He not only readily admits his role in, but more importantly, he was the first to reveal the pattern of misrepresentations and exaggerations about Trump’s assets that lies at the center of New York Attorney General Letitia James’ ongoing civil fraud trial against Trump and others. Those claims — the most important of which the attorney general won before trial even started — could result in a range of dramatic penalties for Trump and his businesses, including their potential dissolution and sale.
And that’s why Cohen, who had not been in the same room with his former boss for more than five years, found himself in a Manhattan courtroom on Tuesday for what he jokingly described as a “heck of a reunion.”
But before Cohen could testify to his own and Trump’s direct, knowing participation in inflating certain assets and minimizing liabilities for the sake of obtaining favorable bank loans and insurance policies, he first had to address what charitably could be called a credibility issue: His longstanding, public insistence that he did not actually commit some of the crimes, namely tax evasion and making false statements to a federally-insured bank, to which he pleaded guilty in 2018.
When Colleen Faherty, a lawyer for the attorney general’s office, asked Cohen if he had “ever made public statements concerning the legitimacy of those convictions,” Cohen smilingly responded, “More than one,” before detailing why he maintains he did not, in fact, commit the tax evasion or make a false statement to a federally-insured bank that he publicly admitted in open court years ago
Cohen was in the rooms where it happened — and he might be the only person who will testify truthfully to what went down.
In essence, Cohen testified in a more gentle and subtle way to what Trump lawyer Alina Habba more dramatically and directly forced him to admit on cross: That, in pleading guilty in 2018, he testified under oath to conduct he now disavows. Habba then presented Cohen with the trial witness’s version of Sophie’s choice; either he was lying then, under oath, to a federal judge or he is lying now. Cohen, unabashed, confirmed that he lied then. And while the building blocks of that admission have been in the public domain for years, hearing Cohen unambiguously testify under oath in one court that he lied under oath to another court was nonetheless shocking. The experienced journalist sitting next to me even gasped aloud.
Given his messiness on the stand, something any watcher of cable news could have anticipated, why then would the attorney general call Cohen? That’s especially worth asking because Cohen is hardly the central witness Team Trump makes him out to be. Indeed, the attorney general already won before the trial even started on its core claim — that Trump, his former CFO Allen Weisselberg, former Trump Org comptroller Jeff McConney, Trump sons Eric and Don Jr., and various Trump companies engaged in a yearslong, persistent fraud through Trump’s statements of financial condition — by citing documents, not testimony, let alone Cohen’s testimony.
But Cohen is important to the six claims that remain, each of which necessitate proof of the defendants’ intent. And given that Trump did not communicate over email, text, or even, for the most part, handwritten notes but through direct instructions only to a small inner circle, Cohen’s testimony matters. Specifically, Cohen’s account is that Trump himself not only intended to misrepresent his net worth, but was the architect of that fraud. Put another way, Cohen was in the rooms where it happened — and he might be the only person who will testify truthfully to what went down.
That’s why the AG’s office took the risk of offering Cohen, flaws and all, as a witness. On Tuesday, he methodically testified to his participation, over several years and at Trump’s express directive, in “reverse engineering” the value of Trump’s assets in order to meet Trump’s asserted net worth objective for each of those years. Weisselberg, for his part, denied those conversations took place or that Cohen played anything more than the most ancillary role in the statements of financial condition. Cohen also admitted that with Trump’s knowledge and on his behalf, Cohen and others, including Weisselberg, presented the resulting — and deceptive — statements of financial condition to insurance brokers and underwriters and at least two banks: Deutsche Bank, Trump’s longtime lender, and Morgan Stanley, which served as financial adviser to the NFL’s Buffalo Bills when Trump made his failed bid to buy that team in 2014.
Whether Cohen’s testimony is, on balance, credible once Habba is done with her cross-examination remains to be seen. With anywhere from a few hours to days left in Cohen’s star turn, watch this space. | Banking & Finance |
Russia Hikes Rates At Emergency Meeting After Ruble’s Crash
Policymakers lifted the benchmark to 12% from 8.5%, the second straight increase and sharpest since Russia’s invasion of Ukraine.
(Bloomberg) -- Russia’s central bank raised interest rates to the highest in over a year, increasing the pace of monetary tightening at an emergency meeting called after one of the steepest depreciations in emerging markets cast a pall over the economy.
Policymakers lifted their benchmark to 12% from 8.5%, the second straight increase and the sharpest since the immediate aftermath of Russia’s invasion of Ukraine almost 18 months ago. The meeting was brought forward by a month after the ruble briefly broke through 100 to the dollar for the first time since March last year.
“The decision is aimed at limiting price stability risks,” the central bank said in a statement. Policymakers provided no further guidance and said they next plan to review borrowing costs on Sept. 15.
The ruble appreciated after the rate announcement before reversing gains and trading weaker against the dollar. It’s still among the three worst performers in developing economies this year with a loss of over 24%.
The decision on Tuesday took a page from a playbook that Governor Elvira Nabiullina used in the past when the ruble foundered, after an announcement the central bank would refrain from foreign-currency purchases last week failed to arrest the rout and a top Kremlin official pinned the blame on the central bank’s “soft” policy.
“Hiking policy rates won’t solve anything,” said Timothy Ash, senior emerging-market sovereign strategist at RBC Bluebay Asset Management. “They might temporarily slow the pace of depreciation of the ruble at the price of slower real GDP growth — unless the core problem, the war and sanctions, are resolved.”
Grievances Aired
The rare public infighting offered a glimpse into the competing priorities driving Russian economic policy. Though a weaker ruble is a boon for government income as revenue from oil exports soared to an eight-month high, it’s also driving up the cost of imports and encourages locals to seek safety by shifting money outside the country.
A weaker ruble dramatically accelerated the timeline for monetary tightening, with economists polled by Bloomberg in late July expecting the key rate to rise to no higher than 9% this quarter.
Just over three weeks ago, the central bank delivered a hike of a full percentage point after long warning that higher rates were on the way in response to inflationary risks from heavy government spending, sanctions and labor shortages caused by the war.
But the stakes rose much higher this month, with the economy drained by capital outflows and annual inflation that exceeded the central bank’s 4% target for the first time since February.
What Bloomberg Economics Says...
“The Bank of Russia’s strategic surprise is an attempt to increase savings in the local currency and increase the credibility of its 4% inflation target. The central bank may put policy rate changes on pause through the rest of 2023.”
—Alexander Isakov, Russia economist.
The urgency for Nabiullina became even greater after President Vladimir Putin’s adviser chastised the central bank on Monday, blaming it for allowing faster lending growth to flood the economy with money and calling for a “strong ruble” to help Russia adjust.
Other prominent voices seized on the depreciation as a threat to social stability that made Russia appear vulnerable at a time when the war in Ukraine grinds on and international sanctions hit trade.
Policymakers are counting on the rate hike to boost the appeal of domestic savings and cool off consumer demand that’s contributed to a deterioration in foreign trade and helped bring the current-account surplus to its lowest in two years.
It’s unclear if the central bank has done enough to iron out the differences that have emerged in the highest echelons of the Russian establishment.
Although Kremlin economic aide Maxim Oreshkin said the Bank of Russia “has all the necessary tools to normalize the situation in the near future,” its options are limited beyond keeping rates elevated and tightening capital controls.
With much of the central bank’s reserves already frozen by sanctions, policymakers will be reluctant to wade into the currency market with direct interventions if the ruble comes under pressure again.
“Steady growth in domestic demand surpassing the capacity to expand output amplifies the underlying inflationary pressure and has an impact on the ruble’s exchange-rate dynamics through elevated demand for imports,” the central bank said. “Consequently, the pass-through of the ruble’s depreciation to prices is gaining momentum and inflation expectations are on the rise.”
(Updates ruble’s performance, adds analyst comment in sixth paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Interest Rates |
Whether you’re saving to retire, or have just come into a nice windfall, knowing where to put your money to grow it is essential. There are multiple ways money can build interest, but how much interest does $1.5 million earn per year? We break down several ways you can save your $1.5 million, starting with the lowest yield and lowest risk, and moving on to higher yield and higher risk. If you’re wanting to automate the asset allocation of your portfolio, consider working directly with a financial advisor.
How Much Interest $1.5 Million Can Earn Per Year
Earning interest in your investments is how most people are able to grow their wealth and increase their available funds during retirement. The amount that you can earn is going to depend on how much money you have to invest and what types of investments that you choose. Riskier investments have a higher potential to return more interest on your money than safer investments, but the risk might be too much for some.
If you’re looking to invest $1.5 million to maximize the amount of interest you can earn, the answer to how much that will be depends on your investment choice. We’re going to cover some of the most popular choices to invest your money in order to earn interest and talk about how much you could earn from each. Here are five popular asset options to earn interest on $1.5 million.
1. High-Yield Savings Accounts and Money Market Accounts
High-yield savings accounts are savings products offered by some banks with a return up to 1%, unlike regular savings accounts, which only earn around 0.06%. They are incredibly safe, with the FDIC insuring them up to $250,000. While you may not want to put your full $1.5 mill in one of these, if you did, you’d earn $15,000 annually in interest.
Money market accounts are similar to high-yield savings accounts. Unlike a savings account, they come with a debit card and you can write checks. Withdrawals are usually limited to six a month, and you may have to keep an account minimum or pay account fees. Still, some accounts can generate up to 2% yearly with hardly any risk. For $1.5 million, that’s $30,000 a year.
Chances are, you could use a savings account like one of these, but if you really want to grow that money, you’ll need to put at least some of it elsewhere. A balanced investing approach is going to provide you an excellent opportunity to maximize interest without sacrificing the safety of investments like a savings account.
2. Certificates of Deposit (CDs)
The next step up the ladder in terms of risk/reward is a certificate of deposit (CD). With a CD, you deposit your money with a bank or credit union for a set term with the agreement that they will pay out at a specified annual percentage yield (APY) after the term is up.
How much interest does $1.5 million earn per year on a CD? Assuming you deposit for two years at an APY of 3% you’d receive $90,000, or $45,000 per year. That sounds like a great deal, right? Well, that depends on the market. If inflation outpaces your CD, you’re losing purchasing power.
For example, the rate of inflation in 2021 was 7.1%. If your money was tied up in a CD producing 3% APY, your money still had 4.1% less value at the end of the year. While CDs are low risk, in a high-inflation environment there are better places to put your money.
3. Annuities
Annuities are long-term investments that can give you a slightly higher return on your money. They’re typically used in retirement planning. They allow you to save tax-free and only pay taxes when you withdraw. Annuities are financial contracts you sign with an insurance company, usually with the agreement that they’ll pay you out on a recurring basis.
Not all annuities are the same. Some defer payment for a long time, while others pay out almost immediately. There are a few different types of annuities, each with its own level of risk and return. Let’s break down how much interest you could earn with $1.5 million per year with each kind of annuity.
Fixed Annuities
A fixed annuity is the most basic version of an annuity. Annuity rates change on a daily basis. For the sake of simplicity, let’s talk about an immediate fixed annuity. At the time of this article, for an annuity that pays out over five years, you can get a rate of around 4%.
How much interest does $1.5 million make per year with a fixed annuity? At 4% over five years, around $30,909 in interest per year, or $154,584.11 total. That gives you a monthly withdrawal of $27,576.40. While it’s better than a savings account, you could still be treading water – or sinking – if inflation outpaces it.
Indexed Annuities
An indexed annuity is a next notch up in terms of risk and returns of annuities. An indexed annuity is tied to the performance of a specific stock market index, like the S&P 500. This means the value of the annuity can go up if the market performs well.
There’s more risk involved, but many guarantee a minimum percentage of the principal, plus a small amount of interest. The upside is that, if the market performs well, you could see more returns. Beware though, indexed annuities come with caps that will limit your return. Each annuity has different terms. Even if the index performs at 12%, you won’t receive that rate of return.
Variable Annuities
Variable annuities are annuity contracts that offer the highest potential for return. However, unlike a fixed annuity, their return is not guaranteed. With a variable annuity, you will choose where the money gets invested. Depending on your choice you could see a large return, or you could lose money.
So, how much interest does $1.5 million earn per year in a variable annuity? For example, let’s say you put your $1.5 million into a variable annuity that earned 10% annually and paid out over 10 years. You’d earn $835,958.34 in interest, with a monthly payout of $19,466.32. That’s a good return and means you picked a solid investment. However, just because you could get a 10% return, doesn’t mean you will. The market can be unpredictable.
4. Funds and Stocks
Of course, you could invest your $1.5 million in the stock market. The aforementioned S&P 500 is a leading index that has shown an average rate of return of around 8% to 12% over the years. You can’t directly invest in the index, but an easy way to get in on the action is to invest your money in an index fund or exchange-traded fund (ETF) that follows the S&P 500 performance.
It should go without saying that nothing is guaranteed in the stock market. A boon year with a 15% return could earn you $225,000 in interest off of $1.5 million. On the other hand, a recession could hit and the market could swing the other way, turning your $1.5 million into $1.25 million, or worse.
However, given the rule of thumb that the stock market grows around 10% on average yearly, if you invest and hold, you could make out over time well despite dips along the way. Let’s say you put your $1.5 million into various funds and keep them there for 20 years. With an average annual return of 10% compounding over those 20 years, your $1.5 million will turn into over $10 million.
5. Real Estate
Real estate is another place you could put your $1.5 million. But don’t take that to mean the housing market. Specifically, an investment where you could see a decent return is what’s called a real estate investment trust (REIT). While real estate can be volatile, some REIT markets have outpaced the S&P 500.
On top of that, REITs are known for their dividend payouts, often more than double that of the S&P 500. That means that, on top of your interest return, you can get an extra annual payout of 2% to 4% on average.
So, say your REIT grows by 13% in a year, with a 3% dividend on top. That’s growing your $1.5 million by 16%, or an extra $240,000, in one year. Of course, if the real estate market falters, or if the REIT you invest in is mismanaged and goes belly-up, you could lose it all.
The Bottom Line
How much interest does $1.5 million earn per year? It really depends on where you put it. If you stash it in a low-risk account, your return isn’t going to be high. However, if you invest it in assets, your return isn’t guaranteed. This underpins why it’s important to allocate assets based on your needs. The younger you are, the more risk you may be willing to take. However, if you’re already retired or nearing retirement, you want to keep that nest egg safe.
Tips for Investing
If you’re looking to maximize the interest or income that your investments are earning in retirement, you may want to consider working with a financial advisor. Your advisor can help you create the right asset allocation mix to meet your financial goals. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
It’s important to diversify your portfolio and know what your risks are. Use our asset allocation calculator to start building the right portfolio to meet your needs.
©iStock.com/PeopleImages, ©iStock.com/tumsasedgars, ©iStock.com/Andril Yalanskyi | Banking & Finance |
John Lewis and Waitrose are joining Tesco and Marks & Spencer in cutting the price of their period pants.
The retailer says it will reduce the price of 30 types of period underwear by 20% in its stores from next week.
The move follows the launch of the Say Pants to the Tax campaign urging the government to ditch VAT on the items.
Currently the underwear - which are absorbent, washable and reusable - are classified as garments and VAT is levied at 20%.
But other period products such as pads and tampons have been exempt since 2021.
John Lewis said it was "the right thing to do" and was aimed at providing "a much-needed boost for customers looking for ways to save on essential sanitary products".
Marks & Spencer and brand Wuka launched the Say Pants to the Tax campaign earlier this month, and have been joined by politicians and campaign groups calling on the government to act.
Some 70 signatories have signed a letter asking the minister in charge of VAT policy, Victoria Atkin, to reclassify the pants as a period product.
Period underwear has become more popular over the past 20 years, with major brands including Sainsbury's, Primark and Next now selling them. Costs for period knickers range from £8 to £46 for a pack of three online.
The pants can be washed and reused many times and rose in popularity during Covid lockdowns, with many people looking for alternatives to single-use products.
However the cost of purchasing the pants can be a hurdle for new users.
Darcey Finch, a 26-year-old illustrator, who has used period pants since the pandemic said she found them "really expensive" and was surprised that they were taxed differently to tampons and pads.
"I just assumed they wouldn't be taxed - the only negative to them is the price," Darcey told BBC News.
What to do if you can't afford sanitary products
- Free sanitary products are available at some leisure centres, libraries and community centres.
- In England, Wales and Northern Ireland schools and colleges carry free products
- In Scotland, councils and education providers are legally required to provide sanitary products and you can find the nearest location through the PickupMyPeriod app.
- The NHS offers free period products to hospital patients.
- Many food banks provide free toiletries and essentials including menstrual products.
- Some supermarkets such as Morrisons also give free sanitary products at some of their stores. | Consumer & Retail |
More than six in 10 Americans said they are living paycheck to paycheck as the rate of price increases remains stubbornly high despite the Fed Reserve’s battle to tame inflation, according to a study.
The survey by LendingClub found that 61% of adults reported barely making ends meet in July — an increase from 59% compared to the same month last year.
The survey dovetails with newly released data from the federal government Thursday which showed that the Personal Consumption Expenditures index, a key inflation measure closely watched by the Fed, rose 0.2% from the previous month.
Core prices, which strip out the more volatile measurements of food and energy, have risen 4.2% from the previous year.
The report found that Americans were spending more to eat out at restaurants and go to live shows, as well as on toys, clothes and prescription drugs.
Ordering a dish that includes beef and veal was nearly 11% more expensive in July compared to the same period last year.
Drinking a beer at a bar or restaurant was nearly 4% more pricier last month compared to July of last year.
The price of clothing and footwear went up by more than 2.4% in July year-over-year, while clothing for kids jumped 5.4%.
Americans have also been spending more on medicine, according to the latest government data.
The cost of pharmaceuticals soared in July by 3.4%, while the price of prescription drugs rose 2.8%.
Americans have also been burdened with the rising cost of health care.
A trip to the dentist or dental hygienist cost 5.3% more last month than it did last July, according to the data.
The latest data come as the Fed weighs whether to again hike interest rates when it meets later this month.
The central bankers are widely expected to leave the rate in the current range of 5.25%-5.5% after increasing it 25 basis points in July.
Earlier this month, the chief economist at Moody’s Analystics reported that Americans are spending $709 more per month on everyday goods and services compared to just two years ago.
“The high inflation of the past 2+ years has done lots of economic damage,” Mark Zandi tweeted following the release of the Consumer Price Index — a closely-watched measure of inflation that tracks changes in the costs of everyday goods and services.
While inflation has fallen off its four-decades high, it remains well above the Fed’s 2% target rate.
“Due to the high inflation, the typical household spent $202 more in a July than they did a year ago to buy the same goods and services. And they spent $709 more than they did 2 years ago,” Zandi added.
Americans are feeling the pinch at the pump as gas prices have climbed roughly 60 cents since the start of the year.
The national average price of a gallon of regular gasoline stood at $3.82 as of Thursday — 9 cents higher than a month ago and just 3 cents shy of last year’s average, according to the American Automobile Association.
At the start of the year, the average retail gas price stood at $3.33 — and hit $3.98 last week before slightly dipping.
Analysts predict that the upcoming hurricane season will likely disrupt production while oil producing countries such as Saudi Arabia have indicated that they will cut supply — causing gas prices to spike even further. | Inflation |
CHICAGO, Oct 5 (Reuters) - Chicken prices at U.S. grocery stores have hit record highs and should stay elevated as Tyson Foods and other companies dial back poultry production to boost margins while inflation-weary shoppers buy chicken instead of beef and pork.
Higher chicken prices should improve earnings at top producers Tyson (TSN.N) and Pilgrim's Pride (PPC.O), but will pinch consumers' pockets as they try to save money by turning away from higher-end proteins. One index shows chicken producer profit margins at their highest in a year.
U.S. consumption of chicken is expected to exceed 100 pounds per person this year for the first time ever, data from the U.S. Department of Agriculture shows.
Beef consumption is forecast to drop to its lowest since 2018, as prices climb due to dwindling cattle supplies. Meanwhile, consumer spending cuts have knocked pork consumption to the lowest since 2015.
Arkansas-based Tyson, which sells all three types of meat, had to deal with a glut of chicken after earning massive profits when meat prices soared during the COVID-19 pandemic.
The company announced the closures of six U.S. chicken plants with nearly 4,700 employees this year to reduce costs. Its chicken business likely returned to profitability in the quarter ended Sept. 30 after two quarters of operating losses, analysts said.
Tightening supplies now favor producers' bottom lines.
U.S. facilities that hatch chicken eggs placed about 2.8% fewer eggs in incubators in the six weeks ending on Sept. 23, compared to a year earlier, according to U.S. government data. That was a sharp turnaround from the same period in 2022, when hatcheries set 3.6% more eggs in incubators.
Chicken producers placed about 2.7% fewer chicks for meat production over the six weeks through Sept. 23 from a year earlier, when there was a 4.5% increase. Cumulative placements for 2023 dropped below last year around the end of May, U.S. data shows.
"They cut back," said Bob Brown, an independent livestock market analyst. "That seems to have buoyed the chicken market."
An index of chicken prices and feed prices that reflects profitability for poultry producers in September hit its highest level in more than a year, said Brown, who maintains the index. Declining feed costs help producers improve margins, and corn prices are near the lowest in three years.
Chicken companies sought to constrain the weights of birds this summer as part of "efforts to limit production and restore profitability," Rabobank said. Lighter birds produce less meat for consumers.
In August, retail prices for whole fresh chickens and bone-in legs reached nominal records, the latest monthly U.S. Department of Agriculture data show. Drumstick prices climbed 10% from a nearly one-year low reached in February.
Wholesale prices have also rebounded.
The U.S. government last month trimmed its estimate for 2023 chicken production from August due in part to expectations for lower chick placements. Production is still expected to surpass 2022.
Producers moved to reduce placements after chicken supplies swelled last year.
Tyson CEO Donnie King said in February that executives overestimated how strong consumer demand would be for chicken in late 2022, leaving the company to resell excess inventories at a discount.
"That was a failure on their part," said Arun Sundaram, senior equity analyst at CFRA Research.
GROWING DEMAND FOR CHICKEN
Chickens raised for meat largely avoided bird-flu infections in 2022, keeping supplies ample as the worst-ever U.S. outbreak devastated flocks of egg-laying hens and triggered export restrictions on poultry.
Improving U.S. demand is now helping reduce excess supplies, Sundaram said. He forecasts Tyson's chicken business will report positive margins of 1.5% in the quarter ended Sept. 30 before jumping to 4% in fiscal year 2024. Quarterly results are expected in November.
"We've seen some recovery in chicken prices and we've seen some consumer prices start to level off," Tyson CFO John R. Tyson told investors last month. "We probably would have expected that to take place sooner."
Companies still have large supplies in freezers. U.S. inventories of frozen chicken breasts were a record high for August. Tyson also said this week that layoffs will expand to the second shift at a chicken facility in Wilkesboro, North Carolina, "in response to customer demand," signaling ongoing hurdles.
Further increases in chicken prices could threaten demand, said Adam Speck, senior commodity analyst for Gro Intelligence.
But consumers are still choosing chicken due to tighter beef supplies, after ranchers reduced their herds during three years of drought in the Great Plains.
"We should see improving demand for chicken going forward," said Bill Densmore, senior director for Fitch Ratings. "We'll see retail beef prices remain high."
Reporting by Tom Polansek; Editing by Caroline Stauffer and David Gregorio
Our Standards: The Thomson Reuters Trust Principles. | Consumer & Retail |
Survey delves into brand-name food and beverage preferences of consumers
Most consumers would choose brand-name beverages over generic or store-brand beverages, according to the September 2023 Consumer Food Insights Report. The report further indicates that consumers make this choice even when presented with a sizable price discount on generic or store brand names.
The survey-based report out of Purdue University's Center for Food Demand Analysis and Sustainabilityassesses food spending, consumer satisfaction and values, support of agricultural and food policies, and trust in information sources. Purdue experts conducted and evaluated the survey, which included 1,200 consumers across the U.S.
In contrast to beverage choices, most survey respondents said they were unwilling to pay a premium for brand-name meat or fruits and vegetables. The findings in the report's "Brand Beliefs" section were based on new questions that yielded some interesting results, said the report's lead author Joseph Balagtas, professor of agricultural economics and director of CFDAS at Purdue.
"When it comes to snack foods, consumer choice of brand is price-sensitive," Balagtas said. "A majority of consumers tell us that brand-name products taste better. And when generics are 15% cheaper, a majority choose the brand-name product. But if generics are 30% cheaper, a majority choose the generic brand."
To dig deeper into why consumers might or might not choose brand-name food, the survey included follow-up questions that gathered consumer beliefs about brand-name versus generic or store-brand foods.
"We find that taste is positively correlated with the decision to choose brand-name foods over cheaper substitutes," Balagtas said. Consumers perceive brand-name beverages to taste better than generics and thus are more likely to purchase branded products even at a premium. But fewer consumers believe that brands are associated with better taste in the meat and fruit and vegetable aisles, and thus fewer are willing to pay a premium for those products.
"Across all food categories, most consumers do not believe that brand-name foods are more nutritious or made from better ingredients or safer than store brands," Balagtas said. "Our finding that taste is the main driver of consumers' valuation of brand names is consistent with results from our food values survey questions, where respondents consistently rank taste as the most important attribute when shopping for food."
Additional key results from the September report include:
- Households making less than $50,000 were more price sensitive when presented with two generic or store-brand discounts.
- The consumer food inflation estimate (6.3%) continues to diverge from the government consumer price index of food inflation (4.3%).
"We see that brand choices differ slightly when disaggregated by income," said Elijah Bryant, a survey research analyst at the center and co-author of the report. "Those who make less than $50,000 are more responsive to changes in the price of their food options."
While consumers with the lowest income already tend to choose generic brands over brand names, this disparity grows when the discount on generic or store-brand foods is doubled from 15% to 30%.
In the food expenditures category, Bryant noted a slight decrease in average food-away-from-home (FAFH) spending, which has gone down since June. "This could be a result of FAFH inflation cooling at a slower rate than food-at-home inflation, meaning a dollar goes further for consumers at the grocery store than it does at restaurants," he said.
Total weekly food spending has increased by 1.6% since last September, which is below the government's food inflation estimate of 4.3%. This suggests that consumers might either be buying slightly less food or more affordable food options relative to last year, Bryant said.
Food security remained under the 2022 average of 15% this month (13%), dropping slightly from last month (14%). "Consumers continue to be happy with their diets and lives as a whole, though lower-income households tend to be less happy with their diets and lives than those in higher-income households," Bryant said.
The Center for Food Demand Analysis and Sustainability is part of Purdue's Next Moves in agriculture and food systems and uses innovative data analysis shared through user-friendly platforms to improve the food system. In addition to the Consumer Food Insights Report, the center offers a portfolio of online dashboards.
Provided by Purdue University | Consumer & Retail |
Bank's Robust Credit Growth Continues In November, Credit, Deposit Ratio Reaches Three-Year High: CareEdge
Credit offtake continued to grow, increasing by 20.6% YoY to reach Rs 156.2 lakh crore for the fortnight ending November 17, 2023.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
CareEdge Research Report
Credit offtake continued to grow, increasing by 20.6% YoY to reach Rs 156.2 lakh crore for the fortnight ending November 17, 2023. This surge is also due to the impact of HDFC’s merger with HDFC Bank Ltd. and growth in personal loans. If we exclude the impact of the merger, credit grew at a lower rate of 16.2% YoY fortnight compared to last year’s growth of 17.2%. The outlook for bank credit offtake continued to remain positive for FY24.
Deposits too grew by 13.6% YoY for the fortnight (including the merger impact). Excluding merger impact growth stood at 12.9%. Sequentially we saw a marginal decline of 0.3%. Deposit growth is expected to improve in FY24 compared to earlier periods as banks look to shore up their liability franchise and ensure that deposit growth does not constrain the credit offtake.
The Short-term Weighted Average Call Rate stood at 6.79% as of November 24, 2023, compared to 6.13% on November 25, 2022, due to pressure on short-term rates.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Banking & Finance |
Expect big discounts and other enticements to lure shoppers to stores for Black Friday. But retailers worry those may not be enough.
Consumers are coming under pressure as their savings dwindle and their credit card debt grows. And although they have gotten some relief from easing inflation, many goods and services like meat and rent are still far higher than they were just three years ago.
Barbara Lindquist, 85, from Hawthorne Woods, Illinois, said she and her husband plan to spend about $1,000 for holiday gifts for her three adult children, 13 grandchildren and three great-grandchildren. That's about the same as last year.
But Lindquist, who continues to work as a pre-school teacher at a local church, said she'll be more focused on deals given still high prices on meat and other staples. And she plans to buy more gift cards, which she believes will help her stick to her budget.
"I go for value," said Lindquist, who just picked up discounted sheets and towels at Kohl's for friends who will be visiting from Panama during the holidays.
Many retailers had already ordered fewer goods for this holiday season and have pushed holiday sales earlier in October than last year to help shoppers spread out their spending. An early shopping push appears to be a trend that only got more pronounced during the pandemic when clogs in the supply network in 2021 made people buy early for fear of not getting what they wanted.
But retailers said that many shoppers will be focusing more on deals and will likely wait until the last minute. Best Buy said it's pushing more items at opening price points, while Kohl's has simplified its deals, promoting items under a certain price point like $25 at its stores.
Target said shoppers are waiting longer to buy items. For example, instead of buying sweatshirts or denim back in August or September, they held out until the weather turned cold.
"It's clear that consumers have been remarkably resilient," Target's CEO Brian Cornell told analysts last week. "Yet in our research, things like uncertainty, caution and managing a budget are top of mind."
The National Retail Federation, the nation's largest retail trade group, expects shoppers will spend more this year than last year, but their pace will slow given all the economic uncertainty.
The group has forecast that U.S. holiday sales will rise 3% to 4% for November through December, compared with a 5.4% growth of a year ago. The pace is consistent with the average annual holiday increase of 3.6% from 2010 to pre-pandemic 2019. Americans ramped up spending during the pandemic, with more money in their pockets from federal relief checks and nowhere to go during lockdowns. For the holiday 2021 season, sales for the two-month period surged 12.7%.
Online discounts should be better than a year ago, particularly for toys, electronics and clothing, according to Adobe Analytics, which tracks online spending. It predicts toys will be discounted on average by 35%, compared with 22% a year ago, while electronics should see 30% cuts, compared with last year's 27%. In clothing, shoppers will see an average discount of 25%, compared with 19% last year, Adobe said.
Analysts consider the five-day Black Friday weekend — which includes the Monday after the holiday known as Cyber Monday — a key barometer of shoppers' willingness to spend. And Black Friday is expected to be once again the busiest shopping day of the year, according to Sensormatic Solutions, a firm that tracks store traffic. On average, the top 10 busiest shopping days in the U.S are expected to once again account for roughly 40% of all holiday retail traffic, Sensormatic said.
Marshal Cohen, chief retail adviser at Circana, a market research firm, said he thinks that shoppers will just stick to a list and not buy on impulse. He also believes they will take their time buying throughout the season.
"There's no sense of urgency," Cohen said. "The consumers are saying, 'I will shop when it's convenient for me.'" | Consumer & Retail |
Bank of England May Tolerate Inflation Above 2%, Two Banks Say
Investors in UK assets are beginning to bet on a de facto increase in level of inflation the Bank of England will tolerate beyond the official 2% target, two major banks warned.
(Bloomberg) -- Investors in UK assets are beginning to bet on a de facto increase in level of inflation the Bank of England will tolerate beyond the official 2% target, two major banks warned.
BNY Mellon Investment Management and Bank of America said in separate notes to clients inflation expectations indicated in markets suggest investors think the BOE will let inflation remain above the target for some time, potentially damaging the credibility of the central bank and its goal.
While BOE Governor Andrew Bailey and his colleagues have reiterated their commitment to returning inflation to 2%, there’s a growing debate about whether to tweak the target to acknowledge that price increases are likely to remain elevated for some time.
Robert Wood, UK economist at Bank of America, said surveys and market pricing suggest that investors do not expect the BOE to hit its inflation target in the medium-term, unlike in other major economies.
“The market seems to expect UK inflation on average to exceed the target in the future, in part because it believes the BOE is more inflation-tolerant than other central banks,” Wood said. “This is a challenge to an inflation-targeting central bank we think.”
Britain’s inflation rate has eased to 6.7% from as much as 11.1% last year but remains well above the 2.9% rate in the euro area and 3.7% in the US. The BOE is expected to keep rates on hold at 5.25% in tomorrow’s MPC meeting as it shifts to a higher for longer approach to borrowing costs.
BNY Mellon Investment Management chief economist Shamik Dhar pointed to higher market-based inflation expectations in the UK that suggests that investors are already starting to question the BOE’s commitment to the 2% target.
“That tells me that at the very least, markets are starting to think, ‘Can we rely on the bank delivering 2% over over longer term time periods?” he said in an interview. The 5-year, 5-year inflation swap rate — which is used to gauge the market’s future inflation expectations — has drifted higher since the start of the year.
Dhar published a note speculating that central banks may allow higher price growth than their official targets. He predicted that interest rates globally will settle at 4.5% to 5.5% in the long run due to stronger inflation with the UK at the higher end of the range.
The warnings come as the BOE battles to restore its credibility on keeping inflation low after accusations that it was slow to tackle to the post-pandemic surge in prices. It has pushed interest rates to a 15-year high of 5.25% to curb inflation, but four of the nine-member Monetary Policy Committee voted to carry on raising borrowing costs at the last meeting in September.
The BOE is expected keep rates unchanged on Thursday, an approach Chief Economist Huw Pill has described as a “Table Mountain” profile in reference to the landmark looming over Cape Town. The implication is that rates will remain elevated for some time instead of spiking higher and then coming down quickly.
However, some rate-setters — including Catherine Mann, Jonathan Haskel and Megan Greene — have expressed concern that the BOE has tightened policy too little, leaving persistent inflation a risk.
©2023 Bloomberg L.P. | Inflation |
Related video above: Tampa pride event cancelled after DeSantis signs ‘anti-drag’ bill
LAKE PARK, Fla. (WFLA) – A gay couple in West Palm Beach is calling on Target to “be better” after they said a store in Florida didn’t allow them to purchase a Pride onesie while shopping for their baby.
After the “infuriating” incident, Michael Hoffacker and Michael Roedel said they’re “demanding that the company reverse” its decision to pull some of its Pride merchandise ahead of June, which is Pride month.
According to WPBF, the couple stopped at a Target store in Lake Park Saturday to pick up baby formula, diapers and shop for some clothes. However, Hoffacker and Roedel said they left the store feeling “shocked” and “emotional” after being denied a purchase.
The couple told WPBF that an employee and manager told them they “couldn’t buy a Pride-themed onesie” that was being displayed in the store’s Pride section.
“We were pretty shocked,” Hoffacker told WPBF.
The news outlet reported that Hoffacker and Roedel went to check out using the self-checkout lane. When the couple scanned the 12-month Pride-themed onesie, they said the checkout screen “showed an alert that an employee was on the way.” WPBF said the onesie had a tag and barcode attached to it.
“A Target team member walked over, and she let us know that that item should have been pulled from the shelves and it had a ‘Do Not Sell’ on it, and they would not be able to sell us the item,” Hoffacker told WPBF.
Hoffacker went on to say that he was “confident” that since the onesie was there, they would “be able to actually purchase it.” He shared with WPBF that he also thought they’d be able to talk one of the managers into letting them purchase the onesie.
But the store refused to sell it to the couple. The manager even told them she “would probably lose her job” if she sold them the item. Hoffacker and Roedel said their 10-month-old son was in the store with them when the incident unfolded.
The couple told WPBF that the Target manager went on to tell them their “only option was to call an 800-number.” When the couple called, Target representatives told them nothing could be done.
Following the incident, the couple sent a letter to Target’s CEO, board of directors, along with other officials, calling Target to reverse its decision to pull some Pride merch ahead of the start of Pride month.
Target released a statement on May 24 regarding the company’s decision to pull some of its Pride items, saying they’ve decided to remove items “that have been at the center of the most significant confrontational behavior.” The company said the decision came after stores experienced threats following the introduction of this year’s Pride collection.
“For more than a decade, Target has offered an assortment of products aimed at celebrating Pride Month. Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and well-being while at work. Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior. Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year.”
According to WPBF, Hoffack and Roedel said the incident Saturday was “a pretty painful and emotional moment.”
“It was a pretty painful and emotional moment,” Hoffacker told WPBF. “I’ve never actually felt restricted from my rights as a gay man through being in college to when I came out until now, I mean, this was one of the moments when I felt like I didn’t have the rights that I deserved to have. It was very uncomfortable.”
Roedel added that the situation was “infuriating,” adding that Target needs to be better and be an ally to the LGBTQ+ community, especially during these times.
“Infuriating,” Roedel told WPBF. “That says it all. Infuriating…Target, in this moment, is wrong. They need to be better and they need to be a better ally in this community and especially in a situation where our family is there, trying to celebrate who we are in a very, very historic and proud, prideful June, and we’re there having a team lead, a manager at Target, tell us we can’t buy a product to actually celebrate our community”
Roedel continued, “Target needs to do better because we are as big of a community as anybody else out there with a right to shop in their stores, and when they take merchandise away from us in this way it’s hurtful and it’s infuriating and it makes us feel less than. And, that’s just not OK from a brand we supported for so long.” | Consumer & Retail |
Once Unthinkable Bond Yields Are Now The New Normal For Markets
It was the week that bond markets finally seemed to grasp what central bankers have been warning all year: higher interest rates are here to stay.
(Bloomberg) -- It was the week that bond markets finally seemed to grasp what central bankers have been warning all year: higher interest rates are here to stay.
From the US to Germany to Japan, yields that were almost unthinkable at the start of 2023 are now within reach. The selloff has been so extreme it’s forced bullish investors to capitulate and Wall Street banks to tear up their forecasts.
Yields on 10-year German debt are close to 3%, a level not reached since 2011. Their US equivalent are back in line with the average from before the Global Financial Crisis and within striking distance of 5%.
The question now is how much higher they can go, with no real top in sight after key levels were broken. While some argue the moves have already gone too far, others are calling it the new normal, a return to the world that prevailed before the era of central bank easy money distorted markets with trillions of dollars of bond buying.
The implications stretch far beyond markets to the rates paid on mortgages, student loans and credit cards, and to the growth of the global economy itself.
At the heart of the selloff were the world’s longest-dated government securities, those most exposed to the ever growing list of headwinds. Oil prices are rising, the US government is piling on more debt and at risk of another shutdown, and tensions with China are on the rise. For anyone who doubted the tough inflation-fighting talk of Jerome Powell and Christine Lagarde against this backdrop, the read-across is not pretty.
“What happened over the last few months was basically markets were wrong because they thought inflation would come down quickly and central banks would be very dovish,” said Frederic Dodard, head of asset allocation at State Street Global Advisors. “Everything will depend about how inflation lands over the medium to long run, but it’s fair to say that we have changed from the ultra low-yield regime.”
Some of the world’s most prominent investors, including BlackRock Inc.’s Larry Fink and Pershing Square Capital’s Bill Ackman, are among those saying the current trend may not be done.
Already, the milestones have been coming thick and fast. Germany’s 10-year yield just had its biggest monthly jump this year. Japan’s government bonds saw their worst quarterly selloff in a quarter century and the US 30-year yield posted its largest quarterly jump since 2009.
Even a US government shutdown hasn’t spurred a sustained bid for Treasuries, the world’s defacto haven asset. House Republicans on Friday failed to pass a short-term funding bill, making a lengthy federal closure more likely.
Amid the rout, few corners of the market escaped damage. Austria’s century bond, a poster-child for long-dated debt issued during the low-rate era, took a fresh drubbing, falling to 35 cents on the euro.
Meanwhile, central bankers continued to try to give the market a clear message.
Fed officials mainly stuck to their mantra of higher-for-longer rates. In Europe, ECB President Lagarde is pushing back strongly against the idea of imminent relief. She told the European Parliament at the start of the week that the central bank would keep interest rates at sufficiently restrictive levels for as long as necessary to cool inflation.
Some chastened bond bulls such as T.Rowe Price got ahead of September’s rout, flipping long bets on Treasuries to shorts. Big block trades this week in Treasury futures targeted a steeper curve and higher long-dated yields.
Until now, the aggressive rate hikes unleashed by central banks had taken the greatest toll on shorter maturities, driving yields up and resulting in deeply inverted curves. Expectations of recessions, along with rate cuts in response, had kept longer-end yields pinned down.
But in the US at least, that recession never showed up, forcing investors to price out monetary loosening. European economies have proved less resilient, but the ECB — which has a single mandate of price stability — has reiterated time and again that it’s too soon to talk about easing with inflation still well above its 2% target.
Exacerbating the bond moves is a rise in the compensation investors demand for holding longer-dated debt. In Europe, that so-called “term premium” could add 50 basis points to 10-year rates, according to Societe Generale.
“Rebuilding term premium can only feed long-end steepening forces,” said Adam Kurpiel, a rates strategists at the French bank. “It looks like the pain trade of even higher yields could continue until something breaks.”
What Bloomberg’s Strategists Say...
“The secular picture for bonds remains inhospitable. Rising inflation expectations, mounting supply and bonds’ diminishing hedging utility (these are all sides of the same coin), mean that any rally in bonds would be considered a trade, not an investment.”
— Simon White, Macro strategist
Click here for the full report
To be sure, there’s a view from some that the selloff has already gone too far. Take Jack McIntyre, a portfolio manager at Brandywine Global Investment Management, who has been overweight Treasuries for much of the year and now senses a long-looked-for turning point.
“I think we are in the fear stage for Treasuries, and that won’t last,” he said. “In our mind, inflation is settling and growth will slow. We will get there in six months.”
Notable too was a revised forecast from Goldman Sachs strategists, who now see 10-year Treasuries ending the year at 4.30%. While that’s some 40 basis points higher than their previous target, it’s below current levels.
At Candriam, global head of multi-asset Nadège Dufossé says the current market trend may not have much more to run, and she’s is considering gradually shifting into longer maturities.
“We believe we are at the end of this movement, with signs of decelerating inflation and economies weakening in Europe,” she said. “We need to endure this overshoot phase in long rates and take advantage of it.”
Even if the pressure on the long end starts to ease, another major test lies ahead as the Bank of Japan — the laggard among central banks globally — edges toward normalizing policy. Yields have already crept to multi-year highs ongoing despite efforts by policymakers to stymie the moves.
“Japan we do think is a live issue and there’s a debate to be had about what impact that should have on the global market,” said Martin Harvey, a portfolio manager at the Hartford World Bond Fund. “It’s a potential catalyst for further steepening and one that we need to monitor.”
As the week drew to a close, one piece of data offered the Fed some hope that it’s getting on top of the inflation battle. Its preferred measure of underlying price growth rose at the slowest monthly pace since late 2020.
But even if the inflation picture continues to soften in the US and elsewhere, it’s clear markets are in a new world.
“We’re just maybe reverting back to what the world looked like before 2008,” said Rob Robis, chief global fixed income strategist at BCA Research. “That period post-Lehman, pre-Covid, was one of inflation struggling to stay at 2%, growth being kind of choppy and central banks having to keep rates very low for longer.”
--With assistance from Anchalee Worrachate, Ye Xie, James Hirai, Sujata Rao and Dayana Mustak.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
Labour have extended their lead over the Tories to 21 points in key 'Red Wall' constituencies, a new poll has shown.
Sir Keir Starmer's party are backed by almost half (49 per cent) of voters in the Northern, Midlands and Welsh seats.
The Conservatives are supported by less than one in three (28 per cent) voters in the same areas, the latest Redfield & Wilton Strategies survey found.
The poll of 'Red Wall' voters also found more than two-thirds (68 per cent) did not believe the Tory Government is taking the right measures to address the cost-of-living crisis.
Prime Minister Rishi Sunak has pledged to halve inflation by the end of this year, with the Bank of England having last week hiked interest rates to a level last seen in 2008.
Britain's economy will witness 'stuttering growth' over the next two years amid pressure from higher interest rates and increased unemployment, according to a think tank. The National Institute of Economic and Social Research (Niesr) said in its main forecast that the economy will avoid a recession in 2023 but there is still a '60 per cent risk' of a recession at the end of 2024. It predicted that UK GDP will increase by 0.4 per cent in 2023, representing a marginal improvement on its previous forecast in May. But Niesr also downgraded previous predictions of 0.6 per cent growth next year down to 0.3 per cent after pressure from higher-than-expected borrowing costs. As a result, the think tank has predicted it will be another year until UK GDP recovers to where it was before the coronavirus pandemic struck in early 2020. It said higher interest rates, which it expects will peak at 5.5 per cent, will particularly weigh on growth prospects.
These are seats that were won by the Tories at the 2019 general election - as well as Hartlepool that was won by the Conservatives in a 2021 by-election - but have traditionally been held by Labour.
Labour's lead over the Tories, when voters were asked who they would vote for at a general election, was up by three points compared to the last 'Red Wall' poll two weeks ago.
More than one-third (36 per cent) backed Sir Keir as the better PM over Mr Sunak (32 per cent), although the Labour leader's score was down six points and was his narrowest lead over the Tory leader since 16 April.
When asked about specific policy areas, almost half (49 per cent) said they did not trust the Conservatives at all to deliver on immigration.
Labour were more frequently trusted than the Conservatives on every policy issue except on responding the war in Ukraine, on which the Tories led by 30 per cent to 27 per cent.
Sir Keir's party held leads of more than 20 points over the Tories when voters were asked who they trusted the most to tackle poverty (40 per cent to 15 per cent), represent the interests of the North (38 per cent to 13 per cent), support the NHS (40 per cent to 16 per cent), and to invest in 'left behind' areas (38 per cent to 16 per cent).
Labour was also more trusted by 'Red Wall' voters to manage the economy (34 per cent to 25 per cent) and to handle immigration (29 per cent to 17 per cent).
The 'Red Wall' constituencies polled by Redfield & Wilton were Ashfield, Barrow and Furness, Bassetlaw, Birmingham Northfield, Bishop Auckland, Blackpool South, Blyth Valley, Bolsover, Bolton North East, Bridgend, Burnley, Bury South, Clwyd South, Darlington, Delyn, Don Valley, Dudley North, Gedling, Great Grimsby, Heywood and Middleton, Hartlepool, Hyndburn, Leigh, Newcastle-Under-Lyme, North West Durham, Penistone and Stocksbridge, Redcar, Rother Valley, Scunthorpe, Sedgefield, Stoke-On-Trent Central, Stoke-On-Trent North, Vale Of Clwyd, Wakefield, West Bromwich East, West Bromwich West, Wolverhampton North, East, Workington, Wrexham, and Ynys Môn. | Inflation |
- Headline CPI in May came in at 8.7%, unchanged from the previous month, while core inflation — which excludes volatile energy, food, alcohol and tobacco prices — increased to 7.1%, its highest rate for 31 years.
- Economic growth has all but stagnated and public debt has surpassed 100% of GDP for the first time since March 1961.
- Shaan Raithatha, senior economist at Vanguard, told CNBC's "Squawk Box Europe" on Monday that the U.K. is suffering from the "worst of both worlds."
LONDON — In January, with one eye on a critical general election in 2024, U.K. Prime Minister Rishi Sunak vowed to halve inflation by the end of the year.
At the time, headline consumer price inflation was running at an annual 10.1%. Given that most economists were projecting that this would halve naturally as the shock of soaring energy prices fell away, the pledge seemed like an open goal for Sunak's Conservative government.
Yet headline CPI in May came in at 8.7%, unchanged from the previous month, while core inflation — which excludes volatile energy, food, alcohol and tobacco prices — increased to 7.1%, its highest rate for 31 years.
Annual average wage growth excluding bonuses also accelerated from 6.7% to 7.2% in the February-April quarter, the fastest rate on record, while the labor market remains hotter-than-expected and the U.K. has faced a unique spike in long-term sickness that has hammered its labor force participation rate.
Meanwhile, economic growth has all but stagnated and public debt has surpassed 100% of gross domestic product for the first time since March 1961.
The Bank of England re-accelerated the pace of interest rate hikes in June, raising the Bank rate by 50 basis points to 5%, further compounding domestic fears of a mortgage crisis and diverging from other major central banks that have been able to either slow or pause rate hikes.
Shaan Raithatha, senior economist at Vanguard, told CNBC's "Squawk Box Europe" on Monday that the U.K. is suffering from the "worst of both worlds."
"We've had a U.S.-style labor market shock, particularly the large number of long term sickness that has really impacted the supply of labor there, and they've also had a European-style energy shock emanating from the war in Ukraine," he said.
"What is perhaps surprising is that the energy shock in the U.K. was larger than in most of mainland Europe."
Raithatha suggested this could partly be a result of government policymakers being too slow to step in during the early stages of the energy crisis, and when they did step in, capping energy prices at a higher level than many peers.
"There's an issue here because the economy is very resilient, we know that the transmission towards mortgages is a bit slower and a bit less effective than we've had in the past as well, and so clearly the Bank has to do a bit more to get inflation under control," he added.
Problem 'principally made in Moscow'
In the aftermath of the most recent inflation print, Sunak reiterated his "total support" for the Bank of England and under fire Governor Andrew Bailey.
In his January speech, the prime minister said the pledge to halve inflation was his personal responsibility, but should U.K. CPI remain stubbornly high through the end of the year, many expect the Bank of England to return to the crosshairs of government ministers looking to redirect blame.
"The economic and political cycles also appear mismatched for the government, especially as the case for pre-election tax cuts in 2024 is becoming harder to commit to at this point given public debt has surpassed GDP for the first time since March 1961," said Richard Flax, chief investment officer at Moneyfarm.
"The chancellor reiterating his pledge to halve inflation this year while also promising to grow the economy and reduce debt appears to be a steep commitment given the challenges the U.K. faces."
Following the high inflation print last month, Panmure Gordon Chief Economist Simon French said the U.K.'s problems were "principally made in Moscow but not exclusively made in Moscow," adding that there is a "Brexit element" at play.
"There is a 4.5% increase in working age inactivity since the Brexit transition where all other G7 countries with perhaps the exception of the U.S. have seen inactivity falling, so we do look like an outlier in terms of impairments to the supply side of the economy which is driving core inflation higher," French said.
"But Mr. Sunak has a narrative there as well which is fair, which is global factors. The U.K. is disproportionately impacted by the gas price because it's a large part of the heating bill, but also the swing supply for electricity, and that has driven up the CPI component — headline — by 120% compared to about 40% in mainland Europe."
In a recent CNBC-moderated panel at a monetary policy forum in Sintra, Portugal, Bailey noted that the U.K. labor force is unique in remaining below its pre-Covid levels.
"I see this when I go around the country talking to firms. What they say to me very frequently is that their plan is to retain labor as much as they can, even in the event of a downturn, because they've been concerned and it's been difficult to recruit labor," he said.
However, Bailey denied that Brexit was the key component in the labor market tightness and sticky inflationary pressures, instead citing the country's response to the Covid pandemic.
The Bank has estimated a long-run downshift in the level of U.K. productivity of just over 3% as a result of Brexit, while fellow Monetary Policy Committee member Catherine Mann recently told a parliamentary committee that additional paperwork had damaged small firms and added to inflationary pressures.
"It's not just small firms in the U.K. who want to export but it is also small firms in Europe who were suppliers and provided competition in the U.K. market, so there is an inflationary effect coming through the competition channel," she added.
Bank of England 'impotence' and the 'British disease'
U.K. inflation is still expected to fall sharply through the remainder of the year, in light of a 20% reduction in the energy price cap from July 1 and as the existing rate hikes feed through into the economy, compressing demand and employment.
The Bank of England has retained its data-dependent, meeting-by-meeting approach to monetary policy tightening, and members of the Monetary Policy Committee have openly challenged the market's pricing for a peak rate of just over 6% through the winter of 2023 and into next year.
A major source of concern for economists is the central bank's credibility, and Bailey recently offered a mea culpa on the MPC's wayward forecasting of inflation over the last 18 months.
Panmure Gordon's French suggested that if the Bank of England had "unimpeachable credibility," policymakers could say the blunt tool of interest rates will take 18 months to two years to pass through the economy and retain the faith of markets and the public. However, its recent proclamations have not gained traction.
"The U.K. as an economy — 3% of global GDP, less than that in terms of population — is largely a price taker in terms of monetary conditions, and whether Andrew Bailey or indeed his predecessors want to admit to it, there is a degree of impotence in terms of the degree to which domestic monetary conditions can influence the domestic economic picture," he said.
French likened the current economic picture to the "British disease" period of economic stagnation and high inflation in the 1970s, also noting that the U.K. hit double-digit inflation in the 1990s and was the only developed country with inflation significantly above target in the aftermath of the global financial crisis.
Thanos Papasavvas, founder of ABP Invest, also alluded to the unique susceptibility of the U.K. to high inflation, but said the Bank of England should have been alive to this far earlier.
"I put a lot of the blame on what's been happening on the comments that he was making a couple of years ago, talking down inflation, the risk of inflation, and smiling about it at a time when there were inflationary pressures coming through and for a country which has had inflationary-prone tendencies," he told CNBC.
"You don't do that in the U.K. Even a few months ago, the expectations of inflation coming down to 2%, 3% were very unrealistic, so I think they've managed the communication very badly and they have a very hard decision."
The Bank of England is undertaking a review of its inflation forecasting mechanisms, and Bailey recently told a parliamentary committee that the central bank had "lessons to learn" from the process, though it still sees inflation coming down rapidly this year, albeit at a slower rate.
Ahead of the coronavirus pandemic and the transition out of the EU in 2020, French highlighted that the Bank of England had managed 22 years of inflation averaging its 2% target, but that it had underestimated the supply side effects of Brexit.
He suggested there are "further frictions to come" in terms of food inflation and second-order effects as further checks on EU animal and plant imports are introduced later this year.
"Looking at some of the failings it's made, some of the stuff was unforecastable, in terms of the futures and energy markets, some of the stuff actually bluntly they were asleep at the wheel in understanding the growth of U.K. imported labor supply," French said. | Inflation |
Unacademy Cash Burn Down 60% In 2023, Says Co-Founder Gaurav Munjal
2023 was a good year for the company, and its April-June quarter was also cash flow positive, he said.
Edtech company Unacademy's cash burn has been slashed by about 60% in the calendar year 2023, according to Chief Executive Officer and co-founder Gaurav Munjal.
The startup has a runway of more than four years with its current cash reserves, Munjal said in a post on social media platform X, without disclosing the amount.
In a memo in July 2022, Munjal said Unacademy has Rs 2,800 crore in the bank.
According to him, 2023 was a good year for the company, and its April-June quarter was also cash flow positive. "Online business degrew by 30% but Ebitda improved by 87%," he wrote.
Unacademy-owned Graphy also grew by 30% and is "very close" to profitability, Munjal said.
The year 2023 saw Unacademy also lay off about 12% of its workforce, or about 380 employees, as it strived for profitability. It hasn't yet reported numbers for FY23, but it posted revenue from operations of about Rs 719 crore in FY22, alongside a loss of nearly Rs 2,850 crore | Consumer & Retail |
The number of people falling behind on their mortgage payments rose sharply over the summer months, figures from the banking sector show.
Rising interest rates have put pressure on homeowners, with UK Finance data showing 87,930 mortgages in arrears, up 18% on the same time a year ago.
Among landlords, the number in arrears doubled in a year.
Home repossessions are rare, but lenders and charities urge people to act early when facing trouble.
Despite the sharp rise in mortgages in arrears, the number behind on payments still represent just 1% of the 8.8 million mortgages in use, UK Finance said.
That will come as a relief during a period of tough cost-of-living pressures and steadily rising interest rates.
However, homeowners tend to prioritise their mortgage repayments, sometimes leaving them unable to pay other bills. Such circumstances are masked by these figures.
But there has now been a relatively sharp rise in arrears, as the pressure gets more intense and fixed mortgage deals expire and are replaced by more expensive loans. An estimated 1.6 million deals will expire next year, with the vast majority rolling onto much higher rates of interest.
The number of homeowners in arrears was up 7% in July to September compared with the previous quarter, UK Finance said.
One 79-year-old homeowner, who did not want to be named, told the BBC he had cut back on other costs as much as he could, but was only able to pay part of his mortgage bill each month.
"The anxiety is affecting my health," he said, claiming that he had received slow responses when highlighting the issue to his lender.
What happens if I miss a mortgage payment?
- If you miss two or more months' repayments you are officially in arrears
- Your lender must then treat you fairly by considering any requests about changing how you pay, such as lower repayments for a short time
- They might also allow you to extend the term of the mortgage or let you pay just the interest for a certain period
- However, any arrangement will be reflected on your credit file, which could affect your ability to borrow money in the future
Talking to a mortgage lender about payment difficulties has no impact on a borrower's credit score and their ability to borrow in the future, although missing payments or getting a mortgage holiday would have an impact.
Frontline banking staff are urging people to get in contact before a situation spirals out of control.
Donna Draper, a relationship manager at the Nationwide Building Society, has been among the call handlers hearing the concerns of struggling customers.
"No-one wants to send debt collectors to your door. Nobody wants that. We want to help you, we want to get a solution in place with you," she said.
"But we can only do that if you give us a call and let us know [you are struggling]."
Sometimes people just need to know that you understand the pressures they have been facing, she said.
"The most difficult calls are probably those where people feel their money worries are so bad they don't want to live any more. I often wish people would just - before you get to that stage and feel that way - pick up the phone and ask for help."
The UK Finance figures record the number of people who have arrears of 2.5% or more of their outstanding mortgage. That covers people who are getting into financial difficulties, rather than someone who may have missed a payment owing to an administrative error, a simple mistake, or a very short-term issue.
Mrs Draper's boss at Nationwide, director of retail Stephen Noakes, said that the lender and wider industry had seen many people being able to manage higher mortgage payments, with arrears lower than before the pandemic.
However, the possibility of interest rates staying higher for longer could cause "a risk and a concern" for the broader sector.
When arrears become so serious with no likelihood of payments being made, then a lender may seek to repossess a home. Requirements on lenders and the courts to exhaust all other possibilities have helped keep those figures very low.
However, separate figures from the Ministry of Justice, also published on Thursday, show that the number of cases in England and Wales at the first stage of the process - a repossession claim - rose to 4,185 in July to September. That was an increase of 14% compared with the same period a year earlier.
However, actual repossessions fell to a very low 622.
Tenants are not immune to these difficulties, as landlords with mortgages have been increasing their rent demands as they face their own mortgage pressures. Landlord repossessions in England and Wales rose by 11% over the same period. This process takes 23 weeks on average, compared with 57 weeks for homeowners.
UK Finance said the number of buy-to-let mortgages in arrears was 11,540 in the third quarter of the year, up 29% on the previous three months and double the level of a year earlier.
Greg Tsuman, director of lettings at Martyn Gerrard Estate Agents and president of trade body ARLA Propertymark, said: "It's a miserable situation for landlords who are losing money, renters who are paying extortionate rents, banks who are finding their loans are in arrears and HMRC isn't even increasing its income due to the number of landlords leaving the market. No one is winning in the present situation."
Data from the Royal Institution of Chartered Surveyors (RICS) shows that demand from tenants is continuing to rise while the number of landlords in the sector is falling.
It said most estate agents expected rents to keep rising, by around 4% over the next 12 months.
How have you been affected by any of the issues raised here? You can share your experience by emailing [email protected].
Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways: | Real Estate & Housing |
Grant Shapps has suggested it is unlikely the government will step in to protect households from rising energy bills this winter.
The energy secretary said in an interview with the Times that once inflation had fallen the government would “absolutely” need to cut taxes.
But he said it was unlikely the government would be able to shield people from steep energy bill rises with a price guarantee.
The government introduced an energy price guarantee last year, which kept the average dual-fuel energy bill at £2,500 a year over the winter.
The scheme came to an end in June, after the government postponed a cut in support that would have ended in April. A separate support scheme that paid about £400 a household from October last year, also came to an end last month.
Shapps said: “We don’t want to be in a position … of having to constantly pay energy bills.
“We’re having to tax people in order to pay it back to people … that money doesn’t come from nowhere.”
Shapps’s remarks come after the Bank of England raised interest rates for the 14th consecutive time to 5.25% while warning businesses and households that the cost of borrowing would remain high for at least the next two years.
Rishi Sunak, who has vowed to halve inflation by the year’s end, has come under increased pressure from Conservative MPs to boost the UK’s struggling economy and lower high inflation rates.
Shapps said: “You need to sort out the macro picture, get growth into the economy, bring down inflation and deal with the longer-term debt. Once you’ve done that you can set your path to lower taxes.
“We absolutely need to show that we understand the future for people in this country is to be a lower-taxed economy. Absolutely it’s in our DNA, in our heart, it’s in the prime minister’s heart as well.”
Analysts and energy firms have said stubbornly high energy bills are here to stay for the coming winter.
Earlier this week, the government announced 100-plus new drilling licences to extract as much oil and gas from the North Sea in a “maxing out policy”, a move which the prime minister described as being significantly more efficient than shipping gas and oil from other countries.
The announcement prompted concern from industry experts that the plans would “send a wrecking ball” through the UK’s climate commitments and led 100 energy firms to voice worries about the country’s over-reliance on gas and diversion from the country’s green agenda.
Labour has pledged to block all new domestic oil and gas developments and proposed heavy investments in renewable sources, such as wind and nuclear power, should the party win the next election. Shapps called the plans the “most absurd Just Stop Oil rent-a-policy I’ve ever heard”. | Energy & Natural Resources |
The Times reports that Rishi Sunak is likely to announce the scrapping of HS2 from Birmingham to Manchester, in his party conference speech tomorrow. The Guardian says an emergency Cabinet meeting will be held at the conference to approve what it calls "the biggest infrastructure climbdown in a generation". The i reports Northern Powerhouse Rail links to Liverpool and Hull may also be at risk because its construction is reliant on parts of HS2. Meanwhile the Daily Mail quotes a Conservative source as saying Mr Sunak is "ready to have the argument" about the issue, as he is making sure the government is not just "throwing good money after bad".
The Daily Telegraph reports that Health Secretary Steve Barclay will announce plans to ban transgender women from female hospital wards in England. Under the changes, trans patients would be housed in separate accommodation to bring back what Mr Barclay describes as a "common sense" approach to sex and equality within the NHS. The paper says he also plans for a return of "sex-specific" language - expelling terms such as "chestfeeding" instead of "breastfeeding", and guidance referring to pregnant "people" rather than women.
The Times says police could soon be given full access to Britain's passport database, to help catch thieves and shoplifters. It quotes Crime and Policing Minister Chris Philp as saying footage from CCTV or doorbell technology would be compared against facial images to help officers find a match "at the click of a button". The Guardian says civil liberties groups have described the plans as "authoritarian". It quotes one campaign group warning it would be "Orwellian" to have police scan people's faces and trawl through their personal information as they go to buy a pint of milk.
The Financial Times says that the head of the IMF has backed reforms that could give Beijing more voting power in the fund. In an interview, Kristalina Georgieva tells the paper the institution should represent changes in the global economy - which include the rise of China. The country has been criticised by creditors for hampering debt relief deals - and the paper says the US - the IMF's largest shareholder - has signalled it would veto an expansion of Beijing's voting rights.
The i reports that up to 200,000 people will be regularly tested as part of a major Covid study aimed at tracking the spread of the virus this winter. It says the survey will involve 32,000 lateral flow tests a week being sent out to volunteers. The study - led by the UK Health and Security Agency and the Office for National Statistics - will run from November to March, and operate in a similar way to a previous ONS study which was scrapped.
And the Mirror carries a study about how daily tea drinkers could be reducing their chances of developing Type-2 diabetes by 28%. It quotes the findings from Adelaide University but points out a weakness - most in the study drank a healthier type of Chinese "dark tea" rather than the black tea with milk that Britons consume. Nevertheless, the paper claims there's "Diabe-TEAs hope". | United Kingdom Business & Economics |
New public sector lenders created by the government since Brexit are investing two-thirds less than the UK was receiving from the EU’s European Investment Bank, a new report finds.
Over more than four decades, the EIB backed UK projects ranging from the Channel tunnel and the Manchester Metrolink to offshore windfarms and upgrading the National Grid.
The thinktank UK in a Changing Europe has compared its record with the work of new Treasury-backed institutions including the UK Infrastructure Bank (UKIB).
The EIB invested an average of £6.4bn in the UK between 2009 and 2016 in real terms, peaking at £7.5bn in 2016 – the year of the Brexit referendum.
By contrast, the successor institutions created by the government, including the Leeds-based UK Infrastructure Bank (UKIB), invested £2.4bn in 2022 – a third as much as the EIB was spending six years earlier.
“It is not clear that the UK’s domestic development banks will be able to fill the hole left by the EIB by the end of the decade. They lack staff and expertise, inhibiting them from scaling up operations quickly,” said the report’s author, Stephen Hunsaker.
“Nor have they achieved the coveted AAA credit rating of the EIB. Consequently, they lend at higher rates, making it more expensive to lend to public-interest projects.”
The new institutions – which include the Scottish National Investment Bank, the Development Bank of Wales and the British Business Bank – also appear to be less focused on infrastructure projects than the EIB.
Between them, they invested just 17% as much in infrastructure projects in 2022 as the EIB did before it began winding down its links with the UK.
Labour’s shadow City minister, Tulip Siddiq, said: “The Tories’ failure to invest in British industry has left growth on the floor and our public services crumbling, with working people paying the price.
“Labour will unlock billions of pounds of private sector investment through our national wealth fund to deliver new gigafactories, clean steel plants and renewable-ready ports across Britain.”
The Liberal Democrat Treasury spokesperson, Sarah Olney MP, said: “This damning report highlights yet another broken promise from this Conservative government. We already knew farmers and [fishers] have suffered from the government’s failed trade deals, but now their investment plans are left in tatters too.”
UKIB’s chief executive, former HSBC boss John Flint, has suggested it will accelerate investment in the coming years, in particular on projects connected to the government’s net zero ambitions.
He said earlier this month: “The financing needs that come directly off the government’s net zero strategy are just going to start increasing significantly year after year.”
But the UK in a Changing Europe report – titled “The Lending Gap” – argues that the UKIB’s growth will be constrained by strict Treasury limits on lending, imposed to protect taxpayers’ money.
Public sector lenders such as the EIB aim to harness the lower borrowing costs and longer time horizons of governments, to back projects that private investors deem too risky.
By providing certainty that a project will go ahead, they can then “crowd in” private funding.
But Hunsaker argues that the more modest scale of the new institutions means they have so far backed “fewer, smaller and lower-risk projects”. One recent high-profile investment by the UKIB was £24m in a Cornish lithium mine.
The analysis shows that EIB projects were not evenly spread across the UK. Between 2010 and 2019, the bank invested £858 per capita in Scotland and £773 a head in London – against £180 in Yorkshire and the Humber, for example.
Launching the UKIB two years ago, Rishi Sunak, then the chancellor, said it would contribute to the government’s levelling up agenda. The thinktank suggests there is little evidence of that happening so far, with most UKIB projects either nationwide, or covering multiple regions.
The research finds the only sector in which the domestically backed banks have matched EU institutions is in lending to small and medium-sized businesses.
The British Business Bank, launched by Vince Cable, then the business secretary, almost a decade ago, surpassed £1bn in lending last year, exceeding the maximum lent by the EIB’s small business arm, the European Investment Fund.
A Treasury spokesperson said: “the UK Infrastructure Bank was set up with £22bn financial capacity and is specifically designed to address net zero and levelling up, providing more targeted support than the EIB and is better aligned with the government’s objectives.
“In its first two years the Bank has done 20 deals worth over £1.87bn in digital infrastructure, green transport and clean energy, supporting 5,700 jobs across the country”. | Banking & Finance |
Hamas’ attacks Against Israel on October 7 have shifted the geopolitical landscape and triggered a looming Israeli ground assault in the Gaza Strip. Now the ripple effects are reaching the cryptocurrency industry, where they’ve become the United States Department of the Treasury’s rallying cry for a crackdown on cryptocurrency anonymity services.The US Treasury’s Financial Crimes Enforcement Network (FinCEN) today released a set of proposed rules that would designate foreign cryptocurrency “mixers”—services that blend users’ digital funds to offer more anonymity and make them harder to trace—as money laundering tools that pose a threat to national security and would thus face new sanctions and regulations. The new rules, if adopted following a 90-day period of public comment and debate, would potentially represent the broadest restrictions imposed yet on the mixing services and could make it far harder for cryptocurrency holders to put their money through the services before cashing it out at a US cryptocurrency exchange, or even at a foreign exchange that accepts US customers.While the proposed rules were almost certainly in the works long before October 7, the Treasury’s announcement of the proposed rules tied the push for a change in policy directly to the use of cryptocurrency by Hamas and militant groups in Gaza. “The Treasury Department is aggressively combatting illicit use of all aspects of the CVC ecosystem by terrorist groups,” Wally Adeyemo, deputy secretary of the Treasury, wrote in a statement, using the term “CVC” to mean convertible virtual currency. Adeyemo says that this includes Hamas and Palestinian Islamic Jihad, a militant group that often aligns with Hamas, which Israel blamed for an explosion at a hospital in Gaza earlier this week.Cryptocurrency mixers have existed almost as long as Bitcoin itself. They offer to take in a user’s cryptocurrency, blend it with that of other users, and return the funds so that they are harder to follow from their origin to destination on blockchains, which generally record every transaction in full public view. The Treasury’s rule change would designate those cryptocurrency-mixing services—or at least the majority of them that are based outside the US—as a “primary money laundering concern.” They would thus be considered a threat to US national security as defined by section 311 of the Patriot Act, a section of the law designed to restrict how domestic financial institutions interact with potential sources of terrorist financing.The rule change would mean that US financial services, as well foreign ones with US customers—including cryptocurrency exchanges—would have to go through extra record-keeping and reporting requirements for funds that have touched a foreign cryptocurrency mixer, and it might even allow the Treasury to block US exchanges from handling those funds. “We’ve never seen anything like this before,” says Ari Redbord, the head of global policy for TRM Labs, a blockchain analysis firm. Redbord notes that the rule change isn’t proposing a blanket ban on foreign mixing services, only new rules for interacting with them. “The reality, however, is that 311 actions oftentimes have a sort of name-and-shame effect, where people are just not wanting to engage with these platforms out of fear of being caught up in money laundering or other type of illicit activity.”Redbord, who previously served as an advisor to the Treasury’s undersecretary for Terrorism and Financial Intelligence, also notes that the proposal was no doubt being considered prior to the latest Hamas attacks and that the Treasury must have changed the proposal’s focus from the use of cryptocurrency by other national security threats, like North Korea and Russia, to Hamas and militant groups in recent days. “Having been at Treasury for a number of years, you don’t just roll out an action like this out over the course of 10 days,” says Redbord. “They’ve kind of shifted the narrative toward Hamas because that’s the news.”Hamas and militant groups’ use of cryptocurrency, while significant, pales in comparison to the amount of cryptocurrency used by other illicit actors. Hamas, for instance, raised $41 million in cryptocurrency over the past two years, and Palestinian Islamic Jihad raised $91 million, according to a report last week in the Wall Street Journal that cited analyses by cryptocurrency tracing firms and seizures by the Israeli government.It’s not clear, however, how much of those funds actually made it to these groups before being seized. In fact, Hamas asked its donors to stop using cryptocurrency in April of 2023, due to the public nature of the transactions on blockchains and the risk of prosecution. Cryptocurrency tracing firm Chainalysis, which frequently works with government and law enforcement customers, went so far as to publish a blog post yesterday cautioning against mistaken analyses that overestimate the role of cryptocurrency in financing entities like Hamas and the Palestinian Islamic Jihad.North Korean state-sponsored cybercriminals, Russian ransomware gangs, and other criminal groups, by contrast, have pocketed billions of dollars through their theft of cryptocurrency or use of the technology as a means of demanding extortion payments from victims. Thieves stole $3.8 billion in crypto last year—much of which went to the North Korean regime—and ransomware hackers extorted close to $450 million in just the first half of 2023, according to Chainalysis.Those criminals often use cryptocurrency mixing services, funneling hundreds of millions of dollars into mixing services like ChipMixer and Sinbad.io. In fact, US law enforcement and the Treasury Department have aggressively sanctioned or shut down one mixer service after another in recent years, including Blender, TornadoCash, and Bitzlato, often citing their use in laundering the profits of those North Korean and Russian hackers.The new FinCEN rules would be less severe than those sanctions, indictments, and busts—a new regulatory process rather than a ban—but also far wider in scope, says Jason Somensatto, Chainalysis’ head of North America public policy. “The impact can be much broader,” says Somensatto. “They can say that this applies to all mixing services that people are interacting with.”As the Treasury doubles down on its push to cut off crypto-based money laundering—and now points to Hamas as a new impetus for that crackdown—TRM Labs’ Redbord cautions that US regulators shouldn’t go too far in censuring services that do, in some cases, offer financial privacy to legitimate users. After all, without mixers, most cryptocurrency transactions are fully public in nature. “I think the challenge for regulators is, how do we thread the needle between stopping illicit actors from using these platforms but at the same time allow regular users to enable some degree of privacy?” Redbord says. “I think the concern is that this could very much be throwing the baby out with the bathwater.” | Crypto Trading & Speculation |
Humza Yousaf has raised the prospect of imposing a wealth tax to help fill a £1 billion black hole in his spending plans for 2024.
In particular, he cited a recent STUC report that proposed raising £1.4 billion per year by imposing a one per cent annual tax on wealth, including property, pension pots and expensive possessions such as jewellery and art.
If imposed on wealth above a £1 million threshold, it estimated that it would affect 12 per cent of households, each of which would pay an average £8,000 per year.
Mr Yousaf said this would also help him afford extra spending on tackling poverty after campaigners said they were “bitterly disappointed” at his first programme for government since he became First Minister.
But he said he could be forced to shelve proposals to raise income tax again on wealthier Scots if the Chancellor uses the UK Budget to cut the levy in England.
‘Unashamedly anti-poverty’
The First Minister said he would have to consider whether the cross-Border tax gap would grow so much that high earners would change their tax residence to south of the Border.
His intervention came the day after he pledged to be “unashamedly anti-poverty and pro-growth” as he unveiled his programme for government for 2024, Holyrood’s version of Westminster’s King’s Speech.
He pledged to “build a new relationship with business” to grow the economy but then reverted to Nicola Sturgeon’s Left-wing agenda, with promises to spend an extra £1 billion on benefits next year and trial a four-day week for some public sector workers.
Mr Yousaf also raised fears he was planning more income tax hikes for Scotland’s middle classes, ordering Shona Robison, the Finance Secretary, to “further progress delivery of the most progressive tax system in the UK”.
Ms Robison admitted in May 2023 that the Scottish Government’s day-to-day spending “could outstrip our funding” by £1 billion in 2024/25 rising to £1.9 billion in 2027/28.
Asked if he would consider a wealth tax to help plug the gap, Mr Yousaf told journalists in Edinburgh: “I’ve said before when it comes to the issue of wealth taxes, and I refer back to some of the work the STUC has done on that in particular, I’ve said that we should give consideration when it comes to the really tough financial constraints that we’re under, that we shouldn’t rule wealth taxes off the table.
“We haven’t made a decision on them but I equally haven’t said that we shouldn’t rule these matters out, because we are facing extraordinary pressures, and for anti-poverty organisations who want us to go further, we’ve got to be able to find the finances and resources.”
Anyone in Scotland earning more than £27,850 pays more income tax than if they lived south of the Border. Those earning a £50,000 salary pay almost £1,500 per year extra.
Mr Yousaf has previously promised to consider introducing a new 44 per cent rate charged on income between £75,000 and £125,140 with the aim of generating an extra £200 million per year.
The First Minister said several factors would influence the final decision on income tax rates and bands, which will be announced in the Scottish Budget, expected on Dec 14 2023.
High earners could move south
He said these included the recommendations of his government’s tax advisory group and the Chancellor’s decisions on income tax in England in the Autumn Statement, which he will unveil on Nov 22 2023.
While he said that “those who earn the most should pay the most”, he expressed concern that a widening tax band between Scotland and England could see higher earning Scots move south.
Jeremy Hunt this week downplayed the chances of tax cuts, saying the UK Government’s priority was to halve inflation.
But the First Minister said: “If the UK Government cuts tax, for example, we will have to be mindful of the divergence that exists. That divergence is fine, absolutely fine, to a point, but we have to be careful around the behavioural impacts of any divergence.”
Liz Smith, the Scottish Tories’ shadow finance secretary, said: “Unfortunately, judging by his depressingly predictable programme for government, the First Minister has no plans to rein in SNP spending but instead wants to introduce even more taxes to cover the black hole in his finances.”
Trade union Unite became the latest Left-wing organisation to issue a scathing assessment of the programme for government, saying Mr Yousaf had “outlined a long list of priorities but next to no detail on how they will be funded and delivered”. | United Kingdom Business & Economics |
Ant Receives Chinese Government Nod To Roll Out AI Services
Ant Group Co., the fintech affiliate of Alibaba Group Holding Ltd., received approval from the Chinese government to roll out products powered by its large language model Bailing to the public.
(Bloomberg) -- Ant Group Co., the fintech affiliate of Alibaba Group Holding Ltd., received approval from the Chinese government to roll out products powered by its large language model Bailing to the public.
Bailing will be applied to Ant’s various services and help with innovation, Xu Peng, vice president of Ant Group said in a statement on Monday.
Chinese tech firms from Alibaba to Tencent Holdings Ltd. and Baidu Inc. have joined startups Baichuan and Zhipu to release ChatGPT-like products, joining a global race to capitalize on the potential of generative AI. Ant, the owner of Alipay, can leverage the popularity of the mobile payment service to gain more data and insight on user habits.
Hangzhou-based Alibaba has defined AI as one of its two core strategies as it goes through a six-way spinoff.
The government approval dovetails with efforts at Alibaba. On Monday, the company’s commerce unit also pushed out a suite of tools including chatbots for small businesses trying to expand overseas.
Last week, Alibaba Cloud - which now hosts half of China’s generative AI firms and serves about 80% of China’s technology companies - released Tongyi Qianwen 2.0. It also introduced several sector-focused models at the company’s annual tech conference in Hangzhou.
In September, Ant unveiled two applications powered by its financial large language model. One is known as Zhixiaobao, which answers questions for customers; and the other Zhixiaozhu is an assistant for financial professionals.
©2023 Bloomberg L.P. | Banking & Finance |
Alok Industries Shares Surge 8% After Board Approves Raising Rs 3,300 Crore
The company has set a coupon of 9% per annum on the NCRPS, which are redeemable at par for a period not exceeding 20 years.
Shares of Alok Industries Ltd. surged nearly 8% on Tuesday after the board approved raising Rs 3,300 crore via preferential issue of non-convertible redeemable preference shares having a face value of Re 1 each.
The textile company will reclassify its authorised share capital by dividing a total of 4,000-crore shares into 3,500-crore and 500-crore equity shares, according to an exchange filing.
It has set a coupon rate of 9% per annum on the NCRPS, which are redeemable at par for a period not exceeding 20 years from the date of allotment. These NCRPS will not be listed on any stock exchange, the company said.
Alok Industries' stock rose as much as 7.86% during the day to Rs 19.9 apiece, the highest since Oct. 20. It pared gains to trade 6.78% higher at Rs 19.7 apiece compared to a 0.22% decline in the benchmark NSE Nifty 50 at 1.36 p.m.
It has risen 26.69% on a year-to-date basis. The total traded volume so far in the day stood at 2.5 times its 30-day average. The relative strength index was at 60.3. Bloomberg covers no analyst tracking the company. | Banking & Finance |
(Bloomberg) -- Options in GameStop Corp. are seeing wild volume as traders bet that the stock will rally 50% in little over a week.
Most Read from Bloomberg
A Dec. 8 $20 call option changed hands 17,500 times by midday in New York. The vast majority of the positions were newly opened and traded in small blocks throughout the morning — a sign that appetite could be coming from individual retail traders.
GameStop has long been a favorite of the Wall Street Bets crowd, who notoriously pushed the shares up 2,700% within a few weeks back in January 2021. The trade “brings back memories of the meme craze, albeit at a much smaller magnitude,” said Daniel Kirsch, head of options at Piper Sandler & Co. He doesn’t think the stock is likely to have another surge like the one that happened during the Covid-19 lockdowns.
The Dec. 8 calls came cheap, anywhere from 6 cents to 21 cents per contract. The positions would also capture the video gaming retailer’s earnings report, which is scheduled for Dec. 6. Options markets are implying a 12% move in the underlying shares — far short of the advance needed to make the Dec. 8 call option in-the-money, according to data compiled by Bloomberg.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Stocks Trading & Speculation |
UK’s Second City Declares Bankruptcy After Equal Pay Claim
Prime Minister Rishi Sunak ruled out a rescue for the struggling council back in July despite growing concerns over the costs facing local leaders.
(Bloomberg) -- Birmingham City Council, the largest local authority in Europe, effectively declared bankruptcy after being hit by a crippling bill from an equal pay claim.
The Labour-run administration representing the UK’s second-largest city issued a so-called 114 notice, putting a stop to all but essential spending and becoming the latest in a string of councils to plunge into financial distress.
Birmingham in central England joins the London commuter authorities of Woking, Thurrock and Croydon in its declaration. It raises questions about the stability of budgets that have been squeezed by cuts from the central government along with risky investments in commercial properties, the pandemic and inflation.
Birmingham City Council said it has a shortfall of £87 million ($109 million) in the current financial year and also faces a “potential liability relating to equal pay claims in the region of £650 million to £760 million.”
It has been forced to pay out after a Supreme Court ruling in 2012 sided with a group of largely female employees who had missed out on bonuses that were given to staff in traditionally male-dominated roles at the council. It has already paid out more than £1 billion on the equal-pay claim and was also hit with costs from a new IT system.
Prime Minister Rishi Sunak ruled out a rescue for the struggling council back in July despite growing concerns over the costs facing local leaders.
The council also blamed “unprecedented financial challenges,” including inflation, rising demand for adult social care and “dramatic reductions” in income from business taxes.
A section 114 notice is issued by a council when it believes its income will not be able to meet spending. It is widely reported as effective bankruptcy for a council, meaning it cannot make new spending commitments. It often leads to a new budget with reduced expenditure.
“The Council has insufficient resources to meet the equal pay expenditure and currently does not have any other means of meeting this liability,” a statement from a Birmingham City Council spokesperson said.
“The notice means all new spending, with the exception of protecting vulnerable people and statutory services, must stop immediately.”
The council will “tighten the spend controls already in place and put them in the hands of the Section 151 Officer to ensure there is complete grip,” the statement added.
“It will be concerning for the people of Birmingham,” Prime Minister Rishi Sunak’s spokesman Max Blain told reporters on Tuesday.
The government had already provided extra funding for the council, at around 10% of its budget, but “it’s for locally elected councils to manage their own budgets,” Blain said.
The government was “engaging” with the council about “how they are able to focus on core services,” Blain added. Ministers also requested that it ordered an “independent governance review.”
(Updates with details on the decision and comment from Sunak’s office)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | United Kingdom Business & Economics |
The prime minister will emphasise the need to strengthen Britain's energy security when he meets industry leaders this week.
Rishi Sunak is to set out details of government's plans for the UK's fossil fuel and green industries.
It comes as some Conservative MPs have been calling for a rethink of the government's green policies.
Environmental groups have expressed "deep alarm" at reports the government may water down its green commitments.
Anger over London Mayor Sadiq Khan's plans to extend the capital's ultra-low emission zone (Ulez) was widely seen as helping seal victory for the Conservatives in the Uxbridge by-election.
Both Mr Sunak and Labour leader Sir Keir Starmer have urged Mr Khan to reflect on the Ulez rollout amid ongoing cost-of-living pressures.
With intense heatwaves worldwide this month prompting climate change warnings, the backlash against Ulez has propelled net zero to the top of the UK's political agenda.
Along with Energy Security Secretary Grant Shapps, the PM will meet senior representatives from the oil and gas, renewable and nuclear industries over the week.
The government hopes the meetings will ensure the UK is making the most of opportunities to boost its energy infrastructure, and drive forward measures "to safeguard energy security and reduce reliance on hostile states".
It said Mr Sunak will set out how the UK's industry expertise will create jobs, grow the British economy and "ensure tyrants like [Russian president] Putin can never again use energy as a weapon to blackmail the UK".
The measures include investment to "put powering up Britain from Britain first", making the most of the UK's resources and reducing reliance on imported fossil fuels.
And support for British innovation in new industries such as carbon capture and storage, and new renewables technologies.
The government, despite alarm from climate campaigners, is also committed to new oil and gas licences in the North Sea.
In its energy security strategy, published in March, the government said it was committed to further oil and gas exploration to "minimise our reliance on overseas imports".
Calling energy security "national security", Mr Shapps said: "Since Putin's illegal invasion of Ukraine the government has driven Putin from our energy market, paid around half of a typical family's energy bill and grown our economy by driving forward major energy projects.
"This week we will go even further. Forging ahead with critical measures to power up Britain from Britain, including supporting our invaluable oil and gas industry, making the most of our home-grown energy sources and backing British innovation in renewables."
Shadow climate secretary Ed Miliband said families and businesses were paying the price, in higher energy bills, of "13 years of failed Tory energy policy".
"Labour will take no lessons from the party that banned onshore wind, crashed the market for solar, stalled energy efficiency, haven't got any new nuclear plants started, and left us at the mercy of tyrants across the world."
Jamie Peters, climate coordinator at Friends of the Earth, said ending the UK's "reliance" on fossil fuels was the "only sensible and effective way" of increasing energy security.
"The UK is blessed with huge renewable energy resources, offshore and onshore, and we should be making better use of these for long-term security and economic prosperity.
"With parts of the world literally on fire, we need our politicians to show bolder leadership on cutting emissions - not more dither and delay." | Energy & Natural Resources |
Central Bank Digital Currency Can Play Important Role In Cross-Border Payment: RBI Governor
"The learning has been excellent and more than what it was one year ago. We are even more convinced that CBDC can prove to be the most effective and efficient mode for cross-border payments in particular, other than of course domestic transactions. And this is not something which is very difficult," he said at an interaction at IMF Governor Talks at Marrakesh, Morocco early this month.
Reserve Bank Governor Shaktikanta Das has said that the Central Bank Digital Currency (CBDC), which is being promoted by the central bank, can play an important role in cross-border payments without much difficulty.
The Reserve Bank, he said, has undertaken pilot projects with regard to promotion of the CBDC and the results have been 'excellent'. The CBDC as a pilot was introduced in the wholesale and retail segments and will now be extended to overnight money markets.
"The learning has been excellent and more than what it was one year ago. We are even more convinced that CBDC can prove to be the most effective and efficient mode for cross-border payments in particular, other than of course domestic transactions. And this is not something which is very difficult," he said at an interaction at IMF Governor Talks at Marrakesh, Morocco early this month.
He emphasised that while paper currency will continue, the CBDC is going to be the future currency of the world.
"CBDC is going to be the future currency of the world and it is necessary that every central bank, every country works on CBDC," he said.
He further said the world is moving towards technology, and CBDCs have a major role, because they can really facilitate efficient, cost-effective and faster payments across jurisdictions for cross border payments for cross border transactions.
On India's foreign exchange reserves, the governor said it was a conscious decision to build up the reserves as a buffer and insurance against spillover risks.
"We have to be self-dependent. We have to have our strong reserves. So with that objective, we have been building up very strong reserves and in fact, that has given great confidence to the market, that whatever be the challenge, India will be able to meet its external sector obligations," he said.
Das said the reserves did help India during the Ukraine war when the US dollar suddenly became very strong and all the emerging market currencies depreciated.
The Indian currency did not depreciate as much because the market had confidence that the Reserve Bank of India would be able to meet its obligations.
The governor further said he would not hesitate to say that the RBI does intervene in the market but 'our intervention is both ways'.
Das said sometimes the RBI buys dollars and sometimes it sells dollars as it depends on which way the market is moving.
But RBI's objective is not to fix the rupee to have a particular level as the central bank does not have any particular level (exchange rate) of Indian rupee for the Indian rupee in its mind against the dollar.
Das also stressed the importance of coordination between the fiscal and monetary authorities. | Banking & Finance |
Pensioners now have more disposable income than working families, analysis has revealed.
The average disposable income for pensioner couples, after housing costs, rose by close to two thirds between 1999 and the end of 2022, from £16,588 to £27,144.
During the same period, disposable income for couples with children only rose 41pc, from £17,524 to £24,752, analysis of official data by brokers Interactive Investor found.
Following a 10pc increase in the state pension last year, pensioners had around £3,924 more disposable income per year than the average family with children by the end of 2022 – a difference of 23pc.
The data shows, if families benefited from the same rises as pensioners over the last 23 years, they would have £28,676 in disposable income each year.
It comes after Prime Minister Rishi Sunak this week refused to commit to the pensions triple lock beyond the next election.
‘Millions of families feel no better off than 15 years ago’
Higher prices are feeding through to rises in retirement benefits, thanks to the increasingly expensive inflation protection mechanism. Critics have said the policy may have to be funded by increasing the state pension age.
At the same time, the salaries of working families, who also face vast jumps in their mortgages, are stagnating in real terms – putting a squeeze on incomes. Families also face the highest tax burden since the Second World War following a “stealth tax” freeze in thresholds.
Alice Guy, of Interactive Investor, said: “Rising pensioner incomes have been a success story of the last 20 years, as the triple lock and rising private pension wealth dragged pensioner incomes up by their bootstraps.
“Incomes for families have risen a lot more slowly since 1999, with wage rises hitting the slow lane after the 2008 financial crash. Wage rises since that point have been negligible in real terms, so millions of families feel no better off than 15 years ago. Working age couples with kids are now worse off on average after housing costs than pensioner couples, often finding themselves less able to save and more exposed to financial shocks like the cost-of-living crisis.”
The Prime Minister said earlier this week he “remains committed” to the triple lock, but did not offer a guarantee that it will stay in place beyond next year.
Introduced by David Cameron, the mechanism ensures the state pension rises by the highest of either wage rises, inflation or 2.5pc.
This April, high inflation pushed the state pension up 10pc. It is on course to rise 8.5pc in 2024, after wages rose 8.5pc in the 12 months to July.
However, the Treasury is looking at tweaking how average earnings are measured this year, so that pension payments go up by a lower amount.
Usually, the number used includes bonuses, but ministers are considering stripping these out. This would reduce the increase to 7.8pc.
The state pension rose by just 3.1pc in April 2022, in line with inflation but lower than an earnings figure of 8.1pc. Mr Sunak, who was then chancellor, argued that the pandemic had distorted the wage data. | Inflation |
Customers of Bed Bath & Beyond still have a few more weeks to shop and use coupons despite the struggling home goods retailer.
The company plans to shut all of its 360 Bed Bath & Beyond and 120 Buy Buy Baby locations by the end of June. Here's what to know about using reward points and in-store credit before stores close for good.
How long can I shop in stores?
Customers can still shop at Bed Bath & Beyond stores, but locations will start to close as soon as Wednesday, April 26. The online store and mobile app is still operational, although the company hasn't said if those shopping options will remain open during the bankruptcy proceedings. Anyone who bought something online but hasn't received it will still have their order fulfilled.
Can I still use rewards, store credits, coupons and gift cards?
Welcome Rewards (which is Bed Bath & Beyond's frequent shopper points program) and in-store credits will be accepted until May 15. Gift cards will be good until May 8, and coupons will be accepted until Wednesday. Customers with a Bed Bath & Beyond Rewards+ credit card can still use it until stores close. But those with a Rewards+ Loyalty membership, which cost $29 annually, cannot cancel it for a refund.
The Container Store also, April 26, that for a limited time it will accept "20% off a single item" coupon.
"Bring in a blue coupon to receive 20% off a single item and experience our vast array of NEW products for college," the company wrote on Twitter.
When is the last day I can return items?
Returns are welcome until May 24, Bed Bath & Beyond said. Purchases made at a store on its closing day are final.
Will I receive items that were purchased on my baby registry?
Bed Bath & Beyond said it plans to work with an outside company to transfer registry data and fulfill those orders. The company hasn't released specifics on that move yet.
Who do I contact if I have more questions?
The Bed Bath and Beyond bankruptcy case can be found here. Customers with questions can email [email protected] or call (833) 570-5355. For those calling from outside the U.S. or Canada, the number is (646) 440-4806.
for more features. | Consumer & Retail |
When choosing where to set aside money for retirement, you need to weigh your options carefully. You’re likely going from one main income source to multiple smaller income sources when you retire. You may also want buy some security for your family in case you die unexpectedly. Sometimes, those two goals can be in conflict with one another, meaning you’ll have to figure out how to achieve them both. One way this can be achieved is using a combination of a life insurance policy and a Roth IRA. Let’s look at how those two products work and how you can use them.
For more help with both insurance and retirement planning, consider working with a financial advisor.
Life Insurance Vs. Roth IRAs
Life insurance and Roth IRAs are two different products. One is a policy you pay for in exchange for a payout when you die. The other is an investment account in which you can stow away money that will grow with the market tax-free. Each has its pros and cons, with its own unique reasons for investing.
Life Insurance Pros and Cons
Life insurance works like any other insurance product. You pay a premium up front in exchange for a payment when needed — in this case, a payment to your family after you die. The cost of that premium will depend on many factors, such as your health and the type of coverage you sign up for. The money your family gets will be tax-free and can be used for funeral costs, estate taxes and other financial burdens.
There are some downsides to life insurance. First of all, premiums are expensive. Adults over the age of 55 can expect to pay more than $1,000 per month for a whole life insurance policy of $500,000. If you pay that for 20 years, that’s $240,000. You could have invested that money or spent it other places you needed it.
Another major downside is that this money is for after you die, meaning it can’t help you during retirement. You can borrow against your life insurance policy, but it’s generally not recommended. You can take advantage of a life insurance retirement plan (LIRP), but any money that you borrow will have to be paid back with interest. If you have a retirement account, you can use that to fund your retirement. That’s not something you can do with a life insurance policy.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Roth IRA Pros and Cons
Roth IRAs are great options for planning your retirement. They are funded with money you’ve already paid income tax on, so any money that’s withdrawn is tax-free. That means you can see funds grow with the market without having to worry about paying taxes on them when you go to withdraw. Your beneficiaries also won’t have to pay income tax on your Roth IRA if they inherit it. After the age of 59 1/2, there’s no withdrawal penalty for your Roth IRA, so you can take the money out and do with it as you wish.
The big downside to a Roth IRA over a life insurance policy is that your beneficiaries will have to pay estate tax on inheriting an IRA. You also won’t have the protection of a policy in place when you die. Another downside to consider is contribution limits. For 2023, you can only invest $6,500 in an IRA if you’re under the age of 50, or $7,500 if you’re over the age of 50.
Deciding Between Life Insurance and a Roth IRA
Deciding where to invest your money depends on where you are in life. A Roth IRA benefits those who are planning their retirement now, especially for younger workers, and plan to live off those funds. They may not expect to leave a lot of money in their IRA when they die. Also, a Roth IRA may be attractive when there is concern about taxes on retirement money withdrawals.
Life insurance can become more appealing as you get closer to death. Having the assurance that your beneficiaries will inherit a policy makes the money spent worthwhile. On top of that, the inheritance of the policy is free of estate tax. If you suspect you’ll leave a large estate, leaving it in an insurance policy can be beneficial to your heirs.
Given the numerous variations in types of life insurance, this approach offers many ways to pay for retirement. For example, a life insurance retirement plan (LIRP) is a permanent life insurance policy that you over-fund over the lifetime of the policy. This builds value in what is known as the plan’s cash account. You can access this money by taking out loans against the account’s balance.
Of course, one option is to put some of your money into a Roth IRA and also buy a life insurance policy. This way, there is some tax-free money for your family after your death and you have money to live off of while you are retired.
The Bottom Line
When comparing a Roth IRA and life insurance, it’s easy to see that both are beneficial to have. Note that there are a large variety of life insurance products. What’s right for you depends on where you are in life and the level of security you want. Roth IRAs are better for a retirement income, but life insurance can offer other benefits, particularly when leaving your estate to your heirs.
Retirement Planning Tips
Industry experts say that people who work with a financial advisor are twice as likely to meet their retirement goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Planning for retirement? Use SmartAsset’s retirement calculator to determine how much you’ll need to save to retire comfortably and confidently.
If you’re employer offers 401(k) matching, you need to take full advantage of it. It can be a way to quickly grow your savings. SmartAsset’s 401(k) calculator can help you estimate your total retirement savings based on your contributions and how much your employer matches.
Photo credit: ©iStock.com/Rockaa, ©iStock.com/Brothers91, ©iStock.com/Drazen Zigic | Personal Finance & Financial Education |
“I wanted my employees to hear it from me,” says Madison Campbell. “It might come out that I’m dating someone controversial.”
The 27-year-old cofounder of Leda Health, a health start-up for sexual assault survivors, is walking me through the complexities of dating a man once labeled the most hated in America. Her relationship with convicted fraudster Martin Shkreli, 40, began in February. They were both seeing other people at the time and living on opposite sides of the country—she in San Francisco and he in New York, where Shkreli had been recently released from a halfway house. “Within four days of our first meeting, Martin tells me he loves me—over text,” Campbell says. “And that’s why he’s not here now,” she adds of Shkreli’s absence during our sit-down in mid-August. “He’s very socially awkward.”
Campbell, meanwhile, is not. She is casual and confident—and having raised $9.4 million since her company’s inception in 2019, perhaps she has a reason to be.
Wearing mom jeans, a baseball tee, and a headband that keeps a flowy bunch of blonde at bay, Campbell is seated in the chic Lower East Side apartment of one of her advisers, sipping green tea as she recalls how she first fell for Shkreli, the former hedge funder and pharmaceutical executive who was released from federal prison last year after serving a little over four years of a seven-year sentence for securities fraud.
Shkreli first attained notoriety in 2015 after his company, Turing Pharmaceuticals (now known as Vyera), acquired the US rights to sell Daraprim—an anti-parasitic medication often prescribed to HIV patients—and raised the per-pill price by 5,000%. Facing public backlash over the hike, Shkreli said he should have “raised prices higher,” smirked defiantly at lawmakers when he was made to testify before Congress, and insisted that Daraprim was unprofitable before his company acquired it. Last year, in a ruling separate from his conviction in the $7.3 million Ponzi-like scheme that ensnared over a dozen investors in three of his companies, Shkreli was permanently banned from working in pharmaceuticals and ordered to repay $64.6 million in profits netted from hiking the price of Daraprim while restricting other companies from entering the market.
Campbell can commiserate with some of Shkreli’s legal battles: She says Leda Health has received cease and desist letters from 11 attorneys general over its early-evidence kits—which allow victims of sexual assault to collect DNA evidence at home without reporting to a hospital. The letter from the Washington State attorney general claims consumers could be deceived into believing a Leda kit has “equivalent evidentiary value” to a kit administered by a medical professional. In Campbell’s view, Leda—which also provides STI testing, emergency contraceptives, and a 24/7 support chat—gives survivors a way to record evidence without being “poked and prodded” in a hospital. She also says that what Leda’s kits offer is nothing unprecedented: “Survivors have always self-collected evidence, whether it is underwear in a bag, [or] a condom in the trash.”
In any case, Campbell seems perfectly fine with the scrutiny her venture has attracted. “We’re both health care pariahs,” Campbell observes of herself and Shkreli. “You know when you first start dating someone, you have those conversations like, ‘Do you know so and so?’ For us, that was like, ‘Oh, this attorney general went after you? OK, well, me too.’ I can’t imagine that there are many women in his dating pool who can go toe-to-toe on that kind of stuff.” Controversy isn’t all they have in common: They both have a pronounced libertarian streak, an edgelord sensibility online, and a distinct distaste for Hillary Clinton. (While Campbell identifies as an independent, she told me that she hopes “to show that there can be young women from tech in the Republican Party.”) They also share Catholic upbringings—which Campbell thought might help smooth things over when she introduced Shkreli to her family. “I didn’t want to lead with ‘My boyfriend went to prison,’” she says, “but it was a little easier to tell my parents that I’m finally dating a Catholic.”
Shortly after she first met Shkreli in person in March, Campbell was reeling from a lengthy New York magazine profile that examined her leadership at Leda. In the article, critics accused the company of misleading rape survivors and ex-employees said she created a “hostile” work environment “where boundaries were nonexistent.” (On the former claim, Campbell replied, “We have disclaimers, both on the kits and online, so we’re very transparent about the fact that not all evidence is going to be admissible.” When asked about the latter one, she called it “fake news,” adding, “I certainly haven't always done it perfectly. But never have I been inhumane or created a hostile environment towards my staff.”) The night the story was published, Shkreli phoned Campbell to offer advice and comfort. “We just talked and talked about the article, what people were saying about me, how to get to the other side of it,” she tells me. “That was the beginning of it. That’s when I started to reevaluate what I wanted in life and what I wanted in a partner.”
Not long after, Campbell moved to New York and the two began officially dating. Shkreli, who declined my interview requests and blocked me on X, formerly known as Twitter, has been living in Queens since his release. Among his post-prison enterprises is a controversial large language model chatbot named Dr. Gupta.ai that dispenses unlimited medical advice for $20 a month. (Despite its name, the chatbot is not a physician, and as such, exists outside of a regulated relationship with people seeking medical advice, making it unclear who is liable if they receive false information.) For months after they met, Campbell opted to keep their relationship in the cocoon stage, avoiding any public mention of it outside of cryptic tweets. “We’re both homebodies anyway,” she explains.
But whispers of their relationship eventually spread throughout Leda Health. According to Campbell, Liesel Vaidya, the cofounder and former chief technology officer, took particular issue. (Vaidya did not respond to requests for comment.) Campbell says that Vaidya alerted a number of investors and employees to Campbell’s relationship with Shkreli and warned of the damage it could inflict on the brand. Campbell says she was then bombarded with questions from disturbed investors. “I got a call from your cofounder that was very strange,’” Campbell recalls one investor telling her. “‘I need to ask you, are you dating Martin Shkreli?’”
Another investor told me that they were on the receiving end of one of these calls from Vaidya; though the call was about broader issues at Leda and not just Campbell’s dating life. “Liesel was concerned that [Campbell] had a relationship with someone who literally went to prison for securities fraud,” the investor said. “And I have to admit, I was concerned about that too.” But aside from encouraging Vaidya to speak with Campbell directly, the investor determined that the relationship didn’t warrant further action on their part.
“I think it was a curious event in Madison's life, which is full of curious events,” the investor added. “This is not an ordinary company, and no one should expect an ordinary CEO. And the reason I back this company is Madison—she has such an extraordinary vision and presence.”
Others at the company felt differently, according to Campbell. “They hired law firms—like expensive, large law firms—to try to figure out how to get rid of me,” Campbell adds, a move confirmed to me by Leda’s chief counsel. Meanwhile, Leda’s counsel advised employees that they should not speak to investors in a way that might damage the company’s reputation, while Campbell says she didn’t want her colleagues calling investors “just to tell them I’m an evil awful person for dating Martin Shkreli.”
A second investor I spoke to was adamant about siding with Campbell throughout the ordeal. “They had no business bringing that up,” the investor said, “and if you want to have a coup of a female founder over who they’re sleeping with, that’s pretty bad.”
Associations with Shkreli have caused professional problems for others in the past: Christie Smythe, a former Bloomberg News reporter, who at one point had been covering Shkreli’s case, left the outlet in 2018 after her employer reportedly determined that her behavior with Shkreli was unprofessional (they’d exchanged emails while he was in prison awaiting his sentencing). But at Leda, the Shkreli-induced unrest fizzled out. Vaidya left the company in July, and not a single investor abandoned ship, Campbell tells me. One backer, she says, even told her that any uproar caused by the relationship would be a boon for her image: “‘People are gonna get mad at you, but it’s just gonna make you more famous.’” According to Campbell, another colleague told her that Shkreli has been tarred over something—raising drug prices by hefty amounts—that other pharmaceutical companies do all the time. (A 5,000% overnight hike is an industry anomaly.)
As for Shkreli’s convictions, Campbell has an answer for that too. “He served his time, he’s rehabilitated, he’s trying to do amazing things in the world.” But her own father saw things differently. When she tried to set up an online chess match—“a neutral playing field,” she thought—between the two men, her father was less than eager. “He was like, ‘I’m not going to do that,’” she tells me. “He was very, very mad at me. Very against [the relationship]. He stopped talking to me for three months.”
Personal and professional tumult notwithstanding, Campbell says she has no regrets. Her relationship with Shkreli, whom she described as the “love of her life,” is something that she believes everyone can understand. “I would hope that from investors, colleagues, regulators, you name it, they can have their own qualms about me, but dragging in their preconceived opinions about someone else,” she says, “it’s just wrong.”
“This is just a matter of me growing up and figuring out who was going to be there for the long run,” she adds.
But by August 17, less than a week after I met with Campbell, the two had broken up. Without going into specifics, Campbell told me things spiraled during a conversation about their future and what they wanted out of the relationship. “There were irreconcilable differences,” she said. “I still incredibly respect him and wish him well with all of his business ventures.”
Shkreli was less diplomatic. He began fielding inquiries for a new romantic partner a day after their relationship ended and blamed the schism on commitment issues—sort of. “I have discovered I don’t have the time or capacity to really be in a relationship,” he wrote in a post on X, “but if you really want to date me, here is a form you can fill out.” The linked Google Form asked prospective candidates to submit their cover letter, weight and body measurements, and willingness to become pregnant. “Would you hold me down if I got locked up?” asked another question.
A few weeks after ending things with Shkreli, Campbell moved back to her hometown of Pittsburgh, where she has since landed the title of Miss Pittsburgh 2023. She now plans to get involved in local activism and politics. “There can be privatized solutions for very hard social issues,” Campbell told me. “I really have seen the power in using capitalism for good.” | Banking & Finance |
Facing cross-examination at his criminal fraud trial yesterday, Sam Bankman-Fried repeatedly testified that he doesn't remember details about what he did and said while running cryptocurrency exchange FTX. Bankman-Fried responded "I'm not sure" or "I can't recall" to many questions from US prosecutor Danielle Sassoon, according to news reports from the trial.
Sassoon "grilled Mr. Bankman-Fried about the inconsistencies between his public statements and how he ran his crypto empire before it collapsed spectacularly in November," a New York Times article said. Bankman-Fried "insisted that he couldn't remember much of what he had said publicly" and "added that he wasn't significantly involved in the hedge fund he founded, Alameda Research."
The New York Post wrote that Bankman-Fried answered with some variation of "I can't recall" over 100 times on Monday. But Sassoon "presented jurors with a mountain of tweets, emails, and podcast clips revealing that the MIT grad did in fact say dozens of things he claimed not to have recalled," the article said.
"After much pressing, Bankman-Fried eventually confirmed one aspect of prosecutors' sprawling fraud and conspiracy case—that his hedge fund Alameda, in an unheard-of arrangement, could pull out billions of dollars it did not own from FTX using a near-unlimited line of credit," the New York Post wrote. "I don't deny it," Bankman-Fried reportedly said. But he seemed to backtrack on that admission hours later, saying, "I'm not sure" when asked if Alameda was allowed to exceed normal borrowing limits, the article said.
Bankman-Fried reportedly drew a rebuke from Judge Lewis Kaplan when the defendant asked Sassoon to "rephrase" certain questions. "Could you just answer the question instead of trying to ask the questioner what she is referring to?" Kaplan told Bankman-Fried.
"When asked whether he was 'involved' in trading at Alameda—a hedge fund he owned 90 percent of—Bankman-Fried replied, 'Depends what you mean by trading,'" the New York Post article said. "Sassoon then showed jurors several instances of Bankman-Fried ordering lieutenants to make trades on Alameda."
FTX/Alameda relationship probed
In this trial, Bankman-Fried faces six charges for defrauding FTX's and Alameda's customers and investors and one charge for conspiracy to commit money laundering. The seven charges' maximum sentences add up to 110 years. He faces five additional criminal charges in a separate trial scheduled for April 2024.
Caroline Ellison, the former Alameda Research CEO who dated Bankman-Fried, testified earlier that Bankman-Fried directed her to commit crimes and that "I would always ultimately defer to Sam." She said that Bankman-Fried had a "utilitarian" philosophy in which rules like "don't lie" and "don't steal" did not fit into his moral framework.
Ellison told the jury about Alameda using FTX customer money, testifying that Bankman-Fried "said FTX would be a good source of capital, and he set up a system that allowed Alameda to borrow from FTX." She also said Bankman-Fried directed her to create a misleading balance sheet so the firm could get more loans.
Under cross-examination yesterday, Bankman-Fried said he didn't remember statements he made publicly about the ties between FTX and Alameda, a Wall Street Journal article said:
Sassoon pressed Bankman-Fried on the relationship between the two entities, including what prosecutors allege were Alameda's secret and unique privileges to borrow virtually unlimited sums from FTX.
"Sitting here today, you don't recall assuring customers that Alameda generally played by the same rules as other customers on FTX?" Sassoon asked. "I'm not sure," Bankman-Fried said.
The trial is in US District Court in New York City. | Crypto Trading & Speculation |
Amid the hurricane of numbers and blizzard of words in the Autumn Statement, just three things really matter: Living standards, the tax burden, and tax cuts.
The government sought to sail the statement on a breeze of rhetoric about tax cuts, from the prime minister down.
And, yes, they were flagged prominently and proudly in Jeremy Hunt's words.
He acknowledged too - in my interview with him - his political inheritance: The pandemic, as well as support paying our energy bills that shot up after Russia invaded Ukraine.
Each were huge and rare moments of colossal state intervention which the Conservatives argue were pragmatic, sensible and widely supported ideas - but ones that were going to have deep and long-lasting impacts on the public finances.
And then there is the current economic picture, which is sluggish.
Let's take a look at each of those three things I mentioned, in turn.
Firstly, living standards.
Here is what the Office for Budget Responsibility said about them: "Living standards, as measured by real household disposable income per person, are forecast to be 3.5% lower in 2024-25 than their pre-pandemic level."
This, the OBR adds, isn't as bad as they had previously forecast (and does underline how forecasts can and do change - and change significantly), but "it still represents the largest reduction in real living standards since Office for National Statistics records began in the 1950s."
Graphs and rhetoric, spreadsheets and spin can't alter this.
So what about the tax burden, and tax cuts?
Again, let's look at what the OBR has to say.
The tax cuts will reduce the tax burden, compared to if the tax cuts hadn't happened, as you might expect.
But there's a twist.
"Tax changes in this Autumn Statement reduce the tax burden by 0.7% of GDP, but it still rises in every year to a post-war high of 37.7% of GDP by 2028-29."
GDP is gross domestic product, or national income.
And the principal reason the tax burden is continuing to grow, albeit at a slower rate, is the thresholds at which people start paying tax on their income, or start paying a higher rate, have been frozen - as inflation has soared.
So millions of people have been dragged into paying a higher rate of tax, without the government doing anything.
Our economics editor Faisal Islam has written about this here.
It prompts an interesting thought about what makes news and what doesn't.
When governments (or opposition parties) choose to do something by changing something, like putting up or cutting taxes, that makes news.
But the decision to opt for inaction, rather than action - which still involves a decision - doesn't so easily make news.
And yet that decision, at repeated Budgets, has a huge impact.
"By 2028-29, frozen thresholds result in nearly four million additional workers paying income tax, three million more moved to a higher rate and 400,000 more paying the additional rate," says the OBR.
The higher rate is charged at 40% on income just over £50,000 a year.
The additional rate is charged at 45% on income of a little over £125,000 a year.
All of this provides Labour with an easy target, right now.
But the most bleak of inheritances if they win the next general election.
Labour say they agree with the tax cuts in the Autumn Statement and they are not outright rejecting other measures in there either.
And they share a diagnosis with the Conservatives about what is at the root of so many of the UK's contemporary challenges: A lack of growth.
Trying to caffeinate a listless, lethargic economy is what the Autumn Statement is attempting to do.
And the opposition would face the same, grinding challenge in power themselves, if they get the chance. | Inflation |
NEW YORK -- Bed & Bath & Beyond will live on, online at least, after Overstock.com acquired the bankrupt retail chain’s intellectual property assets for $21.5 million.
The online retailer Overstock.com is dumping its name online and will become Bed & Bath & Beyond, which declared bankruptcy earlier this year. Overstock.com's CEO Jonathan Johnson told The Associated Press in a phone interview on Thursday that the company is considering changing its corporate name but won't make any decisions until after it digests the assets.
The switcheroo to a very recognizable brand was cheered on Wall Street. Shares of Overstock.com Inc., based in Midvale, Utah, soared nearly 20% during afternoon trading Thursday.
The deal doesn’t include Bed Bath & Beyond stores, the last of which are expected to be shuttered Friday, or the Buybuy Baby chain.
The name change will roll out in Canada next month and in August, a relaunch of the company’s website and mobile app as Bed Bath & Beyond will appear in the U.S. Those visiting overstock.com will be redirected to bedbathandbeyond.com.
The name Overstock still confuses some customers and suppliers who thought it was a liquidator. That's how it got its start in 1999. It transformed in 2004 into a general merchandise retailer, selling a wide variety of items. In 2021, Overstock finetuned its strategy to focus on furniture and home decor, getting rid of items like clothing.
When Bed Bath & Beyond's financial woes deepened last year, Overstock.com tried to court the retailer's suppliers but it met with some skepticism. But after its bid for Bed Bath became public last week, it was able to add 100,000 bed and bath items to its site, Johnson said. He expects that pace will pick up.
“I can't count how many times we were asked when we were going to change the company name,” he said. “This opportunity is too good to be true. We are Bed Bath and a bigger beyond.”
Johnson said that it will offer some coupons to cater to the Bed Bath & Beyond customers who were used to the popular perk, but he noted that customers will be surprised that the discounts offered by Overstock.com are actually better on an every day basis. He also added that Overstock plans to step up marketing to Bed Bath & Beyond customers to make them aware of the change.
He estimated Overstock.com has about 5 million customers; Bed Bath & Beyond's online customers number about 10 million.
Bed Bath & Beyond — one of the original big box retailers known for its seemingly endless offerings of sheets, towels and kitchen gadgets — filed for bankruptcy protection in April. The filing followed years of dismal sales and numerous attempts to turn the flailing business around. | Consumer & Retail |
NEW YORK - About 2 in 3 Americans say their household expenses have risen over the last year, but only about 1 in 4 say their income has increased in the same period, according to a new poll from The Associated Press-NORC Center for Public Affairs Research.
As household expenses outpace earnings, many are expressing concern about their financial futures. What’s more, for most Americans, household debt has either risen in the last year or has not gone away.
Steve Shapiro, 61, who works as an audio engineer in Pittsburgh, said he’d been spending about $100 a week on groceries prior to this past year, but that he’s now shelling out closer to $200.
"My income has stayed the same," he said. "The economy is good on paper, but I’m not doing great."
About 8 in 10 Americans say their overall household debt is higher or about the same as it was a year ago. About half say they currently have credit card debt, 4 in 10 are dealing with auto loans, and about 1 in 4 have medical debt. Just 15% say their household savings have increased over the last year.
Tracy Gonzales, 36, who works as a sub-contractor in construction in San Antonio, Texas, has several thousand dollars of medical debt from an emergency room visit for what she thought was a bad headache but turned out to be a tooth infection.
"They'll treat you, but the bills are crazy," she said. Gonzales said she's tried to avoid seeking medical treatment because of the costs.
Relatively few Americans say they’re very or extremely confident that they could pay an unexpected medical expense (26%) or have enough money for retirement (18%). Only about one-third are extremely or very confident their current financial situation will allow them to keep up with expenses, though an additional 42% say they’re somewhat confident.
"I’ve been looking forward to retirement my entire life. Recently I realized it’s just not going to happen," said Shapiro, of Pittsburgh, adding that his wife’s $30,000 or so of student debt is a financial factor for his household. The couple had hoped to sell their house and move this past year, but decided instead to hold on to their mortgage rate of 3.4%, rather than facing a higher rate. ( The current average long-term mortgage rate reached 7.79% this month. )
About 3 in 10 Americans say they've foregone a major purchase because of higher interest rates in the last year. Nearly 1 in 4 U.S. adults have student debt, with the pandemic-era payment pause on federal loans ending this month, contributing to the crunch.
Will Clouse, 77, of Westlake, Ohio, said inflation is his biggest concern, as he lives on a fixed income in his retirement.
"A box of movie candy — Sno-Caps — that used to cost 99 cents is now a dollar fifty at the grocery store," he said. "That’s a 50% increase in price. Somebody’s taking advantage of somebody."
Americans are generally split on whether the Republicans (29%) or the Democrats (25%) are better suited to handle the issue of inflation in the U.S. Three in 10 say they trust neither party to address it.
Geri Putnam, 85, of Thomson, Georgia, said she's been following the ongoing auto workers strikes with sympathy for the workers' asks.
"I don't think it's out of line, what they're asking for, when you see what CEOs are making," she said. "I think things have gotten out of control. When you can walk into a store and see the next day, across the board, a dollar increase — that’s a little strange. I understand supply and demand, the cost of shipping, et cetera. But it seems to me everyone’s looking at their bottom lines."
Putnam also said she sees her six children struggling financially more than her generation did.
"They all have jobs and have never been without them," she said. "They’re achievers, but I think at least two or three of them will never be able to buy a home."
A slight majority of all Americans polled (54%) describe their household’s financial situation as good, which is about the same as it’s been for the last year but down from 63% in March of 2022. Older Americans are much more confident in their current finances than younger Americans. Just 39% of 18- to 29-year-olds describe their household finances as good, compared to a majority (58%) of those who are 30 and older. People with higher levels of education or higher household incomes are more likely than Americans overall to evaluate their finances as solid.
About three-quarters of Americans describe the nation’s economy as poor, which is in line with measurements from early last year.
Among those who are retired, 3 in 10 say they are highly confident that there’s enough saved for their retirement, about 4 in 10 are somewhat confident, and 31% are not very confident or not confident at all.
Clouse, of Ohio, said the majority of his money had gone towards caring for his wife for the past several years, as she'd been ill. When she passed away this past year, his household lost her Social Security and pension contributions. He sees the political turmoil between Republicans and Democrats as harming the economy, but remains most frustrated by higher prices at the supermarket.
"Grocery products going up by 20, 30, 40%. There’s no call for that, other than the grocery market people making more money," he said. "They’re ripping off the consumer. I wish Mr. Biden would do something about that."
About 4 in 10 Americans (38%) approve of how Biden is handling the presidency, while 61% disapprove. His overall approval numbers have remained at a steady low for the last several years. Most Americans generally disapprove of how he’s handling the federal budget (68% disapprove), the economy (67%), and student debt (58%).
The poll of 1,163 adults was conducted Oct. 5-9, 2023, using a sample drawn from NORC’s probability-based AmeriSpeak Panel, designed to represent the U.S. population. The margin of sampling error for all respondents is plus or minus 3.9 percentage points. | Inflation |
- The European Commission published its legislative proposal for a central bank digital currency.
- While the digital euro’s offer to consumers is questioned, Europe’s financial sovereignty is at the heart of the move.
The European Commission promised that a digital euro “is not a Big Brother project” on Wednesday as it published a proposal to introduce a digital currency run by the European Central Bank.
The commission, the starting engine of the European Union’s legislative machinery, aims to place the political guardrails around the bloc’s potential new central bank digital currency.
For authorities, a CBDC would translate hard, central bank-backed cash into the digital world while not replacing it. The ECB is already developing the digital coin, which may become a reality as early as 2026.
However, policymakers, industry representatives, blockchain advocacy groups, and European citizens have raised fears that a digital euro could create surveillance dystopia, and wonder about the utility for ordinary retail consumers.
Commission representatives pledged that the project’s data privacy will be at the same level of other digital payment methods, with more privacy granted to offline payments.
“This is not a Big Brother project,” European Commissioner for finance Mairead McGuinness told reporters on Wednesday, referring to George Orwell’s “1984.”
She echoed similar pledges from teams behind CBDC projects in the UK and Sweden.
The commission has argued that a digital euro will protect the EU from being overrun by foreign powers.
“Two thirds of Europe’s digital digital payments are processed by a handful of global operators,” the European Commission’s executive vice-president Valdis Dombrovskis told reporters.
A digital euro would put European actors at the head of their own market “at a time when global public tensions make us more vulnerable to attacks on our critical infrastructure,” he added.
“It’s not an area where we can afford to stay behind the curve,” Dombrovskis said.
China, for instance, has undertaken public tests of the digital yuan since 2021. Some reports suggest that 261 million Chinese citizens had set up a wallet as of January 2022.
ECB executives and McGuiness have both stressed the same point.
“If we don’t provide our own solution, then we run the risk of private stablecoins or foreign central bank digital currencies filling the gap,” McGuinness said about the digital euro in April.
‘Not much benefit’
The privacy and competitveness assurances have done little to dissuade sceptics.
Philipp Sandner, who heads the blockchain centre at the Frankfurt School of Finance and Management, and a founding member of the Digital Euro Association, is among those unconvinced.
He told DL News that it makes sense “to fight for a sovereign infrastructure” in the EU, especially as retail payments are “fully in the hands” of American finance giants like Visa and Mastercard.
However, he said: “From a retail perspective there is not much benefit,” and the ECB has “some problems really articulating why we need it.”
With digital payments solutions offered by products like Apple Pay, Google Pay, and PayPal, the digital euro may have tough competition.
For Sandner, the CBDC would function similarly to a prepaid debit card.
It would be hosted on the same commercial banking applications used today, with limits on the amount of the digital currency they can store.
ECB officials have mentioned a €3,000 cap, to avoid excessive bank outflows.
The proposal lays out a few competences for digital euro users. For example, peer-to-peer transactions could be conducted offline, and the currency would be commonly accepted across the bloc.
For those without access to smartphones, public bodies such as post offices could assist consumers.
Blockchain-based stablecoins could still play an important role in carrying the value of the euro, Sandner said.
They provide the perks of decentralised technology like high security and a global infrastructure. Whether the digital euro would use blockchain technology will be up to the ECB.
Protecting privacy
Privacy topped the list as the most important feature for consumers in a 2021 survey conducted by the ECB for a digital euro. For some, a CBDC is the beginning of a surveillance dystopia.
Central bank officials have said that they will not have access to users’ data. But the digital euro app would not be issued by the ECB.
Intermediaries like commercial banks will have to collect certain data to adhere to the same anti-money laundering standards as with any other payment forms.
The offline payments feature may offer additional privacy as banks. If people choose to transfer to each other offline, the banking intermediary would not be able to see the transaction. Yet this only applies to transactions between individuals and not merchants, within the limited holding cap.
Sandnder is “a little bit worried” about the privacy issue, “but not much,” since payment privacy will be on par with the standards on credit card transactions.
His real concern is who is making the rules: “The governance perspective is the problem. Who is governing the system, and who is creating the rules? Because over there, privacy can be created or privacy can be prevented, freedom rights can be affected or not touched.”
Long way yet
While today’s news kick-starts the official process of legislating for a European CBDC, the bloc’s Frankfurt-based central bank has investigated the digital euro over the past two years and built up a prototype.
In October, the bank’s top dogs are expected to decide whether to bring a CBDC into life. If a green light comes, a policy framework will be in the works.
Back in Brussels, the legislative proposal will need to make its way to the desks for policymakers in the European Parliament and the European Council’s member state delegations to amend.
Then, the three institutions will need to battle out a final agreement. That process could take years.
Have a tip on EU crypto regulation? Contact the author at [email protected]. | Banking & Finance |
Food inflation in the UK has slowed from April's record-breaking rise - but is still up more than 15% on the year, new retail figures show.
Research by the British Retail Consortium (BRC) and Nielsen shows a 15.4% rise in food inflation in the year to May.
It is the second-fastest annual increase that the BRC - the trade organisation for UK retailers - has ever measured.
However, it is down slightly compared to April's record-breaking increase of 15.7%.
The group's chief executive, Helen Dickinson, said there was reason to believe food inflation "might be peaking".
However, the slowing of food inflation did not result in a slow-down of overall inflation in shops.
That rose from 8.8% to a record 9% between April and May, the BRC said.
"While overall shop price inflation rose slightly in May, households will welcome food inflation beginning to fall," Ms Dickinson said.
Read more:
Spending calculator - See which prices have gone up or down
Food inflation hits another record high as pressure mounts on home finances
Inflation eases but still remains above 10% as food costs at 45-year high
She said the slowing was likely a result of lower energy and commodity costs beginning to filter through to lower prices on some staples, such as butter, milk, fruit, and fish.
However, she warned the government against plans to introduce new price caps on essential items.
The warning comes after it was reported that Downing Street was drawing up plans to encourage supermarkets to introduce voluntary price caps on food staples in a bid to help with the cost of living crisis.
Click to subscribe to the Sky News Daily wherever you get your podcasts
"While there is reason to believe that food inflation might be peaking, it is vital that Government does not hamper this early progress by piling more costs onto retailers and forcing up the cost of goods even further," Ms Dickinson said.
Mike Watkins, head of retailer and business insight at NielsenIQ, said: "To help mitigate the impact of inflation, shoppers are saving money by looking for seasonal promotions on the high street and taking advantage of the price reductions offered by supermarket loyalty schemes.
"Food retailing in particular is competitive, so hopefully the recent price cuts in fresh foods is a sign that inflation has now peaked, albeit ambient inflation may take a little while longer to slow."
It comes after Chancellor Jeremy Hunt backed interest rate hikes, even if they risk of plunging the UK into recession, in order to combat soaring inflation.
Experts have also previously warned that alarmingly expensive food is set to overtake energy bills as the "epicentre" of the cost of living crisis. | Inflation |
As the criminal trial of FTX founder Sam Bankman-Fried unfolds in a Manhattan courtroom, some observers in the cryptocurrency world have been watching a different FTX-related crime in progress: The still-unidentified thieves who stole more than $400 million out of FTX on the same day that the exchange declared bankruptcy have, after nine months of silence, been busy moving those funds across blockchains in an apparent attempt to cash out their loot while covering their tracks. Blockchain watchers still hope that money trail might help to identify the perpetrators of the heist—and answer the looming question of whether someone with insider knowledge of FTX was involved.Today, cryptocurrency tracing firm Elliptic released a new report on the complex path those stolen funds have taken over the 11 months since they were pulled out of FTX on November 11 of last year. Elliptic's tracing shows how that nine-figure sum, which FTX puts at between $415 million and $432 million, has since moved through a long list of crypto services as the thieves attempt to prepare it for laundering and liquidation, and even through one service owned by FTX itself. But those hundreds of millions also sat idle for all of 2023—only to begin to move again this month, in some cases as Bankman-Fried himself sat in court, raising new and unanswered questions about the thieves' identities and plans.“The funds basically didn't move for nine months, and then a couple of days before the trial starts, they start to move again,” says Tom Robison, Elliptic's cofounder and chief scientist. “Why did they have to move the funds now? It doesn't really make sense to start laundering funds at the time when there's so much attention on the victim of the hack.”Aside from that strange timing, Elliptic says the FTX thieves have largely taken steps typical for the perpetrators of large-scale crypto heists as the culprits sought to secure the funds, swap them for more easily laundered coins, and then funnel them through cryptocurrency "mixing" services to achieve that laundering. The majority of the stolen funds, Elliptic says, were stablecoins that, unlike other forms of cryptocurrency, can be frozen by their issuer in the case of theft. In fact, the stablecoin issuer Tether moved quickly to freeze $31 million of the stolen money in response to the FTX heist. So the thieves immediately began exchanging the rest of those stablecoins for other crypto tokens on decentralized exchanges like Uniswap and PancakeSwap—which don't have the know-your-customer requirements that centralized exchanges do, in part because they don't allow exchanges for fiat currency.In the days that followed, Elliptic says, the thieves began a multi-step process to convert the tokens they'd traded for the stablecoins into cryptocurrencies that would be easier to launder. They used “cross-chain bridge” services that allow cryptocurrencies to be exchanged from one blockchain to another, trading their tokens on the bridges Multichain and Wormhole to convert them to Ethereum. By the third day after the theft, the thieves held a single Ethereum account worth $306 million, down about $100 million from their initial total due to the Tether seizure and the cost of their trades.From there, the thieves appear to have focused on exchanging their Ethereum for Bitcoin, which is often easier to feed into "mixing" services that offer to blend a user's bitcoins with those of other users to prevent blockchain-based tracing. On November 20, nine days after the theft, they traded about a quarter of their Ethereum holdings for Bitcoin on a bridge service called RenBridge—a service that was, ironically, itself owned by FTX. “Yes, it is quite amazing, really, that the proceeds of a hack were basically being laundered through a service owned by the victim of the hack,” says Elliptic's Robison.On December 12, a month after the theft, most of the bitcoins from that RenBridge trade were then fed into a mixing service called ChipMixer. At that point, the thieves went strangely quiet. The rest of their Ethereum would remain dormant for the next nine months.Only on September 30, just days ahead of Bankman-Fried's trial, did the remainder of the funds begin to move again, Elliptic says. By that time, both RenBridge and ChipMixer had been shut down—RenBridge due to its parent company FTX's collapse and ChipMixer due a law enforcement seizure. So the thieves pivoted to trading their Ethereum for Bitcoin on a service called THORSwap and then routing those bitcoins into a mixing service called Sinbad.Sinbad has over the past year become a popular destination for criminal cryptocurrency, particularly crypto stolen by North Korean hackers. But Elliptic's Robison notes that despite this, the movement of funds appears less sophisticated than what he's seen in the typical North Korean heist. “It doesn't use some of the services that Lazarus typically use,” Robison says, referring to the broad group of North Korean state-sponsored hackers known as Lazarus. “So it doesn't look like them.”Does the timing of those new movements of funds ahead of—and even during—Bankman-Fried's trial suggest someone with insider knowledge is responsible? Elliptic's Robison notes that, while the timing is conspicuous, he can only speculate at this point. It's possible that the timing has been purely coincidental, Robison says. Or someone might be moving the money now to make it look like an FTX insider—potentially one who fears they might be about to lose their internet access. Neither Bankman-Fried nor his fellow executives have been charged with the theft, and some of the money movements have taken place while Bankman-Fried has been in court, with only a laptop disconnected from the internet.Eventually, no doubt, the thieves will attempt to cash out their stolen and laundered cryptocurrency for some sort of fiat currency. Robison is still hopeful that, despite their use of mixers, they can still be identified at that point—though he declined to definitively answer whether Elliptic can defeat those mixing services' anonymity measures. “I think they probably will be successful in cashing out at least some of these funds. I think whether they're going to get away with it is a separate question,” says Robison. “There's already a blockchain trail to be followed, and I think that trail will only become clearer with time.”Two other cryptocurrency tracing firms, TRM Labs and Chainalysis, have both been hired by FTX's new regime under CEO John Ray III to aid in the investigation. TRM Labs declined to comment on the case. Chainalysis didn’t respond to WIRED’s request for comment, nor did FTX itself.If those cryptocurrency tracers succeed, we may someday have an answer to the mystery of the FTX heist. In the meantime, however, FTX's many aggrieved creditors will be left to keep one eye on Bankman-Fried's trial and the other on the Bitcoin blockchain. | Crypto Trading & Speculation |
Bandhan Bank Board Approves Re-Appointment Of Chandra Shekhar Ghosh As Its MD For Three Years
The re-appointment, if approved by the Reserve Bank, would be effective from July 10, 2024.
Bandhan Bank on Friday approved the reappointment of Chandra Shekhar Ghosh as its Managing Director and Chief Executive Officer for three years.
The re-appointment, if approved by the Reserve Bank, would be effective from July 10, 2024.
The board approval for re-appointment is subject to the approval of the Reserve Bank of India (RBI) and the shareholders of the bank, the lender said in a regulatory filing.
The current tenure of Ghosh as the MD and CEO will expire on July 9, 2024, and in terms of the regulatory provisions, the application for re-appointment would be submitted to the RBI at least six months before the expiry of the current term, it said.
Accordingly, it said, an application will be made to the RBI seeking prior approval for re-appointment as the MD and CEO of the bank, within the timeline stipulated by the central bank. | Banking & Finance |
Are congressional Republicans about to greenlight a CBDC?
If Republicans want to prevent the introduction of a digital currency that would allow government to track and control your purchases (CBDCs), they’d better scrutinize the two anti-CBDC bills before Congress. There’s a huge difference between them.
One would prevent a CBDC surveillance token from replacing the American dollar. The other would actually greenlight a CBDC by government-chosen contractor.
It would be tragic if a China-style CBDC is forced on the American people by Republicans who, at best, didn’t understand what they voted for.
The idea of a CBDC is to replace the U.S. dollar with a government crypto-token tracking ledger that could surveil and control every dollar you spend. Bureaucrats could prevent you from buying the wrong thing, from raw milk to gas stoves to firearms. They could stop you from donating to the wrong person, like we saw with the Canadian Truckers. They could even force you to buy whatever a government bureaucrat tells you to.
Florida Gov. Ron DeSantis (R) and Sen. Mike Lee (R-Utah) have come out strongly against a CBDC, both to protect our fundamental rights and because a CBDC represents an existential threat to our financial system and to the U.S. dollar itself. Rep. Alex Mooney (R-W.Va.), meanwhile, has introduced a bill to ban any CBDC pilot program.
But a very different kind of Republican CBDC bill is also making the rounds in Congress. This one, bizarrely, openly allows a CBDC so long so it’s run by a government-chosen company like Ripple or perhaps a Wall Street bank.
A contractor fixes nothing. Bank Secrecy Act requirements mean a CBDC run through a contractor will still have to collect your personal data — and turn it over to the government. The federal government would retain every power to surveil, control, and mandate your spending.
Moreover, even a contractor-run CBDC obviously takes its orders from the government; the Federal Reserve and Treasury will not be outsourcing control of money to Ripple or JP Morgan. That means the broader financial and economic risks of a CBDC are all there, obediently executed by government contractors.
These risks include the ability to lock you into a failing bank, or to spark bank runs by draining deposits from regional or commercial banks towards a government-run “public option” for banking — a CBDC risk the Fed has directly admitted.
A CBDC run through a contractor could even help force you into that holy grail of economic central planners: negative interest rates. That means money that vanishes if you don’t spend it, perhaps to “stimulate” the economy in time for Joe Biden’s next election.
The crypto-token firm Ripple — currently locked in a legal battle with the SEC for making $1.3 billion as an unregistered security — has been very active in lobbying to build CBDCs for governments worldwide. After their recently announced CBDC pilot in now China-dominated Hong Kong, Ripple released a glitzy promotional video portraying their turnkey CBDCs running in China, in Taliban-run Afghanistan, and in military dictatorships from Myanmar to Uzbekistan. Given the profits involved, they would surely love to add America to that list.
While CBDC cheerleaders parrot China’s claim that a CBDC is an innocent project to keep up with new technologies, in fact we already have the “digital dollar” in the form of private stablecoins like those of Circle or Paxos that offer every transaction benefit of a CBDC but that are actually separate from government.
These stablecoins act like a true “digital dollar” that can be used online, and are wildly popular to the point that over 99.5 percent of currency-based stablecoins are in U.S. dollars. The dollar is actually far more dominant in crypto than it is in the real world. Stablecoins already provide fast and cheap transactions, settling in seconds at near-zero cost, which safeguards the continued global dominance of the dollar and promotes American exports, especially of agricultural products where cost and speed are critical.
The federal government doesn’t run grocery stores, and it doesn’t run telephone companies. That’s partly because it’s bad at running things, but mostly because of the threats to civil liberties. Instead of promoting surveillance tokens using contractors with deep lobbying pockets, Congress should instead clarify that CBDCs are banned in every form, while fully backed non-government stablecoins are welcome.
Hiding a CBDC inside a government contractor changes none of its power to suppress and punish political opposition, to surveil and control the American people, to whipsaw our economy and threaten our banking system, or to provide a push-button remote control for central planners. Worse, spelling out a congressional roadmap to a CBDC via contractor provides congressional cover for CBDC promoters in Washington who are already champing at the bit to enslave the American people.
The federal government has no business running a CBDC, even if it hires contractors to do the dirty work.
Peter St. Onge, Ph.D., is the Mark A. Kolokotrones Fellow in Economic Freedom at The Heritage Foundation.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Banking & Finance |
Trade body the British Beer and Pub Association says such mass closures would deliver a blow to communities across the country.
It comes after the Mirror revealed that three in 10 pubs are at risk of going bust in the next year, half of those within six months.
The BBPA is calling on Chancellor Jeremy Hunt to freeze duty rates.
It also wants a significant increase in the discount for draft beer sold in pubs, and for him to introduce the previously announced reduced rate for lower-strength beers from August 1. Another major headache for pubs is the swelling cost of energy.
The Government is ending its Energy Bill Relief Scheme from April 1, leaving some non-domestic customers facing a steep bill hike.
The plea for more help comes as data from advisory firm Oxford Economics estimates “on-trade beer sales” – drunk at bars such as in pubs or hotels – will decline by 9% in the 12 months from April.
That equates to 288 million fewer pints sold – and 25,000 potential job losses in pubs and the wider industry. A survey by the BBPA found that 69% of respondents agreed that local pubs played an important role in bringing communities together.
Six in 10 were concerned about an increase in loneliness if more local pubs close down.
Emma McClarkin, chief executive of the BBPA, said: “It is crucial the Government shows in this Budget that it understands the pressures the sector is facing and just how much our pubs and breweries mean to communities everywhere across the UK.
“We urgently need the Chancellor to deliver a plan for sustainable growth with fair, modernised tax rates and a focus on skills and training needed to ensure pubs and breweries can thrive.
“After almost three years of extremely tough trading conditions due to lockdowns, an energy crisis, supply chain disruptions and more, now is a make-or-break moment to save our locals and breweries from failure.
“We need the Government to act now or risk losing something very special for ever.”
Landlady Emma Shepherd warned a potential tripling of her electricity bills means she may have to close the kitchen of her pub altogether.
She and husband Carl, who run the Blue Ball Inn in Worrall, near Sheffield, have already decided not to serve food on a Monday and Tuesday to save.
But with their current fixed rate commercial electricity contract coming to an end next month, they have struggled to find a new supplier.
Their existing supplier’s renewal quote is around £17,000 a year. If they went out-of-contract, the standing charge element of their bill would rocket nearly 1,300%.
“The way it is going, our energy costs will be more than the rent,” said Emma, 52, who used to work for a construction firm.
The pub is a hub of the community hosting coffee mornings and dementia-friendly days.
Emma added: “We haven’t seen a drop in trade at all. If anything, business has increased.” But the surge in costs is creating tough choices.
“We are already working 70, 80-hour weeks to cut down on staff costs,” says Emma. “We may have to close the kitchen and become a wet-led pub.
“That would mean that we have to make a single mum with two kids redundant.” | Consumer & Retail |
Adani Energy Solutions Gets A Score Of 86% From ESG Performance Rating Agency
The score surpasses the electric and gas utilities industry average done among 911 global companies.
Adani Energy Solutions Ltd. has received a score of 86% from CSRHUB, a leading global ESG performance rating agency.
The transmission and distribution company score surpasses the electric and gas utilities industry average done among 911 global companies, according to a press release issued on Friday.
Sustainalytics—a global leader in ESG research and data, which serves the world’s leading institutional investors and corporations—has awarded the company an ESG Risk Rating of 31.5, outperforming the global electric utility industry average of 32.1 (a lower score indicates a better risk profile).
"This achievement places AESL in the esteemed Global Top 40 of the electric utility industry, a testament to AESL’s commitment to environmental stewardship and social responsibility," the release said.
MSCI has also assigned Adani Energy Solutions a stable ESG rating of 'BBB', underscoring the company's dedication to robust ESG performance.
Morgan Stanley Capital International is a leading global provider of stock market indices and portfolio analytics tools, used by investors to track and assess the performance of financial markets and investment portfolios.
The Financial Times Stock Exchange has reaffirmed the company's status as a constituent of the FTSE4Good index series, accompanied by a notable improvement in the ESG score from 3.3 to 4.
"This places AESL well above the global electric utilities sector average of 2.7. Additionally, AESL's governance score stands at an impeccable 5/5, with a social score of 4/5 and an environment score of 3.3/5, further highlighting its commitment to ethical business practices," it said.
Adani Energy Solutions is on track to achieve UN Energy Compact goals, including a target of 60% renewable energy share in bulk energy procurement by FY27, with the current RE share already reaching 38%.
"Furthermore, AESL is making significant strides in reducing GHG (greenhouse gas) emission intensity, aiming to achieve a 40% reduction from the FY19 baseline by FY25," the release said.
Disclaimer: AMG Media Networks Ltd. (AMNL) currently owns 49% stake in Quintillion Business Media Ltd. (QBML), the owner of BQ Prime Brand. AMNL has entered into an MOU to acquire the balance 51% stake in QBML. Post acquisition, QBML will become a wholly owned subsidiary of AMNL. | Renewable Energy |
Subscribe to Here’s the Deal, our politics
newsletter for analysis you won’t find anywhere else.
Thank you. Please check your inbox to confirm.
Michael R. Sisak, Associated Press
Michael R. Sisak, Associated Press
Jennifer Peltz, Associated Press
Jennifer Peltz, Associated Press
Leave your feedback
NEW YORK (AP) — Donald Trump’s lawyers were thwarted Thursday in their longshot bid to put an immediate end to the New York civil fraud trial that threatens the former president’s real estate empire.
The judge didn’t rule on the request, but he indicated that the trial will go on as scheduled Monday with Donald Trump Jr. returning to the stand as the first defense witness.
READ MORE: Michigan judge to hear arguments as activists try to keep Trump off the ballot
Trump’s lawyers had asked Judge Arthur Engoron to cut the trial short and issue a verdict clearing Trump, his company and top executives including Trump Jr. of wrongdoing.
They made the request at the halfway point in the trial of New York Attorney General Letitia James’ lawsuit, arguing that state lawyers had failed to prove their case. James alleges that Trump and other defendants duped banks, insurers and others by inflating his wealth on financial statements.
Engoron said the defense’s arguments seeking what’s known as a directed verdict were “taken under advisement” and did not address them further when he returned to court Thursday afternoon to rule on another matter.
In that ruling, Engoron gave Trump’s lawyers a victory, allowing them to call several expert witnesses in an attempt to refute testimony that Trump’s financial statements afforded him better loan terms, insurance premiums and were a factor in dealmaking.
The judge, who’s had a history of ruling against Trump, has signaled interest in seeing the trial to its conclusion, asking defense lawyers for witness schedules and pegging closing arguments close to Christmas.
In seeking to short-circuit the case, Trump lawyer Christopher Kise argued that state lawyers had failed to meet “any legal standard” to prove allegations of conspiracy, insurance fraud and falsifying business records.
“There’s no victim. There’s no complainant. There’s no injury. All of that is established now by the evidence,” Kise argued.
State lawyer Kevin Wallace responded that there was no basis to end the trial, saying the evidence is “more than sufficient to continue to final verdict.”
Trump, on the stand Monday between barbs for his adversaries, denied wrongdoing and said lenders were “extremely happy” doing business with him. If anything, he testified, his financial statements lowballed his wealth and the value of assets such as his Mar-a-Lago estate in Florida.
Kise implored Engoron to give special weight to Trump’s testimony, citing the ex-president’s decades of experience as a real estate developer. When talking real estate, “if my choices were Donald Trump or Attorney General James, respectfully, I would go with Donald Trump,” Kise said.
He argued that the Democratic attorney general, in pursuit of a political opponent, was trying to “substitute her judgment for that of the banks and, frankly, for that of someone who has been involved in the real estate industry for 50 years.”
Defense lawyer Clifford Robert pressed the judge to dismiss claims against Trump’s elder sons Eric and Donald Trump Jr. The attorney argued that state lawyers had failed to prove that the sons, whom Trump appointed to run his company when he went to the White House in 2017, worked on the ex-president’s financial statements.
READ MORE: As Trump testifies, judge in civil fraud trial reminds him that it’s ‘not a political rally’
Robert said the sons, who signed off on some documents attesting to their father’s wherewithal, “acted appropriately” in trusting accountants and lawyers for assurance the documents were accurate.
“My clients have been dragged into what is essentially a fight between the attorney general and their father, but here we are,” Robert said. “The time has come that we need to put an end to it.”
Wallace countered that Trump and his sons each signed documents saying that they were responsible for the preparation and fair presentation of the financial statements, which Engoron has already ruled were false and misleading.
Thursday’s arguments came a day after Trump’s daughter Ivanka Trump testified as the state’s last witness. She had unsuccessfully fought a subpoena.
Directed verdict requests are common in civil trials, though they’re somewhat infrequently granted. In Trump’s trial, Engoron is deciding the outcome, rather than a jury.
Before the trial, Engoron ruled that Trump, his company and other defendants committed fraud by exaggerating his net worth and the value of assets on his financial statements, which were used to obtain loans and make deals.
Engoron’s pretrial fraud ruling came with provisions that could strip the ex-president of such marquee properties as Trump Tower, though an appeals court is allowing him to remain in control of his holdings for now.
The state rested its case Wednesday after six weeks of testimony from more than two dozen witnesses. James is seeking the return of what she says is more than $300 million in ill-gotten gains and a ban on Trump and other defendants from doing business in New York.
Donald Trump Jr. and Eric Trump testified last week. When Trump Jr. returns to the stand on Monday, he’ll be questioned by defense lawyers including his own. Trump company executives, outside accountants who worked on Trump’s financial statements and bank executives who worked on his loans also have testified as state witnesses.
Kise emphasized that lender Deutsche Bank made its own adjustments to the asset values listed on Trump’s financial statements, giving “haircuts” to the estimates for Trump Tower and other properties, and decided to lend him hundreds of millions of dollars anyway. Adjustments amounted to $2 billion in some years, documents showed.
READ MORE: Minnesota Supreme Court dismisses ‘insurrection clause’ challenge and allows Trump on 2024 ballot
Kise also attacked Trump lawyer-turned-foe Michael Cohen’s credibility. He said Cohen’s “pathetic performance” undermined the state’s case when he backtracked from his initial testimony that Trump had directed him to boost the value of assets to “whatever number Trump told us to.”
Pressed on cross-examination during his Oct. 25 testimony, Cohen conceded that Trump never told him to inflate the numbers on his personal statement — though Cohen later said Trump signaled it indirectly, and “we understood what he wanted.” Robert asked at that point for an immediate directed verdict, which Engoron denied.
Support Provided By:
Learn more
Politics
Nov 07 | Real Estate & Housing |
Mamaearth IPO Subscription: Day 3 Live Updates
The IPO has been subscribed 0.74 times, or 74%, as of 10:57 a.m. on Thursday.
Honasa Consumer Ltd., the parent of FMCG brands like Mamaearth and the Derma Co., launched its initial public offering on Oct. 31. The three-day issue, priced in the range of Rs 308–324 per share, will conclude on Nov. 2. The IPO was subscribed 12% on day 1 and 70% on day 2.
The public issue is expected to fetch over Rs 1,700 crore at the upper end of the price band. The IPO consists of a fresh issue of equity shares worth Rs 365 crore and an offer-for-sale component of Rs 4.12 crore equity shares by promoters, investors, and other selling shareholders.
The company has focused on capitalising on the beauty and personal care segment in the FMCG space.
Honasa Consumer intends to use the proceeds largely towards advertising expenses to enhance brand visibility. It also plans to deploy funds for capital expenditure to set up new Exclusive Brand Outlets and invest in its subsidiary, BBlunt, to set up new salons.
IPO Details
Issue Opens: Oct. 31
Issue Closes: Nov. 2
Fresh Issue Size: Rs 365 crore
Shares for Offer For Sale: 4.12 crore shares
Total Issue Size: Rs 1,701 crore
Price Band: Rs 308–324 per share
Lot Size: 46 Shares
Face Value: Rs 10 per share
Listing: BSE and NSE
The company has not undertaken any pre-IPO placement.
At the upper price band, the company has an implied market cap of Rs 10,424 crore.
Anchor Investors
Honasa Consumer has raised Rs 765.2 crore from anchor investors ahead of its IPO. The beauty and personal care company allotted 2.36 crore shares at Rs 324 apiece to 49 anchor investors.
The marquee investors include Capital Group (through Smallcap World Fund Inc., which was allocated the highest anchor allocation of 8.76%), Fidelity International, Norges Bank, Abu Dhabi Investment Authority, First Sentier (First State Investments), White Oak, Franklin Templeton, Kotak, DSP, Carmigniac Gestion, Loomis Sayles, Matthews, Pictet and Hornbill, and Goldman Sachs, among others.
Subscription Status: Day 3
The IPO has been subscribed 0.74 times, or 74%, as of 10:57 a.m. on Thursday.
Institutional investors: 1.02 times
Non-institutional investors: 0.18 times or 18%
Retail investors: 0.71 times or 71%
Employee Reserved: 3.71 times | Stocks Trading & Speculation |
Price of elder care soars as demand increases, baby boomers age
Many Americans who serve as caregivers are consumed by the immense cost of tending to ailing or aging family members.
And as the baby boomer generation ages, more Americans are in for a rude awakening as to just how expensive caring for older adults has become.
The price of nursing home care increased by an average of 2.4 percent each year between 2012 and 2019, for a cumulative increase of 20.7 percent, according to data from the health research group Altarum Institute.
That stems from multiple sources, including personnel costs and the price of adhering to facility regulations, said Terry Fulmer, president of the John A. Hartford Foundation, a nonprofit that works to improve the lives of older adults.
But the cost of care has primarily shot up due to increased demand in adult day cares, assisted living facilities or nursing homes.
Jean Spera, 67, has been a full-time caretaker for her husband, John, since 2011, when his health started to rapidly deteriorate without any clear cause.
For years, she managed to take care of John in their Holliston, Mass., home without any outside help, even as he became more fragile and confused.
But everything changed when John had a seizure in the middle of their kitchen. After a three-day hospital stay, John’s doctors recommended that he go to a rehab center housed in a nursing home.
“I was overwhelmed, I wasn’t able to bring him home because I didn’t know how I was physically going to take care of someone who was twice my size and on our limited income,” said Spera.
Shortly after John became sick, Spera quit her job at a nursing home to take care of him. Eventually, she picked up part-time work to help cover some smaller costs like groceries. She had to dip into the couple’s $235,000 retirement savings to make ends meet.
But those funds went quickly after she stopped working full-time. “It took us 15 years to save that, and it was gone in six,” she said.
Spera brought John home after five months in rehab, mainly for financial reasons.
Luckily, the couple’s primary and supplemental health insurance, MassHealth and Tufts Health Plan, covered some of John’s stay, but not all of it. And paying out of pocket for more time in the rehab center was not something they could afford.
“I would have had to sell my home and go live in a box somewhere,” she said.
In the end, the pair was slapped with a $10,000 bill for John’s five-month stay.
The median cost of a private nursing home stay in the United States is $12,622 per month, according to the AARP family caregiving cost calculator.
The median cost per month in a semi-private nursing home is $11,254, and $3,492 in an assisted living facility. A home health aide for 10 hours a week is $1,333, according to the AARP cost calculator.
But, of course, those prices vary by state.
In Massachusetts, for example, the median cost of a private nursing home is $15,208 per month, while a semi-private nursing home is $14,265 per month and $8,462 per month to stay in an assisted living facility.
There were roughly 1.3 million people living in a nursing home in 2017, according to the U.S. Centers for Disease Control and Prevention.
Another 251,000 people were enrolled in an adult day care program in 2018, and 918,700 people lived in a residential community that year as well, according to a 2022 report from the National Center for Health Statistics.
One 2021 analysis found that 83 percent of households with a retiree need some level of care, according to the Center for Retirement Research at Boston College.
Of those households, 22 percent will need “minimal levels of care” like help with groceries, cooking and finances. Another 38 percent will have moderate needs, and 24 percent will have severe care needs — or around-the-clock care for several years, according to a brief from the center.
Even for the quarter of adults who require round-the-clock care, half of those care hours are provided by family members, a spokesperson for the Center for Retirement Research at Boston College clarified.
And many baby boomers do not have enough retirement savings to cover the cost of living in good health, let alone in poor.
More than two-fifths of baby boomers don’t have any retirement savings, according to a survey of 2020 Census data.
Without savings, most retired adults will need to rely solely on income they receive through Social Security because Medicare, the federal health insurance policy for adults 65 and older, does not cover nursing home or assisted living facility stays.
The average retired worker receives a monthly Social Security check of $1,782 per month upon retirement at age 65, according to the Center on Budget and Policy Priorities.
To prepare for the high cost of care, Angie Chen from the Center for Retirement Research at Boston College recommends that working-age adults of means set aside a portion of their retirement savings for long-term care costs.
But since most Americans can’t even save enough money to enjoy the same standard of living in retirement as they did during their working years, asking people to set aside hundreds of thousands of dollars for their potential long-term care is “not really reasonable,” Chen said.
Instead, she said, there should be more programs available to cover the cost of nursing home or assisted living expenses. One state that has already implemented a program to address this is Washington.
Under the Washington Cares payroll tax, which took effect this summer, qualifying residents can receive up to $36,500 to help cover the cost of long-term care services and support.
But while that legislation is a big help for older Americans who need some care, it won’t provide enough financial support for those that need years’ worth of around-the-clock care, Chen said.
Chen added that some older adults could turn to Medicaid as a last resort, but that also isn’t really a viable option.
“We don’t really have a great solution,” Chen said.
To help the nation’s growing aging population, more services and support should be offered to family caregivers like those outlined in 2022 National Strategy to Support Family Caregivers, which the John A. Hartford Foundation helped craft, according to Fulmer.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Consumer & Retail |
State Dining Room
4:04 P.M. EDT
THE PRESIDENT: Thank you. Please — (applause) — thank you, thank you, thank you.
Joanne, thanks for that introduction. I — you know, for all the good work you do at AARP and helping Americans achieve security retirement.
Look, Julie Su, our Acting Secretary of Labor — it’s going hell when you’re the fulltime Secretary of Labor. You’re doing such a great job as Acting — (applause) — supporting an awful lot of American workers.
And to the — to the advocates and policymakers here today, thank you for all you do to support the American families and protect hardworking Americans.
Folks, you’ve — you’ve heard me say it before: I ran for President to make sure our economy works for everyone — at least gives everyone and equal shot — and to build an economy from the middle out and the bottom up. Because when that happens, everybody does well, rather than just the top down.
That’s why I created the Competition Council to promote competition across the economy and to lower costs for families. And that’s the end result.
You know, we’re taking on what I — we call “junk fees.” I remember having this discussion early on with the staff about, “Well, you sure people are interested?”
I can tell you what, when you come from a middle-class family like I did, the thing that makes you the angriest is when you’re taken advantage of. And I really mean it. (Laughs.) Even if it’s a little bit, it makes you angry as hell.
These junk fees are hidden charges that companies sneak into your bill to make you pay more just because they can.
Junk fees — junk fees take real money out of pockets of Americans. And they add up to hundreds of dollars, weighing down family budgets and making it harder to pay the bills.
You know, there’s a — they may not matter to the wealthy. I think they do matter to the wealthy, but — they may not matter to them, but they — but they matter to working fa- — families like the one I grew up in.
You know, the way I think about it is the way my dad talked about it and the way so many of you at home talk about it around your kitchen table: How much are your monthly bills? How much do you have to pay for those necessities — your monthly bills? And is there ever anything left over just to give you just a little of breathing room? Not a whole lot, just a little bit of breathing room.
Hidden junk fees make it even harder for families to have a little bit of that breathing room.
That’s why, over the past two years, my administration has taken steps to crack down on unfair and deceptive junk fees in banking, hotel costs, rental housing, cable, Internet, concerts, airlines, healthcare.
You know, for example, my administration banned banks and credit unions from charging fees for basic services like checking your account balance. I love that one. (Laughter.) You know, I got so damn mad when I found — anyway. (Laughs.) Retrieving old bank records — that’s really hard to do, man. Or looking up your balance for your loan — on your loan. That’s a killer, man. That — (laughter) — costs so much money for those banks.
But look, they charge up to $30 for these services. And, you know, when you’ve bounced a few checks like I did, you know, when I was trying to get started, it — anyway. That’s over. (Laughter.) That’s over.
We’ve — we’ve taken — we — we’ve taken those fees. They’re — they’re now illegal.
You know, we’ve secured $140 million in refunds for customers who were charged illegal junk fees by their banks. And it matters. (Applause.)
Just a few weeks ago, I announced our most competitive ac- — comprehensive action ever, and that’s eliminating junk fees in industries and sectors across the entire economy.
You know, the Federal Trade Commission proposed a new rule to ban hidden fees that require companies to adopt “all-in upfront pricing.” I don’t know why that’s so — so hard to have to talk about: all-in upfront pricing.
You know, you seem to — you should be able to know what you’re paying for and how much you’re going to have to pay for it.
That’s where companies fully disclose their fees upfront when you start shopping so there are no surprises at the end when you check out.
Research shows that, without realizing it, folks can end up paying 20 percent more because of hidden fees than they would have paid if they could have known upfront — upfront and compare the price that they’re about to pay for the other options that are available to them.
Now, thanks to actions we’ve taken, companies would have to show the full price from the start.
That’s good for customers and I would argue it’s good for honest businesses trying to do the right thing so they’re not being outcompeted by folks who do the wrong thing.
And today, we’re taking additional action to eliminate junk fees in retirement savings.
Now, I would argue that most people — an awful lot of people — not the people in this room, but an awful lot of people don’t think about that retirement when they’re 20, 30, and 40 years old.
But here’s what it means. Many Americans spend their whole lives working, putting every dime left at the end of the month into a retirement account so, after working hard for decades, they can retire with dignity and a little bit of security.
And many families get advice from financial advisors in doing that and — to help them out because they don’t know. They don’t know “annuity” from “sannuity.” (Laughter.)
But I’m — but think — but think about it. All kidding aside, think about the average family.
Now, let me be clear about something. Most financial advisors give their clients good advice at a fair price and are honest with them.
But that’s not always the case.
Some advisors and brokers steer their clients toward certain investments not because it’s the best interest of the client; because it means the best payout for the broker. I get it, understand it. But I just want you to know we’re watching. (Laughter and applause.) To put it colloquially. (Laughter.)
Now, look, they’re putting their self-interest ahead of their clients’ best interest. And they’re scamming Americans out of hard-earned money.
People should be able to trust that when they get advice from a so-called expert, they’re getting real help, not getting ripped off. A little like going to your doctor — anyway. I’ll get — won’t get into this — (laughter) — because it makes me frustrated when I do.
Look, when a person pays for trusted advice and it comes with a hidden cost, that’s what I call a junk fee. And I think it’s wrong. I think it’s wrong.
Let me give you just one example. Millions of Americans have investments in so-called “annuities” in their retirement accounts. Annuities are supposed to work like a pension plan. You might buy with one — you might buy one with a one-time payment, and then when you retire, you get the sum of — same amount of money back after — year after year.
Now how — that’s how it’s supposed to work. And when advice is sound, many annuities can be steady, reliable sources of retirement income, much like Social Security — the same principle.
But when the advice is self-serving, annuities drain peoples’ savings and deliver much less than is expected by the — by that person. And they can be unclear and confusing.
Look, the fine print can be filled with hidden fees. They cost too much; they don’t pay much back.
But some brokers sell bad annuities because these brokers get big commissions when the amount — that amount to thousands of dollars over time. They’re going into the broker’s pocket instead of the client’s pocket — the money is going in.
Right now, millions of Americans, especially seniors, are being targeted by financial advice and insurance brokers selling bad annuities to — that work for the broker, not for the client. And I’m not saying all brokers; I’m just saying some.
All told, bad financial advice, peddled by unscrupulous financial advisors driven by their own self-interest, can cost a person — a retiree up to 1.2 percent per year in lost investment.
That doesn’t sound like much, but if you’re living long, it’s a lot of money. Over a lifetime, that can add up to 20 percent less money when they retire. For a middle-class household, that can amount to tens of thousands of dollars over time.
Imagine the difference the money would make for retired families all across America if that wasn’t the case.
So, here’s what my administration is doing to protect seniors from this kind of financial fraud.
Today, the Department of Labor is proposing a new rule, meaning that when you pay someone for retirement advice, they must give you advice that’s in your best interest, not whether it gets them the best payday.
To use this technical term, all financial advisors giving retirement advice or selling retirement products would now have to have a “fiduciary duty” to their clients. Most people think there is that fiduciary duty already.
As you may know, many financial advisors already have that duty thanks to the law passed in the 1970s called the Employee Retirement Income Security Act, known as ERISA. Now, you say people have no ERISA, they look at you like, “What are you talking about?” (Laughter.) Like almost all the acronyms we use in the federal government. (Laughter.)
But that law cracked down on conflicts of interest that protect regular folks from being misled or exploited.
But a lot has changed with retirement savings over those last — since that law was passed 50 years ago. Back then, more workers had traditional pensions, IRAs were brand-new, and 401(k)s didn’t even exist.
Things are different now, but the rules haven’t caught up yet. The SEC has done good work to update consumer protections, but big loopholes still remain — for example, regarding the sale of annuities.
With this new rule that we’re proposing, they would close these loopholes. It finalizes any financial — it penalizes any financial advisor or insurance broker who — giving advice about retirement or selling retirement products — and it suggests if they don’t give their client the best — act in the best interests of that client in the first place.
If they don’t, if they breach their fiduciary duty, they could face serious penalties, including having to pay restitution and additional financial penalties.
The action we’re taking today is, I believe, long overdue. If this rule is finalized as proposed, it’s going to protect workers and it’s going to save for — that are saving for their retirements.
It will protect seniors from being exploited. It will protect many trustworthy financial advisors out there who are doing the right thing from unfair competition. Now they won’t be undercut by competitors willing to use deception or underhanded tactics to make a profit.
Look, the bottom line is this is about basic fairness. People are tired of being played for suckers. And me- — and my administration is going to continue to crack down on junk fees across the economy to protect consumers, promote competition, and give families across the country, as my dad would say, “just a little bit of breathing room.”
Let me close with this.
When I ran for president, I promised we would not continue the trickle-down economics of the past. Not a whole lot trickled down to my dad’s kitchen table, as I recall. (Laughter.)
No, I’m serious. My dad worked like hell. My — we lived in a — we were a typical middle-class family, and we lived in a development of rural — you know, when — the — when cities were expanding and people were moving out of the farm areas, we lived in a development of 35 homes — split-level homes. And we had a three-bedroom home with a — with four kids and a grandpop living with us. The walls were thin. (Laughter.) I wondered how my mom and dad got through it when I look back on it.
But all kidding aside — (laughter) — there wasn’t a whole lot that trickled down to my dad’s kitchen table, and my dad worked like hell.
You know, it represented the — the moment we walked away from how this country was built when we got into the trickle-down theories.
I believe every American willing to work hard should be able to achieve the American Dream no matter where they live.
The steps we’re taking today and everything else we’ve done to clamp down on junk fees and restore basic fairness to our economy is part of a larger vision for our country that I think we all share, whether you think the way I’m doing it is correct or not, but I think we share the vision: to build an economy from the middle out and the bottom up instead of the top down.
And I’ll say it again: When that happens, the wealthy still do very, very well — very well. And we all do well.
The economy we’re building is what — is designed to make it fair for everybody. And that’s why I can honestly say I’ve never been more optimistic about America’s future. We just have to remember who we are. We are the United States of America.
I mean this lit- — think about this. There is nothing beyond our capacity when we work together. I mean, nothing.
So, this is just one more effort to eliminate something that’s unfair for ordinary people, not working for them. It doesn’t hurt anybody. And it actually increases competition. It doesn’t diminish it.
So, that’s all I got to say. (Laughter and applause.)
May God bless you all. Thank you.
4:18 P.M. EDT | Consumer & Retail |
Federal Bank - FinTech Partnerships Maturing; Approaching Take-Off: HDFC Securities
Federal Bank has emerged as best in-class mid-sized bank with a visible pathway to emerge as a top-tier bank in the medium-term.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
On the back of its best-in-class liability franchise and a granular loan book, Federal Bank Ltd. has dialled up its FinTech partnerships to address its product (unsecured loans) and customer segment gaps (salaried millennials) and drive growth, especially in high-yield retail segments, to boost profitability metrics.
Having proven for scale over the past couple of years, these partnerships are now maturing and upping the quality quotient (greater productivity).
Each of these individually stitched collaborations dovetails into cross-sell across customer cohorts, thus enhancing the potential profitability of the partners and attracting more high potential alliances.
While near-term return on equities are likely to trend marginally lower from the recent equity raise, we remain constructive on the bank’s ability to monetise its partnerships and amp up its productivity metrics, thereby driving a sustainable 10-15 basis points return on equity reflation over FY23-26E.
We resume coverage with a high-conviction 'Buy', and a target price of Rs 190 (1.5 times March-25 adjusted book value per share).
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Banking & Finance |
RBI Firmly Focused To Bring Down Inflation To 4%: Governor Das
Reserve Bank Governor Shaktikanta Das on Tuesday said the central bank is firmly focused on bringing down inflation to 4% and remains prepared to undertake policy responses to deal with supply shocks, which have become more frequent with profound implications.
Reserve Bank Governor Shaktikanta Das on Tuesday said the central bank is firmly focused on bringing down inflation to 4% and remains prepared to undertake policy responses to deal with supply shocks, which have become more frequent with profound implications.
The current episode of high global inflation and preceding overlapping shocks of the pandemic and Russia-Ukraine war have raised significant issues and challenges for the conduct of monetary policy, the governor said in a speech on 'Art of Monetary Policy Making: The Indian Context' at Delhi School of Economics (DSE) Diamond Jubilee Distinguished Lecture.
He said the monetary policy framework in India has evolved in line with the developments in theory and country practices, the changing nature of the economy and developments in financial markets. Within the broad objectives, the relative emphasis on inflation, growth and financial stability has, however, varied across monetary policy regimes since independence.
Das listed out steps the central bank took to deal with the situation created in the wake of the COVID pandemic and the Russia-Ukraine war.
Following the outbreak of the war, the central bank raised the policy rates by 250 basis points since May 2022.
"After a near-zero policy rate for a prolonged period, central banks in these (advanced) economies started raising interest rates aggressively in 2022, which contributed to stress in certain banks in these economies. In contrast, our battle against inflation is not constrained by financial stability concerns. In fact, even during the COVID phase, we continuously took measures to strengthen financial stability," the governor said.
The Reserve Bank, he said, has adopted a prudent approach and taken several initiatives to revamp the regulation and supervision of banks, NBFCs and other financial entities by developing an integrated and harmonised architecture.
"Our banking system remains resilient and healthy with improved capital ratios, asset quality and profitability," he said.
Das said the RBI's experience in recent years shows that supply shocks have become more frequent with profound implications for inflation management and anchoring of inflation expectations. A key risk of sustained high inflation is that it can de-anchor inflation expectations.
"It is, therefore, important to remain vigilant and take necessary steps in a calibrated and timely manner to keep expectations firmly anchored."
"The Reserve Bank has been quick and calibrated while navigating through such turbulences. We look through fleeting shocks but remain prepared to undertake policy responses if such shocks show signs of persistence and getting generalised," he said.
In such a scenario, monetary policy has to focus on containing the second-round effects, the governor added.
"We will remain watchful of this also. The role of continued and timely supply-side interventions, as being undertaken by the government, assumes criticality in limiting the severity and duration of such food price shocks.
"In these circumstances, it is necessary to be watchful of any risk to price stability and act timely and appropriately. We remain firmly focused on aligning inflation to the target of 4%," he added.
Headline inflation based on the Consumer Price Index had eased to 4.8% in June 2023 from the peak of 7.8% in April 2022. It, however, surged to 7.4% in July, mainly on account of a spurt in vegetable prices, which have already started moderating.
Das noted that low and stable inflation helps households and businesses in planning for long-term savings and investments, which ultimately drive innovation, productivity and sustainable growth.
On the contrary, high and volatile inflation corrodes the economy by denting productivity and the long-term growth potential, he said, adding inflation also imposes a disproportionate burden on the poor.
The Reserve Bank has been mandated to maintain price stability, keeping in mind the objective of growth. Price stability has been numerically defined as maintaining a headline CPI inflation target of 4% with a tolerance band of +/- 2%.
The tolerance band provides flexibility to accommodate growth and financial stability concerns, supply shocks and measurement and forecast errors, Das said.
The target is set by the government in consultation with the Reserve Bank for five years. | Inflation |
Article content
The Bank of Canada’s No. 2 official urged preparation for interest rates staying elevated for longer.
tap here to see other videos from our team.
Senior deputy governor Carolyn Rogers said households and businesses in Canada should ready themselves for an era of borrowing costs higher than over the past 15 years, given the run-up in interest rates since the middle of 2021.
“It’s not hard to see a world where interest rates are persistently higher than what people have grown used to,” Rogers said in prepared remarks in Vancouver.
Structural forces that were keeping borrowing costs low look to have peaked and may be reversing, Rogers said, adding that higher government debt and geopolitical risks have the potential to push rates around the world even higher.
Rising longer-term borrowing costs are adding to debt service costs for businesses and individuals, Rogers said, leaving “less wiggle room” for the financial system in the event of a shock, like another sharp tightening of financial conditions.
“As a small, open economy, Canada likely wouldn’t be immune if severe global stress were to re-emerge and persist.”
Some Canadians are feeling pressured as they contend with both higher inflation and higher interest rates, she said, and are struggling to deal with existing debt. With 40 per cent of mortgage holders already seeing their shorter-duration mortgages renew at higher interest rates, Rogers said officials are watching how households adjust.
“By the end of 2026, virtually all remaining mortgage holders will go through a renewal cycle and, depending on the path for interest rates, may face significantly higher payments.”
Rogers said banks and financial institutions are keeping bigger capital and liquidity buffers, and are putting more cash aside as a “proactive adjustment” to contend with possible credit losses.
- BoC worried government spending could hurt inflation fight
- BoC hold means 'suffocating' mortgage payments to stick
- What economists say about latest job numbers
While Rogers made clear her comments weren’t meant to be predictive in terms of the path for the Bank of Canada’s overnight rate, the speech also adds to evidence policymakers increasingly see borrowing costs as less restrictive. The bank held its key rate at five per cent for the second straight meeting in October, citing mounting evidence of a slowing economy despite increased inflation risks.
Speaking to lawmakers last week, governor Tiff Macklem said the neutral rate — the theoretical level of interest rates that is neither restrictive nor stimulative — was probably drifting higher, and he admitted he wasn’t comfortable with the bank’s decision to leave the range for the neutral rate between two per cent and three per cent in their annual review earlier this year.
Bloomberg.com | Interest Rates |
More than three in four mothers (76%) who pay for childcare say it no longer makes financial sense for them to work, a survey of thousands of parents has found.
A new report by the charity Pregnant Then Screwed warns the ever-increasing costs of childcare are driving families into debt - or preventing them from having children altogether.
The UK's childcare costs are now in the top three most expensive across the developed world, with one in three (32%) families who use formal childcare admitting they have to rely on some form of debt to cover their costs.
Among them is Charlie Taylor Castanheira, 26, who will take on around £15,000 of debt to cover her daughter's nursery fees so she can return to university to train as a barrister.
Charlie was working as a paralegal when she became pregnant with Piper-Rose, now two-and-a-half.
She had hoped to return once her nine-month maternity leave ended, but despite answering emails as late as three hours before giving birth, it quickly became apparent the law firm she worked for was not willing to honour the promise of flexible working.
"It was horrible. I did genuinely love the job and it was really well placed for me to go on to university," she said.
When Piper became old enough to attend nursery, Charlie took on some work in retail.
She added: "I then got stuck in the cycle, because the government help stopped because I was working. So I couldn't stop working to go back to university because the costs were too high."
Her entire salary was swallowed up by nursery fees, but Charlie said it was important for Piper to continue attending: "She absolutely adores nursery. She's made so many friends and her skills have grown so rapidly."
"But my paycheque is null and void at this point," she said.
Charlie, who still dreams of working as a barrister, grew concerned about how the "career break" was impacting her prospects.
"A lot of law firms and chambers don't see retail work as counting towards your career, so it looked like I had a career break of nearly four years," she said.
She eventually decided with her husband that, rather than waiting for Piper's 30 free nursery hours to kick in, they would take out loans so she could go back to university.
Pregnant Then Screwed surveyed more than 24,000 parents and found that one in ten parents (11%) say childcare costs are the same, or more than, their take-home pay.
For one in five (22%), costs add up to more than half of their household income.
More than four in ten parents (45%) have said they often find themselves choosing between paying for childcare and household essentials.
While Charlie said she only wanted one child, "three of my close female friends who have a child the same age say they can't afford a second".
With the next general election less than two years away, 96% of families with a child under three years old are more likely to vote for the party with the best childcare pledge, the survey also found.
Women with young children feel let down by the government - 98% of women using childcare think it is not doing enough to support them.
Charlie is among those disillusioned with the way politicians are dealing with the issue. She has even decided to try to get into politics herself, as an independent in the Tamworth area.
She said: "I don't think any major party accurately covers the issues surrounding childcare. It's very much a one-size fits all approach."
'Parents at the end of their tether'
Pregnant Then Screwed has launched its Cry for Help campaign, created in partnership with Saatchi & Saatchi, where the shrill sound of a baby's cry will be played across Spotify and at billboards around London.
Born from the scientific insight that human brains are hardwired to respond to the sound of a baby crying, the campaign cry has been developed in partnership with Professor Lauren Stewart, professor of psychology and founder of the music, mind and brain MSc course at Goldsmiths, University of London.
Joeli Brearley, founder and CEO of Pregnant Then Screwed, said: "This is our ultimate cry for help. Parents are at the end of their tether.
"Many have now left the labour market, or work fewer hours because our childcare system has been abandoned by this government.
"We don't just have a cost of living crisis in the UK, we have a cost of working crisis with one in 10 mothers now paying to go to work, and that's if they can even secure a childcare place - we've lost thousands of providers in the last year because they simply cannot afford to remain open.''
Click to subscribe to the Sky News Daily wherever you get your podcasts
Becca Lyon, Head of Child Poverty at Save the Children UK, added: "The evidence of our broken childcare system is there in plain sight - it is not working for parents, children, or providers.
"These statistics confirm what we are hearing from the parents we support - many of them would love to get back to work or increase their hours, but they simply can't afford to." | Consumer & Retail |
- The average consumer carries about $6,000 in credit card debt — a 10-year high.
- A higher credit score can help you qualify for the lowest rates on credit cards and personal loans.
- For many consumers, a 0% interest balance transfer card is the best way to pay off credit card debt.
About half of holiday shoppers have already started making purchases or plan to begin by Halloween, according to a recent Bankrate survey. Most of them will use credit cards to pay for at least some of their purchases, the survey shows.
"A couple of years ago, early holiday shopping was all about the supply chain mess," said Bankrate senior industry analyst Ted Rossman. "Now, I think the motivation is more financial."
Many consumers are anticipating the effect of inflation on what they're buying, he said, and they're stressed about the cost of holiday shopping. But it's also important to consider the rising cost of carrying credit card debt.
Overall, credit card debt in the U.S. has reached a staggering record high of $1.03 trillion, according to the Federal Reserve Bank of New York. The average consumer carries about $6,000 in credit card debt — a 10-year high.
Many Americans are also carrying more card debt month to month.
"Part of what's pushing debt higher is people struggling to make ends meet in the midst of high inflation," said Matt Schulz, senior credit analyst at LendingTree. "They look at their credit card as a de facto emergency fund."
But consumers are paying an exorbitant price for having that credit.
The average credit card rate is now about 21%, according to the Federal Reserve Bank of St. Louis. Yet Lending Tree finds the average interest rate on new card offers is 24.45%, the highest level since the firm started tracking credit card rates in 2019. Additionally, 1 out of 3 of the 200 cards it has reviewed has a rate of 29.99% or higher.
Here are five strategies to start paying off credit card debt before you begin holiday shopping:
First, get a handle on your debt and what you owe. Find out the interest rate you're paying on the total balance on each credit card. If you know how much you owe and what you're paying to borrow that money, it will be easier to come up with a plan to reduce your debt.
You can get free access to your credit reports online from each of the three major credit rating agencies — Equifax, Experian and TransUnion — at annualcreditreport.com to help you regularly manage your finances.
Check for errors, including accounts that aren't yours or that you didn't authorize, or incorrect information on credit card limits or loan balances. You can dispute these errors directly online on the credit agency's websites.
While the free credit reports on annualcreditreport.com will not include your credit score, many credit card companies offer their customers a free look at their credit scores. Often when you get your score, it also will give you the risk factors that are affecting your score and what you can work on to improve it.
Paying your credit card bills on time and using 10% or less of the available credit are important factors in raising your score. Higher scores can help you qualify for lower-rate cards or cards with promotional offers of 0% interest.
One of the best ways to get rid of credit card debt is to consolidate it by using a 0% interest balance transfer card, but you may need to already have a credit score of 700 or higher to get one.
A 0% interest balance transfer card offers 12, 15 or even 21 months with no interest on transferred balances. You may be charged a 3% to 5% fee on the amount that you transfer, so crunch the numbers to make sure it is worth it.
For many consumers, it's the "best weapon" for reducing credit card debt, Schultz said. "The ability to go up to 21 months without accruing any interest on that balance is really a game changer," he added. "It can save you a lot of money. And it can dramatically reduce the time it takes to pay that balance off."
If you get a 0% interest card, be aggressive about paying off as much of the balance as you can with no interest during that introductory period. Generally, after that, it will adjust to a much higher interest rate.
Another way to consolidate debt is with a personal loan. Currently, such loans come with an average annual percentage rate of about 12%, although a good credit score could garner you a rate as low as 8%. Only borrow enough money to pay off your credit card debt, not to spend more.
"You work with a lender," said Rod Griffin, senior director for public education and advocacy at Experian. "They give you a personal loan that pays off those credit card debts that are a relatively low interest rate, usually over a long, longer term, but it can reduce your payments.
"And all those credit card account payments would then be paid and reported as paid in full," he added. "That's key."
If you don't qualify for a 0% card or personal loan, contact your card issuer and ask for a lower credit card rate.
Just make the call. A recent Lending Tree survey found about three-quarters of consumers who asked the issuer for a lower interest rate on their credit card in the past year got one — and they didn't need a great credit score to get it.
If you're really cash strapped, you could also try working out a debt settlement directly with the creditor. Your goal is to get the creditor to agree to settle your account for an amount that is less than what is owed because at least some payment is better than none. However, there may be some negative consequences, like a tax hit on the amount of debt that you don't pay that has been forgiven.
Be wary of using debt settlement programs offered by outside companies. With a debt settlement company, instead of paying your creditor, you make a monthly payment into a separate bank account set up by that company.
Once there is enough money in that account, that company will use the funds to negotiate with creditors for a lump sum payment that is less than what you owe. These programs can take years and you can wind up paying hefty fees, experts say.
"So you may be better off using those payments toward your existing debts and reducing those credit card payments yourself as opposed to paying a debt settlement firm," Griffin said.
Once you have lowered the interest you're paying on your credit card debt, you need to figure out how much you can truly afford to pay every month, every two weeks or every pay period.
Figure out how much you must pay for committed expenses such as rent or mortgage, utilities, food and transportation, as well as debt payments, including student loans and credit card bills.
Commit to putting a certain amount of your pay toward paying down your credit card debt — at least the minimum balance due on each card.
If you have multiple cards to pay off, figure out whether you are going to prioritize paying off the highest-interest debt, known as the "avalanche method," or paying off the smallest to largest balances, known as the "snowball method."
If you still prefer to use a credit card for daily expenses, make sure to pay it off in full every month while you're paying down the balance on other cards. That's known as the "island approach:" using different cards for different purposes with the goal of getting the lowest possible interest rate, rewards or cash back on each of them, for example.
One repayment strategy isn't necessarily better than the other, but you need to have a plan — and stick to it.
"There's no quick fix," said Griffin. "It takes time to get into debt; it takes time to dig your way out of debt." The best solution "is usually the slow and steady, have a plan, pay it off over time and change your behaviors," he added.
JOIN ME: Thursday, November 9 for CNBC's YOUR MONEY conference to hear from top financial experts about ways to maximize your finances and invest for a brighter future. Register here for this free virtual event! | Banking & Finance |
Life Insurance Payouts Are Now Taxable For High-Premium Policies
Tax department notifies budget change to bring plans under tax net if yearly premium exceeds Rs 5 lakh. Death payouts stay exempt.
The Income Tax Department notified the income tax liability on any sum received under a life insurance policy when the yearly premium exceeds Rs 5 lakh.
The circular issued on Wednesday is in line with Finance Minister Nirmala Sitharaman's February announcement in the budget for 2023-24.
From assessment year 2024-25, any sum received under a life insurance policy—except in the cases of unit-linked plans—issued on or after April 1, 2023, would not be exempt of tax if the premium payable is over Rs 5 lakh for any of the previous years during the term period.
Before the amendment, individuals enjoyed an income tax exemption under Clause (10D), Section 10 of the Income-Tax Act, 1961. Any sum received under a life insurance policy, including the sum allocated by way of bonus on such a policy, did not attract tax in most cases.
However, the change in law would retain the income tax break only if:
The premium paid by the individual is on more than one life insurance policy (excluding Ulips) issued on or after April 1, 2023, and the aggregate premium does not exceed Rs 5 lakh for any of the previous years during the term of the policies.
The sum is received on the death of a person.
In 2021, the department had issued guidelines on the taxability of Ulips when the premium exceeded Rs 2.5 lakh if the policy issue date was after Feb. 1 that year. | Banking & Finance |
Subsets and Splits