The world’s most powerful financial watchdog has warned of “further challenges and shocks” in the months ahead, as high interest rates undermine economic recoveries and threaten key sectors including real estate.
In his regular update to G20 leaders ahead of their summit in New Delhi this week, Klaas Knot, chair of the Basel-based Financial Stability Board, said: “The global economic recovery is losing momentum and the effects of the rise in interest rates in major economies are increasingly being felt.
“There will certainly be further challenges and shocks facing the global financial system in the months and years to come,” he added.
Knot highlighted real estate as one area authorities should “closely monitor” for signs of stress given its vulnerability to rate rises, and urged “financial providers to those sectors to manage their risks properly”. Read the full story.
Latest property news from China: Country Garden, the cash-strapped Chinese developer, narrowly avoided defaulting on two international bonds after making a late coupon payment.
Here’s what else I’m keeping tabs on today:
Munich motor show: One of Europe’s biggest car shows begins today in Germany. Luca de Meo, the chief of French carmaker Renault, urged European investors to have more “guts” and back companies in the region ahead of the event.
Thanks to everyone who voted in yesterday’s poll. Nearly four-fifths of readers supported the view that politicians in America should make way for a younger generation.
Five more top stories
1. Travis Kalanick’s ghost kitchen start-up CloudKitchens has sacked workers and closed locations in an effort to cut costs, according to people with knowledge of the matter. CloudKitchens, which leases food preparation space to restaurants, has failed to win as many contracts as hoped. Read this exclusive Financial Times story.
2. Apple and Microsoft have argued with Brussels that some of their services are insufficiently popular to be designated as “gatekeepers” under new landmark EU legislation designed to curb the power of Big Tech. The battle between the two US companies and Brussels comes on the eve of the publication of the Digital Markets Act. Here’s more on the new legislation.
3. Kim Jong Un is expected to travel to Russia to discuss weapon sales with Vladimir Putin, a senior White House official said yesterday. A meeting between the two leaders would significantly deepen military ties between North Korea and Russia at a critical moment in the Ukraine conflict. James Politi in Washington has the details.
4. Thousands of festival goers began leaving the Burning Man site yesterday after organisers lifted a driving ban. The event, which has become a playground for technology executives, venture capitalists and social media influencers, turned into a “hellscape” of muck and broken toilets after heavy rains turned the site into a quagmire. Here’s the latest on the ‘exodus’ from the festival.
5. Victoria Villarruel, the vice-presidential candidate on the ticket of radical libertarian economist Javier Milei, enraged human rights groups in Argentina yesterday by holding an event they said justified the crimes of the rightwing military dictatorship that ruled from 1976 to 1983. “It feels like we’re going backwards,” said one leftwing protester. Ciara Nugent reports from Buenos Aires.
The Big Read
Big government is back. The consensus view that a smaller state and lower taxes are good, which rose to prominence in the 1980s under Margaret Thatcher in the UK and Ronald Reagan in the US, is starting to crumble. Challenges such as the Covid-19 pandemic, the transition to greener energy and rising geopolitical tensions have emboldened governments to be more hands-on. But how will we pay for it all?
We’re also reading . . .
Biden’s Middle East policy: The White House’s search for a “grand bargain” with Israel and Saudi Arabia could end up being a grand illusion, writes Gideon Rachman.
Space race: New rules are needed as costs fall and space exploration goes beyond the preserve of superpowers, writes Stephen Bush.
Sequoia Capital’s turbulent year: After a tumultuous 12 months, Silicon Valley’s most storied venture capital firm is fighting to retain the confidence of investors.
Chart of the day
Novo Nordisk has become Europe’s most valuable company, overtaking French luxury goods conglomerate LVMH for the first time. The Danish company’s shares closed yesterday at DKr1,311, giving it a market capitalisation of $428bn. The pharmaceutical group introduced its best-selling weight-loss drug Wegovy in the UK on Monday after its US launch in 2021.
Take a break from the news
Angular suit jackets, skirts, sheer black tights and boardroom pumps — power dressing is back. The AW23 collections have seen the high-powered, corporate glamazon return in all her assertive glory. And trends aside, the messaging of the original movement still holds relevance today.
Additional contributions from Tee Zhuo and Emily Goldberg
Source: Economy - ft.com
