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Long Covid is exerting a silent drag on work and health, say officials and economists who warn that a struggle to count the costs of the condition is leaving authorities “shooting in the dark”.The impact of long Covid — defined as symptoms that continue or develop three months after an initial infection, and last at least two months — has dealt a long-lasting blow to the productivity of health systems, with ripple effects on the wider workforce.But four years after the emergence of the pandemic, attempts to assess how large and enduring the hit will be are hampered by a dearth of data that accurately quantifies the effects of long Covid on the labour market and the finances of healthcare providers.“We have growing evidence that the burden of long Covid is still exacerbating pressure on our health systems,” said Hans Kluge, European regional director of the World Health Organization. “But countries are not monitoring and reporting data consistently. We need better reporting, surveillance and diagnostics, but also data on hospitalisations, mortality and healthcare costs.”Without this, he warned, “we will continue to shoot our policy bullets in the dark”. The WHO aims to determine the extent of long Covid among health workers involved in rehabilitating Covid patients in Armenia, Georgia, Italy, Poland and the UK.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.One EU estimate suggests that long Covid may have cut labour supply in the bloc by up to 0.5 per cent in 2022, the equivalent of more than 1mn full-time workers. Studies in the US and UK have reached broadly similar conclusions — suggesting the condition has driven the recent increase in workplace absence in many countries.But no one knows how many people who stopped or scaled back work because of long Covid have been forced to leave their jobs for good — and how many have been able to return, either in a reduced role or gradually resuming their previous responsibilities.Tiko Bakhtadze, a 36-year-old nurse based in Tbilisi, Georgia, who fell severely ill with the virus early in the pandemic, suffered protracted long Covid symptoms that meant for a period she “wasn’t as productive as I used to be”. Persistent memory problems, for example, meant she had to take detailed notes when she returned to work. Bakhtadze has now largely recovered, insisting she never let her patients down or compromised their safety.Tiko Bakhtadze said long Covid symptoms meant that for a period she ‘wasn’t as productive as I used to be’ More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is research associate at Oxford university’s China Centre and at Soas. He is also a former chief economist at UBSRecent speculation about a significant devaluation of the still closely managed renminbi looks rather fanciful given that China runs a large manufacturing trade surplus and a balance of payments surplus of about 2 per cent of GDP. And that is probably understated.Yet Japan’s surplus is larger, and this has not stopped the yen suffering a deep slump. China could follow suit. The strong dollar is partly the reason but in China, the main story is the persistent decline in interest rates towards zero, domestic economic and financial circumstances, and a policy conundrum.It should be noted that there is little point in or benefit from a policy-induced or accidental depreciation of the renminbi, which — were it to happen — would have far-reaching economic and political consequences.From a domestic angle, there is no case for helping exports, given China’s strong external trade position. It would also be precisely wrong to further discourage imports and consumption when significant changes are needed in distributional and income policies to strengthen domestic consumer demand. The government should announce targeted income and consumption fiscal support for households, financed by withdrawing support from companies and state entities, thereby neutralising incentives for capital to leave the country, at least temporarily. But this would involve an unlikely political volte face. If such fiscal support is limited and monetary easing prevails, a weaker renminbi will aggravate China’s deeply embedded financial imbalances and its endemic proclivity to overproduction and exports.This would, in turn, exacerbate existing trade frictions in new sectors such as electric vehicles and climate change equipment, and older sectors such as steel, metals and shipbuilding. A perceived policy of currency depreciation would doubtless incur hostile reactions from the US — particularly under another Donald Trump administration — and the EU.China’s government would also not welcome the disruptive repercussions of a currency depreciation shock. Memories of the 2015 financial chaos in which a mishandled adjustment of the renminbi precipitated significant currency pressure and capital flight are still fresh. And yet, it could still happen.China’s leaders plan to ease monetary policy, lowering bank reserve requirements and interest rates — as they made clear following the Politburo meeting at the end of last month. Since the latest easing cycle started in 2022, interest rates have fallen by about 0.7 to 0.8 percentage points, with five-year borrowing rates falling to 3.95 per cent. Inflation, however, has fallen by more. Real borrowing rates for companies and households after adjusting for inflation have jumped from a bit above zero to 3 to 5 per cent, tightening the restraints on private firms and the economy.Unless inflation in China is going to turn up sustainably, which seems a long shot given enduring supply and demand imbalances, nominal interest rates are headed, incrementally, towards zero. These circumstances then raise for China a new so-called Mundell-Fleming trilemma, named after the two economists who argued that a country can only ever choose two out of these options: an exchange rate pegged to another country, an independent monetary policy and open capital flows. China has typically opted for a soft peg and monetary independence. Over the past several months, the government has moved to harden the peg, and required state banks to intervene to support the renminbi close to about 7.25 to 7.3 to the dollar.In coming weeks and months, we should expect reductions in interest rates in an economy that remains on the cusp of deflation with softening domestic consumer demand. Loose financial conditions, further falls in some asset prices such as property, and weak investment returns would probably exacerbate unrecorded capital outflows despite controls. In the face of both, the renminbi is likely to get weaker.This outcome is made all the more likely if the growth of liquidity in the financial system expands so much as to swamp the practical capacity of currency reserves to maintain a relatively fixed currency and finance larger capital outflows. Between 2014 and 2017, I estimate China’s financial system assets rose from four to 11 times the reserves. In 2023, at $65tn, they were 20 times as large. This cannot go on without limit, and eventually, following Stein’s law, the renminbi will be the weakest link. More

“Monetary policy needs to remain data dependent: when inflation will reach the central bank’s target range is uncertain and there is a risk of further negative global shocks,” the OECD report said.The Reserve Bank of New Zealand (RBNZ) last month kept its cash rate unchanged at 5.5% for the sixth consecutive meeting and reiterated that restrictive monetary policy was necessary to further reduce capacity pressure and bring down inflation. It has a monetary policy goal of keeping inflation within 1% to 3%.Though rate hikes since October 2021 had led to a marked increase in financing costs and slowed the economy, inflation was likely to be persistent as high migration had pushed domestic demand higher than RBNZ’s expectations, OECD said.”Growth is projected to be slow in 2024, before picking up in 2025, but risks originating offshore are high,” it said.”The pandemic and spending overruns led to a permanent increase in the government spending to GDP ratio, resulting in a substantial deterioration of New Zealand’s fiscal position.”The OECD conducts country surveys every two years to review the economic policies of its members.The New Zealand government said the report reinforced the importance of bringing government spending under control.”This report reinforces the urgent need to rebuild the New Zealand economy after a period of elevated spending, inflation and interest rates,” Finance Minister Nicola Willis said in a statement.New Zealand is in a technical recession after its economy shrank slightly in the fourth quarter. The centre-right National party, which returned to power last October, had blamed the previous Labour Party’s policies for the recession.New Zealand is already acting on several initiatives proposed by the OECD, Willis said, adding her government would consider the other recommendations. More

The RBA is widely expected to keep its official cash target rate at 4.35%, leaving it unchanged for a fourth straight meeting since a hike in November. While the bank had tempered its hawkish outlook in recent months, analysts warned that a stronger-than-expected consumer price index inflation reading for the first quarter could now put some hawkish language back on the table. The RBA is now widely expected to at the very least reiterate that interest rates will stay high for longer, especially as inflation moved away from its 2% to 3% annual target rate in the first quarter. While inflation did retreat substantially from 30-year highs through 2023, sticky service costs and relatively strong consumption stalled this disinflationary trend in recent months. “While we don’t expect the Board to explicitly discuss a rate hike, the communication on Tuesday will be more hawkish than March,” ANZ analysts wrote in a note. “We continue to see the first rate cut  of a shallow easing cycle in November although, as we noted following the CPI , there is a risk this gets pushed into next year.” Analysts at Westpac said that while a scenario where the RBA threatens more rate hikes was not impossible, it appeared unlikely now, and would probably come later in the year if inflation remains sticky. But Westpac analysts also said that such a scenario did not appear likely, and that they expected the RBA’s next move to be a cut, albeit much later in the year. In the near-term, Australian interest rates are expected to remain high, and the RBA is likely to signal as much on Tuesday.Australian stock markets, specifically the benchmark ASX 200 index, are likely to fall in the face of any hawkish signals from the RBA, especially if the central bank brings back its threat of rate hikes.But even the prospect of high for longer rates bodes poorly for local stocks, given that such a scenario heralds weaker domestic earnings and limits investment.Bank stocks may see some strength on the prospect of high rates, although this trend is also expected to be offset by weakening credit activity.The Australian dollar is likely to see some strength in the event of a hawkish RBA, with the AUDUSD pair set to rise. The AUDUSD pair rose 0.1% on Monday and was trading close to a two-month high. Anticipation of a hawkish tilt by the RBA, coupled with recent weakness in the U.S. dollar, saw the AUDUSD mark strong gains over the past three sessions.  More

SINGAPORE (Reuters) – The dollar was broadly steady on Monday as a soft U.S. jobs report boosted wagers that the Federal Reserve may still cut rates twice this year, while the yen was a tad weaker to start the week. The yen had clocked last week its strongest weekly gain in more than 17 months following two bouts of suspected Japanese government interventions to pull the currency away from 34-year low of 160.245 per dollar. On Monday, the yen weakened 0.43% to 153.62 per dollar in early trading, having touched a three-week high of 151.86 on Friday, as the dollar lost additional ground after the jobs data.Mainland China’s markets were closed for three days last week. But the offshore yuan had risen on the back on the dollar’s broad retreat after data showed a cooling U.S. jobs market, Fed Chair Jerome Powell confirmed the central bank’s easing bias and Japan intervened to push the yen higher.The offshore yuan was last at 7.1959 per dollar, and gained more than 1% last week.Japan is closed for a holiday on Monday as is Britain, likely resulting in lower volumes. But with Japanese authorities choosing last week’s quiet periods to intervene in the yen market, traders will be on high alert through the day. The more than 9 trillion yen that the Bank of Japan is estimated to have spent to prop up the frail yen last week has only bought it some time, analysts say, as the market still views the currency as a sell.The Commodity Futures Trading Commission’s weekly commitments of traders report showed that non-commercial traders, a category that includes speculative trades and hedge funds, reduced their yen short positions to 168,388 futures contracts in the week ended April 30, still close to their largest bearish positions since 2007.While Japan clearly has capacity to intervene more, the broader macro environment remains quite negative for the yen, according to Goldman Sachs strategists, noting intervention “success” can only go so far. “But, buying time is still valuable, as it reduces the potential for economic disruptions from the exchange rate adjustment and could stabilize the currency until the economic backdrop becomes more supportive for JPY,” they said in a note.FED PATH Data on Friday showed U.S. job growth slowed more than expected in April and the increase in annual wages fell below 4.0% for the first time in nearly three years, as signs of labour market cooling raised optimism that the U.S. central bank could engineer a “soft landing” for the economy.Markets are now pricing in 45 basis points of cuts this year, with a rate cut in November fully priced in.The Fed held interest rates steady at the conclusion of its two-day monetary policy meeting, as expected, but signalled it was still leaning towards eventual rate cuts, even if they may take longer to come than initially expected. “While inflation is likely to remain closer to 3% than 2% this year, we project just enough cooling in inflation to meet the Fed’s bar for a summer rate cut,” Citi strategists said in a note.”The case for cuts will be much stronger if we are correct that softer April jobs are a sign of further weakening to come.” The dollar index, which measures the U.S. currency against six rivals, was at 105.12, having touched a three week low of 104.52 on Friday.The euro was up 0.07% at $1.0765, while the sterling was last at $1.2547, up 0.02% on the day. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Indonesia’s central bank is “ready for the worst” and will provide more support for the rupiah if needed, the head of its monetary management department has said.Bank Indonesia was prepared to intervene in the currency market — as it did last month when the rupiah hit multiyear lows — but would not rely solely on intervention, Edi Susianto, the monetary department’s executive director, told the Financial Times.Susianto’s comments come as Asian economies brace for more currency volatility following the US Federal Reserve’s signal this month that it will hold interest rates higher for longer.Bank Indonesia raised rates unexpectedly late last month and warned of worsening global risks, saying the rate increase was a pre-emptive move to ensure inflation remained within its target.Indonesia was facing an “unusually” challenging environment from global and domestic factors, Susianto said in an interview.“We believe that we are ready for the worst situation” of a more hawkish Fed and heightened geopolitical tensions in the Middle East, he said.Countries around the world are trying to protect their currencies from a strengthening dollar amid growing expectations the Fed will delay cutting interest rates while inflation stays stubbornly above its 2 per cent target.Bank Indonesia in April stepped into the spot, non-deliverable forwards and bond markets in a “triple intervention” to support the rupiah, Susianto said. The government also asked state-owned enterprises to limit their US dollar purchases.Japan and Vietnam have also intervened to support their currencies, while the central banks of Malaysia and South Korea have said they are prepared to do so.Adding to the wider pressure from a stronger dollar, Indonesia was also experiencing a cycle of dividend repatriation, Susianto said.He said the repatriation by foreign companies, which has further boosted demand for the dollar, was expected to last until the end of May, after which the rupiah would become “more manageable”.Since last month’s rate rise, Indonesia had noted net foreign inflows into government bonds and central bank bills, Susianto said.Separately, central bank governor Perry Warjiyo told a news conference on Friday that it would auction rupiah securities twice a week — instead of once — from this week to attract more inflows.Susianto said the bank was encouraging companies to use hedging instruments and pursuing efforts to deepen the market so there would be less need for central bank intervention.Any future monetary policy action would be “data dependent”, said Susianto, declining to comment on whether the bank was prepared to raise rates further.Before last month’s rate uplift, economists had widely expected Bank Indonesia to begin cutting rates from later this year, though some now believe the easing may not happen.Brian Lee, an economist with Maybank Investment Banking Group, said he did not rule out another rate increase, even though the rupiah had strengthened since the surprise increase last month.“Our base case is for the BI to maintain its policy rate at 6.25 per cent this year to safeguard rupiah stability. It’s unlikely that BI will be able to cut interest rates, given that the central bank expects the Fed to cut only in December,” said Lee.“A resumption of rupiah’s depreciation, at the pace seen during the lead-up to April’s meeting, may trigger another BI rate hike.” More

(Reuters) -Australian bank Westpac raised its share repurchase programme by A$1 billion ($661 million) and declared a special dividend on Monday citing a strong balance sheet, even as its first-half profit fell 16% on tight competition and high costs.Traditionally beneficiaries of rising interest rates, the country’s so-called Big Four lenders have spent the past year sacrificing margins to write new home loans and paying more to depositors, narrowing their closely watched “net interest margin”.Westpac’s net interest margin slipped to 1.89%, down 7 basis points from a year earlier, while net interest income remained largely flat at A$9.13 billion.Its consumer division, which writes just over a fifth of the country’s mortgages, reported a 32% drop in its first-half profit to A$1.08 billion owing to competition.As a result, the country’s No. 3 lender by market value posted a net profit of A$3.34 billion, below last year’s A$4.00 billion. That slightly missed Visible Alpha consensus estimate of A$3.43 billion compiled by UBS.”While inflation has fallen, getting it down to target range is proving difficult globally and here in Australia,” CEO Peter King said in a media release.”It is likely interest rates will stay higher for longer.”Westpac declared an interim dividend of 75 Australian cents per share and a special dividend of 15 cents apiece. It hiked its existing share buyback programme by A$1 billion to A$2.5 billion.The lender’s common equity tier 1 ratio – a key measure of spare cash – stood at 12.55%, 105 basis points above the operating range.”The capital management is a strong support at WBC (dividends and buybacks) and the starting valuation much more attractive than peers,” analysts at Citi wrote in a client note.Last week, National Australia Bank (OTC:NABZY), the country’s top business lender, also said it would double a buyback programme that began last August to A$3 billion even after it reported a 13% drop in its first-half cash earnings.Westpac shares were trading 1.4% higher in early trade.($1 = 1.5131 Australian dollars) More