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Council tax is due to rise on 1 April for many people, another turn of the screw for those already struggling with the cost of living crisis.
People in Wales have seen their council tax rise significantly faster than those in England and Scotland over the past 12 years.
However it's those in Rutland and Nottingham, in the East Midlands, who will have the highest fees when the 2023/24 rates come in on 1 April.
People living in Band D properties there will pay more than £2,400 a year, while those in similarly-priced properties in Westminster and Wandsworth will pay less than £900.
Despite having lower rates per band than those in Rutland and Nottingham, people in Surrey councils are likely to pay some the highest levels of council tax overall as there are more properties valued in the highest tax bands.
In Elmbridge, a Surrey borough home to many Chelsea footballers seeking proximity to their Cobham training ground, more than a quarter of homes are in Bands G and H, six times more than normal across Great Britain.
Just one in fifty properties are in the least expensive Bands A and B, compared with a national average of one in five.
As a result, people in Elmbridge are likely to pay more than £2,800 each in the year to April 2024, more than any other area.
At the other end of the scale, almost all the areas with the cheapest council tax after adjusting for house prices are in Scotland.
People in Shetland or the Western Isles will pay less than £1,200 on average, higher only than Wandsworth and lower than even Westminster, which retain their positions towards the bottom of the table despite high house prices there.
The cheapest areas outside of London or Scotland are Stoke-on-Trent, Sunderland and Wigan, where people are likely to pay just under £1,500 each.
What's happening in the different nations?
Every council in Scotland has reduced council tax in real terms since 2011/12, the first year for which equivalent data is available across all three of England, Scotland and Wales.
In Wales, council tax has risen by at least 12% in every council area, even after adjusting for inflation.
Northern Ireland's Department of Finance say that it is "impossible to make a straightforward comparison" to the other nations on council tax. The country has a system of domestic rates which is similar but different to council tax.
In Wales as a whole people are likely to be paying about a fifth more than they were twelve years ago even after adjusting for inflation, while people in Scotland will be paying about 8% less.
This year's high Inflation is cited as one reason why rates have risen in Wales:
"Budget setting is extremely difficult this year due to high inflation and other cost drivers. While the settlement from Welsh Government was better than expected, it still leaves an enormous gap of around £300m to be bridged," explained the Welsh Local Government Association.
But inflation has also been high across the rest of Great Britain.
The Scottish government froze council tax from 2007/08 to 2016/17, and blocked councils from raising rates by more than 3% in real terms from then until 2020-21.
"This has resulted in 30-40% lower Council Tax charges on average in Scotland compared with England and Wales", said the Convention of Scottish Local Authorities.
There has never been such a cap in Wales, while in England, councils with social care duties can raise council tax by 5% and others can put it up by 3%.
If a local authority wants to increase council tax by more than 5%, residents must vote for it in a referendum. As yet, perhaps unsurprisingly, none have been passed.
Croydon, Slough, and Thurrock, however, have been granted special permission from the government this year to raise their council tax above this cap because of huge gaps in their finances.
Why do some councils set higher council tax than others?
You get a different answer depending on who you ask.
Councils that have managed to keep council tax low, like Wandsworth, Hillingdon and Hammersmith & Fulham laid credit to prudent and responsible financial management from those responsible over several years.
Places like Rutland, Dorset and Wakefield, which have all raised council tax by some of the highest amounts in England, have called for fairer funding for councils, however.
They say that many councils which charge lower council tax get more money given to them by central government grants, despite often having less demand for expensive services like adult social care.
The Local Government Association told Sky News that one fund that the English government distributes to councils - the Revenue Support Grant - meant that "essentially a lot of the calculation of how much council tax people pay is set centrally," supporting claims by councils that higher taxes are somewhat out of their control.
The more grant money a council receives the more likely it is to have lower council tax.
Westminster receives more than £170 per person from the Revenue Support Grant, more than the 157 bottom councils put together - each of which get less than £2 per person.
Rural areas are worst affected. Five of the ten areas that receive the most per person from the Revenue Support Grant are in London and all the others are cities.
Adding to add to that issue, councils with the most over-65s - also more likely to be rural areas - have higher council tax rates than those with fewer.
Councillor Lucy Stevenson, leader of Rutland Council, told Sky News that "part of the first job is actually telling our rural story so that we get people to look beyond what they see is affluence, and actually inside the county."
"When we were looking at levelling up, some of the residents said 'Are you sure we deserve that money?' I said 'absolutely. Have you looked at our data?'
"The second job is to come up with solutions. There is a wider issue for local government. Most councils are looking at deficit budgets or cutting services. The whole of local government needs serious consideration.
"It is the workhorse of the country for everybody's day to day lives."
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done. | United Kingdom Business & Economics |
Angela Rayner was challenged by Deputy Prime Minister Oliver Dowden over "value for money for the taxpayer" after it emerged she had expensed a second pair of earphones.
During PMQs the Deputy Labour leader faced questions over her use of taxpayers money to purchase a second pair of expensive AirPods before she swiftly repaid the cash.
Rayner accused the Government of “spending hundreds of thousands of pounds” of taxpayers’ money on “loophole lawyers”.
But Dowden said he found it "extraordinary" that she should "lecture" the Conservative Party over "value for money" regarding expenditure for the Covid inquiry.
Oliver Dowden said he found it 'extraordinary' that she should 'lecture' the Conservative Party over 'value for money' regarding expenditure for the Covid inquiry
Parliament TV
She said: “He pretends that it’s complicated but it’s simple. They set up the inquiry to get to the truth, then blocked that inquiry from getting the information that it asked for and now they’re taking it to court.
“I know he considers himself a man of the people, so using his vast knowledge of working class Britain, does he think working people will thank him for spending hundreds of thousands of pounds of their money on loophole lawyers, just so the Government can obstruct the Covid inquiry?”
Dowden replied: “We will provide the inquiry with each and every document related to Covid including all internal discussions in any form as requested.
"While crucially protecting what is wholly and unambiguously irrelevant because essential (she) is calling for years worth of documents and messages between named individuals to be in scope and that could cover anything from civil servants’ medical conditions to intimate details about their families.”
He added: “I find extraordinary that she should lecture us on value for money for the taxpayer when I understand she has now purchased two pairs of noise cancelling headphones on expenses.
"I will be fair to (her) if I had to attend shadow cabinet meetings, I think I’d want to tune them out too.”
Rayner expensed the £139 earphones but when confronted about the claim, Commons authorities confirmed that a repayment was made.
The Ashton-under-Lyne MP was accused of "hypocrisy" in 2021 after claiming £249 for personalised Airpods, on top of more than £2,000 for other Apple kit.
Angela Rayner used taxpayers money to purchase a second pair of expensive AirPodsTwitter/ Angela Rayner
On December 12, 2022 she put in another expenses claim titled "earphone for office" for the exact same retail price of 2nd Generation Apple AirPods.
Defending the first purchase of earphones earlier this year, Rayner said: "All of my equipment has to sync with each other so that I can carry out my work and people will understand that.
"I wouldn't say that it's luxury to have computer equipment that is everyday expenditure for somebody that works with computers every day for their job." | United Kingdom Business & Economics |
Justin Tallis/AFP via Getty Images
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A pint of beer is poured at Pressure Drop Brewery, in north London, in 2022.
Justin Tallis/AFP via Getty Images
A pint of beer is poured at Pressure Drop Brewery, in north London, in 2022.
Justin Tallis/AFP via Getty Images
LONDON — It's been a dreary summer in the U.K., which has seen some of the rainiest summer months on record, all while the country continues to deal with the highest inflation in Western Europe. Almost everything — from food to fuel to rent — is getting more expensive.
One thing has just got a little bit cheaper, though.
The U.K. government announced last week what it called the biggest shakeup of alcohol tax in a century. Alcoholic beverages will now be taxed simply based on their strength.
That means drinks having alcohol by volume (ABV) levels below 3.5% will be taxed at a lower rate than drinks with ABV over 8.5%.
Before this change, there were different tax rules for different types of alcohol.
In addition to the new changes, the government has also expanded its "Draught Relief" scheme, which freezes or cuts the alcohol duty on drinks poured on tap. This means that the duty pubs pay on each draft pint will be cheaper than in supermarkets. So a pint could be up to 11 pence — or 14 cents — cheaper, if the pubs pass this saving on to customers.
WPA Pool/Getty Images
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Britain's Prime Minister Rishi Sunak serves a pint of stout that he poured during a visit to the Great British Beer Festival on Aug. 1, in London. He was heckled by a pub owner who was unhappy about the rise in duty for beverages with higher alcohol content.
WPA Pool/Getty Images
Britain's Prime Minister Rishi Sunak serves a pint of stout that he poured during a visit to the Great British Beer Festival on Aug. 1, in London. He was heckled by a pub owner who was unhappy about the rise in duty for beverages with higher alcohol content.
WPA Pool/Getty Images
The government has dubbed this its "Brexit Pubs Guarantee" — an acknowledgment of the difficulties pubs are facing. Finance Minister Jeremy Hunt announced the changes with a visit to a local. "Pubs have been facing a lot of competition from supermarkets and we want to make sure they remain competitive," he said in a video. He promised that the "duty for a pint in the pub will always be less than duty in the supermarket."
Britain has always set its own alcohol taxes, so this move is less likely about Brexit and more likely about a general election next year, some analysts say. (Also, as skeptics pointed out on social media, beer already costs less in a number of European Union countries than in the U.K.)
It comes at a time when pubs around the country are struggling to stay open as higher energy bills and other costs pile up, while the rise in the cost of living keeps customers away. The government hopes the changes will win over voters and offer a much-needed boost to the country's pub industry, which has seen near-record numbers of businesses closing. Last year, over 500 shut their doors.
William Robinson, managing director of Robinson Brewery, which operates 250 pubs, welcomed the difference in draft beer duty between pubs and supermarkets. He told the BBC: "There is clearly a benefit there of a lower duty rate on pubs."
But not everyone is toasting the new rules.
When Prime Minister Rishi Sunak — who himself doesn't drink alcohol — visited a beer festival to promote the changes last week, he was heckled by a pub owner unhappy with the rise in duty on higher-alcohol beverages.
Claer Barrett, consumer editor at the Financial Times, says that stronger wines and spirits will cost more. One of her own favorite tipples, an Argentinian Malbec, with alcohol content of 14% or 15%, will certainly become more expensive. Under the new law, she says, the tax "could go up by nearly a pound — or about $1.27."
Barrett says the changes will amount to a tax hike for a lot of drinks, and most consumers understand this. "I don't think, however much they've had to drink, the British public are that stupid," she says. "We all know that the tax screw is being twisted."
The spirits industry has also raised concerns about what the changes will mean for it. The Scotch Whisky Association has described the duty increase for spirits as a "hammer blow for distillers and consumers."
For Lewis Munro, a bartender from London, the drop in price is nowhere near enough when the average pint in London costs six or seven pounds ($7.65 or 8.92). He says he will keep going to his local in the outskirts of the city — which he calls a "pretty scummy, rundown pub" — where he can get a pint for around half that price, at three pounds.The only thing better than a beer, he says, is a bargain. | United Kingdom Business & Economics |
Image source, Steve Hubbard/BBCImage caption, Alice Hirst explained the process to students at Luton Sixth Form CollegeA town-wide recruitment drive to find more stem cell donors from different ethnic backgrounds is being held.The campaign in Luton hopes to boost survival chances for blood cancer patients by creating a more diverse donor register.Students are being asked to do a cheek swab at Luton Sixth Form College and the University of Bedfordshire."They could save somebody's life," said Alice Hirst of charity Anthony Nolan."For somebody with blood cancer the stem cell transplant is often their only chance," she added."They've had chemotherapy and it doesn't work and a stem cell transplant is the only thing that could save them."Image source, Steve Hubbard/BBCImage caption, Student Sehajkeerat said she thought the campaign was a great ideaAnthony Nolan said patients who were white had a 72% chance of finding the best match from an unrelated donor, which dropped to a 37% chance for patients from minority ethnic backgrounds.Ms Hirst said a case in point was a young girl in Luton with Bangladeshi heritage who had been waiting almost three years for a stem cell donor because there was not a perfect match for her.Luton is one of the most ethnically diverse areas of the UK, with "significant Pakistani, Bangladeshi, Indian, East European and African Caribbean communities", according to the council.The 2021 Census recorded 54.8% of its population as non-white, making it one of four local authorities outside London where the majority of the population is from ethnic minority groups.Councillor Javeria Hussain, chair of Luton Rising, said there were "simply not enough donors from ethnic backgrounds", adding: "We are appealing to young people to participate in the first UK town-wide stem cell recruitment drive and become a lifesaver."Student Sehajkeerat, who volunteered to sign up, said: "God forbid it could happen to one of my family or even myself, so giving someone else the opportunity, I thought it was a great idea."Image source, Steve Hubbard/BBCImage caption, Swabs are sent to a laboratory to determine each donor's tissue typeA stem cell transplant replaces damaged cells in the bone marrow with healthy ones and can be used to treat people with leukaemia and lymphoma.If they are found to be a match for a patient, a donor is given injections to encourage the production of stem cells, which are then transferred to the patient.Find BBC News: East of England on Facebook, Instagram and Twitter. If you have a story suggestion email [email protected] Internet LinksThe BBC is not responsible for the content of external sites. | Nonprofit, Charities, & Fundraising |
Change may come to H-1B visa program, which opens doors for tech workers
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Change may come to H-1B visa program, which opens doors for tech workers
The Joe Biden administration is proposing big changes to the H-1B program — that’s the program that allows employers to sponsor highly skilled immigrants who have bachelor’s or advanced degrees for work visas. So, people who work in tech or as research scientists, professors or doctors.
One issue is that there are a lot more people who want H-1Bs and companies who want to hire them than there are visas to go around. And some companies have been gaming the system.
There aren’t many legal ways to come to the U.S. to work. But H-1B visas are a big one.
“If you know of a scientist or doctor or engineer who emigrated to the United States, chances are pretty good that they came through the H-1B program,” said Jeremy Neufeld at the nonprofit Institute for Progress.
But, he said, the visas are hard to get, especially to work at a for-profit company.
“The number of H-1Bs for them is capped at 85,000 a year,” he said. “And those 85,000 are awarded by lottery.”
Some companies have been submitting multiple applications for the same person — basically like buying extra lottery tickets.
If the administration’s proposed rule goes through, they won’t be able to do that anymore.
Ron Hira at Howard University said there would be other changes too.
“There’s a number of employers who are exempt from the cap,” he said. “Those are universities, they’re research organizations. [The administration is] proposing to expand that quite significantly.”
It’s also proposing allowing entrepreneurs to sponsor themselves for H-1Bs, said Gaurav Khanna at the University of California, San Diego.
“They’re trying to make sure that there’s less fraud, so they’re going to do some on-site inspections,” he added. “They are going to try to make it easier for international students who come to the U.S. on a student visa to transition to an H-1B.”
Changes to the program have been a long time in coming, said Muzaffar Chishti at the nonpartisan Migration Policy Institute.
“What it doesn’t address is that these are extremely small numbers for the 21st century global economy,” he said.
But increasing the number of H-1Bs is not something the administration could do on its own. That would be up to Congress.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
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Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you. | Workforce / Labor |
First Minister Humza Yousaf said the support for independence had never been stronger despite “some of the most difficult weeks and months in our party’s history” as he praised Nicola Sturgeon’s “leadership”.
Yousaf admitted his leadership would “piss some people off” within the SNP as he called for “bold and radical” policies which would allow Scotland to achieve the prosperity of Norway and Austria.
Speaking to the SNP South Scotland Regional Assembly in Dumfries, Dumfries and Galloway, Mr Yousaf pledged to pursue “humane migration” and “the climate emergency”.
He said US climate envoy John Kerry “couldn’t have been more enthusiastic” and “couldn’t have lavished more praise on the Scottish Government” during a visit this week and refused to back the Rosebank oilfield.
He praised Sturgeon for her “leadership on the world stage”.
Yousaf said an independent Scotland could aspire to match countries such as Ireland, Norway and Austria.
Yousaf said: “Just look at the countries around us that are around our size, they are healthier and wealthier than the UK, and doing better than the UK for productivity.
“Why not Scotland?
“We have world class universities, world class food and drink, life sciences, agriculture, the abundant resources which other countries would bite our hand off for.”
He admitted there were divisions within SNP but insisted independence “is closer now than it ever has been” with nearly 75,000 SNP members.
Yousaf added: “It’s so important first of all, that even in the face of let’s be frank, some of the most difficult weeks and months in our party’s history, support for independence remains rock solid.”
He called for a “legally binding referendum” and said “humane migration” could help repopulate rural areas of Scotland such as Dumfries and Galloway, and the Borders.
When asked if the Scottish Government supported the development of the Rosebank oilfield, given Mr Kerry’s views on ending burning fossil fuels, Yousaf said the focus should be on renewables.
Yousaf said: “I’m not convinced the development of the Rosebank oilfield should go ahead.
“Unlimited oil and gas extraction is not our future, our future is within the unleashing the potential of renewable technology.”
He added: “My programme for government is probably going to piss off some people.
“The SNP is best when it’s radical and when it’s bold.
“There are people with a vested interest in the status quo.”
He pledged to “eradicate poverty” rather than reduce it.
Yousaf said: “There is incredible wealth, resource, talent within Scotland.
“We would have a far more humane approach to migration than the UK Government.
“For a country which has depopulation issues, there are countries with the average age of 35 who are desperate to come.
“We lost in 2014 on questions on the economy and currency and pensions.”
Yousaf vowed there would be “meaningful dialogue” with COSLA over school strikes, after both GMB Scotland and UNISON balloting for strike action.
The First Minister said devolution had been “undermined by a contemptuous UK Government” and criticised the “Westminster cost-of-living crisis”.
He said “Blue Westminster or Red Westminster” would make no difference, citing Sir Keir Starmer’s stance on policy issues, and describing Anas Sarwar as “like a child” on a recent visit from the Labour Party leader.
Yousaf said: “The body language was like a child looking for permission from their parent.”
He defended the appointment of new SNP chief executive Murray Foote, who stepped down from his previous comms role for misleading the press over membership figures, praising his “transparency and openness”.
Yousaf said: “Independence is now closer than it ever has been.
“It is closer than ever.
“This is a journey that did not begin with you and I.
“It has been going on not for decades but for hundreds of years.
“We may not have begun it but by God we should finish the job.
“The more likely we are to win the referendum, the less likely they are to give it to us.”
He dismissed the prospect of dissent from rebel SNP MSPs over the Bute House Agreement and insisted he would be achieve Scottish independence.
Yousaf said: “We want a legally binding referendum.
“That’s my job to lead the party to independence.” | United Kingdom Business & Economics |
Rolex, Patek Prices Hit Fresh Two-Year Lows: Subdial Index
Prices for used Rolex and Patek Philippe watches fell to fresh two-year lows on the secondary market last month as demand for pricey timepieces continued to decline amid rising supply.
(Bloomberg) -- Prices for used Rolex and Patek Philippe watches fell to fresh two-year lows on the secondary market last month as demand for pricey timepieces continued to decline amid rising supply.
The Bloomberg Subdial Watch Index dropped 1.8% in October, sinking to its lowest level since 2021. The index, which tracks prices for the 50 most traded watches by value on the secondary market, is now down 42% since a high in April 2022.
The declines follow a massive surge in prices to record levels for the most in-demand Rolex, Patek and Audemars Piguet models during the pandemic. Now that interest rates have jumped amid strong inflation coupled with rising geopolitical tensions and shaky economic growth, watch collectors are curbing timepiece purchases.
Christy Davis, the co-founder of Subdial, a UK-based watch trading platform, said there are signs of further weakening as supply rises and it takes longer for used watch dealers to sell their stock.
“We are seeing growing downward pressure in the market, which could lead to a further downward drift in prices as dealers cut valuations to chase sales,” Davis said in Subdial’s October Market Update.
The number of used watches available on the secondary market has risen by 5% since August, according to Subdial. Price uncertainty, which measures the spread in prices offered for a watch from different sellers, has increased 12% over the same period.
“With more watches available at a wider spread of prices, what we’re seeing is people dropping prices to chase sales going into the holiday season,” Davis said.
As buyers have become more cautious and discerning, the average number of days that a pre-owned watch takes to sell has increased by 8% since August, according to data compiled by Subdial.
A Rolex brand index fell 1.5% last month and is now down 27% since the April 2022 market peak, data compiled by Bloomberg and Subdial shows. An index of Patek Philippe model prices dropped 2.3% in October and is now down 47% since April, 2022.
While secondary market prices for Rolex and Patek watches have corrected sharply since their peak, the most in-demand models for both brands continue to trade well above the prices they are sold for at retail.
(Updates to include Bloomberg Automation attribution)
©2023 Bloomberg L.P. | Consumer & Retail |
CPI Preview: Inflation To Remain Elevated Despite A Modest Drop In August
The country's CPI inflation is expected at 7.1% in August, according to economists polled by Bloomberg. In was at 7.44% in July.
India's retail inflation is expected to remain elevated amid a modest drop in August as food inflation, though easing, remains high.
The country's consumer price index-based inflation rose to 7.44% in July, the highest reading since April 2022, and exceeded the central bank's target range of 4%, plus or minus 2%. In August, CPI inflation may see a modest decline, with further easing by September.
A panel of economists polled by Bloomberg estimated the country's CPI inflation at 7.1% for August.
The average retail price of vegetables has remained elevated, though prices reversed sharply towards month-end, said Rahul Bajoria, chief economist at Barclays, who forecasts CPI inflation at 7.3% year-on-year in August.
Food and beverage inflation is likely to come in at 10.2% in August compared to 10.6% in July, according to Teresa John, economist at Nirmal Bang Institutional Equities. Most vegetable prices are off highs and have been on a moderating trend in late August and early September, she said.
If the monthly average price levels of vegetables, particularly tomatoes, are considered, then food prices on average are unlikely to show a meaningful drop in August based on the data received from the Department of Consumer Affairs, according to Kaushik Das, chief economist at Deutsche Bank.
Whereas core inflation remains on a moderating trend and is likely to come in at 4.7% in August from 4.9% in July, according to John's forecasts. As long as core inflation remains benign, the current spike in headline inflation is unlikely to result in any rate action by the RBI, she said.
Food Prices: Off Highs
Elevated headline continues to be driven by high food prices (weight of 45.9% in CPI basket), said Bajoria, who estimates food inflation to have risen by 10% year-on-year in August or 0.2% month-on-month.
Vegetable inflation is expected to continue to be the largest contributor for a second month in a row, as prices of tomatoes continued to remain elevated while prices of onions also rose sequentially.
Tomato prices, which had surged by more than 210% month-on-month in July, remained elevated in level terms in August on average, though they are estimated to have fallen by around 7% month-on-month as government measures to distribute tomatoes at discounted prices and fresh arrivals towards the end of the month eased supply issues, said Bajoria, who expects a complete reversal in prices by the end of September.
The rise in onion prices also likely contributed to elevated food inflation in August. Daily retail price data shows onion prices rose 12% month-on-month, according to data from the department of consumer affairs, owing to tight supplies due to a weak rabi harvest and some crop damage from excess rains during July.
Depending on how the CSO calculates the vegetable index, there can be significant upside or downside surprises as far as food inflation is concerned, and consequently, the headline CPI inflation outturn of August is considered.
Pulses, rice, and wheat also showed a sequential rise in August from the previous month. Supply-side measures undertaken by the government are likely to keep cereal prices range-bound, John said. However, the key risk is for pulse prices, with sowing down by about 9% year-on-year and erratic monsoons.
September To See A Sharper Fall
The bigger disinflation in vegetable prices will probably be seen in September, as the average price of vegetables for the month shows a significant month-on-month decline compared to August, Das said.
Over June and July, food prices have increased by nearly 8% month-on-month, while in normal circumstances they should have increased by about 2% sequentially. Therefore, there has been a 6% month-on-month excess spike in food prices, led by vegetables like tomatoes. "Even if we assume only a 3% month-on-month correction out of this 6% excess spike and further assume that the downward adjustment will happen entirely in September, then CPI inflation should fall back to 5% year-on-year by September," Das said.
If this trajectory turns out to be correct, then CPI inflation will likely average about 6.5% in the July–September period, 30 basis points higher than the RBI's latest forecast of 6.2%, Das said. | India Business & Economics |
Labour is planning to add VAT to private schools in a move that would hit thousands of parents with higher costs to educate their children.
But private schools are just one of dozens of tax-exempt services that would be open to a raid on incomes by a government led by Sir Keir Starmer.
While the party has remained mostly quiet about how it would tax the UK, shadow chancellor Rachel Reeves recently ruled out a so-called “wealth tax” on the highest earners.
Rita de la Feria, a leading tax law expert, said applying the levy to private schools would be a first step towards reforming Britain’s Value Added Tax and added that expanding the 20pc charge has become an “elephant in the room” for politicians.
The adviser to the Office for Budget Responsibility (OBR) said that the levy, currently the second largest income generator for the Treasury after personal income tax, could fund a sizable expansion of welfare if charged more widely.
“The UK doesn’t tax almost half of consumption,” she said, adding that VAT should apply to “all or almost all” transactions with the money going to fund handouts to “compensate the poorest”.
Left wing administrations in Canada and New Zealand have been funding generous welfare states for years by applying VAT on almost everything.
“The traditional way this has been done in New Zealand and Canada is through the welfare system,” she said.
“In the case of New Zealand VAT [it] has no exception at all and what they do is welfare transfers to the poorest from VAT taxation,” she said.
She said her recent academic work proposes “a real time return of the VAT that you pay”.
“The way it would work is you go to a shop and go to the cashier and pay for the products.
“The cashier would ask you [for your] your tax code and the money would be immediately returned to you in the form of bank transfer or an app on your mobile phone.
“That would mean in essence that the poorest would have almost a personal exemption,” she explained.
Goods and services such as education, shoes and clothes, books, magazines and newspapers as well as financial services like insurance and investing are currently VAT exempt.
Some transactions are subject to a reduced rate of 5pc, which applies to items like children’s car seats, nicotine products to quit smoking and mobility aids for the elderly. It also applies to many construction and home renovation-related costs.
‘We are wasting insane amounts of money defending VAT in court’
The law around VAT exemptions has been at the centre of hundreds of court cases over the years, where firms have sued the Government over claims they were incorrectly hit with VAT when they should be exempt.
The cases then have to be defended in the courts at a substantial cost to taxpayers.
A memorable example includes McVities successfully arguing in 1991 that Jaffa Cakes were chocolate covered cakes and therefore exempt from VAT, as opposed to chocolate covered biscuits which are liable.
In July, Uber won a case that ruled rival ride-hailing apps should also face a 20pc tax charge on their profit margins.
“The amount of money that we spend on these cases is literally insane,” Dr de la Feria said, adding that making VAT apply to everything would bring them to an end for good.
Exemptions are also largely pointless, she argues. “When you cut VAT on products there is a risk that it will not pass to customers.
“We know that on e-books and tampons the VAT cut was not passed through to consumers.
“Even when it is passed through to consumers the big savings only go through to [those on a] high income.”
Attempts to reform VAT have fallen mostly flat so far and Labour’s mooted expansion to schools would be one of the biggest in the tax’s 50-year history.
The last major one came under former chancellor George Osborne in 2012 when ministers sought to bring a so-called “pasty tax” that brought hot takeaway food under the 20pc rate. The plan was later dropped after widespread opposition. | United Kingdom Business & Economics |
I am 65 and at the absolute peak of my earnings. I’m also in the 35% tax bracket and am not looking to retire soon. I need $30,000 for a home project. I have enough to take it out of a nonqualified brokerage account but will pay capital gains taxes on what I liquidate. I’m thinking that the best place to take it from would be my Roth IRA so that I do not increase my tax bill. A home mortgage loan is not in the picture since I need this cash quickly. If you were to say no to the Roth withdrawal now, when is a good time to withdraw from the Roth IRA? Our kids are well off and don’t need it as a future inheritance.
-Joseph
While seeking to minimize the tax impact from this individual project is important, it’s not the only consideration as you decide which account the money should come from.
Before using your Roth IRA to cover the cost of the project on the grounds of short-term tax bill minimization, it is also critical to consider the long-term tax and financial planning implications of withdrawing from each account and when.
I can answer your question generally as it would apply to most taxpayers but will caution that it is best practice to consult a tax professional who thoroughly knows your full tax picture. (And if you need more help with your tax strategy, consider matching with a financial advisor with tax expertise.)
Examine Your Tax Situation
As you note, there would be no immediate tax implications if you withdraw the funds from your Roth IRA since you are past age 59 ½. Because you are in the 35% income tax bracket, the rate you pay on capital gains taxes from your taxable brokerage account will be either 15% or 20% depending on your tax filing status (married and filing jointly, single or head of household) and actual income.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Although it might seem safe to assume tax rates will be lower in retirement when you’re no longer receiving income from employment, I caution against this assumption. Current income tax rates are set to expire at the end of 2025, and they are relatively low by historical standards.
Consider a Taxable Withdrawal
Overall, if you are not close to the top of the 35% income tax bracket and would face a 15% capital gains tax, it might make sense to use your brokerage account for the withdrawal while you have income to support the current tax bill.
Furthermore, while the total value of your brokerage account might indicate that you will owe capital gains taxes on a withdrawal, you should review the individual holdings within the account and consider tax-loss harvesting opportunities.
Given the volatile market environment and the drawdowns most asset classes experienced in 2022, it’s possible that some holdings have declined in value below your original cost basis, depending on what you own and how long you have owned them. If that is the case, you could sell some of the assets that have lost value and use those realized losses to offset capital gains elsewhere in the account, thereby reducing your tax bill.
If tax loss harvesting is not an option, another strategy would be to gift appreciated securities to a charity. In doing so, you would avoid paying capital gains taxes and benefit from a tax deduction equal to the full market value of the gifted assets. The tax savings from this approach could help offset any tax burden associated with liquidating a portion of your taxable account for the home project. (And if you need help harvesting tax losses or gifting securities to charity, consider working with a financial advisor.)
The Purpose of a Roth IRA
So, why pay taxes on a withdrawal from your taxable account when a Roth IRA provides a tax-free source of funds? Because, generally speaking, it would defeat the purpose of a Roth IRA.
Roth IRAs are designed to provide tax-free income in retirement, not a tax-free source of general-purpose funds. Unless you expect to collect a pension or passive income when you retire, your main income sources will likely be Social Security and your savings, including your Roth IRA. Therefore, I believe with the information you’ve provided about your situation, it is unwise to tap a Roth IRA until retirement, even if preserving its value for the next generation is not a primary consideration.
Roth IRA contribution limits are already relatively low, and since you are above the income threshold to contribute, you can only do so through backdoor contributions. Your ability to capitalize on the power of a Roth IRA will be reduced if you withdraw valuable funds from it before retirement. Your savings will be more valuable in retirement if you allow the $30,000 in your Roth IRA to continue compounding tax-free compared to allowing the funds in the nonqualified brokerage account to accumulate taxable gains. (And for more help managing your retirement accounts, consider matching with a financial advisor.)
Bottom Line
On the surface, it may seem ideal to withdraw money from qualified accounts to minimize your current tax bill. However, you should consider the long-term tax implications of your withdrawal sequence and evaluate the purpose that each account plays in your overall financial plan. With taxes, there is no one-size-fits-all recommendation, and working with a professional will increase your likelihood of optimal results. Approaching a home improvement project — or any significant expense — in this manner will yield results that align best with your financial goals.
Tips for Finding a Financial Advisor
Finding a financial advisor doesn’t have to be hard. 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.
Consider a few advisors before settling on one. It’s important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Loraine Montanye, CFP®, AIF®, is a SmartAsset financial planning columnist and answers reader questions on personal finance topics. Got a question you’d like answered? Email [email protected] and your question may be answered in a future column.
Loraine is a senior retirement plan advisor at DBR & CO. She has been compensated for this article. Additional resources from the author can be found at dbroot.com.
Photo credit: ©iStock.com/alfexe, ©iStock.com/Kameleon007 | Personal Finance & Financial Education |
DENVER -- Retired Colorado Rockies first baseman Todd Helton is teaming up with the organization RIP Medical Debt to help eliminate $10 million in medical bills for residents around the state.
The program is set to start later this month, with recipients around Colorado receiving letters that notify them their medical bills have been paid in full. Medical expenses have been among the leading causes for bankruptcy in the United States.
Helton, who retired in 2013 and is the franchise's all-time leader in many statistical categories, said in a release Monday that he drew inspiration from his friend and philanthropist Ryan ‘Jume’ Jumonville.
“(He) recently took care of $100 (million) in medical debt for the people in his home state of Florida," Helton said. “I ... wanted to do something similar for the people of Colorado.”
Helton worked with Jumonville in 2004, when the tandem donated money to health care programs in order to help University of Tennessee system employees.
RIP Medical Debt is a charity that aims to abolish medical bills for those who need financial assistance. Since 2014, the not-for-profit organization has aided more than 6.5 million people in eliminating more than $10 billion in medical debt.
“Medical debt is not only a financial burden; it also creates enormous mental health strain on patients and their families,” RIP President & CEO Allison Sesso said in a statement. “We’re grateful to Todd and Ryan for lifting up this critical issue and directly helping Coloradans who need it most.”
Helton spent his entire professional baseball career with the Rockies after being picked in the first round of the 1995 Major League Baseball draft. His No. 17 was retired by Colorado on Aug. 17, 2014.
The 50-year-old Helton won a National League batting title in 2000 when he hit .372. Helton was a five-time All-Star and won the Gold Glove three times for his fielding at first base.
Helton has been steadily gaining votes in his bid to make the Hall of Fame.
___
AP MLB: https://apnews.com/hub/mlb | Nonprofit, Charities, & Fundraising |
ED Proceedings Against Hero MotoCorp's Pawan Munjal Stayed By Delhi High Court
Delhi High Court puts a hold on Enforcement Directorate proceedings against Hero MotoCorp's CMD, Pawan Kant Munjal.
The Delhi High Court issued a stay on the Enforcement Directorate's proceedings against Hero MotoCorp's Chairman and Managing Director Pawan Kant Munjal on Friday.
The court had previously stayed the proceedings related to foreign currency registered by the Directorate of Revenue Intelligence on Nov. 3.
The court's order highlighted that Munjal had already been exonerated by the Customs, Excise, and Service Tax Appellate Tribunal on the same set of facts, a crucial detail that was not disclosed during the trial court proceedings.
The court found that the petitioner had presented a compelling case for interim protection.
On Nov. 10, the Enforcement Directorate provisionally attached three immovable properties belonging to Munjal in Delhi under the Prevention of Money Laundering Act.
This action followed raids conducted by the ED against Munjal and his companies in August, initiated based on a PMLA case filed in response to the Directorate of Revenue Intelligence's charge sheet. The charge sheet accused Munjal of unlawfully taking foreign exchange out of India.
The Delhi High Court said that, considering the stay granted by the court on Nov. 3 to the Directorate of Revenue Intelligence's complaint, which forms the basis of the ED's investigation, the proceedings by the ED should also be stayed.
However, the court clarified that the stay is specific to Munjal, and the Enforcement Directorate is permitted to continue its investigation for other individuals involved in the case.
The case is scheduled for the next hearing on March 21. | India Business & Economics |
- The Inflation Reduction Act extended and enhanced a prior tax credit for home efficiency upgrades.
- The Energy Efficient Home Improvement tax credit is worth 30% of a project's cost, up to a dollar cap.
- The tax break helps homeowners save money on the upgrades and on future heating and cooling bills.
Winter is almost here, meaning the year's coldest temperatures aren't far off.
But homeowners can take advantage of recently enacted tax breaks to help boost their home's efficiency, thereby trapping more heat inside and better defending against winter's chill — and saving them money in the process.
The Energy Efficient Home Improvement tax credit, offered by the Inflation Reduction Act, can help defray homeowners' costs on such projects — such as installing energy-efficient insulation, windows, doors and electric heat pumps — while also likely reducing the size of future heating bills, experts said. It's worth a maximum $3,200 a year.
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The average American spends $2,000 on energy bills each year, and $200 to $400 may be "going to waste" from drafts, air leaks around openings and outdated heating and cooling systems, according to the U.S. Department of Energy.
Home heating accounts for 45% of the average person's energy use, and water heating for another 18%, the agency said.
"You want to minimize heat loss to the outside through walls, windows, drafts, etcetera, and supply the heat as efficiently as possible," said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy.
Home efficiency upgrades can also reduce people's planet-warming greenhouse gas emissions, at a time when climate change is already fueling more extreme and financially costly weather events.
The Inflation Reduction Act, which President Joe Biden signed into law in August 2022, extended and enhanced a prior tax credit available for home efficiency upgrades.
The tax credit is worth 30% of the cost of qualifying projects. There's a dollar cap: Taxpayers may qualify for up to $3,200 a year, in aggregate. But their ability to do so depends on how many and which projects they undertake.
Certain upgrades carry distinct caps. For example, homeowners can get up to $500 a year for installing efficient exterior doors, $600 for exterior windows and skylights, plus $1,200 for insulation and air-sealing materials or systems. They can also get up to $150 for a home energy audit.
The combined tax break for these projects is capped at $1,200 a year.
Replacing single-pane windows with double-pane Energy Star-rated windows, for example, "is like plugging actual holes in your house," said energy and climate policy expert Kara Saul-Rinaldi, president and CEO of AnnDyl Policy Group.
The Environmental Protection Agency estimates homeowners can save 15% on heating and cooling costs, on average, by air sealing their homes and adding insulation in attics, floors over crawl spaces and basement rim joists.
Some projects carry a separate, $2,000 annual cap. They include: installing electric or natural gas heat pump water heaters, electric or natural gas heat pumps and biomass stoves and biomass boilers.
Altogether, taxpayers can get a maximum overall credit of $3,200 a year, if they combine projects worth up to $1,200 and $2,000. The IRS published a fact sheet that gives examples of the overall tax break consumers can expect for specific upgrades.
The Energy Efficient Home Improvement credit is available through 2032. Homeowners can claim the maximum annual credit each year that they make eligible improvements, and there's no lifetime dollar limit.
"People can look forward and plan," Saul-Rinaldi said. "They may know they need insulation over their kid's room, or need to upgrade their windows, or want to transition to cleaner fuel, but they can't do it all today or this year."
Taxpayers can only benefit from the tax credit when they file their annual tax returns.
The tax credit is also nonrefundable, meaning households must have a tax liability to benefit. The IRS won't issue a refund for any tax credit value that exceeds one's tax liability. Excess value can't be carried forward to benefit in future tax years.
Taxpayers who want to claim a tax break on their 2023 tax returns — which most people will file early next year — have a short window to complete a qualifying project. They'd need to be finished by the end of December. Projects only qualify once they're "placed in service" — essentially, once a project is installed and operational.
Homeowners can consider getting a home energy audit by the end of December, which would qualify for a tax break and help determine future efficiency projects, Saul-Rinaldi said. Then, homeowners can complete those projects and claim the tax break in future years.
They may also be able to pair the tax break with energy-efficiency rebate programs created by the Inflation Reduction Act and soon being rolled out by states, experts said.
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More than 3 million workers would be newly eligible for overtime pay when they work more than 40 hours a week, under a new proposal from the US Department of Labor.
The highly-anticipated proposed rule, announced Wednesday by the Biden administration, would expand time-and-a-half pay protections to more workers by changing the exemptions to overtime eligibility under the Fair Labor Standards Act.
Workers who are salaried, make more than a certain amount of money per year, and work in a “bona fide executive, administrative, or professional capacity” aren’t covered by requirements for employers to pay employees at a time-and-a-half rate for any time they work beyond 40 hours in a week. Employees must meet all three of these factors for the exemption to apply.
The Biden administration proposal would raise the salary piece of the test to ensure workers making less than about $55,000 annually are automatically owed overtime pay, a bump from the current level of $35,568. The change is expected to provide an additional 3.6 million workers with the right to time-and-a-half pay whenever they work more than 40 hours a week, according to the DOL.
Business groups that would see increased payroll costs under the rule change are expected to challenge the final version of the measure, especially given potential guardrails set by previous litigation involving past overtime regulations.
An effort by the Obama administration to raise the salary threshold of the overtime test to $47,476, which would have offered new overtime protections to millions,
That ruling could be used as ammunition against the latest proposal from the Biden administration, if a court could similarly be convinced that the new threshold crowds out other parts of the test. The DOL’s latest proposal doesn’t include any major changes to the job duties provisions.
The proposal is likely to be met with praise from Democrats and worker advocates who had been pressing the administration to expand overtime protections to more workers, but doesn’t go as far as setting the salary threshold to $82,732 as some had suggested.
Once the proposal is officially published in the Federal Register, the public will have 60 days to submit input on the potential changes. | Workforce / Labor |
If the first half of this year was distinguished by the U.S. securities regulator slapping fines on cryptocurrency exchanges, warning of legal action and then following up with the same, the second half started in Asia with a raft of jurisdictions running out new rules for exchanges – without the lawsuits.
While some Asia nations, such as Singapore and Thailand, seem to be following the U.S. Securities and Exchange Commission (SEC) in frowning upon certain products offered by exchanges, the approach in Asia so far seems to be clarity instead of court battles, in contrast with North America.
The U.S. is in a state of political and regulatory warfare over how to manage the cryptocurrency industry, John Rizzo, senior vice president of public affairs at Washington-based public relation firm Clyde Group, said in email comments.
“Congress appears to be making progress on regulatory frameworks for stablecoins and crypto market structure, but the SEC seems to be determined to essentially ban crypto,” said Rizzo, a former spokesperson on digital assets at the U.S. Department of the Treasury.
According to Zennon Kapron, founder of Asia-based fintech consultancy Kapronasia, crypto was “always on shaky ground in the U.S.” as the regulations were never clear. “For this reason, many firms have focused on overseas markets to begin with,” Kapron said in an email interview.
Nick Ruck, chief operations officer at blockchain infrastructure platform ContentFi Labs, agrees with that view.
“The largest issue with the crypto industry in the US stems from regulators trying to apply a century-old framework to new innovations in financial technology,” said Ruck in text message comments.
Countries in Asia are attracting crypto companies by clarifying rules and being adaptable to innovation, he said.
South Korea appears to be one of them. The country’s National Assembly on the final day of June approved a bill focused on protecting the interests of cryptocurrency investors.
Singapore and Thailand followed with rules that include forbidding crypto staking services, though Singapore authorities added that the product is still being studied.
Not to forget Hong Kong – once home to the now bankrupt FTX exchange that became the poster child for all that’s wrong with cryptocurrency trading platforms.
Hong Kong introduced stricter crypto trading regulations of its own on June 1 and is one of the jurisdictions in Asia running for a spot as a leading digital asset center, with all the potential investment, jobs and financial technology edge it could bring.
Tough rules
While the new crypto rules in Asia are tough, come with penalties for violations, and will require restructuring by some crypto business, Lasanka Perera, chief executive of crypto exchange Independent Reserve Singapore, said the new rules of the road in the city-state are welcomed.
“This not only underscores the regulator’s conviction to protect investors but will also undoubtedly inspire greater confidence from the corporate and institutional sectors,” Perera said in an emailed statement.
While South Korea’s Virtual Asset User Protection Act won’t come into effect as law for a year, it is the country’s first step to build a digital asset legal framework, according to the Assembly’s official website.
The bill was approved a little over a year after the collapse of the US$40 billion Terra-Luna cryptocurrency and stablecoin, which was founded in South Korea and caused losses to hundreds of thousands of investors.
As the name suggests, the South Korea bill focuses on investor protection and includes penalties for rule violations that include fines and jail time.
As an aside, the founder of the Terra-Luna project, Kwon Do-Hyung, is now in jail in Montenegro after fleeing to Europe. Both South Korea and the U.S. want to extradite him on fraud charges. He has denied the allegations.
Lots of bills
Back in the U.S., Congress has conducted extensive discussions on digital assets, John Cahill, an attorney at the law firm Wilson Elser’s New York office, wrote in a Forkast commentary this month.
Recent hearings with the chairs of the SEC and the Commodity Futures Trading Commission have showed the diverse opinions on cryptocurrencies and the legislative gridlock, said Cahill.
More than 30 proposed bills related to digital assets have been filed to Congress, but to date, none has advanced and Congress has yet to pass any substantial legislation in this area, according to Cahill.
“Despite ongoing efforts to gather information, the legislative branch has been hesitant to take concrete action,” he said.
Because of that, Cahill said the nation’s courts have stepped up to interpret digital assets within the existing legal framework. But as “courts have been flooded with submissions detailing why, or why not, digital assets should be considered securities” progress is delayed.
“While Congress and its constituents continue to learn about this developing technology, it will be up to the U.S. court system to bridge current laws to digital assets while helping to navigate these unchartered legal waters,” Cahill added.
SEC just doing its job?
After the meltdowns of Terra-Luna and the FTX exchange last year, causing billions of dollars of losses to millions of investors and setting off a cascade of bankruptcies among scores of related businesses, not everyone in the digital asset world is saying the SEC has got it all wrong.
Blockstation, a blockchain-driven platform for tokenizing, listing, trading, clearing and settlement of digital assets and securities, put together an internal memo in 2015 that reportedly said when the crypto market reached a market cap of around a trillion dollars, regulators would react with enforcement measures.
“We called it, and it’s exactly what’s taking place now,” said Blockstation Chief Executive Officer Jai Waterman in an email response to questions.
“Regulators are against unlicensed brokers dealing in securities, and they are against unregistered securities being offered to the public,” he said. “What the industry calls cryptocurrency, is mostly securities, and it’s the regulator’s fiduciary responsibility to protect investors,” he added.
What the industry calls cryptocurrency, is mostly securities, and it’s the regulator’s fiduciary responsibility to protect investors
Blockstation CEO Jai Waterman
If you ask an investor would they rather send money to Binance to trade bitcoin or would they prefer Merrill Lynch to do the same, most would choose the latter, said Waterman, adding that’s because established brokerages have the credibility, governance and proven infrastructure.
The missing component is that such institutions don’t have the appropriate guidance from the regulators and they don’t have the necessary technology and training in blockchain, he said.
A spokesperson for Circle, the issuer of the USDC stablecoin, told Forkast that the SEC’s lawsuits are “long-expected actions” and they’re right on the cusp of Congress “very seriously considering stablecoin and digital asset market regulation.”
The spokesperson, who declined to be named, added: “We now effectively have the three branches of the U.S. government clearly signaling that they want to see legislation.” | Asia Business & Economics |
Twitter Ad Revenue Sharing: Indian Creators React As They Start Receiving Money From X
Another user named 'Maithun' shared a screenshot which claimed that Rs 3,51,000 has been deposited in his bank account.
Last month, Elon Musk-owned social media platform X, formerly known as Twitter launched its 'Creator Ads Revenue Sharing' program.
Many Blue subscribers started receiving payments soon after the announcement.
Now, Indian Twitter users have also started receiving the ad revenue from Twitter.
Elated users have shared screenshots of the amount deposited in their bank accounts by X.
Co-founder of Hood app Abhishek Asthana who goes by the name 'Gabbar' on Twitter claimed he received Rs 2,09,282 from X. He has 1.4 million followers on the platform.
Another user named 'Maithun' shared a screenshot which claimed that Rs 3,51,000 has been deposited in his bank account.
Take a look at some of the other accounts who have received ad revenue share from Twitter.
Twitter Ad Revenue Sharing
Some users who were disappointed by their share of revenue along with several others also shared some hilarious memes on the topic. Take a look:
Elon Musk on August 5 had tweeted that to be eligible for ad revenue share, a user must be an X Premium (Blue) subscriber.
"The ad money will otherwise be kept by X if you are not an X Premium (Blue) subscriber. This program is open to everyone," he said.
Meanwhile, a note on Twitter's Ads Revenue Sharing page states that "the volume of people signing up for revenue sharing has exceeded our expectations."
"We previously said that payments would occur the week of July 31st. We need a bit more time to review everything for the next payout and hope to get all eligible accounts paid as soon as possible."
Twitter Ad Revenue Sharing Eligibility
To be considered eligible for creator ads revenue sharing, a user must
Be subscribed to Blue or Verified Organizations.
Have at least 15M organic impressions on their cumulative posts within the last 3 months.
Have at least 500 followers | India Business & Economics |
Heartless shoplifters have stolen more than £15million of stock from charity shops in the past year, The Mail on Sunday can reveal.
The shocking figure comes from an exclusive poll of UK charities, which found that 80 per cent had seen an astonishing increase in thefts of items that had been kindly donated by the public.
More than half of those polled said they had witnessed an increase in abuse of staff and volunteers in the past 12 months.
Last night, charity shop workers and volunteers said they no longer 'bother to call the police' when thieves strike, because officers will not come out to investigate. The vast majority of charities – 85 per cent – said they do not report the thefts, which happen daily. Those that do report crimes said police officers only turned up to investigate one in five cases.
The poll, by the Charity Retail Association, which represents 9,000 charity shops, also found that over the past year two-thirds of stores have had to install new security measures to combat thieves – diverting an extra £4million away from good causes.
Robin Osterley, chief executive of the association, said: 'The loss of these funds through shoplifting can have a direct impact on the ability of charities to provide or expand these services, which is why seeing so many shops affected and an increase in shoplifting over the past year is so concerning.
'It is something that charity shops urgently need support with, whether it is increased support from the police or campaigning at a national level to stop the abuse that is faced by retail staff and volunteers.
'Being predominately bricks-and-mortar stores with large volumes of stock, they are often a target for shoplifting, as well as abuse of staff and volunteers.
'Among some criminals there seems to be a perception that this is a 'victimless crime', as most of the goods stolen have been donated by the public. However, the effect on the morale of staff and volunteers can be devastating, as well as the loss of potential income, so this is far from the case.'
The MoS has launched a campaign calling on the authorities to crack down on shoplifting amid concerns from retailers over an 'epidemic' of thefts that has cost supermarkets and high street stores more than £1billion a year.
Last night, charity shop workers and volunteers on the retail front line said they were struggling to cope. One children's charity in West London shared dramatic footage of a thief brazenly walking out with a 40in TV that had been donated to the store.
The thief, wearing an orange T-shirt and blue jeans, strolled into the Little Lives UK shop in Raynes Park, picked up the screen, on sale for £200, and calmly walked out past browsing customers during the middle of the day.
Krisztina Schafler, founder and director of Little Lives UK, said that even after staff handed police the footage of both the TV thief and of a getaway van that was waiting outside, Scotland Yard closed the case after just one day and no further action was taken.
Other crimes caught on CCTV by Little Lives UK in recent months showed a thief picking the pocket of a customer, another stealing a laptop from behind a shop's counter and a man taking a pair of jeans from the rail, rolling them up and trying to stuff them down his trousers before he was challenged by a volunteer.
'Since the stores opened in 2017, each year has got worse and worse,' Ms Schafler said. 'Just last week we had a big £200 guitar stolen. They just run.'
The charity operates four shops in London. Ms Schafler, who works at the shop in Raynes Park, said: 'Hundreds of pounds a week is taken from just our one store, thousands a month.
'But unless your life is in danger, the police just won't come. We no longer report 90 per cent of the crimes because the police just don't come and investigate anything.'
Ms Schafler said she tells her staff not to approach thieves in case they turn violent, adding: 'My staff are not allowed to be in the store on their own. We always have two employees working so that they're not in danger.
'My staff and I feel less and less safe. I tell them to never approach or question someone who is stealing. We have had people with scissors and knives on them. We sometimes get great items and high-end brands donated, but we're too scared to put them out on display. In our Fulham store we had a Gucci jumper, and it wasn't even in the shop for ten minutes. Someone came straight in and took it. Nothing is safe.'
Another small charity told the MoS it had lost £45,000 in the past year due to theft.
Legal action against shoplifters is declining. In the year to June 2022, 21,279 people were prosecuted for shoplifting in England and Wales, compared with 80,352 a decade ago. A change in the law in 2014 meant those charged with stealing goods worth less than £200 fall under the bracket of anti-social behaviour, so were likely to receive a fine without having to appear in court.
ONE charity shop targeted by callous shoplifters has had to resort to removing cash donation boxes to stop thieves helping themselves to the contents.
Lee Reynolds, general manager of the White Rose in Nottingham, which sells second-hand fashion items, said: 'I could confidently say that we currently have hourly incidents.
'From the incidents recorded and the burglaries, we estimate around £45,000 has been lost across our 14 stores due to shoplifting in the last year. We have had to remove cash donation pots from our shop floors. We had one example of when a staff member was serving, a shoplifter broke into the till drawer and stole the day's takings.
'We now have CCTV in every shop. Store managers have access to internal radios to quickly call for help if they feel at risk, and we have rolled out intruder alarms and movement sensors to cope with the rise in break-ins.'
Home Office data shows that shoplifting rose by 24 per cent last year, as thieves take advantage of lax policing and a criminal justice system that often lets off perpetrators without jail sentences.
Retailers said there are now ten million thefts every year – about 30,000 per day, or one every two seconds.
In response to our campaign, the Policing Minister Chris Philp last week called on police forces to take a 'zero tolerance' approach to shoplifting.
Policing leaders have vowed to investigate every crime.
Heartless criminals target shops every day ...and staff say there's no point telling police
Dressed in orange T-shirt, the thief strolls into Little Lives UK in West London, heads straight for the massive TV set on sale, and lifts it up.
He appears to struggle with the weight of the 40in television, lifting it with his left leg to get a better grip on his prize.
Right in front of the store's CCTV camera, the shoplifter carries the TV past rows of second-hand clothes and makes for the exit.
The thief brazenly walks out of the shop in broad daylight, carrying his booty, heading for a getaway van that is parked close by. | United Kingdom Business & Economics |
Londoners are just as giving now as they were one year ago. But their donations to the London Food Bank won't go as far.
That's the reality facing the agency, whose 10-day collection drive is wrapping up with numbers nearly identical to the 2022 edition: As of Sunday, they'd collected 43,094 kilograms of food and cash equivalents, not far off the 45,348 kg collected at the same point one year ago.
Friday was a PA day for students, so donations at several schools still need to be picked up. Food bank co-executive director Jane Roy expects this year's final tally to match last year's – enough to help 6,000 families. But that collides with the harsh reality that need has increased significantly over the past 12 months.
“It still would have helped 6,000 families last year, but those 6,000 families would have come to us over a month and a half," Roy said. "Now 6,000 families come to us in a month."
Driving the jacked-up demand are increased rent and food costs, Roy added. “It's so difficult out there for folks that the money they get isn't enough to sustain themselves, so they end up having to come."
The numbers don't lie. Last month, 15,000 people accessed the London Food Bank, compared to 11,500 in September 2022. Glen Pearson, co-executive director along with Roy, his wife, has noted most of the new clients are working, but can't afford rent.
According to a report from rentals.ca, the average month’s rent for a one-bedroom apartment in London was $1,800 in September 2023, a big jump from the $1,302 average just two years ago in September 2021.
The generosity of Londoners, however, remains unchanged, Roy said.
“The public donated. The public showed up. The public itself has been facing stress in terms of their own cost but I still think they did great, and it was an amazing food drive,” Roy said.
The numbers for the 2023 fall collection drive are expected to be finalized on Wednesday.
[email protected]
Brian Williams, Local Journalism Initiative Reporter, London Free Press | Nonprofit, Charities, & Fundraising |
Closely watched data from Kantar Worldpanel, which tracks supermarket sales and prices, charted the steepest decline in checkout costs during the four weeks to 9 July since grocery inflation peaked in March.
Its inflation measure fell by 1.6 percentage points to 14.9% over the period - bolstering hopes that the worst of the pain from the pace of price increases at the tills is over as the wider cost of living crisis continues to shift.
Kantar said while the grocery inflation figure reflected a further easing in the cost of many staple goods, there was a marked move towards customer spending on promotions, which now accounted for just over a quarter of the total market.
As the grocery sector's prices continue to be investigated by the Competition and Markets Authority, Kantar's head of retail Fraser McKevitt said: "One of the biggest shifts we've seen in this [promotions] area is retailers ramping up loyalty card deals like Tesco's Clubcard Prices and Sainsbury's Nectar Prices.
"This could signal a change in focus by the grocers who had been concentrating their efforts on everyday low pricing, particularly by offering more value own-label lines."
Kantar noted that Sainsbury's rate of sales growth had overtaken that of market leader Tesco over the four-week period.
Its report said customers had, on average, saved themselves from paying an extra £353 over the past year by changing their typical grocery habits, such as through trading down to cheaper products or visiting different grocers.
New threat from war to food prices
The report was released against a backdrop of new concerns about the outlook for food security and many staple food costs.
Prices for corn, wheat and soybean surged on commodity markets on Monday after Russia formally withdrew from a deal brokered by the United Nations that enabled millions of tonnes of grain exports from Ukraine to reach their destination.
Nearly 33 million tonnes of corn, wheat and other grains have been exported by Ukraine under the agreement.
The war in Ukraine has been a major factor behind energy-led inflation in Western economies though the cost of living crisis is continuing to evolve.
Read more:
Food prices predicted to fall as BoE's Bailey sees 'marked' dip in inflation ahead
Spending calculator: See which prices have gone up or down
While food inflation is easing, the main rate of inflation in the UK has proved more stubborn to bring down than expected with the Bank of England suggesting that wage rises, at a rate above 7%, are a factor and too high.
The Bank's governor has also accused companies of looking to make excessive profits.
Official figures on Wednesday are tipped by economists to show that the main Consumer Prices Index (CPI) measure of inflation eased back to an annual rate just above 8% from 8.7% in May.
The data is widely expected to reflect Kantar's findings which offer some limited relief for hard-pressed family budgets.
While energy costs have fallen back, finances are facing an additional squeeze from the effects of the Bank's interest rate hikes aimed at tackling inflation with some mortgage rates at 15-year highs. | United Kingdom Business & Economics |
Once it became clear the Hollywood strikes would be going on longer than anyone initially believe, Democratic senators in California wrote up a bill to compensate workers on strike. With backing from the WGA and SAG-AFTRA, the hope was that it would be passed and provide money to anyone out of work in the entertainment industry (and similarly striking hotel workers) in a city that’s already pretty expensive to live in. The writers strike may be over, but bills were (and still are) continuing to pile up for folks.
But according to the Associated Press, California governor Gavin Newsom vetoed the bill on Saturday night. While previously having voiced his support for unions (and received various donations to his campaign from labor unions), Newsom rejected the bill because California’s unemployment benefits fund is expected to be $20 billion in the hole by the end of 2023. The fund reportedly ran out of money during early COVID and from massive amounts of unemployment fraud—and not enough money has been collected to pay all the owed benefits. In a veto message, he plainly stated that it wasn’t the right time “to increase costs or incur this sizable debt.”
Had the bill been approved, workers who’d been striking for at least two weeks would’ve been eligible for unemployment checks from California. Those checks can go as high as $450 a week, a number that labor organizers argued was so small it wouldn’t make that much of an impact on the unemployment fund. Lorena Gonzalez Fletcher, who operates as the executive secretary-treasurer for the state’s labor federation, said Newsom’s veto “tips the scales further in favor of corporations and CEOs and punishes workers who exercise their fundamental right to strike. At a time when public support of unions and strikes are at an all-time high, this veto is out-of-step with American values.”
Even with Newsom’s veto, the CLF doesn’t appear to be giving up. As seen in the tweet above, Fletcher wrote that the organization would “keep fighting until striking workers get the benefits they’ve earned. The AP acknowledged it may be possible for lawmakers to just go ahead and pass the bill regardless of his decision—but noted it’s been “decades” since a California governor had their veto overruled.
Want more io9 news? Check out when to expect the latest Marvel, Star Wars, and Star Trek releases, what’s next for the DC Universe on film and TV, and everything you need to know about the future of Doctor Who. | Workforce / Labor |
PORTLAND, Ore. (KOIN) – A referendum to bring a Salem payroll tax to a public vote needed just under 4,000 signatures to qualify for the upcoming ballot. It’s now reached more than 10,000.
Since June, the City Council has considered the Safe Salem Payroll Tax, which would implement an employee-paid payroll tax to generate “approximately $28 million annually to fund essential safety services, such as police, fire and homeless programs,” according to the city’s website.
The tax would apply to work performed within city limits, impacting everyone living and working in Salem – even commuters. The tax would not, however, apply to those making minimum wage.
On average, city officials say a worker in Salem would pay $1.39 per day. Petitioners say that decision should be made by the workers themselves.
Petitioners with Refer the Tax on Salem Workers say they expect even more signatures ahead of the petition’s Aug. 9 deadline. They’ll continue to receive signatures in an effort to meet the qualification threshold.
Angela Wilhelms, the president and CEO of Oregon Business and Industry, spearheaded the referendum.
“The Salem community has stepped up in a big way to make their voices heard and to ensure that residents have an opportunity to vote on this tax,” Wilhelms said.
She said there could be a higher-than-average number of invalid signatures on the petition due to confusion over who is eligible to sign it.
“There is understandably a lot of confusion about who can sign the petition due in large part to the complexities of the tax itself,” Wilhelms said. “For example, a lot of voters have a Salem address but do not live within the technical city limits. So, even if those folks work within the city and are subject to the tax, their signature would be invalid.
Stay with KOIN 6 as this story develops. | Workforce / Labor |
Amazon Is Now Charging a Fee For Some UPS Store Returns
The online retail giant wants $1 for some returns not made at Amazon Fresh, Whole Foods, or Kohl's.
Amazon built its business on customer service, believing everything would fall into place if the company made shopping easy and convenient. Case in point: Their return policy allows customers to return millions of items they don't want free of charge.
But that return policy is also wildly expensive. In 2021, a record $761 billion of merchandise was returned to retailers, according to the National Retail Federation.
Now Amazon wants its customers to think twice before sending products back. The e-commerce giant has quietly implemented a new policy, charging customers a $1 fee if they return items to a UPS store instead of a Whole Foods, Amazon Fresh, or Kohl's closer to their address, according to a report in The Information.
Amazon owns Whole Foods and Amazon Fresh, and Kohl's partners with the company.
Amazon is also warning consumers about "frequently returned" items sold on their site. They recently introduced a badge that tells shoppers to check the product details and customer reviews on items with higher return rates in their product category.
Amazon cutting costs
The new return fee is the latest in a series of cost-cutting measures implemented by Amazon. Last month, the company announced it would be laying off 9,000 workers, following an earlier round of layoffs last year that saw pink slips handed out to more than 18,000 employees.
While Amazon's return fees are surprising, they're not unprecedented. Other retail chains have recently done away with their free online return policy, including Abercrombie & Fitch (which charges $7), American Eagle, Foot Locker, Urban Outfitters, and Zara.
If there is any good news to come out of these new return policies, it's that they have a positive impact on the environment. Returns cause 16 million metric tons of carbon emissions and up to 5.8 billion pounds of landfill waste in the U.S. each year, according to Optoro.
Less returns mean less waste — even if it may cost you a buck. | Consumer & Retail |
Volta, the electric truck start-up, has been bought out of administration by one of its biggest creditors but the bulk of its 600 UK workers are out of a job - for the moment at least.
Sky News revealed a week ago that Luxor Capital Group, which was both a shareholder in and lender to Volta, was in advanced talks with the company's administrators Alvarez & Marsal (A&M).
The value of the deal was not divulged but it is typical in such circumstances for the business to have been snapped up for a token sum.
Volta collapsed in October after a failure to secure new funding.
Volta Trucks filed for bankruptcy in Sweden, where the company was headquartered, and later appointed A&M as administrators to its UK business days later.
It employed 600 staff at its main UK manufacturing, research and development facilities.
Sky News understands the vast majority of those employees lost their jobs and that a small number of staff, who were retained, will keep their roles under the new owner.
It is unclear at this stage if Luxor's new ownership vehicle, Volta Commercial Vehicles Limited, will seek to hire back the staff who were let go.
A&M managing director Andrea Jakes said: "We're pleased to have safeguarded the future of Volta Trucks by facilitating its acquisition by Volta Commercial Vehicles Ltd."
The UK business was seen as attractive to potential buyers given the race towards net zero to fight climate change.
The company had been conducting customer trials of its all-electric truck, the Volta Zero, in both the UK and on the continent, and had only recently opened a service hub in north London when it collapsed.
Read more from Sky News:
House prices 'show further growth' after pause in interest rate hikes
Investigation launched into takeover of Telegraph
Cristiano Ronaldo faces $1bn lawsuit
The emission-free model, which has a range of up to 200 kilometres (124 miles), is designed for multiple deliveries within a large town or city.
It features a central driving position, saving costs by easing pressure on the manufacturing process by having no need for left or hand-hand drive versions. | United Kingdom Business & Economics |
Anti-diabetic drugs like Ozempic and Wegovy which are being touted for their weight loss and appetite-suppressing benefits are slamming stocks of beer and snack distributors — particularly after Walmart said that the medications were causing shoppers to pare back on groceries.
Swiss snacking conglomerate Nestle’s share price dropped by more than 2.5% on Friday while Mondelez International, the company behind brand names such as Oreo and Chips Ahoy, saw its stock drop by 2.7% as of 2:20 p.m. Eastern time.
The Kraft Heinz Company’s stock was down by nearly 1% while JM Smucker Company, which recently announced that it will acquire Twinkies maker Hostess, was down 0.7%.
The stock price of Constellation Brands, the US distributor of Modelo Especial, which has recently overtaken Bud Light as the nation’s most popular beer, is down 1.3% on Friday.
Kellanova, the cereal company that was formerly known as Kellogg’s before its recent rebranding, saw its share price dip by 1.5%.
Investors reacted to comments made on Thursday by Walmart US CEO John Furner, who told Bloomberg News that Ozempic was the reason customers were buying “less units” and consuming “slightly less calories.”
“We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket,” Furner told Bloomberg News.
Walmart, which sells weight-loss drugs at its pharmacies, is able to study changes in sales patterns using anonymized data on shopper populations, according to the outlet.
With those data sets, the Bentonville, Ark.-based can see how many customers are on diabetes-turned-weight-loss drugs like Ozempic, Wegovy, and Mounjaro and compare their shopping habits to those not taking the medications.
In the first six months of the year, Novo Nordisk, the Danish pharmaceutical company behind Ozempic and Wegovy, has raked in profits of some $7 billion — up 32% from the same time a year ago.
Eli Lilly, the New York-based pharmaceutical company, made $1 billion in sales of Mounjaro in the second quarter of this year.
Users of the drugs, which reportedly cause some unpleasant side effects, have said that the appetite suppressant has cut their grocery bill by as much as 20%.
“I still have a fully stocked kitchen, there’s chips and pretzels in there. I don’t find it tempting,” Carolyn MacBain-Waldo, who takes Mounjaro for weight loss, told The Wall Street Journal.
Morgan Stanley estimated that 7% of the US population, or 24 million people, will be taking hunger-suppressing weight-loss drugs by 2035 — cutting their daily calorie consumption by as much as 30%, according to the firm, which surveyed over 300 patients.
For a person on an FDA-recommended 2,000-calorie daily diet, that could mean eliminating a one-ounce bag of salted potato chips, a bottle of soda, and more each day.
Additional Reporting by Shannon Thaler | Stocks Trading & Speculation |
Tax cuts worth £20bn in Jeremy Hunt’s autumn statement favoured the richest 20% of earners, undoing much of the progressive policy changes made during the parliament’s first half, a leading thinktank has found.
The top fifth will gain £1,000 on average, five times the gains seen by the bottom 20%, who will be only £200 better off from measures that include a 2p cut in national insurance, according to the Resolution Foundation’s analysis.
The thinktank also found that while earnings are growing faster than previously estimated by the Office for Budget Responsibility (OBR) – the Treasury’s independent economic forecaster – real average earnings adjusted for inflation are not forecast to return to their 2008 peak until 2028 – “a totally unprecedented 20-year pay stagnation”.
The analysis said this parliament was on track to be the first in which real household disposable incomes fall – by 3.1% from December 2019 to January 2025. Households will on average be £1,900 poorer at the end of this parliament than at its start.
In what is widely seen as the opening bid by the chancellor to woo voters before an election next year, Hunt announced on Wednesday that he was able to lift the tax burden after a steep fall in inflation and after the economy had turned a corner.
However, he left in place £90bn of tax rises over the life of the parliament that the thinktank said remain progressive, with the richest fifth of households set to lose £1,100 on average, while the poorest 20% gain an average of £700.
Torsten Bell, chief executive of the Resolution Foundation, said that “despite the tax-cutting rhetoric”, taxes are on course to rise by 4.5% of the UK’s gross domestic product (GDP) between 2019 and 2020 and 2028 to 2029, equivalent to £4,300 a household.
The thinktank praised welfare benefit increases and a lifting of the cap on private rent subsidies after a freeze of several years that had been blamed for thousands of tenants being forced to leave their homes.
However, Bell added that the tax cuts and benefit rises were underpinned by an “implausible” squeeze on public services over the next five years that amounted to a 15% budget reduction in real terms for unprotected departments such as justice and transport.
He said: “Jeremy Hunt yesterday got his pre-election giveaways in early, with an autumn statement offering tax cuts today, at the price of implausible spending cuts tomorrow.
“Well-targeted specifics, addressing problems such as our tax system’s bias against working-age earnings or benefit system’s failure to keep pace with fast-rising rents, were juxtaposed with far less well-designed big picture fiscal choices. Tax-cutting rhetoric clashed with tax-rising reality, and positive steps to encourage business investment combined with a growth sapping hit to public investment.”
Commenting on the fall in real household disposable incomes, Bell said: “Ultimately this reflects the pressures, not only of an upcoming election, but of governing a sicker, older, slower growing Britain, amid an era of far higher interest rates.
“That might be difficult for policymakers, but it’s a disaster for households whose wages are stuck in a totally unprecedented 20-year stagnation. This parliament is set to achieve a truly grim new record: the first in which household incomes will be lower at its end than its beginning.” | United Kingdom Business & Economics |
U.S. Senator Josh Hawley (R-Mo.) introduced the Capping Credit Card Interest Rates Act, new legislation that would cap credit card interest rates at common sense levels, bringing relief to working people across America.
“Americans are being crushed under the weight of record credit card debt—and the biggest banks are just getting richer," said Senator Hawley. "The government was quick to bail out the banks just this spring, but has ignored working people struggling to get ahead. Capping the maximum credit card interest rate is fair, common-sense, and gives the working class a chance.”
Cumulative consumer credit card debt recently surpassed one trillion dollars, the highest level in history. Last year, many major credit cards soared past the 30 percent interest rate threshold for the first time, and now the average rate of interest is hitting a record level. This means working people face higher financial burdens at the same exact time the biggest banks are booking bumper profits and wielding immense power over the market.
Senator Hawley’s Capping Credit Card Interest Rates Act would:
- Cap the annual percentage rate (APR) for credit cards at 18 percent.
- Prevent credit card companies from imposing new fees to evade the cap.
- Impose penalties on credit card companies that violate the cap.
Read the full bill text here. | Banking & Finance |
- The rate of customers ordering french fries with meals at fast food restaurants has remained above pre-pandemic levels, potato supplier Lamb Weston said Thursday.
- That can indicate a willingness of consumers to continue splurging even as inflation remains high.
- Still, the company noted shifts in consumer behavior, such as a move toward quick-service food providers from casual and full-service restaurants.
Consumers are still splurging for a side of fries with their meals. That can have a positive read through for the economy.
Frozen potato supplier Lamb Weston Holdings has seen the share of consumers ordering the iconic side with fast food meals — known as the fry attachment rate — remain above pre-pandemic levels, CEO Tom Werner told analysts on the company's earnings call Thursday. That could indicate a resilient consumer even as inflation has pinched pocketbooks and fears of a recession have mounted.
"The global frozen potato category continues to be solid with overall demand and supply balanced," Werner said. "Fry attachment rate, which is the rate at which consumers order fries when visiting a restaurant or other food service outlets across our key markets have remained largely steady and above pre-pandemic levels."
When consumers feel financial pressure, a natural reaction is to cut back on spending through measures like trading down to cheaper brands or cutting extraneous expenses. In the case of Lamb Weston and fast food companies, that can manifest in the form of customers opting to skip fries or other sides in a bid to keep spending restricted.
To be sure, the impact of inflation can impact the business in other ways outside of just fry sales. Lamb Weston saw little change in total traffic in key U.S. markets, but evidence of a shift in consumer behavior was there: Growth in quick-service food providers, which are typically more affordable, balanced out declines seen in full-service and casual-dining restaurants.
Werner also said inflation can continue to drive up costs for the company, specifically related to potato contract prices.
He pointed to June as a source of restaurant traffic weakness seen in the fiscal fourth quarter. But Werner said it has been reassuring to see trends approve since then, while remaining confident in the ability of the company's potato offerings to weather an economic slowdown.
"We suspect that restaurant traffic trends will be volatile in the near term as high interest rates, high inflation and uncertainty continues to affect consumer," Werner said. "That said, frozen potato demand has proven resilient during the most challenging economic times, and we continue to be confident in the long-term growth prospect for the global category."
Lamb Weston stock jumped more than 9% in Thursday's session. The stock has performed almost in line with the broader market in 2023, up almost 11% since the year began. | Consumer & Retail |
- Germany on Friday approved a litany of changes to its rules for stock-based compensation at tech startups, listing of companies and taxation.
- Under the new rules, taxes on employees' stock options will be deferred until the point of sale, so that staff aren't faced with the prospect of being taxed on their shares as soon as they receive them.
- The scope of the scheme will also be widened so that more growth companies can benefit.
Germany on Friday approved a package of key reforms to its capital markets frameworks to help its technology industry compete with Silicon Valley.
The reforms, which are expected to come into effect on Jan. 1, 2024, will usher in a litany of changes to Germany's frameworks for stock-based compensation at startups, listing of companies and taxation.
The reforms, which have been in the works for sometime, had been widely expected.
Some of the major changes will be to employee stock options plans, which allow companies to hand a slice of the business to their employees.
Martin Mignot, a partner at Index Ventures who has pushed for reform to stock options policies in Europe to improve tech employee retention, said that previously the laws were "disadvantageous for employees and a really unfair policy for everyone."
"There was a formal ESOP plan in law in Germany but it was just so cumbersome administratively where every minority shareholder gets a vote and veto right almost, and also very little tax advantage," Mignot said, referring to the acronym for Employee Stock Option Plans.
"It made it such that it was virtually impossible for companies to use actual ESOP," he added.
Index has invested in a number of high-profile German tech startups, including human resources software firm Personio and financial service startup Raisin.
Under the new German rules on ESOPs, taxes on employees' stock options will be deferred until the point of sale so that staff aren't faced with the prospect of being taxed on their shares as soon as they receive them, according to a draft version of the legislation viewed by CNBC.
Meanwhile, the scope of the scheme will also be widened so that more growth companies can benefit.
The threshold for companies that can take advantage of German ESOP plans will be raised so that firms with up to 1,000 employees and a maximum of 100 million euros ($108.7 million) of annual revenues can distribute shares to staff.
Capital gains tax rules will also be changed so that startup employees are charged tax on the profits they make when they sell their shares. This tax is viewed as a reflection of the risk that employees take on a young, unproven startup.
Meanwhile, capital gains tax rules will be changed so that startup employees are charged tax on the profits they make when they sell their shares. This tax is viewed as a reflection of the risk that employees take on a young, unproven startup.
The new legislation will also mean that companies listing in Germany can issue dual-class shares. Dual-class shares are a key point of attraction for venture-backed startups, as it allows founders to maintain control over the business.
Europe now has a much more established venture capital industry which has provided startups with access to ample amounts of cash, with billions of dollars worth of funds having been raised by funds across the continent.
But bottlenecks remain around attracting talent that mean it has been harder to compete with Silicon Valley giants when it comes to finding the best people.
European tech startups are unable to match some of the offers by U.S. tech giants like Google, Amazon, Meta and Microsoft — but stock options provide them an alternative way to compete on compensation, Index Ventures' Mignot said. | Europe Business & Economics |
UK retail sales fell by 0.9% between February and March with shops blaming wet weather for fewer shoppers.
Non-food retailers, in particular, said that rainfall affected sales with department stores and clothing shops reporting a drop in volumes.
It was the sixth wettest March on record since 1836, according to the Met Office.
The retail figures were worse than expected and came after a rise in sales the month before.
The Office for National Statistics (ONS) also said that sales at food shops also fell, down 0.7%, following shortages of some products.
Many supermarkets imposed limits on fresh produce such as tomatoes, peppers and cucumbers because of poor weather in areas including southern Spain and North Africa.
The ONS said that "26% of adults experienced shortages of essential food items that were needed on a regular basis" for much of March. That was an increase of the 18% who reported similar problems in February.
The amount of food that people bought last month is 3% below pre-pandemic levels in February 2020, which retailers blamed on the increased cost of living and higher prices.
Inflation - the rate at which prices are rising - hit 10.1% in March, mainly due to the increasing cost of food.
The rate had been expected to fall below 10%.
However, a drop in food production costs - which peaked in October last year according to the British Retail Consortium (BRC) - has not yet filtered into supermarkets.
The BRC said that it takes between three and nine months for falling prices to reach shops. But it said: "We expect consumer food prices to start coming down over the next few months." | United Kingdom Business & Economics |
Bitcoin breached $42,000 on Monday morning — a level the volatile cryptocurrency hasn’t seen since April 2022.
Bitcoin peaked at $42,108.59 as of 6:00 a.m. EST on Monday, attributed to traders’ expectations that US regulators will soon approve an exchange-traded bitcoin fund — and bets that the Federal Reserve is done hiking interest rates.
Fed Chair Jerome Powell incited fresh optimism that central bankers’ aggressive tightening regime is over on Friday. “We are getting what we wanted to get” out of the economy, he said during an event at Spelman College in Atlanta.
Though he said that the “full effects” of the current interest rate have likely not yet been felt, he noted that a key measure of inflation averaged 2.5% over the six months ending in October, near the Fed’s 2% target.
Powell said it was clear that monetary policy was slowing the economy as expected with a benchmark overnight interest rate “well into restrictive territory.”
The benchmark federal funds rate is currently at a 2-year high, between 5.25% and 5.5%.
Economists have been divided on what Fed officials’ next move will be following their next meeting on Dec. 12 and Dec. 13 — and whether it means the US economy is in for a soft landing, which will see it skirting a recession, or a hard landing.
Powell reiterated, as his colleagues have in recent weeks, that it was still too early to declare the Fed’s inflation fight finished.
Bitcoin traders, however, evidently foresee a soft landing.
At the time of writing, the coin sat at $41,800, an impressive 152.83% year-to-date increase.
Investors are also hoping the Securities and Exchange Commission is set to approve bitcoin exchange-traded funds
Over the summer, an appeals court in Washington, DC, ruled that the SEC should have approved an application from Grayscale Investments to create a bitcoin-specific ETF — a landmark victory for the asset manager that could pave the way for the first product of its kind.
A panel of judges in the District of Columbia Court of Appeals in Washington said in August that the securities regulator’s denial of Grayscale’s proposal was arbitrary and capricious because the SEC failed to explain its different treatment between bitcoin futures ETFs and spot bitcoin ETFs.
The ruling came more than a year after Grayscale, a crypto asset manager, submitted an application for a spot bitcoin ETF.
It remains to be seen how the ruling might impact proposals submitted this past June by BlackRock, the world’s largest asset manager, and several other firms to offer spot bitcoin ETFs.
The bitcoin rally shows just how resilient cryptocurrency is.
Since 2022, the coin has weathered the storm triggered by Sam Bankman-Fried, who was convicted last month of stealing $10 billion from users of his crypto exchange FTX and lying to lenders and investors.
The conviction marked the end of Bankman-Fried’s fall from grace.
He faces up to 110 years in prison when he’s sentenced on March 28.
Late last month, Binance came under fire after its chief, Changpeng Zhao, stepped down and faced prison time after pleading guilty to settle a years-long US illicit finance probe — a move that triggered investors to pull about $956 million from the world’s largest crypto exchange.
Zhao’s agreement with authorities will also see Binance pay a $4.3 billion fine to settle the years-long illicit finance probe.
Following the incident, the price of Binance was still up over 1%, at $230.32. | Crypto Trading & Speculation |
Fedbank Financial Services IPO Subscription: Day 1 Live Updates
The IPO has been subscribed 0.11 times, as of 11:03 a.m. on Wednesday.
Fedbank Financial Services launched its initial public offering on Nov. 22.
The retail-focused NBFC, targeting MSMEs and emerging self-employed individuals has fixed its IPO price bank in the range of Rs 133 to Rs 140 per equity share. The face value of the issue is Rs 10.
The share sale is a mix of fresh issue of 4.29 crore shares, aggregating to Rs 600.7 crore; and an offer for sale of 3.52 crore shares to the tune of Rs 492.26 crore.
Through OFS, the Federal Bank's overall holdings will come down to 61% from the current 73%, and True North's will come down to 8.5% from the current 25%.
The company intends to use the net proceeds from the fresh issue towards augmenting Tier-I capital base to meet its future capital requirements arising out of the growth of business and assets.
ICICI Securities, Equirus Capital, IFL Securities, JM Financial are managing the IPO.
The company has raised Rs 330 crore from anchor investors via a pre-IPO placement on Monday. The pre-IPO placement comprises 23.5 lakh equity shares, according to an exchange filing.
SBI Life Insurance, Star Union Dai-chi, Yasya Investments, Nuvama Crossover III, and Nuvama Crossover IIIA are some of the key investors.
IPO Details
Offer Opens: Nov. 22.
Offer Closes: Nov. 24
Fresh Issue Size: Rs 600 crore shares.
OFS Size: 3.52 crore shares
Price Band: Rs 133–140 per share.
Lot Size: 107 shares.
Face Value: Rs 10 per share.
Listing: NSE, BSE.
Business Model
Fedbank Financial Service Ltd is a retail-focused NBFC, promoted by the Federal Bank Ltd.
Fedbank Financial Service has the second and third lowest cost of borrowing among MSMEs, gold loan and MSME & gold loan peer set in India in financial year 2023, and three-months period ended June 30, 2023, respectively, according to CRISIL.
The financial service is the one of the top five NBFCS promoted by private banks in India. Fedbank Financial witnessed a three year CAGR of 33% between FY2020 and FY2023, and the fourth fastest year-on-year asset under management growth of 42% for three-months period ended June 30, 2023, according to CRISIL.
Subscription Status: Day 1
The IPO has been subscribed 0.11 times, or 11%, as of 11:03 a.m. on Wednesday.
Institutional investors: 0.0 times
Non-institutional investors: 0.05 times
Retail investors: 0.20 times
Employee Reserved: 0.08 times | Banking & Finance |
Editor’s note: This article previously included a typo portraying inaccurate information about the average cost of the tax. It has since been updated.
PORTLAND, Ore. (KOIN) — A group representing businesses from around Oregon is trying to put a controversial Salem payroll tax on the ballot.
Oregon Business and Industry has filed a petition to refer the Safe Salem Payroll Tax to the voters on the November ballot — saying the tax will exacerbate the effects of already-rising inflation and will prompt residents to look for jobs outside of the capital city. The association says it also expects the tax will further burden employers.
“OBI is headquartered in Salem, and we care deeply about this community. We have no problem with Salem or any other city asking voters to support levies for important local services. However, this proposal is vague, the tax is high, the administrative burden is significant, and there is little assurance as to how funds will be spent,” said Angela Wilhelms, OBI’s president and CEO. “At a minimum, the community deserves a chance to vote.”
The city council passed the payroll tax late Monday, July 10, and is looking to implement it by July 2024. The tax would be imposed on all wages for individuals working in Salem, regardless of where they live — minimum wage employees would be exempt.
On average, it will cost Salem workers $42 dollars per month next year.
Salem City Manager Keith Stahley says the tax would help pay for emergency services as the city faces a $19 million budget shortfall. Employees and employers lined up for over two hours of public testimony, with most people speaking against the tax.
The petition was filed and approved by the city on July 14. OBI needs about 4,000 signatures by August 9 in order to refer it to the November ballot, but “to account for possible errors and ensure success,” the association says they’re aiming for 6,000 signatures.
Stay with KOIN 6 News for continuing coverage. | Inflation |
CBDT Says Over 6 Crore ITR Filings Processed For Assessment Year 2023-24
As many as 6.98 crore tax returns have been filed for income earned in 2022-23 fiscal and out of them, more than 6 crore filings have been processed, the Central Board of Direct Taxes said on Tuesday.
As many as 6.98 crore tax returns have been filed for income earned in 2022-23 fiscal and out of them, more than 6 crore filings have been processed, the Central Board of Direct Taxes said on Tuesday.
The CBDT -- the apex decision making body in matters of income and corporate taxes -- said the department is not able to process certain Income Tax Returns for want of certain information/action on the part of taxpayers.
Of the total ITRs filed, about 14 lakh are yet to be verified by taxpayers while the department has sought further information from another 12 lakh taxpayers, for which requisite communication has been sent through their e-filing accounts.
Besides, certain ITR filers are yet to validate their bank accounts.
"As on Sept. 5, 6.98 crore ITRs for Assessment Year 2023-24 have been filed, of which 6.84 crore have been verified. Of these, more than 6 crore ITRs, or 88% of the total verified ITRs, have been processed," the CBDT said in a statement.
Refunds have been issued for more than 2.45 crore filers for AY 2023-24.
The average processing time of ITRs after verification has been reduced to 10 days for returns filed for AY 2023-24 compared to 82 days for AY 2019-20 and 16 days for AY 2022-23.
"The Income Tax Department is committed to processing the ITRs in a speedy and efficient manner," the CBDT said.
With regard to 14 lakh ITRs, which are yet to be verified, the CBDT said failure to verify the returns causes delays. A tax return filed can only be taken up for processing once the verification has been completed by the taxpayer.
"Taxpayers are urged to complete the verification process immediately," it said.
The CBDT has sought a speedy response from the 12 lakh taxpayers from whom additional information has been sought.
"There are several cases in which the ITRs have been processed and refunds have also been determined but the department is unable to issue them as taxpayers have not yet validated their bank account in which the refund is to be credited."
"Taxpayers are requested to validate their bank accounts through the e-filing portal," the CBDT added. | India Business & Economics |
Argentina Seeks Larger IMF Disbursement After 18% Devaluation
Argentina to ask IMF to increase a disbursement planned, a senior government official said.
(Bloomberg) -- Argentina intends to ask the International Monetary Fund to increase a disbursement planned for later this month by an unspecified amount, a senior government official said after the central bank was forced to devalue its official exchange rate by 18%.
The peso’s sharp devaluation on Monday was all but unavoidable after investors, caught off guard by the unexpected primary victory of outsider candidate Javier Milei, pushed the currency to record-low levels in parallel markets. Argentina’s central bank is running out of reserves to support the peso in the foreign exchange market.
The decision to weaken the official exchange rate to 350 pesos per dollar, compared with Friday’s closing price of 287 per dollar, was made by the government to pro-actively address currency pressures stemming from Sunday’s vote upset, the official said, asking not to be named discussing ongoing talks with the Fund.
Read More: Out of Options and Money, Argentina Presses the Panic Button
The IMF has agreed to give Argentina as much as $10.8 billion in loans for the rest of the year as part of a refinancing agreement brokered by Economy Minister Sergio Massa, who’s also running for president in the Oct. 22 election. The first payment of $7.5 billion is expected by the end of August, after approval of a staff-level agreement by the Fund’s executive board.
President Alberto Fernandez’s government had been resisting to pressures for a major currency devaluation to avoid fueling even faster inflation in the run-up to presidential elections. Consumer prices are already rising at more than 115% a year.
Yet the official said that the government expects pass-through effects from Monday’s devaluation to be contained, and perhaps even milder than in previous occasions.
Markets had been bracing for a devaluation of no less than 20% for the past few weeks. The gap between the official and parallel rates remains be wide, signaling another adjustment will be needed down the line.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Latin America Economy |
Many people in the UK ate food past its use-by date and struggled to keep warm in the run-up to Christmas as prices rose further, official data shows.
About one in five adults (18%) reported eating smaller portions and food past its use-by date, which can make people sick, according to the latest Office for National Statistics monthly data release on winter pressures. The rates are even higher among those with depression, diabetes or dependent children.
The figures, which span from 22 November until 18 December and are based on a surveyof more than 4,700 people, also show that more than two-thirds (70%) of those who ran out of food in the past two weeks and could not afford to buy more also reported struggling to keep comfortably warm. Overall, nearly a quarter (24%) said they could not heat their homes properly.
People identified this as the biggest risk to their health, alongside waiting too long for a GP or hospital appointment or having to cut back on gas or electricity to cook or heat meals.
The data shows that one in five adults are waiting for a hospital appointment or medical treatment, with a third saying the wait is having a strong negative impact on their lives, mostly in terms of wellbeing, worsening the condition, or on their mobility.
The rates were even higher for those experiencing depression, living in the most deprived areas or who have a disability. Of those waiting, one in five had waited more than a year.
Four in 10 employed adults say the wait has affected their work, with a quarter saying they have reduced their working hours as a result, and 7% have gone on long-term sick leave.
Almost a quarter say they were unable to get a GP appointment – and those with depressive symptoms were a third more likely to report this.
To help with the cost of living, about half of adults said they were spending less on food and essentials (45%), one in six (16%) said they were using more credit and about 3% were turning to charities, including food banks.
About one in seven (15%) adults were worried their food would run out before they had money to buy more in the past two weeks, with those identifying as Asian or from an “other ethnic group” particularly concerned. One in 20 reported that their household had run out of food in the past fortnight, and one in 10 said they were unable to afford a balanced diet. | United Kingdom Business & Economics |
At least 26 councils in some of Britain’s most deprived areas are at risk of effective bankruptcy within the next two years, according to a leading local government group, which says many authorities simply have “nothing left”.
Britain’s local government network has been shaken by a string of financial collapses in the past two years, starting with Slough and followed by Croydon, Thurrock and most recently Woking, which announced a deficit of £1.2bn in June after a risky investment spree.
The quartet could be only the tip of the iceberg, according to a survey of 47 councils in northern England, the Midlands and on the south coast, which revealed mounting anxiety that rising costs will blow irreparable holes in budgets that fund crucial local services.
Five members of the Special Interest Group of Municipal Authorities (Sigoma) – a collective of 47 urban councils – said they were in such dire financial straits that they were considering issuing a notice of their inability to balance their annual budget for 2023-24.
A further nine Sigoma members said they may have to in effect declare bankruptcy next year. The group called on the government to provide additional funding to local authorities struggling to manage.
A spokesperson for the government said it had already agreed extra funding, adding that councils were ultimately responsible for their own finances and should not take excessive risks with taxpayers’ money.
The growing threat of a wave of effective bankruptcies is said to be driven by the dwindling of cash reserves usually held over to plug gaps in budgets.
Councils said the most common cause of financial pressures was increased demand for children’s social care services after the government said these should be given equal priority with adult social care and funded accordingly.
Other significant factors cited were sky-high inflation costs and related wage rises, the local authorities warning that an imminent increase in the cost of borrowing would add to the financial pressure they face.
Sigoma said it understood that at least 12 other councils across the country, which are not part of the group, were considering issuing a section 114 notice – an official declaration of inability to balance their books – in 2023-24.
Sir Stephen Houghton, the Labour leader of Barnsley council and the chair of Sigoma, said: “The government needs to recognise the significant inflationary pressures that local authorities have had to deal with in the last 12 months.
“At the same time as inflationary pressure, councils are facing increasing demand for services, particularly in the care sector.
“Pay increases are putting substantial pressure on budgets, and so the government must ensure that local authorities have the additional funding they need to fully fund these pay increases or risk impacting future service delivery.
“The funding system is completely broken. Councils have worked miracles for the past 13 years, but there is nothing left.”
Houghton called on the government to provide clarity on the timing of local government funding reforms.
Some recent local authority bankruptcies have come in the wake of financial scandals, including a disastrous property investment binge by Woking’s Tory council and a doomed borrowing spree at Tory-run Thurrock.
A government spokesperson said: “Councils are ultimately responsible for the management of their own finances … local authorities should not take excessive risk with taxpayers’ money, and we have established the Office for Local Government to improve the accountability for performance across the sector.
“We recognise all councils are facing pressures and, as well as making it a priority to halve inflation, we have introduced a one-off funding guarantee to ensure that every council sees at least a 3% increase in core spending power before any local decisions on council tax rates.
“We are also providing around £2bn in additional grants for social care.” | United Kingdom Business & Economics |
U.S. consumer inflation eased in March, with less expensive gas and food providing some relief to households that have struggled under the weight of surging prices. Yet prices are still rising fast enough to keep the Federal Reserve on track to raise interest rates at least once more, beginning in May.
The government said Wednesday that consumer prices rose just 0.1% from February to March, down from 0.4% from January to February and the smallest increase since December.
Measured from a year earlier, prices were up just 5% in March, down sharply from February's 6% year-over-year increase and the mildest such rise in nearly two years. Much of the drop resulted from price declines for such goods as gas, used cars and furniture, which had soared a year ago after Russia's invasion of Ukraine.
Excluding volatile food and energy costs, though, so-called core inflation is still stubbornly high. Core prices rose 0.4% from February to March and 5.6% from a year earlier. The Fed and many private economists regard core prices as a better measure of underlying inflation. The year-over-year figure edged up for the first time in six months.
As goods prices have risen more slowly, helping cool inflation, costs in the nation's services sector — everything from rents and restaurant meals to haircuts and auto insurance — have jumped, keeping core prices elevated.
"It's comforting that headline inflation is coming down, but the inflation story has had some shifts under the hood in the last couple of years," said Sonia Meskin, head of U.S. economics at BNY Mellon's investment division. "Overall inflation still remains much too strong."
Even so, the March data offered some signs that suggest inflation is slowly but steadily headed lower. Rental costs, which have been one of the main drivers of core inflation, rose at the slowest pace in a year. And grocery prices fell for the first time in 2 1/2 years.
Grocery prices dropped 0.3% from February to March. The cost of beef fell 0.3%, milk 1% and fresh fruits and vegetables 1.3%. Egg prices, which had soared after an outbreak of avian flu, plunged nearly 11% just in March, though they remain 36% more expensive than a year ago.
Despite last month's decline, food costs are still up more than 8% in the past year. And restaurant prices, up 0.6% from February to March, have risen nearly 9% from a year ago.
Paul Saginaw, who owns Saginaw's deli in Las Vegas, said nearly all the costs of a Reuben sandwich — his most popular — including corned beef, cheese and bread, have soared. He charges 10% more for a Reuben than he did 2 1/2 years ago, although he said "our costs have gone up a lot more" than that.
Saginaw is also paying more for paper goods and packaging, just as takeout and delivery orders have become a much bigger part of his business. One clamshell-style food container has jumped from 43 cents apiece to 98 cents.
"Everything we use has gone up," he said.
Rich Pierson, a semi-retired owner of a financial planning business who was shopping this week at Doris Italian Market and Bakery in North Palm Beach, Florida, said high restaurant prices have led him and his wife to eat much more at home.
"We cook more at home than we ever have due to the rising costs," he said. "You do look for the occasional deals and add value when you can — that's for sure."
Gas prices fell 4.6% just from February to March, a drop that partly reflected seasonal factors: Prices at the pump usually rise during spring. Gas costs have tumbled 17% over the past year.
Yet price increases in the service sector are keeping core inflation high, at least for now. That trend is widely expected to lead the Fed to raise its benchmark interest rate for a 10th straight time when it meets in May.
Travel costs are still rising as Americans make up for lost vacation time during the pandemic. Airline fares rose 4% from February to March and are up nearly 18% in the past year. Hotel prices jumped 2.7% last month and are up 7.3% from a year ago.
Among the biggest drivers of inflation has been rental costs, which make up one-third of the government's consumer price index. Rental costs rose 0.5% from February to March. Though still high, that was the smallest such increase in a year.
According to Wednesday's government report, rents have risen by about 9% from a year ago. Yet Apartment List, which tracks real-time changes in new leases, shows rents rising at a 2.6% annual pace. As more apartments reset with those smaller increases, the government's inflation data should show milder increases in coming months.
"It's something that's certainly coming, there has been some moderation in rents," said Mark Vitner, chief economist at Piedmont Crescent Capital.
Fed officials have projected that after one additional quarter-point hike next month — which would raise their benchmark rate to about 5.1%, its highest point in 16 years — they will pause their hikes but leave their key rate unchanged through 2023. But officials have cautioned that they could raise rates further if they deem it necessary to curb inflation.
When the Fed tightens credit with the goal of cooling the economy and inflation, it typically leads to higher rates on mortgages, auto loans, credit card borrowing and many business loans. The risk is that ever-higher borrowing rates can weaken the economy so much as to cause a recession.
On Tuesday, the International Monetary Fund, a 190-nation lending organization, warned that persistently high inflation around the world — and efforts by central banks, including the Fed, to fight it — would likely slow global growth this year and next.
There are other signs that inflation pressures are easing. The Fed's year-long streak of rate hikes are also starting to cool a hot labor market, with recent data showing that companies are advertising fewer openings and that wage growth has been slowing from historically elevated levels.
A more worrisome trend is the possibility that banks will pull sharply back on lending to conserve funds, after two large banks collapsed last month, igniting turmoil in the United States and overseas. Many smaller banks have lost customer deposits to huge global banks that are perceived to be too big to fail. The loss of those deposits will likely mean that those banks will extend fewer loans to companies and individuals.
Some small businesses say they are already having trouble getting loans, according to a survey by the National Federation for Independent Business. The IMF said Tuesday that pullbacks in lending could slow growth by nearly a half-percentage point over the next 12 months.
A slowdown in the economy could cool inflation and as a result would help the Fed achieve its objectives. But the blow to the economy might prove larger than expected. Under the worst-case scenario, it could mean a full-blown recession with the loss of millions of jobs. | Inflation |
Tackling Intimation About Low Or Zero Advance Tax Payments
For advance tax, the individual has to first estimate the income that would be earned during the year.
Taxpayers have to ensure that they are meeting the various requirements of the Income Tax Act throughout the year and not just at the time of filing their tax returns.
One of such requirements is with respect to the advance tax, which has to be paid by them if their tax liability is above Rs 10,000 in the year. One of the things that several taxpayers have been facing this year is an intimation from the tax department if they have paid a low advance tax or not paid this at all.
This situation should not be a cause for concern and here is how this should be tackled.
Advance Tax
The first condition that has to be met for the payment of advance tax is that the taxpayer has to be covered under the guidelines. An individual who has to pay more than Rs 10,000 as tax would have to pay advance tax. This can happen when the income earned by the individual does not have the full amount of tax payable deducted at source due to a lower rate. If the advance tax is not paid, then it would have to be paid along with interest later.
The important thing is that a senior citizen who does not have business income does not have to pay advance tax, so they are out of the ambit of this requirement. The advance tax has to be paid in four instalments for individuals with 15% of the amount to be paid before June 15, 45% of the amount before Sept 15, 75% of the amount before Dec. 15 and then 100% of the amount before March 15.
Estimation And Working
The main difference between normal self-assessment tax and advance tax is that for self-assessment tax, the details of the income for the year are already available, and based on this, the tax calculation is made.
For advance tax, the individual has to first estimate the income that would be earned during the year. This is not always easy, especially for those who are professionals or business income earners, because there might not be regularity in receipts.
Hence, the estimation and working for the tax calculation are important, and this might even change during the year for the taxpayer, due to which they will have to revise their advance tax payments too.
Intimation And Action
This financial year, the income tax department has been proactively sending intimations to a lot of taxpayers who have either not paid advance tax or paid a lower advance tax than last year.
To understand this, one has to look at the information that the tax department is looking at. If there is high income for the last year and then there are large expenses or high value purchases and then there is no advance tax paid, then this is flagged in the system. This, plus other kinds of mismatch of data, is the main reason why such intimations might be sent to the taxpayer.
On their part, the taxpayer has to be clear about their position and they need to have their working ready. If there is either lower income or a situation where they need not pay advance tax based on their estimation of income, then they should stick to their position. There is no obligation to pay advance tax and if there is a shortfall, then they would need to pay at the time of filing their returns along with the necessary interest.
However, there are times when future income is not sure or it is likely to reduce and in such a situation, the advance tax payment might not be needed.
Similarly, there might be a large tax deduction in some other area which might not require the payment of advance tax. If the non-payment is due to this being forgotten, then the intimation is a good wake up call to take action. On the whole the actual situation faced by the taxpayer will determine the exact action.
Arnav Pandya is founder Moneyeduschool
The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team. | India Business & Economics |
- Climate change is expected to impose "substantial financial costs" on U.S. households in the coming years.
- In a new Treasury Department report, government officials warn of rising prices and disruptions to income due to climate disasters and the warming planet.
Between 2018 and 2022, weather and climate disasters cost more than $617 billion, it found — a record. Within the last year, 13% of Americans reported economic hardship due to severe weather events and disasters.
"Severe flooding, wildfires and extreme heat are imposing significant financial burdens on households across the country," Graham Steele, assistant secretary for financial institutions at the Treasury Department, said in a statement.
The government report flags the biggest financial risks from a warming planet. Here are some of them.
Flooding and wildfires can damage businesses, forcing employers to furlough or lay off staff, the Treasury Department found. This could lead workers to lose their pay for a period, and potentially their workplace benefits, including health insurance or retirement plan support.
Recurring hazards such as wildfires or heat waves could reduce the available jobs in certain sectors, leading to long periods of unemployment for people. Workers in the fields of agriculture, construction, manufacturing and tourism may be especially hard hit.
Meanwhile, "outdoor workers," as the report describes those who spend more than two-thirds of their workday outside, comprise about a fifth of the civilian workforce and are among the most likely to see their hours and pay disrupted.
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At times in the Treasury's report, the financial threat is secondary to a more existential risk given the dire climate conditions anticipated.
For example, it warns that prolonged exposure to extreme heat may impair workers' physical and cognitive abilities, "which can lower their overall productivity and, consequently, result in a decline in their earnings."
Climate disasters impacted 1 in 10 houses in the U.S. in 2021, and led to damages exceeding $56 billion, according to one recent study by CoreLogic, a global property information firm.
Families unable to quickly pay for repairs in the wake of climate disasters may see their property values decline or vanish, the Treasury Department says. It points out that Hurricane Katrina damaged about 70% of all Louisiana properties. Nearly a fifth of those properties remained unrepaired five years later, and 8% were uninhabitable.
Many families could have to relocate due to climate change, incurring relocation expenses.
Climate change-caused disruptions to supply chains could lead to soaring prices on certain products, the Treasury Department finds.
Droughts, floods and extreme temperatures will likely create food shortages and make prices at the supermarket increase. Transportation of food and goods may also be hit by climate events, leading to more delays and shortages on store shelves.
"When climate hazards increase food prices, this may cause additional households to experience food insecurity," the report says. "Food insecurity disproportionately impacts lower-income households, families led by single mothers, families with children, and households in Southern states."
Households may see their energy bills rise too as climate change worsens. Heat waves, for example, will lead many families to use their air conditioners more frequently. Climate events can also lead to increased medical expenses. The Treasury report notes that in one analysis from 2012, 10 climate events led to a total of $10 billion in health-related costs.
Andrew Rumbach, a senior fellow at the Urban Institute, said he was glad to see the government focusing on climate change's financial impacts on households. Usually that discussion is centered on societal expenses, he said.
But, "at the end of the day, it is individuals and families that will carry a lot of these costs," he added. | Inflation |
The impact of Brexit is being felt, ITV News' business and economics editor Joel Hills reports.2022 was supposed to be a year of recovery. Instead, we find ourselves in December, staring into the eyes of another recession. The war in Ukraine has brought us here, that’s unambiguously clear. The Russian invasion unleashed a surge in the price of energy which has trampled on the spending power of households and the profits of businesses. But in the background, the impact of Brexit is also being felt.
The evidence increasingly shows that our decision to leave the European Union has lifted the price of imported goods, flattened business investment and damaged trade. The government’s own forecaster, the Office for Budget Responsibility (OBR), considers Brexit to be an economic “shock” but separating Brexit’s impact from that of Covid and the war in Ukraine is tricky.A graph captures the Brexit shortfall.
Since 2018, John Springford at the Centre for European Reform (CER) has been modelling the economic performance of a UK that remained in the EU - using data from countries like the US, Germany, New Zealand, Norway and Australia, whose performance was similar to the UK’s before Brexit. The difference in performance between his “doppelgänger UK economy” and the real thing is stark. Mr Springford’s latest update estimates that Brexit reduced Britain’s GDP by 5.5% by the second quarter of 2022. Put another way, between April and June economic output was £33 billion lower than it would have been had the UK voted to stay in the EU, costing the government around £12 billion in lost tax revenues. In the year to the end of June 2022, Mr Springford estimates the tax loss at around £40 billion.
'I think we can be pretty clear that the hit from Brexit is significant,' Mr Springford says“There can be no doubt that the UK economy is significantly smaller as a result of Brexit,” Mr Springford says. “In March 2022, when he was chancellor, Rishi Sunak tacitly accepted the OBR’s projection that the economy would be around 4% smaller, and as a result raised tax by £46 billion to ensure public services would be funded. "According to my analysis, almost all of those tax rises wouldn’t have been needed if Britain had remained in the EU.” Mr Springford’s doppelgänger model suggests Brexit has had other negative impacts, lowering both business investment and goods trade. Although, trade in services is largely the same.A chart captures the flattening of business investment since Brexit.
“I’m reasonably confident in the [GDP] number,” Springford insists. “There are always errors around estimates so we shouldn’t say it’s absolute gospel but we are comparing the UK to lots of other countries who have similar economies to the UK and they are not seeing the slowdown we have seen in the UK”. The UK voted to leave the EU in 2016 and officially left on 31st January 2020. Boris Johnson’s Conservative government decided to take the UK out of both the EU single market and the EU’s Customs Union and negotiated a fairly standard trade agreement with basic access for goods. The government prioritised greater sovereignty, including the right to diverge from EU regulations and to set its own rules. Springford’s analysis suggests this political freedom was won at great economic cost.
Mr Springford urges the government to be transparent about the 'negative' impact of Brexit“All reputable forecasters and analysts pretty much agree that Brexit has had a negative impact on the British economy,” Mr Springford says. “It was a consequence of the decision that the government took that they wanted to take back as much control as possible and they were going to sacrifice some economic activity as a result of that and it’s best for the government to be open and straightforward about that decision”. Last week the government set out a series of post-Brexit changes, designed to make the City more competitive against its global rivals. The “Edinburgh” reforms were presented as having been made possible by the (genuine) regulatory freedom leaving the EU secured.Analysts also say trade in goods has dropped sharply.
Responding to Mr Springford’s conclusions, an HM Treasury spokesperson said: “We do not recognise this analysis. The UK had the fastest growth in the G7 last year and the IMF has forecast the same in 2022. “We are taking full advantage of the opportunities of Brexit, for example through reforming EU-derived rules for insurers to unlock £100billion into infrastructure over the next decade, and by setting a skills-based migration policy which suits the UK’s needs. “The government is determined to drive growth by tackling inflation, investing in infrastructure and innovation, and getting our people back to work.” | United Kingdom Business & Economics |
JPMorgan Chase & Co. (NYSE:JPM), the world's largest publicly traded bank by market cap, issues market and stock predictions throughout the year. The bank has a cautious outlook on the economy for 2023, as it expects the Federal Reserve to raise the benchmark interest rates again in the near term.
While the inflation levels remained flat in October, raising hopes regarding a pause on further rate hikes, JPMorgan CEO Jamie Dimon expects the Fed to resume rate hikes next year.
"Personally, I think people are overreacting to short-term numbers — and they should stop doing that," Dimon said. "I think inflation is probably a little stickier than that [data] shows."
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Dutch Bros
Dutch Bros Inc. (NYSE:BROS), one of the most prominent coffee chains in the U.S., was recently upgraded by JPMorgan to Overweight. The multinational bank expects Dutch Bros stock to hit $35, indicating a potential upside of over 22%.
Investors have been optimistic regarding Dutch Bros stock after the company reported impressive revenue growth in the last quarter. In the third quarter, the company generated record revenue of $265 million, reflecting a 33% rise year over year. Dutch Bros' net income rose by over 737% year over year to $13.4 million in the last quarter. Shares of BROS have surged by over 10.9% over the past month.
Dutch Bros also upgraded its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) outlook by $15 million to $150 million to $155 million for the current quarter because of stronger-than-expected year-to-date profitability. The company also raised its liquidity position in the last quarter, which should boost its long-term growth rate.
“During Q3 in a span of less than 45 days, we executed two transactions, an upgrade of our credit facility and a follow-on equity offering that unlocked a total of almost $500 million in incremental liquidity and positioned our balance sheet to support a long runway of growth. We intend to continue confidently pursuing high-quality investments in new shops on our path to 4,000,” Dutch Bros CEO Joth Ricci said in the company's latest earnings release.
Hubbell
Hubbell Inc. (NYSE:HUBB), which specializes in electrical and utility products, has had a good year so far, with its shares rising by over 26% year to date. JPMorgan expects HUBB to rise further, as it upgraded the stock to Overweight on Nov. 17. The bank has a price target of $35 on the stock, indicating a potential upside of over 12%.
Hubbell agreed to purchase Northern Star Holdings Inc., also known as Systems Control, maker of substation control and relay controls, for $1.1 billion last month. This should boost Hubbell's financials significantly, as Systems Control is expected to record sales worth $400 million in fiscal 2024.
"Systems Control has a strong track record of financial performance and is highly complementary to Hubbell's portfolio, enabling us to deliver additional value to our core utility customers while enhancing our overall growth and margin profile for shareholders," Hubbell President and CEO Gerben Bakker said in a press release.
Analysts expect Hubbell's revenue to amount to $1.32 billion for the fourth quarter, indicating an 8.1% rise year over year. The consensus earnings per share (EPS) estimate of $3.54 for the ongoing quarter reflects a 36.2% rise over the same period.
VF Corporation
JPMorgan is bullish on Denver-based lifestyle apparel and footwear designer VF Corp. (NYSE:VFC), which operates brands such as Vans and North Face under its umbrella. JPMorgan raised its price target on VF Corp. from $15 to $19, indicating a potential upside of over 14%.
While the company's sales margin plummeted in the second quarter, CEO Bracken Darrell has been taking steps to restructure the business, focusing on a "Vans turnaround." This comes as Vans sales fell 23% year over year in the last quarter.
"I see four things that we need to do," Darrell said. "And then we'll have a bigger strategy that will follow."
This involves cost-reduction strategies, establishing a global commercial structure, reducing debt levels and deleveraging the balance sheet as well as appointing a president for the Vans segment.
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© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. | Stocks Trading & Speculation |
Big banks are doing "as little as they can get away with" when setting higher savings rates for loyal customers, an influential group of MPs has said.
The Treasury Committee has been scathing of the returns being offered to savers by the major High Street banks as interest rates have risen.
It has called on customers to shop around for better deals.
New Bank of England figures suggest people have been shifting their savings to get better interest rates.
'Too slow'
The Treasury Committee has consistently raised concerns about whether the rising Bank of England benchmark interest rate is being passed on in full to savers.
In July, it accused them of offering "weak excuses" for low rates.
Banks have been reporting their results in recent days, with HSBC the latest to reveal higher profits.
In response. Harriett Baldwin, who chairs the Treasury Committee, said: "The big four banks have been far too slow to reward savers through better rates on instant access savings accounts.
"The figures published in the past week still show signs that the banks are trying to do as little as they can get away with to reward our constituents for saving. We will continue to press for individual and business savers to be rewarded. Meanwhile, savers should shop around for the best rate."
She suggested that "savvy consumers" were looking around for better deals, a view backed up by the latest figures from the Bank of England which were published on Monday.
The data showed that £7.7bn was deposited into Treasury-owned National Savings and Investments (NS&I) in September, the most in a single month for three years, and up sharply from the £300m deposited in August.
NS&I was offering a market-leading fixed deal at the time, which required savers to lock away their savings.
This type of account, offered across various providers, currently has an average interest rate of 5.21%, compared with a 1.96% average return on easy-access accounts.
Alice Haine, personal finance analyst at investment platform Bestinvest, said: "The era of cheap money is well and truly over, so households should prioritise clearing expensive unsecured debt and building up a rainy day pot to withstand any unexpected expenses.
"Those fortunate enough to have spare money to save should move fast, as the top deals get snapped up quickly."
In response to criticism, bank bosses have argued that attempts have been made to encourage savers to look at all the available deals.
What are my savings options?
- As a saver, you can shop around for the best account for you
- Loyalty often doesn't pay, because old savings accounts have among the worst interest rates
- Savings products are offered by a range of providers, not just the big banks. The best deal is not the same for everyone - it depends on your circumstances
- Higher interest rates are offered if you lock your money away for longer, but that will not suit everyone's lifestyle
- Charities say it is important to try to keep some savings, however tight your budget, to help cover any unexpected costs
There is a guide to different savings accounts, and what to think about on the government-backed, independent MoneyHelper website. | Banking & Finance |
Keir Starmer has challenged the oil industry to dramatically speed up its shift to clean energy by offering up to £2.5bn to subsidise new jobs in renewables for North Sea workers.
The Labour leader has told executives from firms including Shell and BP that the UK is in a global race to move away from oil and gas, with competitor countries such as the US investing billions in climate-friendly technologies.
Starmer and Ed Miliband, the shadow climate secretary, hosted a roundtable with executives from 20 energy firms in Aberdeen on Thursday during a two-day visit to promote the party’s plans to decarbonise UK energy supplies by 2030 – a target date the oil industry is vigorously resisting.
Starmer will announce on Friday that if Labour wins the next election, it would set up a £2.5bn “British jobs bonus” fund to prioritise investment in three clean energy technologies, in regions heavily dependent on North Sea oil, including around Aberdeen and north-east England.
The technologies would be: carbon capture to support industries that still need oil and gas to pipe their waste CO2 into depleted North Sea oilfields; building floating windfarms for deep-water sites; and in green hydrogen – a zero carbon fuel needed for energy-intensive industries such as steelmaking, railways and chemicals production.
Starmer argues that Rishi Sunak’s recent decision to “max out” the North Sea’s oil and gas production and deprioritise green energy and technology investment is a strategic failure driven by the belief it will increase the Conservatives’ short-term electoral support, particularly in north-east Scotland.
“This Conservative party has zero ambition, zero plan and zero concern for the millions of British families suffering sky-high energy bills as a result of the government’s abject failure,” the Labour leader said.
“Every day that they play political games, causing uncertainty and investment risk for the sector, they are costing jobs and hitting people’s pockets. My Labour government will rise above short-termist gimmicks, put the country before our party, and deliver the long-term future of our energy industry.”
The oil industry lobbying group Offshore Energy UK (OEUK) says it is committed to a long-term transition to net zero but has embraced Sunak’s decision to license extraction in the Rosebank oil and gas field, the North Sea’s largest untapped field.
OEUK is pressing the government to support another £100bn in new North Sea investments, to replace the 180 fields it predicts will stop producing oil in the next decade. Climate scientists are adamant that doing so will sabotage global efforts to prevent runaway climate heating.
Starmer is understood to have argued in the roundtable that while oil and gas will still play a role in UK energy supply, a partnership was required between industry, unions and government to shift quickly on to zero-carbon technologies.
Labour has promised the £2.5bn jobs subsidy and other funding streams would support “historic energy communities” across the UK, including Grangemouth, a sprawling oil and petrochemical complex on the Firth of Forth. It also plans to invest in upgrading major ports around the UK, arguing that is a far wiser strategic investment than the freeports Sunak has vowed to create.
Starmer’s engagement with oil executives carries political risks but also recognises the significance of persuading the industry to accept the case for rapidly meeting the UK’s net zero targets, both for the general election and meeting Labour’s manifesto commitments.
Sunak has made clear he plans to frame Labour’s approach as a “war on motorists” and will accuse Starmer of destroying valuable North Sea jobs. Labour hopes voters, union leaders and oil workers will accept the urgency of the climate argument, and that Starmer’s strategy will also help it outflank the Scottish National party at the next election.
Floating offshore windfarms will provide much cheaper clean electricity but there are substantial reservations about how significant a role carbon capture and mass-produced hydrogen can play in the clean energy transition. | United Kingdom Business & Economics |
SBFC Finance - High Visibility On AUM Growth In Near Term: ICICI Securities Initiates Coverage With A 'Buy'
Creating a space in small-ticket MSME financing differently
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.
ICICI Securities Report
SBFC Finance Ltd. is a direct play on ‘increasing formalisation of micro, small and medium enterprise financing,’ with its-
most diversified distribution network (presence in more than 15 states with no single state contributing more than 20% of assets under management), targeting formal MSME customers (income tax return is mandatory for all borrowers),
in-house operations divided into six independent verticals, and
highly experienced management team having the potential to drive more than 25% AUM growth in the near term.
Further, SBFC Finance's strong focus on collection (average more than one collection person per branch) and score-card based underwriting could help credit cost remain at less than 100 bps in the near term.
We build in 36% AUM compound annual growth rate over FY23-25E with return on asset /return on equity at 3.8%/10.4% by FY25E.
We initiate coverage on the stock with a 'Buy' rating and a target price of Rs 115, valuing it at four times FY25E price-book value.
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. | India Business & Economics |
Fin-tech firm Payoneer is moving to L&L Holding Company’s 195 Broadway, the “wedding cake” landmark which David W. Levinson’s and Robert T. Lapidus’ firm bought in 2005.
L&L now manages the property for institutional investors advised by J.P. Morgan.
The move is one of the year’s largest relocations to the FiDi area. Payoneer is expanding from 23,000 square feet at 150 W. 30th St. to 42,000 square feet at 195 Broadway, which sources said is 86 percent leased.
The asking rent was said to be $57 per square foot.
The 1.1 million square-foot tower is also home to offices of Omnicom, HarperCollins and Gucci and to famed restaurant Nobu.
Payoneer CEO John Caplan said, “Relocating our headquarters to the Financial District and creating a new space for employees fosters collaboration for the benefit of our customers.”
He said the neighborhood “reflects the innovative, resilient and inclusive culture of Payoneer.”
Savills North America’s Jeffrey Peck, Daniel Horowitz, Jacob Stern and Roi Shleifer repped Payoneer.
L&L was repped in-house by leasing director James Marcellino. | Real Estate & Housing |
- Among all the central banks, the Bank of England has been the most aggressive in selling the bonds purchased to bolster the economy during the quantitative easing era, according to Christopher Mahon of Columbia Threadneedle.
- Yields on benchmark 10-year U.K. gilts rose from around 2.99% in early February to a 13-year high of almost 4.75% in mid-August, before moderating slightly. Yields move inversely to prices.
- "In our view, the actions of the ... Bank of England could again mark the bottom of the market," Mahon said.
LONDON — The Bank of England's rapid pace of bond sales is creating a "selling gold at the bottom" moment for investors, according to Christopher Mahon, head of dynamic real return at Columbia Threadneedle.
In the aftermath of the 2008 financial crisis, the central bank spent 13 years buying up £895 billion ($1.12 trillion) of U.K. government bonds — known as gilts — while interest rates were historically low.
Now, despite the fact that the value of gilts has fallen dramatically since then, the central bank is unwinding those holdings, and fast.
Among all the central banks, the Bank of England has been the most aggressive in selling the bonds purchased to bolster the economy during the quantitative easing era, according to Mahon.
"Selling bonds on this scale has never been done before, nor has it been tried when bond markets have had to digest the ramifications of both high inflation and substantial rate hikes," he said in a video blog last week.
The BOE is crystallizing massive losses as a result of the sales, which are being backstopped by the U.K. Treasury. In late July, the central bank estimated that it would require the Treasury to indemnify £150 billion ($189 billion) of losses on its asset purchase facility (APF).
"Our analysis suggests the reduction has been the equivalent of around 7.5% of all outstanding government debt," Mahon said. "This is a huge amount, and is effectively additional issuance that the market has had to digest."
Yields on benchmark 10-year U.K. gilts have risen from around 2.99% in early February to a 13-year high of almost 4.75% in mid-August, before moderating slightly. Yields move inversely to prices.
"It's unclear to us why the Bank has been so hasty. The fast pace of these sales has been pushing down on gilt prices, it's been worsening the losses for the taxpayer, and worse, it crystallizes what would have been paper losses into a drain that the U.K. Treasury has to make good," Mahon said.
"For markets, the pace of such hefty selling pressure by the U.K. central bank is in our view, one factor why gilts have struggled this year and struggled to find buyers."
The U.K. certainly has a shaky track record when it comes to the mass disposal of assets.
Between 1999 and 2002, the U.K. controversially offloaded 401 metric tons of gold — out of a total holding of 715 tonnes — at what turned out to be the bottom of the market for the precious metal.
For Mahon, there are clear similarities in how the Bank of England is now disposing of its gilt stock.
"Similar pre-announcements of sales are used which act to depress the prices, similar disinterest is expressed by the Bank of England in the prices achieved or the scale of the losses crystallized, and similarly, there is a big fear in the market that the pace of the sales could even increase," he said.
"In our view, the actions of the ... Bank of England could again mark the bottom of the market."
A spokesperson for the Bank declined to comment when contacted by CNBC.
Mahon added that, with inflation coming down and peak interest rates in sight, this could provide an opportunity for investors and "is one of the reasons why we think that gilts and indeed fixed income are very attractively priced."
The central bank's Monetary Policy Committee is next due to meet on Sept. 21. At its last meeting, the committee did not provide any further information on its plans for gilt sales, but Deputy Governor Dave Ramsden in July suggested that the pace of quantitative tightening could be set to increase.
In a research note last month, BNP Paribas economists predicted that the central bank will hike the pace of gilt sales from £80 billion a year to £95 billion.
The Bank of England, for its part, disputes that the asset sales are affecting markets in any substantive way. In his July speech, Ramsden said analysis of the evidence to date suggested that "QT [quantitative tightening] effects on gilt yields, while greater than zero, appear to be materially smaller than the effects of QE [quantitative easing]."
"Given our experience so far, as a very rough indication of scale, Bank staff estimate that a one-off additional £80 billion of QT relative to expectations is likely to increase 10-year gilt yields by less than 10 bps in prevailing market conditions," Ramsden added. | United Kingdom Business & Economics |
BlackRock's move into crypto fits into the asset management giant's broader mission of creating products that are easy to use and cheap for investors, CEO Larry Fink said Friday. From a report: "We believe we have a responsibility to democratize investing. We've done a great job, and the role of ETFs in the world is transforming investing. And we're only at the beginning of that," Fink said. BlackRock applied for a spot bitcoin ETF on June 15, which appeared to spur a rally in cryptocurrencies and a flurry of similar filings from other asset managers. The initial filing for the iShares Bitcoin Trust did not include a management fee.
[...] Fink had previously been critical of crypto, saying in 2017 that the popularity of digital currencies was do in large part to money laundering. However, interest from clients and the high cost of transactions motivated BlackRock to take a closer look at entering the space, Fink said. He also added that crypto can serve a diversification role in investor portfolios. "It has a differentiating value versus other asset classes, but more importantly, because it's so international it's going to transcend any one currency," Fink said.
[...] Fink had previously been critical of crypto, saying in 2017 that the popularity of digital currencies was do in large part to money laundering. However, interest from clients and the high cost of transactions motivated BlackRock to take a closer look at entering the space, Fink said. He also added that crypto can serve a diversification role in investor portfolios. "It has a differentiating value versus other asset classes, but more importantly, because it's so international it's going to transcend any one currency," Fink said. | Crypto Trading & Speculation |
Roughly one in three young shoppers in the U.S. has admitted to giving themselves five-finger discounts at self-checkout counters, a new survey shows.
According to loan marketplace LendingTree, 31% of Gen-Z consumers have stolen items from self-checkout kiosks, compared to 15% of consumers of any age. Those figures come as businesses work to combat shoplifting, which some retailers have blamed for hurting their financial performance and.
"Ultimately, retailers need to decide whether the self-checkout terminals are worth the risk," LendingTree chief credit analyst Matt Schulz said in a statement. "That's a question lots of retailers are likely wrestling with."
LendingTree based its findings on a survey of 2,000 U.S. consumers between the ages of 18 and 77.
Although some respondents to the poll said they regretted having sticky fingers, 44% planned to continue stealing from self-checkout kiosks, while 37% said they would do so to save money on groceries or health care goods, according to the survey. Of those who had stolen at kiosks, only a thir said they had ever been caught, the data shows. Self-checkout phase out
Retailers are generally reluctant to disclose information on the prevalence of theft, making it hard to gauge how common self-checkout theft is compared to other forms of stealing, Neil Saunders, a retail analyst at GlobalData Retail, told CBS MoneyWatch.
Theft data is "commercially sensitive information that [retailers are] under no obligation to reveal," he said. "There is a fear that highlighting the issue may encourage more self-checkout theft."
Still, losses resulting from the use of automated checkout stations appear to have spurred several major retailers toor beef up measures to detect thefts, according to Saunders.
Walmart removed self-checkout stations at some of its stores in New Mexico earlier this year after employees reported a rise in self-checkout thefts, Insider reported. Similarly, Wegmans scrapped its scan-as-you-shop self-checkout system last year because of excessive theft, Saunders said.
Meanwhile, Costco has said it plans toareas after acknowledging this year that it had suffered losses "in part…due to the rollout of self-checkout."
for more features. | Consumer & Retail |
How A Recurring Deposit Can Help Lock High Returns For A Longer Time
A recurring deposit can help lock into rates for a longer time period, without a large upfront investment.
There are several opportunities that crop up for investors in various asset classes at different time periods, so it is crucial for them to lock in the benefits when they are available.
On the fixed income side, a situation of higher interest rates makes it an opportune time for the investor to reallocate their funds to higher-yielding choices. The best option would be to lock in to instruments for a longer time period so that a higher return is earned for this entire duration. A tricky situation arises when the investor does not have a large amount to invest at the current juncture. This is where a recurring deposit can help them lock into rates for a longer period of time without requiring a large upfront investment.
Nature Of Investment
A recurring deposit is similar to a fixed deposit, where the investor invests an amount for a certain time period, after which they get back the amount with interest.
The big difference between an investment with a fixed deposit and a recurring deposit is that in a recurring deposit, the investment has to be made every month for a specific time period that has been chosen. In a fixed deposit, the investment is one-time, and this will complete the process. The investor has to make the regular deposit each month in the recurring deposit, and they will get back the full amount with interest once the time period that has been selected at the time of opening the deposit is completed.
Multiple Investments
One of the problems with a fixed deposit is that you have to make a separate deposit for each amount that you invest. This means that if you make 10 investments, then there will be 10 deposits, and managing this will become your responsibility, and this can be a nightmare. This creates a tricky situation for those who do not have a lump sum and would like to invest on a regular basis, because their savings or money will come on a regular basis. This is where the recurring deposit is helpful, as the very nature of the deposit ensures that there is a regular investment possible that matches with the manner in which the cash flow is coming in.
Longer Time Frame
The advantage of undertaking a recurring deposit during a period of higher interest rates is that one can lock in for a long period of time.
The key feature of a recurring deposit is that the interest rate applicable for the relevant period at the time of investment is locked in for the entire duration of the deposit. This ensures that the investor can adopt a strategy in such a way that they make a recurring deposit that earns them a high interest rate.
For example, if the prevailing interest rate for a 10-year deposit is 7.75%, then starting a recurring deposit during this time period will ensure that the rate is earned for the next 10 years, no matter what happens in the interim period.
Higher Rate
The side benefit or advantage of locking in for a longer time period is also that the interest rate that is earned is high. Normally, for longer-term deposits, the interest rate is higher, though it might not be the highest rate offered by the bank at a particular point in time, as higher rates depend on the position that the bank finds itself in and when they need the money. The higher rate advantage is that the investor is able to boost their overall returns from the fixed-income instrument. There are various banks that the investor should check before selecting the appropriate option, but this can be a good choice for their fixed-income portfolio.
Arnav Pandya is founder Moneyeduschool | Banking & Finance |
Members of the Armed Force are using food banks because of "personal decisions around how people are budgeting", according to the UK veterans minister.
Sky News' defence editor, Deborah Haynes, reported last month that some military personnel and their families had been forced to use the centres as high inflation and rising costs tipped them into crisis.
But on the day Johnny Mercer announced a new phoneline to give support to homeless ex-servicemen and women, the minister also cast doubt on whether those currently in the military required such services.
Politics live: Sunak to be grilled my MPs at Liaison Committee
Asked by Sky News' Kay Burley if there was "any need" for military personnel to use food banks, he said: "These are personal decisions around, you know, how people are budgeting every month.
"I don't want to see anyone using foodbanks, of course I don't, but we're you know, we're in an extremely difficult time around cost of living.
"I'll always advocate for service personnel to get paid more. I'd be mad not to. But it has to be, you know, within the constraints of a budget."
When Burley suggested it was not a "choice" when people used food banks, Mr Mercer replied: "Well, in my experience, that's not correct.
"I think there are some dire cases that we need to do more to wrap our arms around and make sure that there is a safety net for people.
"[But] I don't think food bank use is an accurate portrayal of where levels of poverty, relative or absolute poverty, are in this country."
The veterans minister added: "I don't want to see anybody using foodbanks, but, you know, I think that being in the military still affords you a good wage and a good quality of life. And, you know, and that will continue to be the case." | United Kingdom Business & Economics |
It was as unashamed in its naked politicking as Sir Keir Starmer purporting to be the next Thatcher in The Telegraph.
Legal migration was far too high, insisted border controller-in-chief James Cleverly, and the Conservatives were (finally) going to do something about it.
“Today we are taking more robust action than any government before,” he declared, as if he somehow belonged to a different tribe from the one that repeatedly promised to bring numbers down to the “tens of thousands” only to end up with 745,000 new arrivals last year – after 13 years of Tory rule.
As is ever the case with such announcements, timing was everything. The Home Secretary delivered his statement to the Commons just as Rishi Sunak’s approval rating among Tory activists was revealed to have dropped to a new low of -25.
Seemingly with the influential Conservative Home poll in mind (last month he was top of the table on plus 72, but since moving to the Home Office and denying calling Stockton-on-Tees a s---hole, he has fallen to 11th from bottom), Mr Cleverly took to his feet.
He declared that the public was “absolutely right to want to reduce overall immigration numbers – not only by stopping the boats and shutting down illegal routes, but through a reduction in legal immigration.”
This was the MP for Braintree channelling his inner Nigel Farage while the former Ukip/Brexit Party leader was otherwise engaged in the Australian jungle.
Amid growing talk of a May general election, there’s a faint whiff of Reform in the air. Traditional Conservatives increasingly seem to be saying to the party: I’m a Right-wing Tory, get me out of here! So something had to be done.
As with all plans devised by Rishi Sunak’s Government, there were five points to it.
This FPP (five-point plan) was not to be confused with the Prime Minister’s original FPP to halve inflation, grow the economy, reduce debt, cut waiting lists and stop the boats.
Or indeed his supplementary FPP, announced last month, to (deep breath) reduce debt, cut tax and reward hard work, build domestic, sustainable energy, back British business and deliver world-class education.
Cleverly’s quintet of pledges was no less ambitious in promising to curb abuse of the health and care visa, increase migrant salary thresholds, cut the shortage occupations list discounts, increase family income requirements and cut student dependants.
Taken together, he boasted, the proposals would mean “that around 300,000 people who were eligible to come to the UK last year would not be able to in future – the largest reduction on record”.
Just in case the electorate didn’t get the message, he hammered it home with a Bravermanesque: “Enough is enough.”
But will it be enough to stop the mass migration of voters away from the Conservatives?
A little like the Autumn Statement offering “the biggest tax cut on work since the 1980s”, only to take the tax burden up to a record high of 37.7 per cent come 2028, wouldn’t bringing legal migration down by 300,000 still result in an annual influx of around 445,000?
It remains to be seen whether the public will view still granting visas to the equivalent of the population of Leeds every year as “the largest reduction on record”.
The Tories won power in 2019 promising that net migration would fall, but what Cleverly is proposing still amounts to double the level of immigration witnessed at the last general election.
Yet as with Jeremy Hunt’s Autumn Statement last month, the spirit of the piece appeared to be that you’ve got to start somewhere.
Voters, however, could be forgiven for suspecting that the Government has closed the stable door after the horse has bolted. | United Kingdom Business & Economics |
Sales of smart speakers have "fallen off a cliff" as customers cut back and trade down on electrical items, the boss of Currys has said.
Sales overall fell 7% in the year to 29 April as people bought cheaper goods due to the rising cost of living.
Shoppers also bought more products on credit to spread their costs.
"People aren't as interested in Amazon Alexa as they used to be," managing director Alex Baldock told the BBC's Today programme.
This is surprising as many industry analysts have predicted a boom in smart speakers.
However, the firm said that after a surge in sales during the first stages of the Covid pandemic, people were not upgrading.
Mr Baldock said that shoppers were "being careful with their money".
He said some shoppers were also trading down to buy lower value items.
These included TVs and smaller kitchen appliances like kettles, where an entry level product "still boils water for you", the firm said.
It said it was "wary of optimism about consumer spending power" in the coming year.
'Not so smart'
Smart speakers were "selling like hot cakes" a few years ago, but now sales have come back down, according to Joseph Teasdale, head of tech at Enders Analysis.
He said people do not tend to replace them once they have one, and "maybe you buy a second device for the kitchen, but not much more than that".
But more importantly, "smart speakers just aren't that smart", Mr Teasdale added.
"They're great if you want to set a timer, find out the weather forecast, or listen to the radio. But they're a long way from an all-purpose artificial intelligence assistant," he said.
"If you don't word your request just right, they don't understand you, and half the time they can't do what you want them to anyway."
Credit rise
Currys said more of its customers were using credit to buy more expensive products, particularly if they thought it could save them money in the long term.
For example, energy-efficient washing machines, although more expensive upfront, would save money as bills soared.
Nearly 18% of goods at the chain were bought this way in the year, compared with 13% previously.
"Credit has never been more important for customers than during a cost of living crisis," the retailer said.
Customers were choosing more energy-efficient products because they were aware this was better for the environment too, it added.
Shares in the retailer dropped more than 7% after it said that it was wary about the prospects for consumer demand bouncing back.
Struggling households have been hammered by rising prices over the past few years as food, energy and fuel costs have soared.
To battle inflation, the Bank of England has been raising interest rates - but this has been putting more pressure on people with big loans, such as mortgages.
However, the pace of general price rises has not eased as much as had been hoped, leading to predictions of more interest rate rises. | Consumer & Retail |
Protean eGov Technologies IPO: Is It Attractively Valued To Subscribe?
Protean eGov Technologies IPO comprises of 6,191,000 shares via an offer for sale only, aggregating up to Rs 490 crore.
Protean eGov Technologies Ltd.'s initial public offering launched for public subscription on Monday will close on Nov. 8. The IPO issue is priced in the range of 752–792 per share.
The IT-enabled solutions provider is offering 61.9 lakh shares via an offer for sale only, aggregating up to Rs 490 crore. It has raised Rs 143.5 crore from anchor investors ahead of its initial share sale.
Protean will not receive any proceeds from the offer, and all the offer proceeds will be received by the selling shareholders in proportion to the offered shares sold by the respective selling shareholders as part of the offer.
Invest Or Not: What Valuation Suggests
At the higher price band, Protean eGov Technologies is demanding a price-to-equity ratio of 29.9 times, with an implied market capitalisation of Rs 3,203 crore.
There are no listed companies in India that are comparable in all aspects of business and the services that they provide.
"The company is a pioneer and market leader in universal, citizen centric and population-scale e-governance solutions. The company is valued at a P/E ratio of 29.9 of its FY23 earnings. We believe that issue is fairly priced and recommend a “Subscribe – Long Term” rating to the IPO," said Anand Rathi in a note.
Protean is a key player in building public digital infrastructure and providing e-governance services such as the Tax Information Network, Pan card issuance, Central Pension System record keeping, Aadhaar authentication and e-KYC services.
There is significant headroom for steady growth, with 50–60 million PAN cards expected to be allotted annually until FY27 and NPS-APY subscribers expected to grow at a CAGR of 16–17% (FY22–FY27P) as a growth strategy for the coming few years, said analysts at Reliance Securities.
"..with consistent profitability, positive cash flows and limited capital expenditure and working capital required to scale growth in its key areas. Therefore, we recommend subscribing to the issue," they said.
Another brokerage Choice Broking has also assigned a "subscribe" rating for the issue considering its dominant position in the domestic e-governance market, its capabilities to roll out nationally critical and population-scale greenfield technology solutions, and its attractively demanded valuations. | India Business & Economics |
White House urges federal agencies to increase in-person work
President Biden’s top aide on Friday wrote to Cabinet officials urging them to increase the amount of in-person work federal employees are doing at each agency.
White House chief of staff Jeff Zients, in a letter obtained by Axios, told agency leaders that an increase of in-person work was a “priority” for the president.
“As we look towards the fall, and with the end of the COVID-19 public health emergency, your agencies will be implementing increases in the amount of in-person work for your team,” Zients wrote. “This is a priority of the President — and I am looking to each of you to aggressively execute this shift in September and October.”
He also wrote that a return to in-person work “is critical to the well-being of our teams and will enable us to deliver better results for the American people.”
Zients noted that the White House has been working in-person for the past two years, “which has allowed us to work more nimbly and effectively as a team and with the aim of serving you and your agencies better.”
A White House spokesperson did not immediately respond to a request for comment.
The COVID-19 public health emergency lapsed in May, and the Biden administration has pushed returning to the office since earlier this year after the pandemic forced much of the federal workforce to work remotely.
The Office of Management and Budget in April issued a memo urging federal workers to return to the office full-time, while encouraging remote work where it has been most efficient.
In his State of the Union address in 2022, Biden pledged to bring workers back to the office.
“It’s time for America to get back to work and fill our great downtowns again with people,” he said.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Workforce / Labor |
Gandhar Oil Refinery Shares Debut At 76% Premium Over IPO Price
Shares debuted at Rs 298 apiece on the National Stock Exchange, a premium of 76.33% over the IPO price of Rs 169 apiece.
Shares of Gandhar Oil Refinery (India) Ltd. debuted at Rs 298 apiece on the National Stock Exchange, a premium of 76.33% over the IPO price of Rs 169 apiece.
On the BSE, the stock debuted at Rs 295.4 apiece, at a 74.79% premium.
The state-run company's initial public offering was subscribed 64.07 times on its third and final day.
The bids for Gandhar Oil Refinery were led by institutional investors (129 times), non-institutional investors (62.23 times), and retail investors (28.95 times).
The company planned to raise Rs 500.69 crore via a fresh issue worth Rs 302 crore and an offer for sale of 1.18 crore shares, worth up to Rs 198.69 crore, by the promoter-selling shareholder.
The price band for the IPO was fixed between Rs 160 and Rs 169 per share. At the upper price band, the company is valued at Rs 1,654 crore in market capitalisation.
The company raised Rs 150.2 crore from anchor investors on Tuesday ahead of its initial public offering and allotted 88.88 lakh equity shares at Rs 169 apiece to 16 anchor investors.
Major anchor investors included ICICI Prudential ELSS Tax Saver Fund, HDFC Mutual Fund, Whiteoak Capital Flexi Cap Fund, Morgan Stanley Asia (Singapore) Pte, Societe Generale, and Aditya Birla Sun Life Insurance Co., among others.
Business
Gandhar Oil Refinery is a producer of white oils by revenue, with a growing focus on the consumer and healthcare end-industries. As of June 30, their product suite comprised over 440 products, primarily across the personal care, healthcare and performance oils, lubricants, and process and insulating oil divisions under the “Divyol” brand.
The company's products are used as ingredients by Indian as well as global companies for the manufacture of end products for the consumer, healthcare, automotive, industrial, power, and tyre and rubber sectors. | Stocks Trading & Speculation |
- Target said organized retail crime is worsening and will fuel $500 million more of lost and stolen merchandise this year than last year.
- CEO Brian Cornell said the company has taken measures to prevent theft and keep stores open.
- Other retailers have also spoken out about rising retail crime and blamed online marketplaces.
Target said Wednesday that organized retail crime will fuel $500 million more in stolen and lost merchandise this year compared with a year ago.
Target's inventory loss, called shrink, totaled about $763 million last fiscal year, based on calculations from the company's financial filings. With the anticipated increase, shrink this year would surpass $1 billion.
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It can be difficult to quantify theft, since shrink includes inventory loss from other causes, such as employee theft or damage, too.
CEO Brian Cornell called out the challenge on the company's fiscal first-quarter earnings call, saying the retailer and others are grappling with rising theft on top of slower sales and more price-sensitive shoppers. He described retail theft as "a worsening trend that emerged last year," and said violent incidents have increased at Target's stores.
"The problem affects all of us, limiting product availability, creating a less convenient shopping experience, and putting our team and guests in harm's way," he said on the call.
Organized retail crime has become a hot-button issue in the industry, and some companies have blamed the growth of online marketplaces that allow thieves to anonymously sell electronics, makeup and other items they stole from stores. Home Depot, Walmart, Best Buy, Walgreens and CVS are among the major retailers that have spoken about the problem, saying that shrink has gotten worse.
"The country has a retail theft problem," Home Depot CFO Richard McPhail said on a call with CNBC on Tuesday. "We're confident in our ability to mitigate and blunt that pressure, but that pressure certainly exists out there."
Yet it's hard to verify if organized retail theft has grown and if so, by how much. Shrink cost retailers $94.5 billion in 2021, up from $90.8 billion in 2020, according to the National Retail Federation. Its data is anonymized and shared by retailers, so it cannot be fact-checked.
External retail crime accounts for only 37% of those losses, or about $35 billion, the NRF data shows.
There are other caveats. Covid fears and pandemic-related temporary store closures disrupted 2020, potentially tamping down foot traffic for both shoppers and thieves. Plus, shrink comes not just from shoplifting and employee theft, but from damaged products such as dinged furniture and expired food.
Target has become more vocal about organized retail theft, as it has struggled with excess inventory and its margins have disappointed. It missed Wall Street's earnings expectations for three consecutive quarters last year. Unwanted merchandise sat around in its stores and warehouses, before the company took aggressive action to cancel orders and mark items down.
Cornell, however, has stressed that more theft is the driving Target's worsening shrink.
Chief Financial Officer Michael Fiddelke said on the company's investor call Wednesday that shrink reduced the company's gross margin rate in the fiscal first quarter by a full percentage point compared with a year ago.
Cornell said Target is trying to reduce theft by installing protective fixtures and adjusting assortment in some stores. He said the company is working with politicians, law enforcement and retail industry trade groups to come up with policy solutions.
Some retailers and trade organizations pushed for the INFORM Consumers Act, a law that's intended to require verification so thieves can't easily sell stolen or counterfeit goods through online marketplaces. It was included in Congress' omnibus spending package late last year and relies on enforcement by state attorneys general.
Cornell said the company is "focused on keeping our stores open in the markets where problems are occurring." It has roughly 1,900 stores across the country, which are located in suburban areas and major cities including New York City and San Francisco.
— CNBC's Gabrielle Fonrouge contribute to this report. | Consumer & Retail |
The 20,000 volunteers at Citizens Advice, our charity appeal partner, have a close-up view of the cost of living crisis and its impact on individuals and society. They carry out a range of roles including advising clients, campaigning, media support and acting as trustees in Citizens Advice’s 250 independent local branches. We spoke to three volunteers about why they do it and how they make a difference.Since [I started volunteering] there’s been an increase in people seeking help with universal credit, struggling to buy food, needing help with energy bills. Also, since Covid so many things are online only. I see people from older generations who are struggling a lot.I joined Citizens Advice in 2018. I wanted to volunteer because connecting with people and supporting my community are very important to me. Citizens Advice was top of the list. I had [received] help from them before and was fully supported.I’m an asylum seeker, and Citizens Advice was the first organisation that gave me the opportunity to volunteer. This also gave me the strength to [join] other organisations, like the fire and rescue service. I hope to get the message to people that asylum seekers can be part of the community if they’re welcomed.I’ve been enriched by my involvement and gained firsthand experience of [the issues] people are struggling with. I’m now studying to become a barrister, and Citizens Advice helped me integrate after I came to Newcastle – I was really welcomed. I’m grateful to be in the Citizens Advice family.Newcastle is quite diverse – I speak five languages and I see clients with different language needs. I always get a thank you from clients. I believe in client care: you have to listen to people’s problems and show empathy. That makes the difference.Md Mominul Hamid, 30, generalist adviser, Newcastle‘I’m really inspired by the people I work with’ We are seeing clients in quite bad debt with rent and energy bills. We try to explain to people that this could be you – just because you are fine now doesn’t mean you [always] will be. We’ve set up a money literacy project, talking to students about how to not get into debt and how to avoid scams. Since Covid there’s been a lot more scams online.I started volunteering two years ago. I had been made redundant from my role in communications before Covid. I wanted to do something in the local community, and Citizens Advice needed a comms person. There’s really good training and I’m really inspired by the people I work with. It’s a place to build confidence and skills.We want to build a stronger local community and give people the tools to deal with the things life throws at them. It’s really rewarding to see the thank-you notes that come to us. [Clients] come into our offices feeling anxious and very stressed and go out thinking they’re not alone and on a route to manage their troubles.Jane Sheils, 59, communications volunteer, Epsom and Ewell[When I started volunteering] benefits problems were the big issue, but in the last few months the number of people with utility problems outstrips those with benefits issues. The sheer number who can’t afford energy has increased dramatically, unsurprisingly. But it’s still a shock.Councils are struggling – they don’t have the resources to maintain services and support. The knock-on effect is organisations like us picking up some of that work. Telephone requests have increased dramatically over the last year.When I retired six years ago I wanted to do something properly worthwhile, and Citizens Advice offered me the opportunity to help people directly.As generalist advisers, we deal with issues like benefits, debt, housing, pensions. When you help someone, you feel you’ve really achieved something and improved their life. It might be in a small way, like by filling out forms or signposting them to a specialist.Clients are grateful – they’re just glad there’s someone to help them. That’s the common thread, whatever the issue.We’re an integral part of the community.Mark Jackaman, 69, generalist adviser, LiverpoolThe Guardian and Observer annual appeal in support of grassroots charities working with people on the frontline of the cost of living crisis has so far raised £1,210,000. The appeal runs until midnight on Sunday 15 January. Learn more about becoming a Citizens Advice volunteer at www.citizensadvice.org.uk/about-us/support-us/volunteering/ | Nonprofit, Charities, & Fundraising |
ITR 2023: How To Fix A Mistake In Your Income Tax Return
Individual can rectify any mistake made in the tax return by filing a revised return. Here's a look into that aspect of ITR.
Individuals often file their tax returns under a lot of pressure. This is especially acute when there is a last-minute rush to beat the deadline for filing the tax return. One of the consequences of such a situation is that some information is missed in the tax return, or it could be that some details are entered incorrectly.
This is not a big cause for worry because the individual has the option to rectify this by filing a revised return.
Nature Of Revised Return
A revised return can be filed under Section 139(5) of the Income Tax Act, and this can be used to rectify any mistakes that have been made or if some income has been missed in the original return.
One basic factor that needs to be met before a revised return is filed is that there has to be a return that has been filed. The return that has been filed can even be a belated return, which means that the return was filed after the due date, and even this is eligible for a revised return. The revised return will then be considered the actual final return, which will override the earlier return, so this also needs to be filed carefully so that it reflects the correct situation.
Time Period
There is a specific time period during which a revised return can be filed.
This has to be filed before Dec. 31, 2023, for the current filing cycle or before an assessment has been completed for the taxpayer, whichever is earlier. This is crucial because once an assessment is complete and the tax officer finds some income that has been missed and initiates proceedings, a revised return cannot be filed saying that this was missed by mistake.
This is the reason why one has to file the revised return as quickly as possible once the information that was missed or is incorrect has come to the attention of the taxpayer.
Checking Details
It is required that the taxpayer take a close look at the various details that have been mentioned in the income tax return that they have filed. There are lots of times when details are missed. This could be some bank account that has some receipts that have not been mentioned, or it could be some mutual funds or shares sold that have not been mentioned. In other cases, there might be details that are wrongly mentioned, like the figures being calculated improperly for dividends because they have not been grossed up due to a tax deduction at source on them.
A similar situation could be the case with interest, where some tax is deducted. It is not necessary that all the cases have a negative impact on the taxpayer. Sometimes they even forget to claim a benefit, like, for example, if there is a donation made but they did not remember it at the time of filing the return, or it could be that they did not know a particular investment had a tax deduction and they failed to claim it.
So, it can be either of these situations that need to be considered.
Additional Impact
In the event that there is an additional tax that crops up in the workings, this will need to be paid, or if there is a refund, this can be claimed.
The main point is that the revised return will help the taxpayer ensure that the details that they have mentioned are correct. There are any number of times that the returns can be revised as long as the eligible conditions are met, so one has to make use of the facility that has been given.
Arnav Pandya is the founder of Moneyeduschool.
The views expressed here are those of the author and do not necessarily represent the views of BQ Prime or its editorial team. | India Business & Economics |
Regulators must monitor more than big banks to avoid systemic failure
Federal banking agencies are fiercely waging what some big banks consider a jihad mandating tough new rules. Some of the rules are warranted, some not. Regardless, what’s completely missing and all too essential is action on all the other manifest threats that aren’t big banks.
Indeed, one looming nonbank’s systemic merger poses a clear and present danger: Intercontinental Exchange Inc. (ICE). ICE, an already-systemic global clearing and settlement powerhouse, is now poised to gain still greater control over critical portals across the even more systemic $12 trillion mortgage market through a merger with real estate software company Black Knight.
So much could go so wrong so fast if ICE is allowed to complete its acquisition of Black Knight that, should this occur, the firm as a whole must quickly be designated a systemic financial market utility and regulated as such by the Federal Reserve.
As already stipulated in U.S. law and rule, financial market utilities are entities that control systemic payment, settlement, clearing or exchange functions as determined by the Financial Stability Oversight Council (FSOC). Trillions of dollars silently flow through these entities every day. Financial market utilities are like plumbing: We take them for granted, but miss them — sometimes grievously — the minute something stops flowing, backs up, or worse, floods. When this happens in the trillions of dollars in payment, settlement, clearing or exchange transactions every hour of every business day, risk moves in an instant from the personal to the institutional to the systemic to the macroeconomic.
Why is ICE a financial market utility and how does its risk grow still more insuperable if it acquires Black Knight and still stands immune from enterprise-wide safety and soundness regulation?
Regulators have acknowledged ICE’s existing systemic scale in two relatively small corners of its global empire. In 2012, the U.S. FSOC designated ICE Clear Credit LLC as a financial market utility because this venture is a central counterparty that clears the majority of U.S. credit default swaps, derivatives that permit financial institutions and even speculators to hedge credit risk or bet big on it. This is clearly a systemic arena — the total gross notional value of outstanding credit default swaps is $10.9 trillion.
ICE is also a major financial market presence outside its credit default swaps clearing activities, controlling as it does the New York Stock Exchange and numerous other equity, foreign exchange, commodity and bond market platforms around the world. Its scale outside the U.S. is formidable — for example, the United Kingdom has designated ICE Clear Europe. ICE is indeed so important in so many markets that its concerns about implementing the Russian oil price cap set by G-7 heads of state have threatened its implementation in the European Union.
Combining ICE’s global reach across core markets with a dominant role in U.S. mortgage finance would also heighten the risk that even a minor operational problem would snarl critical markets. Earlier this year, the NYSE suddenly stopped working. When it came back, investors were out millions of dollars, but ICE essentially told them to take it like grown-ups until the SEC strongly suggested otherwise.
Is this all the risk ICE poses? Absolutely not. As I have demonstrated in a longer paper, ICE’s control of key financial and mortgage market infrastructure creates clear systemic risk transmission channels using the standards by which global and U.S. regulators measure and control it.
First and foremost is the fact that even a short-term operational hiccup at ICE/Black Knight could shake financial stability because remaining large-scale alternative suppliers of critical market infrastructure will fade away under ICE’s withering market power.
This risk is already on the rise due to the rapid adoption of “deep learning” versions of artificial intelligence in key trading and credit underwriting markets. ICE is among the players deploying AI, but it is outside the reach of regulatory efforts to prevent discrimination or the highly correlated risks resulting from opaque models driving risk decisions across the capital and/or mortgage markets. ICE even plans on linking them once it acquires Black Knight by, for example, establishing new futures and secondary markets for mortgages.
ICE/Black Knight would also operate outside the reach of stability-critical operational and resolution rules. The NYSE outage noted above is clear evidence that even a small failure is highly disruptive in the absence of alternative systems or obligations to quickly make things right.
What if an ICE/Black Knight outage in the credit default swaps, foreign exchange, commodity, mortgage or another market adversely affected one or both of the huge government-sponsored enterprises whose own temporary outage in 2008 forced hundreds of billions in taxpayer bailout? Systemic banks and financial market utilities are required to have contingency plans ensuring ongoing service under even acute stress. ICE must be required to do the same across the full scope and scale of its operations, not just in its central counterparty corners.
Regulated banks and financial market utilities are also required to ensure that solvency, liquidity or operational stress do not create a systemic failure leaving gaping holes in global financial markets only taxpayers can fill. Been there, done that and ICE should not be allowed to pose risks known all too well to systemic regulators, not to mention taxpayers.
We know none of these risks is theoretical because entities such as ICE have in the past failed with such catastrophic effects. Although the extent to which nonbank financial companies should be systemically designated is controversial, neither the Trump nor Biden administration has done anything but reaffirm the importance of the 2011 financial market utility designation framework. It hasn’t been used since ICE’s central counterparty and other firms were designated as financial market utilities in 2012.
Much has happened since then in terms of concentrated market power, the growing use of AI, the increasing digitalization of critical infrastructure services and the risks of cybersecurity, geopolitical and even climate-induced financial crises.
Any firm as dominant and powerful as the combination of ICE and Black Knight warrants rapid mobilization of a systemic risk designation to demand effective governance, resilience, transparency and resolvability before yet another financial crisis teaches us the cost of infrastructure failures all over again.
Karen Petrou is the managing partner of Federal Financial Analytics, Inc. and the author of “Engine of Inequality: The Fed and the Future of Wealth in America.”
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Banking & Finance |
KKR Veteran Nayar Backs Climate Fund Seeking to Raise $250 Million
Sanjay Nayar, a KKR & Co. veteran, is backing a venture capital firm seeking to raise as much as $250 million to invest in climate tech startups.
(Bloomberg) -- Sanjay Nayar, a KKR & Co. veteran, is backing a venture capital firm seeking to raise as much as $250 million to invest in climate tech startups.
Nayar joined as a general partner at Peak Venture Advisors, that invests in companies in sectors including new energy, food systems, water and climate, he said in an interview in Mumbai. The fund is seeking to raise money from institutional investors, Nayar said.
Founded by Samir Shah, who ran a multi-strategy hedge fund in Hong Kong for 10 years, Peak Venture has already backed companies, including Indra Water and Avant Wood, according to information provided by the firm. The Mumbai-based company has a team of about 10 people and a pipeline of deals to deploy capital over the next two years, Shah said in an interview.
Earlier this month, the Securities & Exchange Board of India approved Nayar as the general partner of the firm, in which Shah is the managing partner, the company said in a statement.
The KKR veteran is backing investment platforms after spending 40 years in India’s financial circle. He was handpicked from Citigroup Inc. in 2008 by KKR’s co-founder Henry Kravis to lead the alternate asset manager’s India business. Nayar left his role as the private equity fund’s India chief executive officer in December 2020.
Nayar, whose family controls a $3 billion stake in the owner of beauty e-retailer Nykaa, set up his venture fund — Sorin Investment Management — last year targeting early-stage startups. The fund has already raised more than $165 million and is scouting for investments, Nayar said.
©2023 Bloomberg L.P. | Renewable Energy |
When I retired in September 2022, my 401(k) was invested aggressively (90/10 split between stocks to bonds) and lost approximately 30%. I left the 401(k) invested in mutual funds in hopes it would gain back some of the losses. A year later it has gained back approximately 20%. I'm not required to take RMDs for another five years. My question is should I transfer the 401(k) funds to my traditional IRA account, which is invested 100% in equities and let an advisor manage the account? Or should I leave it in the mutual funds and rebalance the stock/bond percentage to be less aggressive, say 80/20 or 70/30?
– Bev
Congratulations on your recent retirement and being in what sounds like a stable financial position. Your question is a simple but somewhat loaded one. The answer depends a lot on what you want and need from your retirement account and what you would want from an advisor. Instead of focusing on returns, I would encourage you to think about how your investments fit within a broader context of your goals, attitudes and lifestyle preferences. (And if you need help making important retirement decisions, consider working with a financial advisor.)
Assessing Your Situation
The reason I say it sounds like you may be in a good financial position is the implication that you aren't withdrawing from your account. I take that to mean you have enough other income or savings to get you through until required minimum distributions (RMDs) begin. If so, that's great that you're able to do that.
That being said, let's talk about your asset allocation – the mix of different investments you hold. On one hand, for a retiree to have 90% of their investments in stocks is incredibly aggressive. For the vast majority of retirees, that would be too aggressive. Ordinarily, that money needs to be much more stable so you can take regular withdrawals from it. Since you implied that you won't begin withdrawals for another five years, this may not be the case for you.
Your investment horizon may be much longer, and you may not need the money you’re required to withdraw once you hit RMD age. If that’s the case, it's possible that you have the capacity to invest aggressively in stocks, although I can't say for certain based on the information you shared. (And if you need help selecting an appropriate asset allocation, consider speaking with a financial advisor.)
Consider Your Risk Tolerance
Of course, your attitude toward risk comes into play, too. You made the right choice by waiting it out rather than panic-selling after your account dropped in value. This suggests you may have a high enough risk tolerance to stomach an aggressive asset allocation. However, consider how stressed you were, too.
But your asset allocation and risk tolerance shouldn’t be the only determining factors. You seem very focused on the investment aspect, but I think it is important that you ask yourself what you want from the money. (A financial advisor can help you answer this all-important question.)
Is there a goal you’re saving that money for? Does it need to support your income? Are you wanting to leave it to heirs? Your goals should drive your investment decisions. Don't invest in a vacuum.
Working With an Advisor
I'm curious about the way you tied rolling your 401(k) into an IRA, investing it 100% in stocks and letting an advisor manage it all together. Those are each independent decisions that aren't inherently connected.
Again, make sure you think through your goals and what you want to accomplish with the money. An advisor who is also a financial planner would help you with this. A financial planner can also help you make sense of how you should be investing given your goals and risk tolerance. I think that is key. Financial planners may also be able to manage your investments for you in a way that aligns with the plan the two of you lay out. (And if you’re ready to work with a financial advisor, this tool can help you match with one.)
Bottom Line
Don't make investment allocation decisions in a vacuum. Consider your personal situation, attitudes and goals. Then, choose an allocation that is most appropriate for you. This should be the approach whether you choose to do it on your own or with the help of an advisor.
Tips for Finding a Financial Advisor
Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
Consider a few advisors before settling on one. It's important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you'd like answered? Email [email protected] and your question may be answered in a future column.
Please note that Brandon is not a participant in the SmartAdvisor Match platform, and he has been compensated for this article. Some reader-submitted questions are edited for clarity or brevity.
Photo credit: ©iStock.com/Ridofranz, ©iStock.com/shapecharge | Personal Finance & Financial Education |
Boots is changing the way its loyalty card works by offering discounts on more of its own-brand products but reducing the monetary value of points.
The health and beauty retailer said that from May, holders of the Advantage Card would collect 3p worth of points for every £1 spent, instead of 4p.
The move comes when many retailers' costs are increasing amidst record rises in energy bills and overheads.
Boots, owned by US firm Walgreens, is also the UK's biggest pharmacy chain.
It said the move was in response to customer feedback.
It added that customers would be able to save 10% in store on 6,000 of its own-brand products.
It said customers would also save on hundreds of products with its Price Advantage scheme in a move which was to "make things stretch that little bit further". Price Advantage allows Boots card holders exclusive access to lower prices on certain products.
On its website Boots said: "We understand that more customers are looking to access instant savings, so offering 10% off our Boots own brand range will give even more opportunities to save.
"We understand that many customers still love saving up their points for big purchases in the future, so will continue to offer 3p worth of points for every £1 spent at Boots."
The retailer said points accrued until 23 May would not change in monetary value.
It also said students would continue to receive a 10% discount storewide, alongside the extra 10% for Boots branded products.
Recent research suggests that shoppers have been switching away from branded products at certain retailers and opting for own-brand equivalents to save money at the till, as inflation - the rate at which prices rise - reaches record highs. | United Kingdom Business & Economics |
The pool of U.S. students who completed accounting degrees dropped sharply in the latest available academic year as more workers in the profession retire without an adequate pipeline of entrants to fill the gap. From a report: Roughly 47,070 students earned a bachelor's degree in accounting in the 2021 to 2022 academic year, down 7.8% from the prior year, according to an annual report released Thursday by the American Institute of Certified Public Accountants, a professional organization. About 18,240 students received a master's degree in that academic year, down 6.4% from the prior year. That is compared with drops of 2.8% and 4.7% for graduates with bachelor's and master's degrees in accountants in the prior-year period, respectively.
Overall, the number of U.S. accounting graduates with either degree dropped 7.4% to 65,305 in the 2021 to 2022 year, the largest drop in a single year since at least the 1994 to 1995 year, when 51,622 students graduated in accounting, a review of AICPA data showed. Fewer people are selecting accounting as their career, citing low salaries compared with industries such as tech and banking. Young workers are wary of the requirement of 150 college credit hours for getting a certified public accountant license, posing additional costs and time commitment.
Overall, the number of U.S. accounting graduates with either degree dropped 7.4% to 65,305 in the 2021 to 2022 year, the largest drop in a single year since at least the 1994 to 1995 year, when 51,622 students graduated in accounting, a review of AICPA data showed. Fewer people are selecting accounting as their career, citing low salaries compared with industries such as tech and banking. Young workers are wary of the requirement of 150 college credit hours for getting a certified public accountant license, posing additional costs and time commitment. | Workforce / Labor |
With the former president sitting in the courtroom, Donald Trump’s lawyers moved into their next phase of attack at his bank fraud trial on Tuesday, arguing that his vastly inflated property values were never official appraisals—and weren’t ever meant to be.
The defense that Trump’s blathering real estate assessments were obviously not to be taken literally was on display Tuesday as his lawyers cross-examined a witness for New York Attorney General Letitia James, who is trying to topple the tycoon’s real estate empire and siphon $250 million or more from his bank accounts.
The tactic centers on the idea that prices are totally relative, and Trump’s guess is as good as any. This doesn’t explain how Trump could blatantly lie about space—like tripling the size of his New York City penthouse on paper. But it is an attempt to undermine the AG’s argument that Trump’s inflated sums weren’t honest or fair.
During a break in the trial, Trump Organization chief legal officer Alan Garten told The Daily Beast he thinks no assessment of Trump buildings could possibly be grounded in anything concrete—because there’s nothing like them.
"These are unicorn properties,” he said, pointing to Trump Tower. "At 57th and Fifth, you're at the crossroads of the shopping capital of the world. What's the comp real estate? The Champs-Élysées?"
A Trump trial lawyer went further with that idea while questioning the AG’s witness, trying to counter what the AG’s team presented earlier in the day.
The AG’s lawyers spent Tuesday morning questioning Doug Larson, who spent years assessing the overall value of Trump Organization buildings while he worked at Cushman and Wakefield. State investigators used his testimony to show that, after he’d conducted an appraisal, Trump’s staff would fudge the numbers on internal spreadsheets and his personal financial statements.
In one example, assistant attorney general Mark Ladov pointed out how Trump seemed to double count the same commercial space at the Manhattan neo-Gothic skyscraper 40 Wall Street—tallying up the expected income from the Dean and DeLuca grocery store, but then also registering that same area as rentable space that could bring in even more cash.
“Is this double counting the Dean and DeLuca lease?” Ladov asked.
Larson paused and frowned.
“I'm not sure what they did. I know in my June 2015 appraisal, Dean and DeLuca was included in the valuation,” he said.
Ladov also pointed out how the Trump Organization claimed an entirely different—and much rosier—number when assessing the building’s capitalization rate, which measures real estate investments. Generally speaking, a lower number is less risky. Of course Trump made sure the number went down. While Larson quoted a cap rate of 4.25 percent, internal Trump Organization spreadsheets pushed that down to 3.04 percent.
“Is that the same cap rate you used?” Ladov asked.
“No, it is not,” Larson responded.
In the afternoon, Florida defense attorney Lazaro P. Fields presented an alternative way to read the situation. His questions drew a distinction between the appraisals and Trump’s statements of financial condition, essentially saying they exist in different universes.
The idea here is that the appraisals were commissioned by Capitol One bank—which was willing to share them with Trump—but the real estate tycoon was free to make his own independent assessments and route them to outside accountants at MazarsUSA to have them compile a snapshot of his wealth.
After all, Garten noted to The Daily Beast, the banks could still rely on their own commissioned study.
But that argument hasn’t been well received by Justice Arthur F. Engoron, who has stressed that the AG does indeed have the power to punish lying entrepreneurs to ensure an honest marketplace—even if no one involved gets harmed by losing money.
Still, Fields pressed Larson to acknowledge that appraisers do official appraisals, while Trump was merely doing valuations—a notion that would free up the tycoon to fill in the blanks as he pleased.
“You agree that appraisals are an art, not a science?” Fields asked.
“I've heard that term before, yes,” Larson said, later acknowledging that two appraisers in the courtroom could come to two different conclusions.
Fields repeatedly pointed out that Cushman and Wakefield’s own appraisal paperwork noted that “the intended function is for loan underwriting and/or credit decisions by Capital One bank and/or participants," obliquely countering a previous AG argument that Trump hid these appraisals from his Mazars accountant.
Fields ended the bank fraud trial’s eleventh day by furthering an argument that is bound to see more play as the court battle moves forward: the idea that coming up with real estate prices is a nebulous endeavor.
He pulled up copies of two appraisals Larson issued on the same date in November 2012, with one pegging 40 Wall Street at $200 million while the other claimed it was $220 million.
“You're not sure which of these two is the final verdict?” he asked.
Fields did it again, pointing to two November 2015 appraisals in which Larson separately assessed the same building at $240 million and $260 million.
“It is possible you made an error appraising this property?” Fields inquired.
“I don't know... it's possible,” Larson said. | Real Estate & Housing |
Window Opens For Frozen High-Yield Emerging-Market Dollar Deals
The waiting game for some of the riskier emerging-market borrowers is coming to an end.
(Bloomberg) -- The waiting game for some of the riskier emerging-market borrowers is coming to an end.
With higher interest rates appearing locked in for longer globally, incentives to wait for better deals are evaporating. Meanwhile, obligations to pay back maturing dollar debts are pushing some of the riskier sovereigns to look again at global bond markets, despite borrowing rates rising to double digits.
Emerging-market countries have about $13.7 billion in debt maturing through the end of 2023, and Turkey, Egypt, Paraguay, Romania and Chile are some of the issuers who’ve tapped international markets for more funds so far, contributing to a rebound across the asset class. Developing-nation sales have already exceeded the $103 billion of dollar and euro debt raised in all of 2022, data compiled by Bloomberg show.
Most of that issuance, however, has been from higher-rated sovereigns like Saudi Arabia and Poland. Investors are now looking to countries like Kenya, which like the rest of Sub-Saharan Africa, has been locked out of international debt markets for more than a year.
“High-yield sovereigns are fair game to issue this second half,” said Guido Chamorro, co-head of emerging-market hard-currency debt at Pictet Asset Management in London. “After all, they are the ones that need funding the most.”
The absence of Sub-Saharan African sovereigns from the market has been striking, with South Africa the last to borrow internationally in April 2022. Historically low rates after the global financial crisis had helped African countries tap international debt markets, and just two years ago, eurobond issuance from the region totaled $14 billion, according to the International Monetary Fund.
“The period of 2009 to 2019 was probably as close as we will get to ideal conditions for eurobond issuance from EM and frontier-market countries for the foreseeable future,” said Mark Bohlund, a senior credit research analyst at REDD Intelligence.
Tightening Cycle
Sales grounded to a halt after US policymakers embarked on their most aggressive tightening cycle in a generation. With risk conditions improving slightly since the US reported last week the lowest consumer-price growth in more than two years, a window has opened for potential issuers that couldn’t come to market in the first half of the year.
READ MORE: JPMorgan Asset’s Michele Says Global Bond Rally Is Just Starting
The narrowing spread between yields on African bonds over US Treasuries may encourage African sovereigns in need of foreign currency to consider issuing dollar debt, even at relatively elevated prices. At 818 basis points as of July 12, the spread has dropped to the lowest since March. It was over 1,000 basis points — a level widely considered to be “distressed” — as recently as May, according to JPMorgan Chase & Co. indexes.
Adding urgency to the need to find dollar funding, South Africa, Kenya, Senegal, Ivory Coast, Ethiopia and Gabon will have to repay a cumulative total of $7.25 billion next year. Kenyan authorities are already making moves to cover for a $2 billion repayment due in June, meeting with potential investors in London last week to discuss options including syndicated loans, a bilateral commercial loan, a sukuk bond or samurai bond.
The yield on Kenya’s 2024 note was 12.69% as of Friday, down from as high as 21.4% in May, but still around double the levels at which it traded when issued in 2014. Those higher rates are something that lower-rated borrowers will just have to get used to, according to Benedict Oramah, the president of Afreximbank, the Cairo-based pan-African multilateral lender.
‘New Normal’
“People are beginning to understand that what looks like a shock is a new normal,” Oramah said. “Those who can go to the syndicated loans market will go there, but it’s becoming increasingly obvious to many that they have to bite the bullet.”
That’ll mark a change in the emerging-market bond landscape, as investment-grade sovereigns have dominated borrowing so far this year. Saudi Arabia issued the largest amount of debt, accounting for 15% of the total, followed by Poland, which jumped from 12th largest last year to complete $8.8 billion worth of deals so far this year.
READ MORE: Ukraine Bond Rally Has Legs as Economy, Flows Improve, BofA Says
Deutsche Bank strategist Anthony Wong sees emerging-market issuance reaching as high as $150 billion by year-end. The Institute of International Finance earlier this year predicted $47 billion of bond sales from frontier markets for 2023.
“Frontier markets, which include most African economies, will likely find it generally harder to come to market still,” said Samantha Singh, senior markets strategist at Rand Merchant Bank in Johannesburg. “Even those with big reform agendas could struggle to issue eurobonds in the near term unless they do pay up a bit.”
Damian Sassower, chief emerging-markets fixed-income strategist for Bloomberg Intelligence, predicts that governments that are able to continue tapping their domestic markets will do so for as long as possible.
For lower-rated countries, progress on IMF deals and the so-called Common Framework — which includes China in creditor talks — “opens doors for very distressed issuers, especially frontier Africa, to return to credit markets before year-end,” Sassower said. “It could be significant, considering the number of distressed borrowers and size of debt rollovers required.”
What to Watch
- China has a slew of data including a key policy rate decision, retail sales, industrial production, investment and GDP
- Mexico will release data on its international reserves; Philippines balance of payments
- Argentina and Colombia will release trade data for June and May respectively
- South Africa, Turkey and Russia will announce their interest rate decisions
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
Higher electric and gas bills are another thing New Yorkers will have to budget for along with congestion pricing and MTA fare hikes in the coming months and years.
Under a new rate plan approved by the state Public Service Commission, residential electric customers using 600 kilowatts an hour per month will see an increase in monthly bills over the next three years.
Beginning in August, electric bills will go up by an average of 9.1%, or $14.44. That's followed by a 4.2% (or $7.20) increase starting January 2024. Then in January 2025, there will be a 1.4% (or $2.43) increase.
"Itâs the seniors and the retirees and the elderly, I feel for them, the ones that are on fixed incomes," Astoria resident Richard Simmons said of the increases.
"The cost of living in the city is outrageous. It's crazy,â added Astoria resident Anthony E., who asked NY1 to abbreviate his last name.
Anthony, who is a landlord, said with the cost of electricity and gas going up, it seems like everything in the city is becoming too expensive.
"For a two-family house, gas and electric, I kid you not was $932 three months ago in the winter," he said.
For gas customers using an average of 100 therms per month, they will see their monthly bills increase.
In August, gas bills also go up by an average of 8.4% (or $17.28). In January, there will be a 6.7% (or $14.90) increase. And in 2025, there will be a 6.6% (or $15.61) increase.
"With the gas and light bill going up, itâs competitive with everything else that's going up,â Simmons said.
Itâs a cost that Anthony said he will likely have to pass along to his tenants.
"What are you going to do? I have a two-family house. I'll have to raise rents," Anthony said.
The Public Service Commission said the proposed rate increases for both electric and gas are required to address several factors, including rising company costs, property taxes and to help with capital investments for Con Edison. | Energy & Natural Resources |
Sam Bankman-Fried's criminal trial is beginning this week with jury selection on Tuesday morning. SBF, the 31-year-old man behind bankrupt cryptocurrency exchange FTX, is facing seven criminal charges with maximum sentences adding up to 110 years.
"Your client in the event of conviction could be looking at a very long sentence," US District Judge Lewis Kaplan told SBF's lawyers in a hearing on Thursday while rejecting the defense's request for a temporary release from jail. "If things begin to look bleak... maybe the time would come when he would seek to flee," Kaplan said, according to a Reuters article.
Bankman-Fried was previously under house arrest but was sent to jail in August after his bail was revoked. In their request for a temporary release, SBF's lawyers said the "case is highly technical and complex, and we need our client to help us understand the facts and explain many of the issues. He alone knows the facts which are also critical in preparing his defense."
Arguing that he isn't a flight risk, Bankman-Fried lawyer Mark Cohen "said there was 'nothing in the record' to suggest that his client would try to flee," Reuters wrote. "He said Bankman-Fried had voluntarily consented to extradition from the Bahamas—where FTX was based—to the United States after his December 2022 arrest."
Jury selection is scheduled to begin at 9:30 am ET tomorrow in US District Court for the Southern District of New York, located in Manhattan. Opening arguments in the trial are scheduled to begin Wednesday.
7 charges now, 5 more in March 2024 trial
The seven charges in this trial are wire fraud on customers of FTX, conspiracy to commit wire fraud on customers of FTX, wire fraud on lenders to Alameda Research, conspiracy to commit wire fraud on lenders to Alameda Research, conspiracy to commit securities fraud on investors in FTX, conspiracy to commit commodities fraud on customers of FTX in connection with purchases and sales of cryptocurrency and swaps, and conspiracy to commit money laundering.
The five charges related to wire fraud and money laundering carry maximum sentences of 20 years each, while the two securities and commodities fraud charges have maximum sentences of five years each. Kaplan will determine the actual sentence if the jury convicts SBF.
It's possible that SBF could be convicted, sentenced, and then get more years tacked onto his sentence next year. That's because the current trial doesn't cover all 12 charges against him. Some of the charges were severed and scheduled for a separate trial expected to begin in March 2024.
The five additional counts in the March 2024 trial are for fraud on customers of FTX in connection with the purchase and sales of derivatives, securities fraud on investors in FTX, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money-transmitting business, and conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act.
The indictment's bribery charge said the bribe's purpose "was to influence and induce one or more Chinese government officials to unfreeze certain Alameda trading accounts containing over $1 billion in cryptocurrency, which had been frozen by Chinese authorities."
One charge for conspiracy to make unlawful campaign contributions and defraud the US Federal Election Commission was dropped. | Crypto Trading & Speculation |
More 16-24-year-olds get jobs as living costs bite
- By Michael Race
- Business reporter, BBC News
More people are entering or returning to work as the cost of living continues to bite into household finances.
The Office for National Statistics said a record number of people moved out of "economic inactivity", which is defined as people not looking for work, between July and December, as more got jobs.
It was driven by people in the 16-24 age group, as well as 50-64-year-olds.
One analyst suggested a "great unretirement" trend had emerged, with older people returning to work.
The UK's economic inactivity rate, the proportion of people aged between 16 and 64 who are not in work or seeking to be, had been falling in general since records started in 1971, but then it increased during the Covid pandemic.
This increase was partly due to those aged 50 to 64 taking early retirement and illness, as well as inactivity among students.
But the trend has started to reverse in recent months. The ONS said the fall in economic inactivity during the latest three-month period was helped by more of those aged 16 to 24 either getting jobs or looking for work.
An increase in employment was also driven by part-time workers.
Darren Morgan of the ONS said that in the last three months of 2022 fewer people remained outside the labour market altogether, with some moving straight into jobs and others starting to seek work again.
"This meant that although employment rose again, unemployment also edged up," he added.
The trend is partly down to the rising cost of living, according to Helen Morrissey, head of pension analysis at Hargreaves Lansdown.
"The great unretirement helped drive a record number of people back to work in the year to October-December," she said.
"People are realising their pensions may not go as far as they had expected. However, we also know some of these people stopped work because of long-term sickness, so better health may have encouraged them to reconsider a return to work."
However, she added that young people entering the workplace, many for the first time from education, also played a "major role" in the rate falling.
UK economic growth has flatlined in recent months and the Bank of England expects the UK to enter a recession this year. Many industries have struggled to recruit workers, though job vacancies are falling.
The government has been considering plans to coax retired middle-aged workers back into jobs to try to boost the economy, with reports older workers could be offered a "midlife MoT" to assess finances and opportunities for work.
Kate Shoesmith of the Recruitment and Employment Confederation said the Spring Budget was an opportunity for the government to provide extra support.
"Improving childcare support and provision to enable more parents to work and older workers such as grandparents to stay in work is vital, as is reinvigorating welfare to work schemes," she said.
Mark Hassan-Ali from the N Family Club nursery in Balham, London said the over-50s workforce was "definitely an untapped area" in his sector.
He said the nursery had partnered with an organisation called Restless who specifically target recruiting the over-50s.
"Flexibility is what we are offering over-50s because we know that people have outside responsibilities, we know that working isn't the biggest thing in their diaries day to day," he said.
The jobs market is very closely watched by the Bank of England. Their concern is that rising rates of pay puts more money into the economy and that can keep inflation higher for longer, prompting further calls for yet higher wages, causing an inflationary spiral.
That means the the Bank may have to combat that with further interest rate rises to suck some of that money back out.
These figures are a mixed bag. Although wage rises in the private and public sector increased to 7.3% and 4.2% respectively, with an average of 6.7%, an increasing number of people of working age are returning to the workforce.
That is good news for the Bank of England as it increases the supply of labour at the same time as we see that demand - the number of vacancies - is falling.
While that may encourage the Bank that supply and demand for labour is becoming more balanced, it also means that employers are scaling back their hiring intentions - a sign they think the economic outlook is getting worse. Taken together these numbers seem to confirm the view that the economy will remain stagnant at best or slip into recession this year.
Pay outstripped by rising prices
With rising energy and food prices squeezing household finances, many worker have asked for pay rises in recent months.
Pay, excluding bonuses, increased at an annual pace of 6.7% between October and December 2022, which was the strongest growth seen outside of the Covid pandemic.
However, when adjusted for inflation which is at 10.5%, regular pay fell by 2.5%.
The ONS also said that 843,000 working days were lost to strike action in December, which was the highest number since November 2011.
The total number of strike days from June to December 2022 was more than 2.4 million, the highest total for a calendar year since 1989. There is no ONS data on the number of strike days from February 2020 to May 2022.
Thousands of workers have gone on strike in recent months over pay and working conditions.
Chancellor Jeremy Hunt, who has warned the UK is "not out of the woods" despite it narrowly avoiding a recession last year, said: "The best thing we can do to make people's wages go further is stick to our plan to halve inflation this year."
But Rachel Reeves, Labour's shadow chancellor, said the UK's economy was "stuck in the slow lane" and called for more government measures to "prevent yet more harm from the cost of living crisis".
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Inflation has begun to cool, and that may translate to some assets.
The Treasury’s Series I Bonds, or “ I bonds,” are no longer the prized savings tool they were 12 months ago. As cost increases slowed over the past year as Federal Reserve raised interest rates, it was inevitable that this inflation-tied asset would also begin to cool.
A financial advisor can help you manage your investments and respond to economic shifts. Find a fiduciary advisor today.
As Bloomberg recently reported:
“Since the yield on Series I savings bonds dropped in May, investors have redeemed about $800 million worth of the securities, more than in all of 2021. That’s a big change from last year, when Americans piled into I bonds to shield their savings from inflation.”
Rates of redemption have soared since the start of 2023, as investors trade their I bonds for cash. At the same time, sales have plummeted from a high in October 2022. Last month, investors bought $1 worth of I bonds for every $20 they spent on the same asset at its height.
As the market loses interest in these securities, investors are pondering “What next?”
What Are Series I Bonds?
Series I Bonds are a form of treasury debt, like the ubiquitous five- and 30-year bonds that the government sells. They’re designed to protect investors from high inflation by pegging the asset’s yield to the government’s benchmark inflation rate. Each bond pays interest that’s based on a fixed rate and a variable one. The fixed rate is set at the time of the sale and remains the same for the lifetime of the asset, while the variable interest rate is based on the rate of inflation and is updated every six months.
For example, a new Series I bond is currently paying 4.30%. This is based on a 0.90% fixed rate and an adjusted inflation rate.
As with all variable products, the value of an I bond depends entirely on its environment. The I bond’s fixed interest rate tends to be far below other Treasury assets. For example, in August 2023, a 30-year Treasury bond is paying 3.625% compared to the I bond’s 0.90% fixed rate. In a low-inflation environment, this will reduce the value of the I bond. In a high-inflation environment, however, the value of an I bond can soar. At their recent high, these assets repaid investors at a coupon rate of more than 9%.
But that was when inflation itself had peaked at over 9%, pushing the combined rate of this asset to almost the historical annual return of the S&P 500 itself. Now, with inflation tracking back to the high side of normal, that yield has vanished.
What Should You Do With I Bonds Now?
All of this doesn’t mean I bonds are worthless. They will still generally maintain the value of your money against inflation.
I bonds come with some redemption stipulations. Once you have held this asset for 12 months, you can cash it in with the Treasury for the asset’s face value and its accrued interest. You might lose a few month’s of the bond’s interest, if you redeem it earlier than it’s full term, but you wouldn’t lose any of your principal.
This is a pretty significant advantage over other bonds. For example, if you hold a 30-year Treasury bond and want to get your money out, you’ll need to sell it on the market at large. If yields have begun to fall, you may not be able to recoup your initial investment and would need to accept a loss.
Focus on the Fixed Interest Rate
For long-term savers, though, there might still be plenty of reasons to hold on to your I bonds, or even buy more.
Yields in this asset have fallen with inflation, it’s true, but the fixed interest rate has actually ticked up slightly. That rate remains good for the life of the bond, and the Treasury updates both its fixed and variable rates every May 1 and November 1. So, all I bonds issued until Oct. 31, 2023, will pay 0.9% over inflation.
That fixed rate tends to increase as inflation decreases. An I bond bought in a lower-inflation environment can be particularly valuable if the inflation-adjusted value goes up. For potential buyers, you may be better off buying I bonds after the November 2023 adjustment, given the likelihood that inflation continues to fall.
Bottom Line
Together this all means that I bonds are a good way of holding onto cash for the long term. The redemption option means that you can take this money out of storage with relative ease. I bonds aren’t as accessible as savings accounts, but they are relatively liquid after the 12-month mark. The fixed-over-inflation formula means that any money you hold in this asset will preserve its value.
Investing Tips
Having the right mix of stocks, bonds and cash for your risk tolerance is an important component of portfolio management. SmartAsset’s asset allocation calculator can help you determine how to spread your money across these three asset classes.
A financial advisor can help you build a comprehensive investment portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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The post The Series I Bond Frenzy is Dying Down. Is Now the Time to Cash Out? appeared first on SmartReads by SmartAsset. | Inflation |
Nigel Farage says he has evidence that Coutts bank decided to close his account because his views "do not align" with their values.
Writing in the Telegraph, he said he had gained access to a report by the bank's wealth reputational risk committee via a subject access request.
The BBC previously reported that his account was being closed because he fell below the financial threshold.
Coutts said decisions to close accounts included reputational considerations.
In the Telegraph article, former UKIP leader Mr Farage says that the "36-page" document shows that he was targeted "on personal and political grounds".
According to what the Telegraph says are minutes of a meeting of Coutts' wealth reputational risk committee held on November 17 2022, they read: "The committee did not think continuing to bank NF [Nigel Farage] was compatible with Coutts given his publicly-stated views that were at odds with our position as an inclusive organisation.
"This was not a political decision but one centred around inclusivity and purpose."
He also said there was a perception that he was regarded as "racist and xenophobic", which he called an "appalling slur".
The BBC has not seen the document.
In a video posted to his Twitter account, Mr Farage said he put in a subject access request because he wanted to establish the reason "behind them closing the account".
He said it read like "a brief that you could give to a barrister ahead of a serious criminal trial", and made several references to Brexit and Russia.
He added that the document said that closing his accounts for financial reasons was not justified because his "economic contribution is now sufficient to retain on a commercial basis".
Coutts said: "Our ability to respond is restricted by our obligations of client confidentiality.
"Decisions to close accounts are not taken lightly and take into account a number of factors including commercial viability, reputational considerations, and legal and regulatory requirements."
Last month, Mr Farage went public with the fact that his account was being shut, and said he believed it was for political reasons. He later said he had been turned down by nine other lenders.
But people familiar with Coutts' move subsequently told the BBC it was a "commercial decision", and that the criteria for holding an account with the bank "are clear from the bank's website".
Coutts requires its customers to borrow or invest at least £1m with the bank or hold £3m in savings.
The Financial Times reported that Mr Farage had reduced his business with the bank below its financial eligibility criteria.
In response, Mr Farage did not dispute the fact he did not meet Coutts' threshold, but added that the bank had not had a problem with it for the last 10 years.
He later tweeted that at "no point" had Coutts given him a minimum threshold.
Amid the row, Andrew Griffith, economic secretary to the Treasury, wrote a letter to the Financial Conduct Authority calling for a review in to whether banks are closing accounts of those who are "politically exposed".
Someone classed as a politically exposed person, or PEP, generally presents a higher risk for financial institutions as their position makes them potentially vulnerable to bribery or corruption.
Mr Griffith said that while he recognised the importance of measures taken to prevent money laundering, "it is crucial that an appropriate balance is struck" so that elected officials and their families can access banking services. | United Kingdom Business & Economics |
Michael Gove has said that 25-year fixed-rate mortgages could help to solve Britain’s borrowing crisis as households brace for a further surge in their bills.
Speaking after another day of financial turmoil sent the average two-year fix up to 6pc for the first time since December, the Levelling Up Secretary suggested that longer-term deals would protect homeowners from sudden sharp rises in their costs.
Mortgage rates have surged over the past month amid fears the Bank of England has lost control of stubbornly high inflation, and analysts expect costs to climb even higher as lenders withdraw and reprice products. TSB became the latest big bank to temporarily pull some of its deals on Monday.
In Britain, most loans are fixed for two or five years. Around 1.4m of these deals are due to expire this year alone, with these customers facing a very sharp increase in their bills as a result.
Mr Gove suggested that longer-term fixed deals could mean households avoid unexpected wild swings in their bills.
Speaking to The Telegraph, he said it is becoming “more difficult to have access to mortgage finance”.
Mr Gove said: “One of the things that I think is right for levelling up over all is making sure we can develop the types of products that are elsewhere in the world – particularly in countries like Canada – which are long term, fixed rate mortgages, so you don’t get the oscillation of how much you pay every two or five years, but you have certainty over as long as 25 years on what you pay. I think that is something we should look at.”
Although longer-term fixed deals would help homeowners weather interest rate rises, they could also make it more difficult for interest rates to pass through the economy and reduce inflation.
It came as the Government’s own short-term borrowing costs climbed to their highest level since the global financial crisis.
The two-year gilt yield – among the most sensitive to changes in Bank of England interest rate policy – advanced 0.06 points to 5pc, a level last reached in 2008.
Meanwhile data provider Moneyfacts said the average two-year fix had reached 6pc – adding around £1,000 a year to a typical borrower’s bill.
Although some British lenders allow customers to fix their mortgage for ten years or more, the rates charged are typically higher and the products are not widely used, accounting for only 1.5pc of the market before 2022 according to software company Twenty7Tec.
This is a result of the industry’s underlying financial structure, with most home loans funded by deposits that can theoretically be withdrawn at any time. The longer the fixed-rate term a bank lends for, the more it will need to rely on potentially expensive derivatives to structure it.
For example, the best available interest rate for a typical £200,000 two-year fixed-rate mortgage is 5.05pc from Barclays according to data from MoneySavingExpert. Specialist lender Kensington offers a 25-year fix at 5.6pc for the same loan.
A customer who fixed for 25 years now would have more certainty over their payments, but would also risk missing out on potentially far lower rates in the decades to come.
Mr Gove referenced Canada in his comments, but long fixed deals are more common in the US. In Canada, most homeowners have fixes of five years or less, according to the Canadian government.
In the US, most Americans have 30-year rates thanks to a long tradition of federal support through lenders Fannie Mae and Freddie Mac.
Mr Gove echoed Downing Street and the Treasury in rebuffing calls for extra support to help homeowners with soaring mortgage rates, insisting that Rishi Sunak’s plan for halving inflation this year remains the right one.
He said: “The root cause of the problem is inflation– in order to defeat inflation we need to ensure interest rates are at an appropriate level.
“If we embark on unfunded spending commitments then we risk having more inflationary pressure in the system for longer and interest rates being higher for longer, which is no one’s interests least of all those who currently have mortgages.
“So what we need to do is to have the big hairy audacious goal of reducing inflation as the most important task in mind to help people with mortgages.”
However, pressure from Tory MPs for action is starting to build, with some backbenchers calling for a Margaret Thatcher era tax relief to help home-owners to return.
The mortgage interest relief at source, or Miras, allowed Britons to claim the interest paid on mortgages off their tax bill.
The scheme was scrapped in 2000 when Labour’s Gordon Brown was Chancellor, costing today’s borrower £270 a year, according to broker L&C Mortgages.
Now some Tory MPs are calling for the policy to be readopted.
Damien Moore, the Conservative MP for Southport, said: “This government has taken steps in lots of innovative ways to support people through the pandemic and the energy crisis“This is an off the shelf Conservative solution to the problem which was scrapped by Gordon Brown.
“There’s lots of uncertainty and people want to feel secure in their homes. It gives the Prime Minister breathing room to deliver our priority of halving inflation.”
A second Tory MP, a recent former cabinet minister, said: “We know Treasury orthodox resists anything that cuts people’s taxes. But the political reality is if the government doesn’t react to this mortgage crisis, voters will.”
The Treasury has played down the likelihood of new spending to help mortgage holders, stressing it could be inflationary and noting the government’s finances are tighter given rate rises increase the cost of debt interest payments.
Such a move could include political risks, given it would be homeowners – who are on average more wealthy than other Britons – who would benefit from the tax cut. Mr Sunak in the past has favoured tax and spending moves that most benefit the less well-off.
Mr Sunak, speaking in a brief interview with a TV reporter released on Monday, played down the likelihood of extra help.
The Prime Minister said: “I know the anxiety people will have about the mortgage rates, that is why the first priority I set out at the beginning of the year was to halve inflation because that is the best and most important way that we can keep costs and interest rates down for people.
“We’ve got a clear plan to do that, it is delivering, we need to stick to the plan.
“But there is also support available for people. We have the mortgage guarantee scheme for first-time buyers and we have the support for mortgage interest scheme, which is there to help people as well.” | United Kingdom Business & Economics |
Rishi Sunak’s pledge to ease the cost of living crisis is in tatters after the Bank of England was forced to raise interest rates to 5% in an inflation-busting move that risks driving the economy into recession.
With the prime minister under fire over the soaring cost of borrowing, the central bank pushed through a half-point hike, deploying what economists described as “shock and awe” tactics.
Mortgage holders are bracing for more pain, with rates now at their highest level since the 2008 financial crisis, and markets betting on a further rise to 6% by Christmas.
The prime minister said he supported the Bank’s move, despite warnings that the economy may have to be pushed into recession in order to tame the steepest price rises in the G7.
Speaking on a visit to an Ikea distribution centre in Kent after the Bank’s decision, Sunak sought to reassure workers by arguing he was “totally, 100% on it” in his central mission to ease the pressure on living costs.
“It is going to be OK and we are going to get through this and that is the most important thing I wanted to let you know today,” he said.
He repeated a promise to halve the rate of inflation by the end of the year, but said it had “clearly got harder” to meet the pledge and admitted the chances of doing so were diminishing.
Joe Nellis, a professor of global economy at Cranfield School of Management, said: “The Bank of England is deploying shock and awe tactics in a bid to shake the economy out of its current state of inflation. Inflation is becoming embedded in the system with little sign of it subsiding. Unfortunately, further financial hardship is expected for many millions of households – and those at the lower end of the income scale with variable rate mortgages, or who are in the process of remortgaging, will be hit the hardest.”
Figures on Wednesday showed inflation remained unchanged at 8.7% in May, driving expectations that the central bank would have no choice but to respond. Inflation had been expected to fall to 8.4%, still well above the Bank’s 2% target.
Markets are forecasting that the Bank will have to keep its base rate above 6% from December until June next year, piling pressure on borrowers in the run-up to the next general election.
“We think this will trigger a recession in the UK and we believe that’s what is required to reduce inflation,” said Ruth Gregory, the deputy chief UK economist at the consultancy Capital Economics.
Andrew Bailey, the Bank’s governor, said he was “not desiring a recession” but warned that the central bank would “do what is necessary to bring inflation down to target”.
Warning of far-reaching consequences for the economy and for society at large, the National Institute of Economics and Social Research said as many as 1.2m households would become in effect “insolvent” as higher mortgage costs sap their financial headroom and leave their outgoings equal to their income.
The shadow chancellor, Rachel Reeves, said the government was failing to tackle inflation despite Sunak’s promise to halve it. “This Tory government can’t get a grip of this problem because they are the problem – 13 years of the Tories and their disastrous mini-budget are damaging our economic security and leaving families worse off,” she said.
With the government under growing pressure to intervene to help households, the chancellor, Jeremy Hunt, is due to hold meetings in Downing Street with Britain’s biggest high street banks on Friday.
MPs from across the political divide have called for help, with ideas ranging from a windfall tax on banks to tax breaks for mortgage holders and government guarantees on mortgage payments. However, ministers have so far stopped short of offering the kind of financial help given during the energy crisis, warning that this would serve only to stoke inflation further.
“If we don’t get on top of it, it would just get worse and it would last longer, and that’s not going to do anyone any favours,” Sunak said.
He ruled out tax cuts, something backbenchers have been calling for but which he said would only make inflation worse and would be “hard” to deliver.
A series of Conservative MPs declined to comment when asked whether they thought Sunak could or should do more for mortgages, instead preferring to focus criticism on the central bank governor.
Reflecting growing anger on the right of the party, Jacob Rees-Mogg, a former business secretary, said Bailey had been “burying his head in the sand” after being “too slow” in steering the response to inflation. “They now risk an overreaction that risks damaging economic consequences,” he said, accusing the Bank of showing “extraordinary arrogance”.
His criticisms were echoed by the Tory backbencher Jake Berry, who told LBC: “The Bank of England has been asleep at the wheel … They clearly have reacted too slowly to this inflationary pressure.”
Sources told the Guardian that Liz Truss, who was criticised while in Downing Street for appearing to question the Bank’s independence, felt partly vindicated by what had happened since. One said the former prime minister had told friends she believed the Bank should have raised rates sooner and not given the impression that they would remain low for the long term.
Sunak defended Bailey, saying: “I support the Bank of England with what they’re doing.” | United Kingdom Business & Economics |
Moody’s Revises Up SoftBank Outlook To Stable After Arm IPO
Moody’s Investors Service said it revised up the credit ratings firm’s outlook on SoftBank Group Corp. to stable from negative on a reduction in its leveraged debt levels as well as better transparency in its investment portfolio after the listing of chip unit Arm Holdings Plc.
(Bloomberg) -- Moody’s Investors Service revised up its outlook on SoftBank Group Corp. to stable from negative, saying the listing of chip unit Arm Holdings Plc brings transparency to a bigger chunk of the tech investor’s portfolio, which includes hundreds of startups.
Rising interest rates make it imperative for the Japanese firm to avoid a deeper ratings slip into junk territory, with former banker and Chief Financial Officer Yoshimitsu Goto publicly protesting downward revisions by agencies in the past.
Credit ratings firms have cited SoftBank’s exposure to private market valuations as an ongoing risk. SoftBank’s portfolio, which includes bets of billions of dollars in bankrupt WeWork Inc. and hundreds of unprofitable and unlisted startups, remains opaque, with pricing often determined by a handful of private equity firms.
But Arm’s September initial public offering lifts the proportion of SoftBank’s listed assets, Moody’s said in a report Monday. Along with telecom unit SoftBank Corp. and Alibaba Group Holding Ltd., SoftBank’s listed assets now make up more than 60% of its total portfolio value, it said.
SoftBank, which floated a little less than 10% of Arm shares in the IPO, had ¥6.7 trillion ($45 billion) in cash and cash equivalents as of end-September. That cash pile’s prompted a flurry of new investments by SoftBank’s billionaire founder Masayoshi Son, as well as talks with OpenAI’s ousted co-founder Sam Altman about helping to fund a possible chip startup.
Altman Sought Billions For Chip Venture Before OpenAI Ouster
Moody’s said it will consider a downgrade if new investments deplete the holding company’s cash on hand so that it can no longer cover two years of scheduled debt maturities, or if the company’s total debt increases. The current so-called corporate family rating by Moody’s on SoftBank Group is Ba3.
“A significant increase in new investments into emerging startups with untested business models or speculative opportunities could add to downward pressure if they lead to an erosion in its liquidity or the asset quality of its investment portfolio,” it said. “Downgrade pressure will also arise if material legal or other contingent obligations crystallize or governance risks rise further.”
Standard & Poor’s in September also revised its outlook on SoftBank to “positive” after Arm’s IPO.
(Adds more detail from Moody’s statement, context on SoftBank)
©2023 Bloomberg L.P. | Asia Business & Economics |
Reddit is sunsetting its current coins and awards systems, meaning you soon won’t be able to thank a kind stranger for giving you Reddit Gold for one of your posts.
Awards are little icons on posts you might have come across while scrolling around Reddit, and they’re given by other users to show appreciation for a post. Perhaps the most commonly-known award is Reddit Gold, which shows up as a gold medal with a star, but there also reaction awards and awards specific to certain communities.
To buy an award, you need to use Reddit Coins, but if you don’t already have some, you aren’t able to get any more of them as of Thursday, according to a post from Reddit admin (employee) venkman01. Awards and existing coins will still be available until September 12th, and the change to the awards and coins systems means that Reddit Premium subscribers won’t get a regular allotment of coins.
“While we saw many of the awards used as a fun way to recognize contributions from your fellow redditors, looking back at those eons, we also saw consistent feedback on awards as a whole,” venkman01 said. “First, many don’t appreciate the clutter from awards (50+ awards right now, but who’s counting?) and all the steps that go into actually awarding content. Second, redditors want awarded content to be more valuable to the recipient.”
“We want to create a system that is simple, easy to use, and easy to understand.”
Reddit does have plans for some kind of award system in the future, but the post only provides vague hints about what that might look like. “Rewarding content and contribution (as well as something golden) will still be a core part of Reddit,” venkman01 said. “In the coming months, we’ll be sharing more about a new direction for awarding that allows redditors to empower one another and create more meaningful ways to reward high-quality contributions on Reddit." In a reply, venkman01 said that “we want to create a system that is simple, easy to use, and easy to understand.”
Many users aren’t happy with Reddit’s decision. “Killing features without replacements ready, yep, sounds like Reddit to me,” wrote one user in a highly-awarded reply. Another, replying to an announcement post in a subreddit for moderator news, expressed unhappiness that Reddit isn’t providing some sort of compensation or transition into the next system. And for users already frustrated at Reddit over new API pricing that forced some popular third-party apps to shut down, the loss of awards like Reddit Gold, arguably one of the most iconic elements of the platform, could sting that much more.
While Reddit hasn’t specified what the new system might look like, Android Authority may have dug up some clues. Based on code in the Reddit’s Android app, Reddit appears to be working on a “contributor program” that would let users cash out gold or karma (basically, points you get for posts, comments, or giving awards) they receive into real money. Reddit didn’t respond to a request for comment sent Wednesday about Android Authority’s article. | Consumer & Retail |
The boss of Iceland supermarkets, who had hoped to become a Conservative MP, has quit the party, labelling it "out of touch".
The attack from Richard Walker came on the eve of the annual Conservative conference, as delegates gathered in Manchester.
Mr Walker told the BBC's Laura Kuenssberg that the party was losing touch with business and consumers.
The Conservatives declined to comment on the record.
But party sources told the BBC that Mr Walker had frequently criticised the government in public.
They added that he and his father had been lobbying very senior party figures over the summer, to try to secure Mr Walker a seat, while also pointing out that Labour had been in touch with him too.
Richard Walker's father, Sir Malcolm Walker, was the founder of the Iceland supermarket chain.
Mr Walker - who has previously said he would like to be prime minister - had been on the Conservatives' approved list of parliamentary candidates.
Mr Walker told Laura Kuenssberg: "It's become clear to me over recent months that the Conservative Party are drifting out of touch with the needs of business, of the environment and the everyday people my business touches and serves."
Announcing his decision to resign from the party earlier on Saturday, as well as withdrawing from the approved list of potential MPs, Mr Walker hit out at what he called a "sluggish economy" and "high levels of regional inequality".
"Today's reality is that we have a nominally Conservative government, yet I struggle to name a single thing they are actually conserving.
"Certainly not the business sector or our economy, the vitality of our high streets or the safety of my retail colleagues, our farming and rural communities, our rivers and seas, our net zero obligations, our NHS, our schools, our reputation for decency and fairness, or the future prosperity of our kids and grandkids."
He claimed he was warned by senior Conservative figures that his outspoken views on the environment and social issues weren't welcome, but he had concluded: "I won't wear a gag to bag a seat.
"I am not prepared to change my values and principles to suit a party that has itself lost its way."
Mr Walker had previously been vocal in his criticism of some Tory policies - including the plan of then-Prime Minister Liz Truss to scrap the top rate of income tax.
He has also previously spoken about the impact of rising prices on his customers, saying some have been forced to use food banks.
Earlier this week, he was forced to apologise after claiming that three staff contracted HIV as a result of needle attacks.
He said had made the comments "in error" in a draft article for Mail Online about threats of violence against store workers by shoplifters. | United Kingdom Business & Economics |
Indian Oil, BPCL, HPCL Richly Valued: Prabhudas Lilladher
Gross marketing margins have risen in Q3 to-date however any spike in benchmark prices may impact these margins.
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.
Prabhudas Lilladher Report
Oil marketing companies like Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd. are likely to witness a strong Q3 performance on back of improvement in gross marketing margins on petrol and diesel.
Singapore gross refining margin for Q3 to-date stands at $4.5/barrel of oil, while gross marketing margins on petrol and diesel are at Rs 8.2/(-0.6)/litre.
Indian Oil/BPCL/HPCL have historically traded at long term price/book value of 1/1.3/0.8 times respectively (we exclude the period between 2014-18, during which the OMCs enjoyed higher valuations due to twin benefits of deregulation and benign oil prices) and are currently trading at 0.9/1.3/1.1 times FY24 P/BV.
We downgrade our rating from ‘Hold’ to ‘Reduce’ on Indian OIL with a target price of Rs 94 based on 0.7 times FY26 P/BV.
We downgrade our rating on BPCL from ‘Hold’ to ‘Reduce’ with target price of Rs 365 based on one time FY26 P/BV. Similarly, on HPCL we downgrade our rating from ‘Hold’ to ‘Sell’ with a target price of Rs 272 based on 0.7 times FY26 P/BV.
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. | India Business & Economics |
The rate at which prices are rising has unexpectedly gone up, after falling for three months in a row.
Shortages of salad and other vegetables helped push food prices to a 45-year high.
To help slow prices, the Bank of England has already put up interest rates 10 times in a row, to 4%,
What does inflation mean?
Inflation is the increase in the price of something over time.
If a bottle of milk costs £1 but £1.05 a year later, then annual milk inflation is 5%.
How is the UK's inflation rate measured?
To come up with an inflation figure, the Office for National Statistics (ONS) keeps track of the prices of hundreds of everyday items in an imaginary "basket of goods".
The basket is constantly updated, with the most recent changes seeing Alcopops removed and frozen berries added.
Each month's inflation figure shows how much these prices have risen since the same date last year.
You can calculate inflation in various ways, but the main measure is the Consumer Prices Index (CPI).
The latest figure for CPI was 10.4% in February, up from 10.1% in January 2023.
Why are prices rising so fast?
The soaring cost of energy has been a key factor in driving inflation.
Oil and gas were in greater demand as life got back to normal after Covid. At the same time, the war in Ukraine meant less was available from Russia, putting further pressure on prices.
The war has also reduced the amount of grain available pushing up food prices.
This effect was compounded in the UK in February by a shortage of salad and other vegetables, which took food inflation to a 45-year high.
Alcohol prices in restaurants and pubs also rose.
Your device may not support this visualisation
Are wages keeping up with inflation?
Pay increases for many people aren't keeping up with rising prices.
The average weekly salary in the UK, excluding bonuses, in January stood at £589, up £1 on a month before, according to official figures.
Throughout 2022, the average salary rose by nearly £3 a month.
But when you take inflation into account, the average salary actually fell by 2.4% in the three months to January, compared to the same period the year before.
Unions say wages should reflect the cost of living and many workers have been striking over pay.
However, the government argues big pay rises could push inflation higher because companies might increase prices as a result.
What can be done to tackle inflation?
The Bank of England has a target to keep inflation at 2%, but the current rate is still more than five times that.
Its traditional response to rising inflation is to put up interest rates.
This makes borrowing more expensive, and can mean some people with mortgages see their monthly payments go up. Some saving rates also increase.
When people have less money to spend, they buy fewer things, reducing the demand for goods and slowing price rises.
In February, the Bank increased interest rates for the tenth time in a row, taking the main rate to 4%.
The next interest rate announcement is on 23 March.
Rates may rise again.
But when inflation is caused by factors such as global energy prices, action from the Bank of England may not be enough to slow it down.
When will inflation come down?
Lower inflation does not mean prices fall. It just means they stop rising as quickly.
The Office of Budget Responsibility (OBR), which assesses the government's economic plans, predicts that inflation will fall back to 2.9% by the end of 2023.
Prime Minister Rishi Sunak has said halving inflation by the end of 2023 is one of the government's five key pledges.
What's happening in other countries?
Other countries are also experiencing a cost of living squeeze.
Many of the reasons are the same - increased energy costs, shortages of goods and materials and the fallout from Covid.
The annual inflation rate for countries which use the euro is estimated to have been 8.5% in February.
Inflation is falling in the US too, but is still considered high. Prices rose by 6% over the 12 months to the end of February - down from 6.4% in January. | United Kingdom Business & Economics |
Jamie Rees, 18, suffered an unexplained cardiac arrest at a friend’s house in the early hours of New Year’s Day last year and passed away despite his friends' desperate attempts to save himNaomi Rees-Issitt is backing the Mirror’s campaign to have defibrillators installed in public spaces across the countryAn inspiring mum has raised thousands to buy defibrillators in her hometown following the tragic death of her teenage son. Jamie Rees, 18, suffered an unexplained cardiac arrest at a friend’s house in the early hours of New Year’s Day last year. The only defibrillator nearby was locked away in the teen’s old school – leaving his friends to perform CPR in a desperate bid to save him. He died five days in hospital later without ever regaining consciousness. In just 12 months Naomi Rees-Issitt, 43, has raised £55,000 and installed 25 defibrillators – which can be accessed 24/7. The family have also paid for eight portable machines which are carried by tradesmen and hauliers. Naomi of Rugby, Warks, is now planning to apply for a slice of a newly-announced £1million government fund to buy more. She is also backing the Mirror’s campaign for them to be installed in public spaces across the country. We are calling for a law requiring their availability at locations such as sports grounds and public buildings. Jamie Rees, 18, suffered an unexplained cardiac arrest at a friend’s house on New Year's Day last year (
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SWNS) Naomi with her son Jamie on a beach in Newquay (
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SWNS) Naomi, a charity manager, said: “I fully support the Mirror campaign. If we can make a difference in Rugby, imagine what can happen country-wide if the right laws are in place and money made available. “The big thing we want to highlight is accessibility. These defibrillators need to be accessible 24/7, not just at certain times of the day. “Sadly on the night Jamie collapsed, his friends can be heard on the 999 call being told to get the defibrillator from the school. “But it was locked inside. There was a defibrillator two minutes away that could have saved his life but it was locked inside the school. Naomi Issitt at home in Wolvey (
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SWNS) “Jamie collapsed at 2am. They need to be accessible. The ones we have installed in Rugby have PIN codes and are always accessible. “92% of out of hospital cardiac arrests happen in the evening, in the community. There is just no protection.” Naomi began her fundraising just three weeks after Jamie’s death. “We sat down as a family and decided to try to raise £1,500 to get an accessible defibrillator for outside the school,” she said. “We set up the JustGiving page and overnight it went to £3,000. So we decided to carry on and see what we could do. Naomi began her fundraising just three weeks after Jamie’s death (
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SWNS) “Since we lost Jamie in January we have managed to raise £55,000 and install 25 defibrillators, plus 10 waiting to go in. “These things can be bought and installed so quickly. I actually went round Rugby yesterday servicing them all. Trust me, there are a lot. In the town centre we include bleed kits with them. If you can have two pieces of life-saving equipment, even better.” Naomi organised raffles, race and bingo nights and did a parachute jump as part of the fundraising effort.“The public got behind us so much,” she said. “Jamie was such a popular lad, with the most beautiful face. “He just deserved better.” “We have organised two sites in Leamington Spa for defibrillators and one in Northamptonshire. Naomi has managed to raise £55,000 and install 25 defibrillators since Jamie's death (
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SWNS) “We’re just going to carry on what we’re doing. There is plenty more money in the pot.” Earlier this week the government unveiled a new £1million fund to increase the number of defibrillators. Organisations are invited to bid for a slice of the cash and match funding to get machines for their community. This could double the 1,000 new “automated external defibrillators’ expected to be made available. Naomi said she supports the scheme, but hit out at the government over their lack of action. The Mirror is campaigning for more defibrillators in public places “Obviously now we’re going to apply and see if we can get access to the new government fund,” she said. “But the difficulty for us is that this has been raised three times in Parliament by our local MP and we’ve had no feedback at all. We are no further forward than we were a year ago.” More than 30,000 people suffer cardiac arrests outside hospital every year in the UK, and just one in 10 of them survives. Public defibrillators, which deliver a shock to restart the heart, are used in less than a tenth of cases. Using a defibrillator within five minutes raises the chance of survival by 40%. Read More Read More Read More Read More Read More | Nonprofit, Charities, & Fundraising |
Sir Keir Starmer has refused to say whether a Labour government would spend more money on public services.
The Labour leader told the BBC's Sunday with Laura Kuenssberg his party would always invest in public services but to do this it needed to grow the economy.
"That has to start with responsible economics and it has to be coupled with reform," he added.
Some, including Labour's biggest union backer Unite, have called for the party to be more ambitious in its pledges.
However, Sir Keir insisted his promise to reform public services was bold.
He told the BBC he did not just want to offer "sticking plaster" solutions.
"If our horizon and focus is only on the immediate problems, we will never fix the fundamentals," he said, adding that the NHS was "a classic example".
He also gave the example of building more homes, which he said could be achieved not by spending taxpayers money but by reforming the planning system and restoring housebuilding targets.
Asked repeatedly if he believed public services needed more money and if a Labour government would offer this, Sir Keir would only say: "A Labour government will always want to invest in its public services."
Sir Keir's message to his party was that he would not promise to spend lots of money ahead of the next general election, which is due next year.
That is a hard message for many in his party to hear, and likely, many members of the public too, who want answers to the problems they face right now.
As the election approaches, the pressure on Sir Keir to make expensive promises is only going to grow and the party is trying to manage expectations of how much they would actually be able to do if they win power.
The Labour leader also refused to say whether his party would offer junior doctors a higher pay offer to end strike action, saying only that a Labour government would "be around the table negotiating and we would settle this dispute".
He added: "This is the government's problem. They as good as broke our public services, they've created a situation in which wages have been stagnant for many, many years and they need to sort out this mess."
Public sector workers including teachers, police and doctors have been offered pay rises of between 5% and 7%, with junior doctors in England in line for 6%.
Four education unions said the deal would allow them to end their pay disputes and that they would advise members to accept the offer.
However, junior doctors in England have asked for a 35% rise to make up for years of below-inflation increases.
Their latest walk out, which lasts five days, runs until Tuesday. | United Kingdom Business & Economics |
Surging Gold Prompts Indians To Recycle Jewellery For Weddings
Surging gold prices are prompting some Indians to exchange gold jewelry for new pieces as demand rises during the wedding season in the biggest consumer of the precious metal after China.
(Bloomberg) -- Surging gold prices are prompting some Indians to exchange gold jewelry for new pieces as demand rises during the wedding season in the biggest consumer of the precious metal after China.
More Indians are looking to reuse their gold, and the higher prices mean imports will remain pressured in the coming months, said Surendra Mehta, national secretary at the India Bullion and Jewellers Association Ltd. Consumers have been buying to meet wedding-related needs, but are otherwise largely staying away from the market, he said.
Spot gold jumped to a record high on Monday and has risen more than 10% since early October on speculation the Federal Reserve will cut rates early next year. A weakening rupee means bullion is even more expensive in India, which is totally reliant on imports.
“Wedding purchases are happening as they are inevitable,” said Ashish Pethe, a partner at Waman Hari Pethe Jewellers. Indian prices have been hovering around 60,000 rupees ($720) for 10 grams, and some consumers have been adjusting their purchases by exchanging old jewelry for new, he said.
Read More: Weddings Blitz Opens Up a $51 Billion Opportunity for India
Wearing and gifting gold is considered auspicious during weddings, and Indian spend heavily on jewelry. Most Indians tie the knot between November and February.
Indian households and temples collectively hold about 25,000 tons of the precious metal. The country imported 220 tons of gold in the July-September quarter, 19% more than a year earlier.
©2023 Bloomberg L.P. | India Business & Economics |
The COVID-19 pandemic brought profound changes to consumption and work habits. These changes have had large effects on commercial real estate (CRE), which is typically defined as the office, retail, industrial, and multifamily real estate sectors. For example, the ability to work from home (WFH) has spurred remote work and decreased demand for offices. While there was a significant return-to-office trend in early 2023, this movement seems to have stalled, with office occupancy at around 50% of pre-pandemic levels. As a result, many businesses are either not renewing their leases on office space or downsizing to smaller spaces. In retail, the growth of e-commerce has harmed brick and mortar businesses, especially regional malls. The multifamily real estate market has also been suffering from rising operating costs, slower rent growth, and rising costs of refinancing due to, among other things, rising interest rates.
Many institutions, including the Board of Governors of the Federal Reserve System, are concerned about the downside risks that the CRE market is currently facing. In their May 2023 Financial Stability Report, the Board of Governors noted weak long-run fundamentals due to WFH, elevated valuations and leverage, and rising interest rates as potential problems for the CRE market.1 Figure 1 compares an index of CRE debt and an index of CRE prices, both adjusted for inflation. It shows that while CRE prices have been recently declining, the total amount of debt backed by CRE has been roughly constant, which suggests that leverage is rising in this sector. This fall in collateral values can trigger solvency issues and lead to a wave of defaults, which in turn can cause problems for those who own this debt.
Who Is Exposed to CRE Risks?
With CRE risks looming, a natural question is, Who is exposed if default in the CRE market occurs? In Figure 2, we show a breakdown of the major owners of CRE debt. Banks and thrifts are the largest direct holders, accounting for nearly 40% of CRE debt. These represent direct CRE holdings at banks, such as a loan for a mall or an office building. However, an additional 34% is held in mortgage-backed securities (both agency and commercial), which in turn tend to be securities held by banks. Therefore, when accounting for both direct and indirect holdings, banking institutions hold between 40% and 75% of all CRE debt, making them by far the most exposed institutions to CRE debt.
Which Banks Are the Most Exposed?
Not all banks are equally exposed to risks in the CRE sector. Different banks have different business models and often focus on lending to different areas: consumers, firms, specific sectors, etc. To understand how these exposures vary as a share of banks' total portfolios, we collect detailed data on the balance sheet components of US bank holding companies from quarterly regulatory reports (FR Y-9C). The detailed data allow us to compute a measure of each bank's direct and indirect exposures to CRE, as we observe not just loans that are secured by commercial and multifamily properties, but also a bank's holdings of financial securities backed by CRE (such as commercial mortgage-backed securities). Our main measure of bank-level exposure is the total value of CRE loans and securities as a percentage of total assets.
We then compute a series of simple correlations with different bank characteristics. We find that banks with larger CRE exposures tend to be smaller (in terms of value of their assets), have lower liquidity ratios, lower tier 1 capital ratios, fewer loan-loss provisions, and lower market returns since 2019:Q4. Size is the characteristic most strongly correlated with CRE exposure: Figure 3 presents a scatter plot that shows this correlation. The x-axis measures the logarithm of assets, measured in millions of dollars, while the y-axis corresponds to the measure of CRE exposure as a percentage of assets. The figure displays a statistically and economically significant negative correlation between the two variables. Large banks, with assets over $100 billion (red triangles), tend to have significantly lower CRE exposure than the average commercial bank in the US.
This negative correlation suggests that the risks from a potential downturn in the CRE are concentrated in smaller banks and not in the large bank holding companies that are commonly perceived as "too big to fail." Still, as the 2007-08 Financial Crisis has shown, large waves of failures among even small institutions can generate significant disruptions in financial markets and later spread to the real economy. Our future research will use bank-level microdata to assess the aggregate effects of large drops in CRE valuations.
Note | Real Estate & Housing |
The Government is in a “terrible bind” - whoever wins the next election, a leading think tank has warned.
The Institute for Fiscal Studies says weak economic growth and stubbornly high inflation leave “no room” for unfunded tax cuts or spending increases any time soon. One issue is the amount the government is shelling out on interest payments on the nation’s debt mountain, which stood at nearly £2.6trillion at the end of August.
The IFS’s sobering assessment comes as Chancellor Jeremy Hunt prepares to announce his Autumn Statement next month. It warned unfunded tax cuts ahead of the next election could create a “short-term economic sugar rush”.
But this risked fuelling the chances of a recession if the Bank of England has to hike interest rates further to stem inflation, the IFS said. It added: “The Chancellor is in a terrible bind, as will be whoever is Chancellor after the general election.”
Publishing its Green Budget today, the IFS said that on one hand the amount the Treasury is collecting in taxes has reached a record high, with government borrowing below the Office for Budget Responsibility’s forecast in March. But it warned the government’s debt interest spending was on track to reach the highest level since the 1980s, and around £30billion above levels the country is used to.
“That’s £30 billion each year that can’t be put to better use,” it said. While the nation’s debt is expected rise, the economy is forecast to be stuck with feeble growth. That, in turn, is set to curtail government spending plans.
“With commitments on health, defence and childcare, among others, this would imply cuts to most public service spending,” the IFS said. Today’s report was produced in association with the bank Citi, which forecast the UK would experience a “moderate” recession in the first half of next year.
Paul Johnson, director of the IFS, said the country was in a “horrible fiscal bind.” He added: “The price of our high levels of indebtedness, failure to stimulate growth, and high borrowing costs is likely to be a protracted period of high taxes and tight spending.” | United Kingdom Business & Economics |
In September 2022, when he found out that Alameda had been using FTX customer funds, Nishad Singh said he asked to speak with the founder of Alameda and the CEO of FTX. They were both, of course, Sam Bankman-Fried. Singh and Bankman-Fried met on the balcony of the penthouse they shared in the Bahamas, which was spacious enough to include a pool, around 8PM or 9PM local time. As Bankman-Fried sprawled in a white chaise lounge, Singh paced anxiously.
“I’m not sure what there is to worry about,” Bankman-Fried told Singh, according to Singh’s court testimony today.
What about the $13 billion Alameda owed to FTX, Singh wanted to know.
“Right, that,” Bankman-Fried replied in Singh’s retelling. “We are a little short on deliverable.”
How short? Well, they could pay back $5 billion of the money — a cool $8 billion less than they owed.
“I felt really betrayed.”
To really set the scene as Singh testified, prosecutor Nicolas Roos pulled up a photo of the balcony in question. Barbara Fried, the defendant’s mother, appeared incredulous as the luxury balcony appeared on the screen. As Singh told the story of the conversation, Fried appeared agitated, occasionally glancing in the direction of her son.
Asked how he felt about discovering the hole in the balance sheet, “I was blindsided and horrified,” Singh said. “I felt really betrayed.” But he felt he couldn’t leave. He wouldn’t be able to live with himself if his departure meant that FTX fell, and the fall was avoidable. Bankman-Fried had told Singh he was indispensable.
Like Gary Wang before him, Singh had briefly been a paper billionaire — he owned “6 or 7” percent of FTX. He got a salary of $200,000, and equity in FTX in lieu of bonuses from 2020 on; before that, his bonuses had been as much as $1 million. He was also a long-time friend of Bankman-Fried’s younger brother, Gabe, and had known the defendant since high school. In a black suit and red tie, Singh looked much younger than his years, like a member of a high school mock trial team. When he stepped down from the stand as we took a break for lunch, he took a hit from an asthma inhaler.
Singh has pleaded guilty to six felonies. He says his co-conspirators in committing these crimes were FTX executives Ryan Salame and Gary Wong, Bankman-Fried, and Alameda CEO Caroline Ellison. All of them have pleaded guilty to assorted crimes as well — except Bankman-Fried.
“I’ve always been intimidated by Sam.”
“I’ve always been intimidated by Sam,” he said. (The defense objected to this, and it was overruled.) Singh said that Bankman-Fried was a “formidable character, brilliant.” Singh also called the actions he and his co-conspirators took “evil.”
Singh was late to the conspiracy, and didn’t find out about it until September 2022. But even before that, he was “embarrassed and ashamed” about Bankman-Fried’s “excessive” approach to spending. Though he’d complained to Bankman-Fried, he was told that the real problem was “people like me sowing seeds of doubt in the company decisions.” That comment was made in front of other people in the office, which Singh found “pretty humiliating.”
That was the introduction to how Bankman-Fried splashed his cash around. One of the investments was Genesis Digital Assets, a Bitcoin mining company. The idea of Bitcoin mining perplexed Judge Lewis Kaplan, who inquired about an explanation. (It was one of several times this would occur with jargon Singh used in his testimony.) Singh explained that these were banks of computers solving puzzles in order to get a reward and add a block of transactions to the blockchain.
Kaplan sighed. “Well, I’m sure that’s the best I’m going to get.” The courtroom laughed.
“Kendall and Kris Jenner, I honestly could not tell you what they do.”
There was also a discussion of K5 Ventures, a venture capital firm run by Michael Kives. We saw a memo in which Bankman-Fried said Kives was “probably, the most connected person I’ve ever met” and described a dinner with guests such as Hillary Clinton, Doug Emhoff, Katy Perry, Orlando Bloom, Leonardo DiCaprio, Jeff Bezos, Ted Sarandos, Kendall Jenner, Kris Jenner, and Corey Gamble. Singh read the names aloud and briefly described what each did — though he didn’t recognize Sarandos or Gamble.
“Kendall and Kris Jenner, I honestly could not tell you what they do,” he said, inspiring another wave of laughter. It had been a funnier day in court than most.
Bankman-Fried saw K5 as a “one-stop shop” for relationships, and wanted to commit up to $1 billion of capital to the firm in the long-term, something Singh objected to. Singh felt the firm was “toxic to FTX and Alameda culture,” but Alameda Research Ventures invested anyway.
We then saw a spreadsheet of endorsement deals, including those for Steph Curry, Tom Brady, Gisele Bundchen, the FTX Arena, and Larry David. In total, Bankman-Fried’s entities spent $1.13 billion on endorsement deals.
“Sam’s a fan of views.”
Singh’s testimony pained Bankman-Fried as very loose with money — investing broadly in real estate as well. We saw a spreadsheet of the properties FTX had leased and purchased, including both of Bankman-Fried’s apartments and the one his parents lived in. (At this point, Joe Bankman and Barbara Fried switched legal pads, apparently their way of passing notes.) As for the penthouse, Singh didn’t want it, and neither did some other members of the group. But “Sam really liked this one,” he said. “Sam’s a fan of views.” Finally, Bankman-Fried told his prospective roommates that he’d pay them $100 million to make the drama go away, which Singh took as a signal to shut up.
Even before he knew about Alameda’s special access to FTX, Singh had been involved in other shady transactions. For instance, in December 2021, Singh created some back-dated transactions that pushed FTX’s revenue “over the line” to $1 billion. He did that by changing the rules around the staking of a token, Serum, such that FTX got 25 percent of the rewards. This information was provided to auditors, he testified.
Singh also testified to “allow_negative,” the damning bit of code Gary Wang had talked about during his own testimony. Singh’s initial understanding was that it was, in part, to let Alameda transfer the FTT token Wang and Bankman-Fried had invented. Bankman-Fried assigned Singh the project, and Wang came up with the specific details about how it would function. Later, when he found out how else it had been used, Singh said “this seemed like a real abuse of a feature I believed until that point” was serving FTX. But when he discovered how big the hole in the FTX balance sheet was, he knew “this couldn’t have been a mistake.”
In August 2022, Singh transferred the money Alameda owed to the “Korean friend” account, seoyuncharles88, without explaining why that name had been chosen. The reason: to keep Alameda from having to make interest payments on the debt.
Ellison told him, verbatim, “that’s impossible.”
In September 2022, Singh noticed that Alameda didn’t have nearly enough collateral on its obligations if the enormous line of credit wasn’t included. He said there were points where Alameda was $10 billion short on their collateral. So Bankman-Fried suggested that Singh, Wong, Ellison, and Bankman-Fried transfer their personal Serum tokens to Alameda. Then Singh could back-date the transfer, to make it look as if the funds had been there all along. The point was to fool the eventual recipient of the data: the Commodities Futures Trading Commission. Singh refused.
He remembered the same conversation about shutting down Alameda that both Ellison and Wang had described in their testimony. Singh suggested closing Alameda’s accounts on FTX, and letting the company trade elsewhere. Ellison told him, verbatim, “that’s impossible.” And that, according to Singh, was when he discovered that Alameda was undeniably using FTX customer funds. Why else would it be impossible? “That was absolutely devastating,” he said.
And that was why he wanted to meet with Bankman-Fried on the balcony; his bedroom was often used for meetings by others, and he wanted privacy to discuss the situation. They met a second time, in Bankman-Fried’s private apartment, after he returned from a trip to the Middle East to try to raise capital.
“I’m really not doing well,” Singh told Bankman-Fried, according to his testimony. Barbara Fried’s head was in her hands as he testified; she looked as if she might be crying.
Singh tried to reel in spending, in the hopes of closing the hole
As Singh talked to him, he noted that Bankman-Fried seemed to be on edge; he was grinding his teeth and closing his eyes, which Singh said were tells for when Bankman-Fried was angry. “I ended up apologizing to him at the end for asking for the meeting because I could tell it was so unwelcome,” Singh said.
Singh tried to reel in spending, in the hopes of closing the hole, he said. But Bankman-Fried then invested $250 million in Modulo Capital, a hedge-fund led by some of his associates in September, and later in Anthony Scaramucci’s Skybridge Capital too.
This was when the truly weird shit started in testimony: Singh began discussing his political donations. Apparently multiple people, including Ryan Salame, the former FTX executive, had access to Singh’s bank accounts. Money from Alameda would be wired in, then sent out to approved causes. This was coordinated on a Signal chat called “donations processing,” which included Gabe Bankman-Fried. “My role was to click a button” approving the transaction, when a confirmation request arrived in his email, Singh said.
In one conversation, a political consultant wrote, “Can we get the $20k from @NishadSingh for the Delaware Democratic party today?” Salame replied, “On it.” Then he messaged the group telling Singh that he needed to check his email to approve the transaction, as well as five others.
Singh also testified that he signed blank checks from another bank account, at Gabe Bankman-Fried’s request
Singh also testified that he signed blank checks from another bank account, at Gabe Bankman-Fried’s request. That was used by Gabe to make donations for Guarding Against Pandemics, his advocacy group. First, Singh had given him their credit card, but that stopped working. A PayPal account also ran into issues. So an assistant was flown out to Singh with checks for him to sign.
After the September conversations, Singh understood the money was coming from customers’ funds, he said.
When November came, and the FTX collapse began, Singh said he was suicidal. At one point, he asked Bankman-Fried to clarify that the FTX CEO had orchestrated the entire thing. That didn’t happen.
I have been struck, throughout the trial, by how the inner circle at FTX and Alameda were the people Bankman-Fried was closest to: his college roommates Adam Yedidia and Gary Wang; his ex-girlfriend Caroline Ellison; his brother’s childhood friend, Singh; his brother Gabe; and, of course, Barbara Fried and Joseph Bankman.
Even if Sam Bankman-Fried believed himself to be innocent, he probably could have spared some of these people by doing what Singh asked him to do in November 2022: taking responsibility and turning himself in. Instead, I am watching Bankman-Fried’s mother cry in court as a man who’s known Bankman-Fried since high school testifies against him.
On November 20th, 2022, Singh had his first meeting with prosecutors. Of the inner circle, Wang cooperated first. Singh was second. Ellison was third. | Crypto Trading & Speculation |
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for more features. | Personal Finance & Financial Education |
A Labour government would cut NHS waiting lists in England by funding two million more hospital appointments a year, Sir Keir Starmer has said.
On the eve of the party's conference in Liverpool, he said that £1.1bn per year would be spent to ensure 40,000 out-of-hours appointments each week.
This would be paid for by savings from ending the non-dom tax status, he said.
Labour is also promising to set up specialist further education colleges to tackle local skills shortages.
It says it plans to work with local political leaders and businesses to identify these shortages and focus on fixing them.
Labour has signalled that boosting economic growth will be the central theme of its conference, which is being held in Liverpool this week.
"Everything we do will be about delivering growth," Sir Keir told the Observer.
He told the newspaper his plans to shake-up skills training were key to his mission of firing up the economy - and he was responding to calls from business leaders who told him they could not find workers trained for their needs.
Sir Keir said that, if Labour won power, it would work with local councils - using money raised from a revamp of the apprenticeship levy - to set up specialist "technical excellence colleges".
These would equip workers specifically for local industries, with a particular emphasis on sectors such as renewables, nuclear, engineering, computing and modern toolmaking.
Labour has previously said it wants to set up a new expert body, Skills England, to improve skills training, comprising trade associations, companies, trade unions, councils and education leaders.
Under a government scheme, bodies representing employers - mostly chambers of commerce - have drawn up skills "improvement plans" to influence what is taught in their local area.
Under legislation passed last year, the government will be able to intervene at further education colleges that fail to "adequately reflect" the blueprints in what they teach.
Labour's NHS appointments initiative would involve paying existing staff overtime to increase capacity.
The party says it wants to recruit more staff to the NHS, but that this will take several years to have a significant impact on waiting list numbers.
It says it would spend £1.1bn to cover the extra overtime, which would be paid for by scrapping non-dom tax status for wealthy individuals.
Speaking to the Sunday Mirror, he said: "We will use the money from abolishing the non-dom status. That's where the super-rich don't pay their tax in this country. I think they should."
Labour claims scrapping non-dom tax status would save just under £2bn. It would also spend £171m on doubling the number of CT scanners in NHS hospitals and in £111m on improving dentistry out of the planned savings.
The party also plans to use part of the cash to fund breakfast clubs that are run by primary schools, providing £365m so the service will be provided to pupils for free.
Under Labour's NHS waiting list plan - which the party claims would add 40,000 extra appointments a week - staff would be offered overtime to work evening and weekend shifts, so procedures could be carried out.
Neighbouring hospitals would also be encouraged to pool staff and use shared waiting lists. Patients would be given the option of travelling to a nearby hospital for treatment on an evening or weekend, rather than wait longer.
In June, Prime Minister Rishi Sunak announced plans to recruit and train thousands more doctors, nurses and support staff in a major NHS England workforce plan. | United Kingdom Business & Economics |
LIC To Launch 3-4 Products For Double-Digit Growth In New Business Premium In FY24: Chairman
LIC is going to launch one product in the first week of December, he said, hoping that it will attract a lot of traction in the market.
Insurance behemoth Life Insurance Corporation (LIC) has lined up 3-4 product launches in the coming months with a view to achieve double-digit growth in new business premium in the current financial year.
"We are projecting double-digit growth over the last year. We are going to achieve that because a recent trend is showing uptick in individual retail business. In order to further reinforce our commitment, we are going to launch some new attractive products," LIC Chairman Siddhartha Mohanty told PTI in an interview.
LIC is going to launch one product in the first week of December, he said, hoping that it will attract a lot of traction in the market.
Sharing some features of the new product, Mohanty said it will provide assured returns and after maturity, the policyholder will get 10% of the sum assured life long.
He exuded confidence that the new product will create disruption in the market as everybody wants to know how much he or she is paying and the returns one would get after 20-25 years.
In addition, he said, loan facility and premature withdrawal would also be a feature of the new product.
Guaranteed return products are in the interest of policyholders and shareholders, he said, adding that many shareholders are also policyholders. "So, it is dual benefit for policyholders," he added.
Mohanty said 2-3 more policies will be launched during the course of the year to achieve double-digit growth in new business premium.
During the first half of the current financial year, LIC's new business premium income (individual) segment registered 2.65% growth to Rs 25,184 crore as against Rs 24,535 crore in the year-ago period.
New business premium is the insurance premium due in the first policy year of a life insurance contract or a single lumpsum payment from the policyholder. It indicates new business underwritten by a life insurer.
In terms of market share measured by first year premium income as per IRDAI, LIC continues to be the market leader by market share in life insurance business with an overall share of 58.50%.
For six months ended September 30, LIC had a market share of 40.35% in individual business and 70.26% in group business.
The Assets Under Management (AUM) of the insurance giant increased to Rs 47,43,389 crore as on Sept. 30, 2023 as compared to Rs 42,93,778 crore a year ago, registering an increase of 10.47%.
The overall expense ratio for the first half of this fiscal was 15.14% as compared to 16.69% in the year-ago period. | India Business & Economics |
Professor Danny Dorling, the Halford Mackinder Professor at the University of Oxford, will be previewing his latest book Shattered Nation at an event in Edinburgh this week, hosted by the David Hume Institute and Scotland’s Futures Forum.
His presentation will address the key theme of his forthcoming book - that the failure to tackle rising inequality and to invest in ways of meeting the basic needs of people living in the UK puts Britain at risk of becoming a failed state.
Dorling cites a number of economic and social trends that contribute to the breaking of Britain - including having the highest levels of inequality of all European nations, except Bulgaria, increased polarisation, narrow media ownership, spiralling housing costs, the role of private finance in the provision of essential services and the ways in which the tax and benefits system too often exacerbate, rather than mitigate, the damage being caused.
Dorling argues that things can be fixed though, pointing to a positive trajectory in Scotland.
“Britain was once the leading economy in Europe; it is now the most unequal but we can change this and Scotland is showing the way.
“Scotland already has a lower proportion of children living in poverty than the most affluent region of England, which is the south east.
“Further progress has been achieved through the Scottish Child Payment - given to any family in receipt of a wide range of qualifying benefits - which has been raised to £25 a week for every child aged 16 or under.”
He continued: “Together with other measures, including the Scottish Government's recently announced ‘cash first’ approach to food insecurity for reducing growing reliance on food banks, this is a welcome sign that we could be at the beginning of a far faster move towards equality than we have experienced in any year since the 1930s.
“The question is how to make sure that effective policies that reduce poverty and inequality are introduced across the whole of our nation.“
Susan Murray, director of the David Hume Institute, said: “We are delighted to host Professor Dorling in Edinburgh to preview his latest extensive analysis, ahead of a launch in London next month.
“His handle on the complex data trends across the UK clearly shows the impact of different policy choices - he argues that in order to build a better future we need to share more and find ways to consume less because economic growth will not return to rates previously seen.
“We know from our quarterly Understanding Scotland Economy Tracker that significant numbers of the Scottish population are losing sleep over their finances,“ she stated, adding: “Efforts to increase productivity are unlikely to succeed without a focus on improving the lives of the people who power the economy.”
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free. | United Kingdom Business & Economics |
CapStack, a startup formed by Pipe co-founder Michal Cieplinski, has raised $6 million toward its effort to build an integrated operating system for banks.
In simpler terms, Cieplinski described CapStack as the “first bank-to-bank marketplace,” giving the institutions the ability to share and have visibility into one another’s portfolios.
Cieplinski started CapStack in March with Tzvika Perelmuter and, interestingly, says they managed to raise the capital almost immediately after launching the company and right before the meltdown of Silicon Valley Bank — not only pre-revenue, but pre-product.
“Something I saw is that banks are islands,” Cieplinski told TechCrunch in an interview. “Each bank operates on its own and there is no connectivity…And they’re all searching for an ability to diversify capital sources.”
Small and mid-sized banks in particular, said Cieplinski, are limited by geographical footprint with most of their customers residing near a bank branch.
“We don’t necessarily realize how serious that is,” he said. “Especially because small and mid-sized banks are not investment banks — they don’t get money other than deposits.”
What Cieplinski envisions building would give not only these banks, but larger financial institutions as well, a way to invest deposits and loans and “de-riskify their portfolios.”
“Over 60 banks agreed to join the platform even before the first line of code was written and a single employee was hired,” Cieplinski said. “And with that I went to VCs.”
Fin Capital, which also was a lead investor in Pipe, led CapStack’s round, which also included participation from Alloy Labs, Cambrian Ventures, Cowboy Ventures, Future Perfect Ventures, Gaingels, Selah Ventures, Uncorrelated Ventures and Valor Equity Partners.
Cieplinski transitioned from his role as chief business officer to a senior advisor at Pipe at the end of February, a few months after the alternative financing startup made headlines for the rest of its co-founders stepping down at the same time amid a hunt for a new, “veteran” CEO. Pipe, which had raised more than $300 million in funding and was once valued at $2 billion, was the target of a number of allegations surrounding its use of capital — all of which the company vehemently denied.
With CapStack, the executive — who also co-founded Fundbox and is a former SVP of LendingClub — says he wants to give financial institutions the ability to host on CapStack’s platform the loans that they originate and the ability for other banks to participate in those loans, borrow/move each other’s deposits and to see what other assets another bank might have that they can invest in so they can “diversify risk and exposure into other non-correlated assets.”
In the banking sector, explained Cieplinski, there are institutions which originate great assets, such as loans, but may not have enough capital to fund them — such as small and mid-size banks. Then there are larger banks, which sit on massive deposit bases but have “no way of originating loans” because they don’t have relationships on the ground.
“My TAM is effectively all the banking systems in America, sub the Top 30. But even some of the top 30 banks want to be buyers of these assets too,” Cieplinski said.
Fin Capital founder and managing partner Logan Allin, who has joined CapStack’s board, said in a written statement that he believes CapStack has the opportunity “to dramatically improve solutions for bank risk management at a critical time for the stability of our country’s banking infrastructure.
“Banks still rely on legacy technology for managing risks around their balance sheets, and to restore confidence for consumers, commercial customers, regulators, and other stakeholders, they absolutely need an upgrade,” Allin added.
Cieplinski is targeting the fourth quarter or first quarter of 2024 to perform the first beta testing with design partners.
“Everybody knew what was happening with SVB — it had an over-concentration of assets,” he said. “Every single one of the banks that want to join the platform are also over-concentrated in some assets — some of them have too much deposits, and they don’t know how to deploy it, but they need to provide the return to their depositors to the customers.”
Want more fintech news in your inbox? Sign up for The Interchange here. | Banking & Finance |
HG Infra Q2 Results Review - Execution Good But Inflow Remains Weak: IDBI Capital
Current order book of Rs 107 billion provides a visibility of ~ two 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.
IDBI Capital Report
HG Infra Engineering Ltd. Q2 FY24 profit after tax came lower than our estimate by 14%, as PAT has declined 5% YoY. Miss is coming from higher interest cost and depreciation. Though, revenue growth of double digit and Ebitda margin of 16% were healthy.
Higher depreciation charge is expected to continue and due to falling order book we have cut revenue estimate. This has led earning per share cut of 8%/7% for FY24E/FY25E and target price is revised lower to Rs 1,169 (earlier Rs 1249) on unchanged 12 times price-to-earning ratio multiple for engineering, procurement and construction segment.
Order inflow is key event to watch as it was muted in H1 FY24 and HG Infra Engineering has also reduced guidance by Rs 20 billion to Rs 50-60 billion in FY24E.
Current order book of Rs 107 billion provides a visibility of ~ two years. Maintain 'Buy' rating on HG Infra Engineering, for industry best revenue growth, margin. Stock catalyst order win.
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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. | India Business & Economics |
While Republicans are generally more skeptical of wage increases, Sen. Tom Cotton, R-Ark., and Sen. Mitt Romney, R-Utah, re-introduced a bill this week to raise the minimum wage only for legal workers who verify their American citizenship.
"American workers today compete against millions of illegal immigrants for too few jobs with wages that are too low — that’s unfair," Cotton said in a statement this week. "Ending the black market for illegal labor will open up jobs for Americans. Raising the minimum wage will allow Americans filling those jobs to better support their families."
The Higher Wages for American Workers Act of 2023 proposes a minimum wage hike from $7.25 an hour — the lowest amount allowed by federal law — to $11 over the next four years, followed by regular adjustments for inflation. The duo first introduced the bill in 2021, but it did not receive further movement in the Democrat-controlled Senate.
The 2021 version of the bill proposed an increase to $10 an hour over the following three years with the same legal status requirements.
The revised bill proposes a slower implementation for small businesses with fewer than 20 employees, should it become law, and would mandate the use of "E-Verify for all employers" to confirm citizenship.
The legislation would also penalize employers who knowingly hire illegal immigrants and violate I-9 paperwork rules. It would also require workers aged 18 and above to provide a photo ID for verification, cross-referenced with the verification of their citizenship status.
"Despite rising costs of living, the federal minimum wage has not been increased in more than a decade, which has left millions of Americans struggling to make ends meet," Romney said in a statement on Wednesday. "Additionally, requiring employers to use E-Verify would ensure that the wage increase goes to legal workers, which would protect American jobs and eliminate a key driver of illegal immigration."
The bill was introduced just a few hours before Romney declared his retirement.
Other GOP senators cosponsoring the bill include Bill Cassidy, R-La., Susan Collins R-Maine, Shelley Moore Capito, R-W.V., and J.D. Vance, R-Ohio.
In July, Sen. Bernie Sanders, I-Vt., proposed raising the federal minimum wage to $17 by 2028. Sanders strongly criticized the existing $7.25 per hour federal minimum wage, referring to it as a "starvation wage." The bill would create an annual income of $15,000 for a 40-hour workweek.
Labor unions in states like New York, California, and Massachusetts have been advocating for proposals in the last few years that, if approved, would incrementally raise the minimum wage to $20 or more. Increases in California would continue annually until 2029. | Workforce / Labor |
Ben Bernanke, the former head of the US central bank, is to lead a review of the Bank of England's forecasting.
The appointment comes as the Bank faces criticism for its efforts to control soaring prices and failure to predict their surge.
Inflation in the UK was 7.9% last month - far higher than the 6% peak once forecast by the bank.
Bank Governor Andrew Bailey said the review would allow the institution to "step back and reflect".
"The UK economy has faced a series of unprecedented and unpredictable shocks," he said announcing Dr Bernanke's role.
"The review will allow us to take a step back and reflect on where our processes need to adapt to a world in which we increasingly face significant uncertainty."
Dr Bernanke, who steered the US economy through the 2008 financial crisis while at the helm of the Federal Reserve from 2006-2014, said he was "delighted" to have been given the role.
"Forecasts are an important tool for central banks to assess the economic outlook," he said.
"But it is right to review the design and use of forecasts and their role in policymaking, in light of major economic shocks."
The Bank is due to meet next week to decide whether to raise interest rates for a thirteenth time.
Markets and economists expect the Bank to increase its main rate by a quarter of a percentage point, to 5.25%, which will be the highest rate since 2008.
The moves are aimed at stabilising prices, which have soared in recent years due to a mix of factors, including the war in Ukraine, which disrupted global oil and food markets.
The pressures have proven far more persistent than the Bank initially anticipated.
In December 2021, when it started to raise rates, it said it expected inflation to peak at about 6% in April 2022.
The current rate remains higher than 2% rate targeted by the Bank, even after fuel prices fell last month.
In May, Mr Bailey said there were "very big lessons" to learn about how the central bank had dealt with the economic shocks of recent times.
He said the bank's internal forecasting failures had led it to look elsewhere for help setting policy.
Dr Bernanke, who was awarded the Nobel memorial prize in economics in 2022, will be assisted by the Bank's internal review unit.
Their work is due to start this summer but not before the Bank's next interest rate decision which is due on Wednesday. He is expected to report back next spring. | Inflation |
Artificial intelligence programs’ impressive (albeit often problematic) abilities come at a cost—all that computing power requires, well, power. And as the world races to adopt sustainable energy practices, the rapid rise of AI integration into everyday lives could complicate matters. New expert analysis now offers estimates of just how energy hungry the AI industry could become in the near future, and the numbers are potentially concerning.
According to a commentary published October 10 in Joule, Vrije Universiteit Amsterdam Business and Economics PhD candidate Alex de Vries argues that global AI-related electricity consumption could top 134 TWh annually by 2027. That’s roughly comparable to the annual consumption of nations like Argentina, the Netherlands, and Sweden.
Although de Vries notes data center electricity usage between 2010-2018 (excluding resource-guzzling cryptocurrency mining) has only increased by roughly 6 percent, “[t]here is increasing apprehension that the computation resources necessary to develop and maintain AI models and applications could cause a surge in data centers’ contribution to global electricity consumption.” Given countless industries’ embrace of AI over the last year, it’s not hard to imagine such a hypothetical surge becoming reality. For example, if Google—already a major AI adopter—integrated technology akin to ChatGPT into its 9 billion-per-day Google searches, the company could annually burn through 29.2 TWh of power, or as much electricity as all of Ireland.
de Vries, who also founded the digital trend watchdog research company Digiconomist, believes such an extreme scenario is somewhat unlikely, mainly due to AI server costs alongside supply chain bottlenecks. But the AI industry’s energy needs will undoubtedly continue to grow as the technologies become more prevalent, and that alone necessitates a careful review of where and when to use such products.
This year, for example, NVIDIA is expected to deliver 100,000 AI servers to customers. Operating at full capacity, the servers’ combined power demand would measure between 650 and 1,020 MW, annually amounting to 5.7-8.9 TWh of electricity consumption. Compared to annual consumption rates of data centers, this is “almost negligible.”
By 2027, however, NVIDIA could be (and currently is) on track to ship 1.5 million AI servers per year. Estimates using similar electricity consumption rates put their combined demand between 85-134 TWh annually. “At this stage, these servers could represent a significant contribution to worldwide data center electricity consumption,” writes de Vries.
As de Vries’ own site argues, AI is not a “miracle cure for everything,” still must deal with privacy concerns, discriminatory biases, and hallucinations. “Environmental sustainability now represents another addition to this list of concerns.” | Energy & Natural Resources |
The eldest son of former President Donald Trump has said he did not work on the financial statements at the centre of a civil fraud trial that threatens the family's property empire.
Donald Trump Jr, 45, appeared relaxed in the New York City court as he cracked jokes and denied wrongdoing.
His siblings, Ivanka and Eric Trump, are due to testify in the coming days.
The judge has already found the Trump Organization exaggerated its wealth and falsified business records.
The civil trial will determine what penalty should be imposed. New York Attorney General Letitia James, a Democrat, is seeking a fine of $250m (£204m) and a ban on the former president doing business in his home state.
Donald Trump Jr is the first of the Trump children to give evidence in this case. Earlier this week, he appeared on the conservative Newsmax network to call the trial a "sham" in a "kangaroo court".
He and Eric Trump are co-defendants in the case, alongside their father. The brothers are both executive vice-presidents at the Trump Organization.
Dressed in a blue suit and bright pink tie, Mr Trump Jr testified for a little over an hour. His testimony will resume on Thursday.
The outset of his evidence focused on Generally Accepted Accounting Principles (GAAP) - the standardised practices and guidelines that businesses use to ensure financial records are accurately maintained.
Mr Trump Jr said he was not familiar with GAAP, besides what he could recall from his time studying business at university.
Pressed by state attorney Colleen Faherty on this understanding of the subject, he drew chuckles in court as he responded: "I have no understanding."
"I leave it to my accountants," Mr Trump Jr said.
At another point Mr Trump Jr told the judge he was sorry for speaking too quickly.
"I apologise, Your Honour, I moved to Florida, but I kept the New York pace," he joked.
He told the court that he has done "anything and everything" during his time working for the family business. But he is not an accountant.
When his father, the Republican president, took office in 2017, he testified that his role in the company grew.
"We stopped reporting to my father on decisions in the business," he said.
The afternoon in court proved mostly calm, aside from a few fiery exchanges between Mr Trump's lawyers and the New York attorney general's team near the end of questioning, when prosecutors began to press Mr Trump Jr on whether he was involved in preparing financial statements for the company.
He denied he had been involved in preparing certain financial statements for the family business, arguing that he relied on experts to "put together a document of this nature".
"The accountants worked on it. That's what we paid them for," he said.
New York Judge Arthur Engoron, a Democrat, is presiding over the trial and has already found Mr Trump liable for inflating his assets to secure favourable loans.
Hours before his son took the stand, Mr Trump wrote on his Truth Social account: "Leave my children alone, Engoron. You are a disgrace to the legal profession!"
The judge last week fined the former president a total of $15,000 for twice breaching a gag order over comments he made about a court clerk.
Ivanka Trump was initially listed as a co-defendant in the case, before she was removed from the docket and compelled to testify as a witness.
On Wednesday, lawyers for Ms Trump appealed against the order to testify. She is expected to take the stand on 8 November.
The former president, who is the frontrunner to be the Republican presidential nominee in 2024, is himself expected to testify on Monday.
He appeared in court last week to watch the testimony of his former lawyer Michael Cohen, who told the court one of his responsibilities was to "reverse engineer" assets to increase their value based on a number "arbitrarily elected" by Mr Trump.
He is also facing four criminal prosecutions, including cases in Georgia and Washington DC in which he is accused of seeking to overturn his 2020 election defeat. | Real Estate & Housing |
There Just Isn't Enough Money
Governments in Sub-Saharan Africa will not be able provide quality public services until national economies grow.
From one perspective, Adolf Faustine Mkenda would have been fairly happy in early 2020. The Tanzanian Education Minister’s portfolio was one of six priority sectors for the government. Government coffers had swollen to a record 26.13 trillion Tanzanian shillings (US$11.3bn) and Mr Mkenda’s ministry was set to receive around 16% of this, an impressive sounding $1.8bn.
But from another perspective, the minister might not have been so excited. Angie Motshekga, Mr Mkenda’s counterpart in South Africa, a country of similar population, had about $66bn to spend. Whereas Giuseppe Valditara, Italy’s education minister and another country with a population hovering around 60 million, had a budget that topped $100bn. If Mr Mkenda looked beyond his borders, he might have felt a little bit short changed.
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These comparisons highlight one salient fact. Governments south of the Sahara just don’t have enough money. Recently the United States’ ambassador to Liberia, Michael A. McCarthy, wrote a piece lamenting the poor state of public services in Liberia. There is no doubt he is right about the services Liberians receive from their government. As the brilliant Ken Opalo points out, the Ambassador’s proposed remedies – cutting back on salaries and entitlements of MPs, small and targeted road maintenance, and (an implied) crack down on corruption – are hardly bad ideas. But the Ambassador misses the point: Liberia needs a lot more money. Changes such as these just aren’t going to deliver the fiscal returns Liberia needs to run a functioning state to the level that the majority of the world’s citizens receive from their governments.
This problem is endemic across Sub-Saharan Africa (SSA). Populations are large, economies are small, and governments are only able to collect a comparatively modest percentage of GDP through tax and other revenues. For example, the Tanzanian government’s tax take as a percentage of GDP is 12%; for South Africa and Italy the percentages are 29% and 42% respectively. When converting this to the amount of money each government has to spend on each citizen per year, we get the following:
The numbers are stark. For every dollar the Tanzanian government has to spend on public services, the Italian government has 49. No amount of hair-shirted salary sacrificing by MPs will bridge this gap. When next year’s budgets roll around, these disparities will be more or less the same. On a global view, the governments of SSA are almost uniformly revenue poor.
If Tanzania was able to collect tax at the same rate as Italy, Mr Mkenda’s budget would be $6.3bn. More schools, more books, better teachers; still well short of Italy’s $100bn education budget, but a meaningful boost to an under-resourced sector. For governments in Sub-Saharan Africa to achieve OCED level of tax collection requires significant investments in tax infrastructure and efforts to move more of the workforce into the formal, and more easily taxable, sector. That means off subsistence farms and into factories and jobs with monthly salaries. GPI will have more on the drive for formalization in later posts.
But at the heart of the matter is an economy which is just too small for its population. If the Tanzanian government is to deliver a better standard of public services to its citizens, transformational economic growth will be required. Italy’s GDP is more than 31 times as large as Tanzania’s. Frugal MPs and efficient tax collection can only get a country so far. Broad-based sustainable economic growth is the engine that drives improvement in public services, and development outcomes in general.
Thanks for reading The GPI! Subscribe for free to receive new posts and support our work. | Africa Business & Economics |
ITR Filing: Misreporting Of Income, Claiming Wrongful Deductions To Attract Penalty Of 200%
Which cases will be considered as misreporting of income and what is the penalty for the same?
The Income Tax Department (Telangana and Andhra Pradesh) on Friday discovered a large number of individuals who have incorrectly reported exemptions and deductions as part of its monitoring efforts to verify the accuracy of tax returns submitted by taxpayers. These taxpayers have claimed refunds based on these incorrect declarations.
Principal Chief Commissioner of Income Tax, Andhra Pradesh & Telangana Mitali Madhusmita addressed a press conference on the issue of suspicious refunds being claimed by some taxpayers, in Hyderabad.
The Press Information Bureau (PIB) in Telangana, on July 7, 2023 tweeted, "Under the Income-tax Act,1961(the 'Act') there are stringent consequences of misreporting of income and claiming wrongful deductions. Those include interest @ 12% /yr, penalty @ 200% of taxes, prosecution which may entail imprisonment. Who have filed such claims and taken wrongful refunds from the Department can file Updated Returns u/s 139(8A) for AY 2021-22 & AY 2022-23 and deposit due taxes as per section 140B. For AY 2023-24, Revised returns can be filed u/s 139 (5) in those cases where original return has already been filed." [sic]
Under the Income-tax Act,1961(the 'Act') there are stringent consequences of misreporting of income and claiming wrongful deductions. Those include interest @ 12% /yr, penalty @ 200% of taxes, prosecution which may entail imprisonment— PIB in Telangana ð®ð³ (@PIBHyderabad) July 7, 2023
-Pr Chief Commissioner, @IncomeTax_APTS
1/2 pic.twitter.com/wqaA9qG9Fx
What is Misreporting of Income
The following cases will be considered as misreporting of income:
Misrepresentation or suppression of facts.
Failure to record investments in the books of account.
Claim of expenditure not substantiated by any evidence.
Recording of any false entry in the books of account.
Failure to record any receipt in books of account having a bearing on total income.
Failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction.
Penalty for misreporting of income
Under the Income-tax Act, penalties are levied for various defaults committed by the taxpayer. Some of the penalties are mandatory and a few are at the discretion of the tax authorities. Many times a taxpayer may try to reduce his tax liability by misreporting of income. In such cases, the taxpayer shall be liable for a penalty at the rate of 200% percent of the tax payable on such misreported income. | India Business & Economics |
Britain has, unknowingly, become a nation of dependents. New data from the Office for National Statistics (ONS) shows that more than half of the population (53.8pc) now receives more from the state than they contribute in taxes.
In 2021/22, 36 million British adults lived in households where cash benefits and what the ONS calls “benefits in kind” – the imputed value of government spending on health, schools and so on – were higher than the taxes they paid. What’s more, for only the second time ever, middle earners now receive more from the state than they pay in taxes.
Last year, the top fifth of earners paid an average of £33,579 more in taxes than they received in benefits and contributed half (49.4pc) of all tax collected by the government.
The top ten per cent pay a third of all tax. For income tax, the contribution of the well off is even more startling: the top fifth of earners now pay two-thirds (67.7pc) of all the government’s income tax receipts.
It is true that Covid-19 and the Government’s response to it are largely responsible for this spike in the “net recipient ratio”. Immediately, before the pandemic, the proportion of households receiving more in benefits and benefits-in-kind than they pay in taxes was 47.5pc.
It then shot up to 55pc after the first year of lockdowns, as support measures, vast increases in NHS funding and a collapse in consumer spending leading to reduced VAT receipts all significantly impacted dependency on the state. This impact would have been even higher had furlough payments been treated by the ONS as a benefit, not as household income.
There are many worrying trends hidden in this latest data. Why has the net recipient ratio fallen by such a tiny amount, from 55pc to 53.8pc, since the economy reopened? The latest figure is the second highest, and coincided with the end of lockdowns and a return to relative normality.
Remember the optimism that our economy would bounce back stronger? These data show just how misplaced it was. We are a long way from clearing the economic damage.
If you exclude retired households – who understandably pay relatively little in income tax – it becomes clear that middle earning households are net recipients. The amounts may seem small – £563 last year – but as recently as in 2016/17 middle earners paid over £3,300 more in tax than they received from the state.
How has this happened? The biggest difference is in the value of the benefits-in-kind they received – up in nominal terms from £7,605 per middle income household in 2016/17 to £13,272 last year, an extraordinary increase of 74.5pc.
Can anyone say that our hospitals or schools have seen commensurate improvements? Such is the wait for treatment that there are now 400,000 more people not in employment or looking for employment than there were during the pandemic.
We are now in a vicious cycle; NHS spending is increasing, but the marginal gains are minute. The benefits bill is soaring (£298.7bn in 2021-22 – up from £168.7bn in 2017-18) as fewer people work and more claim welfare.
The pandemic may be in the past but the Government is still putting its arms around us, with an Energy Price Guarantee worth hundreds of pounds for every household in the country, and inflation-linked increases in pensions and disability payments.
How long can this go on? Should we expect the ratio to fall in the future, or are we relaxed about more and more households receiving more from the Government than they pay in tax?
The rich’s pips are squeaking as the middle classes become increasingly dependent on the state. Look at the recent anti-work movement characterised by the rise of quiet quitting, “Bare Minimum Mondays” or “acting your wage”.
Consider attendance levels across Whitehall, or recent reports that UK employees spend an average of 1.5 days a week working from home, compared to an international average of 0.9 days.
The latest ONS data raise big, almost existential, questions. Is it sustainable in the long term for a growing number of people to “receive” more from the state than they “contribute”?
Does this – albeit inadvertently – give strong incentives to the electorate to favour ever higher state expenditure, particularly as the top fifth of earners pay half of all tax meaning that, for most people, someone else will pick up the bill? Above all, is the founding principle of the welfare state of a generous safety net for all now out of control? Are we not at risk of trapping people in welfare dependency?
It doesn’t need to be like this. The net recipient ratio can fall – as it did between 2010 and 2019 when it dropped from over 52pc of the population to under 48pc.
Moreover, that fall happened when, just as now, the average age of the population was increasing significantly. An ageing population does not necessarily mean that the net claimant ratio will increase. But it does require tough controls on spending.
It is time for this net recipient ratio to be part of the fiscal conversation. That most people receive more from the state than they contribute in tax cannot continue to be brushed under the carpet. | United Kingdom Business & Economics |
Feelings about cryptocurrency may be shaping the jury in Sam Bankman-Fried's criminal trial.
He's charged with fraud following the collapse of crypto exchange FTX.
One prospective juror said he couldn't be objective given "everything negative" he's heard of crypto.
Cryptocurrency itself isn't on trial, but strong feelings about the virtual currency may be shaping Sam Bankman-Fried's criminal trial.
During an otherwise plodding day of jury selection on Tuesday in Manhattan federal court, two prospective jurors shared some of their feelings about cryptocurrency.
One potential juror said he believed he harbored a bias in the case because of "everything negative" he's heard about the tokens.
"I'm not sure I could be totally unbiased about crypto given the history and everything negative I've heard about it," he told US District Judge Lewis Kaplan on Tuesday afternoon.
Strong feelings about cryptocurrency, Kaplan explained, weren't relevant in the case. Prosecutors allege that former billionaire Bankman-Fried defrauded customers and investors of FTX, a cryptocurrency exchange he ran. He did this by commingling funds with Alameda Research, a cryptocurrency hedge fund he also controlled, they say.
Jurors, Kaplan said, would be tasked with determining whether Bankman-Fried's actions fell into the legal parameters of fraud.
After the man said he believed he would be biased — and explained that he had just started a new job and is supposed to be the best man at an upcoming wedding — Kaplan dismissed him from the case.
Lawyers and Kaplan must choose 12 jurors and six alternates for the trial, which is scheduled to last six weeks. He told prospective jurors earlier in the day that he expected to conclude the selection process by Wednesday morning, before opening statements.
Familiarity with cryptocurrency, the dramatic collapse of FTX, or Bankman-Fried's case specifically isn't necessarily disqualifying to be a juror. Several prospective ones had said they'd learned about the case through news publications and podcasts. None, as of early Tuesday afternoon, said they were a customer or lender with FTX or Alameda Research.
Another prospective juror said she worked at the private equity firm Insight Partners, which she said lost money from investing in FTX and Alameda Research.
But she didn't have any personal dealings with the company and could be impartial in the case by deciding "on the basis of the facts," she said. Kaplan didn't immediately dismiss her from the jury pool.
Other jurors raised different concerns. One prospective juror said she would have a problem rendering a guilty verdict if Bankman-Fried faced the death penalty.
The trial is not, Kaplan assured her, a death penalty case. She appeared comforted to learn that.
Kaplan did not mention that Bankman-Fried faces a potential — if unlikely — sentence of over 100 years.
Read the original article on Business Insider | Crypto Trading & Speculation |
MetaMask, the world’s biggest self-custodial hot (internet-connected) wallet with over 22 million users, has added the option for users to convert cryptocurrencies into fiats like USD, as a growing list of web3 players strive to make digital assets usable in the real world.
Wallets that allow users to have full control over their digital assets, hence “self-custody”, are becoming more popular after the collapse of FTX that exposed the flaws of centralized exchanges. The challenge is that they are historically hard to navigate for they require a certain level of technical challenges, but players like MetaMask are working to make them more user-friendly.
The cash-out feature initially supports the conversion of only ETH, the world’s second-largest cryptocurrency, into types of fiats that depend on one’s location. To start with, users pick the country they are in. They then will decide the amount to cash out, at which point they will see a list of third-party, so-called “off-ramp” providers, including Moonpay and Transact — which already facilitates MetaMask’s cash-in, or what the crypto world likes to call it, on-ramp process.
From there, Moonpay will take over and send the ETH to users’ designated bank accounts after calculating the exchange rate. Within minutes, the funds will show up in the bank. Users can also withdraw to PayPal, which is already a partner of MetaMask enabling its on-ramp process.
The off-ramp option could help accelerate MetMask’s mass adoption — provided that the solution is smooth and cheap enough for the average user. But fees can add up quickly.
For one, users are responsible for the gas fee, which is paid to network validators for conducting transactions on the underlying decentralized network. They also likely have to pay Moonpay or other cash-out providers a transaction fee. Let’s see how the costs are divvied up according to the MetaMask demo, using Moonpay in the U.S.:
- The user chooses to withdraw 0.05 ETH
- 0.00021 ETH goes to the gas fee
- 0.0458 ETH is sold
That means there’s an additional transaction cost of 0.00399 ETH, which is about 8% of the total total transaction. Not an insignificant fee.
Of course, transaction costs will vary among users depending on the available withdrawal partners in their markets. The feature is rolling out first in the U.S., the U.K. and parts of Europe “with plans to expand to more regions to cater to our worldwide community,” according to MetaMask’s announcement.
MetaMask isn’t the only one trying to make it easier for users to spend their crypto. Recently, Gnosis, a blockchain network known for low gas fees, introduced a Visa card that allows users to spend cryptocurrencies from their self-custodial wallets in Europe, with plans to expand the service to the U.S. and Hong Kong. | Crypto Trading & Speculation |
BOJ’s Record-Bond Buying Is Driving Need for Yield-Curve Tweaks
The Bank of Japan is purchasing government bonds at a record pace this year, a factor that likely prompted its recent move to allow larger yield movements to reduce the strain on its control of longer-term interest rates.
(Bloomberg) -- The Bank of Japan is purchasing government bonds at a record pace this year, a factor that likely prompted its recent move to allow larger yield movements to reduce the strain on its control of longer-term interest rates.
Doubling the effective cap on benchmark yields in December and again last month has yet to significantly reduce the BOJ’s bond buying, raising the possibility that more changes will be needed to help rein in purchases.
The increase in buying after each policy tweak also raises the question of whether the BOJ moved too slowly in adjusting its settings, given how aggressively it had to respond to stop investors pushing yields too far.
Calculations by Bloomberg indicate that total buying will reach ¥124.6 trillion ($857 billion) unless market pressure relents and the BOJ is able to scale back its operations. The projected figure is up 12% from 2022, and 4.5% from the previous high in 2016 when the central bank launched yield-curve control to make its stimulus more sustainable by reducing the need to buy JGBs.
“If the BOJ decreases the amount it buys, market participants take that as a sign it’s close to exiting the policy, which boosts yields and forces it to increase the purchases,” said Naomi Muguruma, chief fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo.
The central bank has had to intervene in the market twice with unscheduled purchase operations since July 28, when it made its latest policy adjustment. Total buying in those two forays to slow sharp yield gains totaled ¥700 billion.
The benchmark 10-year yield reached the highest level since 2014 at 0.655% this month as traders tested the BOJ’s tolerance. Data Friday showed inflation above the central bank’s 2% target for a 16th consecutive month, further emboldening investors who see YCC ending sooner than central bank is prepared to acknowledge.
Concern over China’s economic slowdown and the outlook for US interest rates add to the BOJ’s difficulty in trimming bond purchases, Muguruma said.
The Reserve Bank of Australia’s “disorderly” exit from its own yield-control program suggests a tough period ahead for Japanese policymakers. Debt purchases to defend the RBA target came at a financial cost given the subsequent increase in yields, it said.
“The existence of a yield target under the YCC policy, even with progressive shifts to wider bands and higher ceilings, may not necessarily taper the BOJ’s JGB purchases,” Stephen Chiu, chief Asia foreign-exchange and rates strategist at Bloomberg Intelligence, wrote in a research note.
--With assistance from Toru Fujioka.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Asia Business & Economics |
Many of Wednesday's papers focus on the measures announced in the King's Speech and how they have been received.
According to the Times, senior Tories think the measures in the speech aren't a "game changer" and may not do enough to revive Conservative electoral fortunes. They want the chancellor to go further and bring tax cuts forward to this month's autumn statement.
In an editorial, the Daily Telegraph says there were some "eye-catching" proposals, but the paper questions whether they offered the Conservatives a "coherent springboard for a successful bid for re-election". For the Daily Mail, the speech drew the election battle lines, but the paper also says it's troubling there is nothing to "quicken the pulse" about the economy.
The Guardian accuses Prime Minister Rishi Sunak of offering old ideas when new ones are needed. It says there are some welcome changes - such as a football regulator - but that "the good is dwarfed by the ugly", referring to more anti-green measures such as new licences to look for oil and gas in the North Sea.
The Daily Mirror calls the Speech "vapid, shallow and tired" and says it offered only "shabby electioneering" and political gimmicks. It praises some measures, such as requiring serious criminals to attend their sentencing, but said overall the direction was wrong and slow.
The Daily Telegraph carries a report from Gaza describing a "last stand" by Hamas fighters at a hospital in the north of the territory. The paper says Israeli forces have cornered the few remaining members of a 1,000-strong battalion at the site and quotes one commander, Lt Col Blich, saying Hamas's forces have proved less formidable than feared. "They talk the talk but they don't walk so good," he says.
The Guardian has more detail about the insistence of Sir Mark Rowley, commissioner of the Metropolitan Police, that he can't ban the pro-Palestinian march planned for Armistice Day this Saturday. The paper says a "defiant" Sir Mark has resisted what the paper calls a "chorus" of cabinet ministers calling for the ban and insisted on the independence of his force instead.
The Times says further discussions between the government and the Met are expected today. Downing Street is said to have asked how Sir Mark reached his decision. The Daily Mail says it hopes Sir Mark's decision to "give a green light" to the march won't result in a riot at the Cenotaph. It reports that groups of football hooligans are planning to "protect" the monument in case marchers veer off course.
According to the Financial Times, the accounting watchdog has scrapped plans for a full-scale shake-up of boardroom rules. The Financial Reporting Council says it's protecting competitiveness, but critics say the move marks the unravelling of long-promised corporate governance reforms.
And the Times reveals that, among women, the joint-heaviest binge-drinkers in the world are British. A new report from the Organisation for Economic Co-operation and Development said one in four British women had at least six small drinks in one session at least once a month. They were matched only by women in Denmark.
Sign up for our morning newsletter and get BBC News in your inbox. | United Kingdom Business & Economics |
Subsets and Splits