Aurelia Butler

LONDON (Reuters) -Britain will host the world’s first global artificial intelligence (AI) safety summit this week to examine the risks of the fast-growing technology and kickstart an international dialogue on regulation of it.It will take place at Bletchley Park – where Britain’s World War Two code-breakers worked – in southern England on Nov. 1-2.Here’s what we know about the gathering:WHO IS GOING?Organisers told Reuters there would be around 100 guests, including world leaders, tech company executives, academics and nonprofits. The full guest list has not been made public.Some world leaders – including German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau – will not attend, but U.S. Vice President Kamala Harris, European Commission President Ursula von der Leyen, China’s tech vice minister Wu Zhaohui and United Nations’ Secretary-General Antonio Guterres will.China’s presence is another sign of thawing relations with Britain, after its top diplomat James Cleverly visited Beijing in August in the first trip by a British foreign secretary in five years.Executives from the best-known AI companies in the world – including Google (NASDAQ:GOOGL) Deepmind CEO Demis Hassabis and Sam Altman, who founded ChatGPT creator OpenAI, which is backed by Microsoft (NASDAQ:MSFT), will also attend. Representatives from Alibaba (NYSE:BABA) and Tencent will be there.Billionaire entrepreneur Elon Musk will join the event.Academics and nonprofits, which have warned of the risk of the rise of AI, will also take a leading role, represented by AI “godfathers” such as Stuart Russell and Geoffrey Hinton, alongside the Alan Turing Institute and the Future of Life Institute.WHAT WILL BE DISCUSSED?The aim of the summit is to start a global conversation on the future regulation of AI.Currently there are no broad-based global regulations focusing on AI safety, although some governments have started drawing up their own rules. For instance, the European Union has written the first set of legislation governing its use for the bloc.According to the summit agenda, there will be a series of roundtable discussions on threats posed by future developments in the tech.Topics include how AI systems might be weaponised by hackers, or used by terrorists to build bioweapons, as well as the technology’s potential to gain sentience and wreak havoc on the world.Experts and regulators appear split on how to prioritise these threats, with the EU’s long-awaited AI Act prioritising potential infringements of human rights – such as data privacy and protection from surveillance – versus the so-called existential risks which dominate much of the summit’s agenda.WHY IS IT HAPPENING NOW AND IN THE UK?British Prime Minister Rishi Sunak wants Britain to be a global leader in AI safety, carving out a role after Brexit between the competing economic blocs of the United States, China and the European Union.The event comes almost a year after OpenAI released AI-powered chatbot ChatGPT to the public, sparking international debates over the rapidly-developing technology’s potential, with some experts comparing it to climate change or nuclear weapons.WHAT WILL IT ACHIEVE?When the summit comes to a close on Thursday, Sunak is expected to deliver a speech outlining what participants have agreed on, before joining Musk for a live discussion to be broadcast on X.A recent Financial Times report said Sunak plans to launch a global advisory board for AI regulation, modeled on the Intergovernmental Panel on Climate Change (IPCC).When Sunak announced the summit in June, some questioned how well-equipped Britain was to lead a global initiative on AI regulation.Since then, U.S. President Joe Biden has issued an executive order governing the use of AI across the country, the EU has edged closer to passing its own AI Act, and the G7 agreed its own code of conduct for companies using the technology.Last week, the UN announced it had formed its own AI advisory board – made up of a few experts from industry, research, and different governments.But advocates say Britain has a role to play as an intermediary between the world’s three great power blocs – the U.S., the EU, and China – and hope the summit will lay the groundwork for future international dialogue on the matter. More

Policymakers are arguing against further hikes due to tighter financial conditions linked to higher yields and an easing economy. Investors are closely scrutinizing the U.S. Treasury’s plan to borrow $776 billion in the final quarter of 2023, which is lower than projected.Key economic indicators such as October’s consumer confidence report, August’s S&P/Case-Shiller home price index, and the upcoming October jobs report indicating labor market conditions are under close watch by investors. The Bank of Japan maintains interest rates while making its yield curve control policy more flexible. Euro zone inflation and GDP figures are also on the horizon.The government’s large deficits, particularly the $1.7 trillion for fiscal 2023, are causing concern amidst robust economic growth. The Treasury’s fourth-quarter borrowing estimate is $776 billion, with a first-quarter 2024 estimate of $816 billion, shaped by advice from the Treasury Borrowing Advisory Committee.Investors are also keeping a close eye on recent auctions such as the $38 billion sale of 7-year notes and a $23 billion auction of 30-year bonds. These auctions, along with the Treasury’s borrowing plans, are crucial in understanding the U.S.’s fiscal trajectory amidst rising Treasury yields.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

BEIJING (Reuters) – China on Tuesday set out plans to develop a free trade zone in its northwestern Xinjiang region, rooting it in President Xi Jinping’s ambitious Belt and Road Initiative to connect the country to Europe through economic corridors.Rights groups accuse Beijing of abuses against Uyghurs, a mainly Muslim ethnic minority that numbers around 10 million in Xinjiang, including the mass use of forced labour in internment camps. China denies any rights abuses. Opening up Xinjiang as a free trade zone aligns with broader Chinese government plans to boost cross-border trade and infrastructure connectivity across northern China, including in Inner Mongolia and Heilongjiang, Jilin, and Liaoning provinces.The plan proposes giving officials in Xinjiang greater autonomy to enact policies to attract foreign investors from neighbouring countries, of which all but Afghanistan are members of China’s ambitious project to revive the ancient Silk Road.Officials from the region’s local government and the Xinjiang Production and Construction Corps will be tasked with establishing the Xinjiang Pilot Free Trade Zone, the plan said.Xinjiang Production and Construction Corps, was sanctioned by the United States in 2020 – and later Canada and the European Union -for human rights abuses.In December 2021, the U.S. also enacted the Uyghur Forced Labour Prevention Act, prohibiting the import of goods into the U.S. that are either produced in Xinjiang or by companies listed on the Uyghur Forced Labour Prevention Act Entity List unless the importer can prove that the goods were not produced with forced labor.Volkswagen (ETR:VOWG_p) investors at a shareholder meeting in May demanded that the carmaker request cooperation from its joint venture partner to conduct an independent audit of labour conditions at a site in Xinjiang.”It is necessary to firmly establish the overall national security concept…and effectively strengthen the construction of risk prevention and control systems,” the plan from China’s cabinet read.Chinese officials hope that turning Xinjiang into a free trade zone will also bolster its ambitions to see more countries settle payments in the Chinese yuan, rather than U.S. dollars, particularly when paying for commodities. More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Eurozone inflation has fallen more than economists expected to 2.9 per cent in October, the slowest annual growth in consumer prices since July 2021, after the bloc’s economy started to shrink in the third quarter.The big reduction from 4.3 per cent in September was mainly a result of falling energy prices and a drop in food inflation, according to Eurostat, the EU statistics arm. Economists polled by Reuters had expected eurozone inflation to be 3.1 per cent in October.The sharp slowdown in prices reflected weaker activity in the eurozone economy, which Eurostat said shrank 0.1 per cent in the three months to September, undershooting economists’ forecasts, after contractions in Germany, Ireland and Austria offset growth in Spain and France.The figures add to evidence of stagnation in the eurozone economy, which has barely grown in the past year as consumers and businesses have faced rising borrowing costs, weaker global trade and the biggest surge in the cost of living for a generation. The drop in underlying inflation adds to expectations that the European Central Bank will not raise interest rates further, after it held its benchmark deposit rate steady at 4 per cent last week, ending its unprecedented series of 10 consecutive increases.However, economists said the disinflation process was likely to slow as the Israel-Hamas war pushes up energy prices and the base effect of comparing energy prices with last year’s high levels diminishes. Inflation ranged from 7.8 per cent in Slovakia to minus 1.7 per cent in Belgium.“Looking ahead, inflation is unlikely to keep falling this quickly,” said Jack Allen-Reynolds, an economist at consultants Capital Economics, adding that “energy inflation will probably pick up a little in the next few months” and EU survey data pointed to a stabilisation in services inflation.Core inflation, which excludes energy and food and is closely watched by the European Central Bank as a gauge of underlying price pressures, fell in line with expectations to 4.2 per cent, down from 4.5 per cent the previous month. Services inflation fell 0.1 percentage points to 4.6 per cent. But ECB president Christine Lagarde said last week that wage growth was “critically important to determine the inflation outlook”. She pointed out that details on the next round of collective wage bargaining agreements with unions would only come “way into 2024” — suggesting the ECB would wait until then before deciding if it could start cutting borrowing costs.“The ECB needs to see wage inflation slowing and this could take a further six months,” said Mark Wall, chief European economist at German lender Deutsche Bank.Eurozone energy prices fell 11.1 per cent from a year earlier, while the price of food, alcohol and tobacco rose 7.5 per cent, compared with 8.8 per cent the previous month. The month-on-month rate of inflation was 0.1 per cent.Austria’s economy contracted 0.6 per cent in the third quarter, while Irish output fell 1.8 per cent. Spain grew 0.3 per cent, France 0.1 per cent and Italy stagnated. Figures released on Monday confirmed Germany’s place as one of the world’s weakest major economies after its gross domestic product shrank 0.1 per cent.Compared with a year earlier, output in the economies of the 20 countries that share the euro was 0.1 per cent higher in the third quarter. That contrasts with a rapid expansion of the US economy, where annualised third-quarter growth was reported at 4.9 per cent last week.Third-quarter eurozone GDP was weaker than the zero growth forecast by economists in a poll by Reuters. Eurostat said the bloc’s slight contraction was also a reversal from upwardly revised growth of 0.2 per cent in the previous quarter. “Momentum going into the fourth quarter remains exceptionally weak, weighed down by tight financial conditions,” said Rory Fennessy, an economist at consultants Oxford Economics. “The eurozone economy is set for a period of economic stagnation, with growth only returning once real income growth turns sufficiently positive.” More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The Bank of Japan has taken a significant step to end its seven-year policy of capping long-term interest rates after a sharp rise in US bond yields, setting the stage for a gradual unwinding of massive monetary easing measures as it sharply raised its inflation outlook.The BoJ’s policy board on Tuesday announced a near-unanimous decision to allow yields on the 10-year Japanese government bond to rise above 1 per cent, revising its so-called yield curve control policy for the second time in three months.The bank said the 1 per cent ceiling on 10-year yields would be regarded as “a reference”, noting that strictly capping long-term interest rates could entail “large side effects”. The BoJ previously said it would offer to buy 10-year bonds at 1 per cent in fixed-rate operations, after raising the cap from 0.5 per cent in July.BoJ governor Kazuo Ueda said the board wanted to make the controls on the bond market more flexible as a step to avoid future volatility in financial markets, including currencies.“In July, we did not think that the [10-year JGB] yields would approach 1 per cent so quickly,” Ueda said at a news conference on Tuesday. “The biggest factor behind this is the bigger than expected rise in US Treasury yields.”The decision marked one of the BoJ’s biggest steps towards exiting its long-running experiment with ultra-loose monetary policy, as the weakening yen, rising bond yields and persistent inflation put pressure on Ueda to begin unwinding core parts of its accommodative stance.The central bank maintained its policy rate at minus 0.1 per cent, the world’s only negative interest rate. But it also significantly revised its inflation forecast upward, saying it expected 2.8 per cent core inflation in the 2024 fiscal year, instead of its previous forecast of 1.9 per cent.“In its final phase, the YCC seems to have become more of a dead letter,” said Hiroshi Miyazaki, senior economist at Mizuho Research & Technologies. “Investors will question the BoJ’s stance that it will patiently continue with monetary easing, so they will expect the next step such as the lifting of negative interest rates to happen more quickly.”Price growth in Japan has been more persistent than expected this year, with annual inflation at 4.2 per cent in September, excluding energy and fresh food prices.Ueda has argued that the main factor pushing up prices is a rise in import costs and that the central bank needs to wait for more sustainable signs of wage growth to ensure the economy does not fall back into decades of deflation.On Tuesday, Ueda acknowledged that the BoJ was more likely to hit its 2 per cent inflation target on a sustainable basis. “But we have not yet reached a situation where we can be fully confident,” he said. The growing gap between borrowing costs in Japan and those of the US and Europe — especially after 10-year US Treasury yields surged to their highest levels in 16 years this month — has forced the BoJ to repeatedly make large JGB purchases to keep yields below its 1 per cent ceiling.Ahead of Tuesday’s decision, the yen touched new lows against the dollar as hedge funds tested Japanese authorities’ willingness to intervene to defend the currency.Foreign exchange analysts said the main takeaway for currency markets was that the BoJ was attempting to weaken the YCC cap and remove a “target” for the market.“The ultimate objective is to engineer an exit from YCC without explicitly telling the market they are doing so — it will be feeling in the dark to test how far above reference range we can get — but the direction of travel is clear,” said Benjamin Shatil, foreign exchange strategist at JPMorgan.The yield on 10-year JGBs hit 0.941 per cent, after having risen to as much as 0.957 per cent in morning trading ahead of the announcement, its highest level since June 2013.The yen fell as much as 0.9 per cent against the dollar to a low of ¥150.41. The Japanese currency is down about 12.8 per cent against the dollar this year.Additional reporting by Hudson Lockett and William Langley in Hong Kong More