Aurelia Butler

The official, speaking on background, said that Secretary of State Antony Blinken made the decision following more than 100 briefings to Congress by the State Department and that the Biden administration remained committed to working in “close consultation” with that body.”The security situation in Haiti remains untenable due to violence perpetrated by violent gangs, and the people of Haiti cannot wait,” the official said.The funds include $95 million for security mission support and $15 million to the Haitian National Police to counter gang violence. “The Biden Administration’s choice to override the hold I had placed on U.S. taxpayer funding for the ill-conceived Haiti MSS (Multinational Security Support Mission) is extremely disappointing,” Senator Jim Risch, the top Republican on the Senate Foreign Relations Committee, said in a statement.Risch and Representative Michael McCaul, the Republican chairman of the House of Representatives Foreign Affairs Committee, said in March they had put “holds” on funds to Haiti because they needed “a lot more details” before approving them.The State Department said at the time it was engaging with Congress to get approval for the funds, seen as essential for the deployment of Kenyan police in the Caribbean nation, where spiraling gang violence has cut off food supplies and forced hundreds of thousands of people from their homes.Leaders of the foreign relations committees have approval power over the money, but the administration can override their holds if it decides a situation is extreme enough to warrant going ahead. More

BRUSSELS (Reuters) -European Union finance ministers cautiously backed on Thursday the idea of an EU industrial policy that would help correct market failures, work where better solutions cannot be used or to provide EU public goods, the chairman of the ministers said.”We did acknowledge that there can indeed be situations in which carefully designed industrial policies can play a useful role,” Paschal Donohoe told a news conference after the ministers’ discussions.”But these tend to be where market failures are present, where first best solutions are not available or more positively where we’re trying to identify and deliver pan-European public goods,” he said.The ministers were discussing industrial policy at the level of the 27-nation block because Europe’s global competitors such as China and the United States have theirs and use them to gain competitive advantage. The EU only has separate national industrial policies, moderated by the EU’s competition rules to preserve a level playing field, which makes it more difficult to compete globally in sectors where scale is important, like “green” industries.”There is a growing recognition that with many of the world’s largest economies taking a more activist approach to industrial policy, Europe cannot afford to be a bystander,” European Economic Commissioner Paolo Gentiloni said.”In the current geopolitical landscape, there are limits to what we can achieve by continuing to conduct industrial policy only at the national level,” he said.A European Commission paper prepared for the ministers’ discussions said France spent around 0.6% of GDP on industrial support in 2019, while Germany and the U.S. spent around 0.4% of GDP each. China spent 1.7% of GDP.While in France and the U.S. the aid was for research and development, the money in China mainly took the form of production subsidies, credit at below-market rates and subsidised access to land.The Commission paper said that, because the EU had little money to finance an industrial policy, it could only for now coordinate national policies to avoid fragmentation of its single market.”Industrial policy would benefit from EU-level funding to facilitate the flourishing of industrial value chains across the Union as a whole,” the paper said. Gentiloni said the discussion on industrial policy would be handled by the next European Commission, due to take office in October and the next European Parliament, which will have its first session in July.”We must also strengthen the European dimension of our industrial competitiveness with appropriate competencies and funding for industrial policy at the EU level. This should be part of the broader reflection on what happens after the expiry of Next Generation EU in 2026,” he said, referring to the EU’s post-pandemic joint borrowing called Next Generation EU. More

LONDON (Reuters) – Traders upped bets for a Bank of England rate cut in August, helping to underpin a pre-election rally for UK stocks and government bonds even though the central bank left rates on hold at a 16-year high on Thursday.After the BoE delivered its widely expected decision it hinted that it was edging closer to cuts, prompting money markets to place a 44% probability on a move in August, up from around 32% a day earlier. They priced in a 90% chance of a September cut. Wednesday’s data showing UK inflation has dropped to the BoE’s 2% target have encouraged those bets.Investors now widely see rate cuts boosting the UK economy alongside a predicted landslide in the July 4 general election for the opposition Labour Party, which claims it can rebuild growth and run the country’s debt-laden finances cautiously. That’s a turnaround for UK markets scarred by the 2016 Brexit vote and former Conservative Prime Minister Liz Truss’ under-funded 2022 mini-Budget.”Rate cuts are definitely coming and we have a stable outlook for government for the next few years,” Morningstar European strategist Michael Field said. James Briggs, a portfolio manager at Janus Henderson, said he had a “relatively upbeat” stance towards UK stocks, corporate credit and government bonds, known as gilts. He said UK equity and credit valuations did not yet reflect the economy’s improving prospects and that gilts would benefit because “that tail risk of unorthodox fiscal policy is off the table.”RALLY ON? London’s FTSE 100 share index was steady just below record highs hit in May on Thursday. Sterling slipped 0.2% to around 84.58 percent per euro, but held near its strongest levels since 2022.Two-year gilt yields dropped to their lowest since March after the BoE’s decision, LSEG data showed. UK bonds, which have outperformed U.S. and euro zone government bonds this month, rallied as the BoE said that the outlook for rate cuts was “finely balanced.” Pictet Asset Management senior economist Nikolay Markov was negative on gilts because he suspected Labour, which has a long held image as a tax-and-spend party, might prioritise public spending over keeping state borrowing under control. “The public finances are not in good shape,” Markov said, adding that potential moves by Labour to stimulate the economy would be inflationary. Economists polled by Reuters expect the UK economy to grow by 0.7% this year, in an upgrade to earlier forecasts that had placed Britain at the bottom of the league table for predicted growth among advanced economies in 2024. Becky Qin, multi-asset portfolio manager at Fidelity International, said she would keep a neutral stance on UK stocks until she saw further signs of sustainable economic growth. “Inflation data is also not as good as the BoE probably hoped for,” she said, referencing UK services sector inflation that stayed stubbornly high at 5.7% in May.CAUTIONWhile UK markets are rallying, there are few signs as yet that they are picking up long-term support. Tracker funds that offer low-cost exposure to UK equity indices have pulled in new money during three of the last four weeks since Prime Minister Rishi Sunak called the election, data from Lipper Global shows. Actively managed UK stock funds, which are a longer term commitment because they charge higher fees and promise superior returns over time, have suffered outflows in recent weeks in a trend that has persisted for years.Janus’ Briggs said a recent spate of takeovers of UK-listed companies could prompt investors to question if they were missing out on bargain valuations. Overall, the mood among investors towards the UK was buoyant as rate cut hopes added to the pre-election buzz. Yvan Mamalet, senior market strategist at SG Kleinwort Hambros, said his firm was bullish on UK stocks and gilts, although he expected rate cuts to pressure sterling. And Newton Investment Management fixed income portfolio manager Carl Shepherd said he favoured long-term gilts. “There are idiosyncratic risks in the UK and there is that sticky services inflation, but I think (once we) get the election out of the way, there’d be hopefully a period of more stability.” More

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