Aurelia Butler

The Lloyds (LON:LLOY) Bank Business Barometer, which surveys around 1,200 companies across the economy, fell to 36% from August’s 18-month high of 41%.While painting a less downbeat picture than other indicators like the S&P Global PMI, the decline in the Lloyds barometer fitted with other signs of a slowing economy – something the Bank of England highlighted as it left interest rates on hold last week.Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said the BoE’s decision – taken after the survey was conducted – could underpin business confidence in the coming months.”Although the economic environment remains uncertain with inflation and interest rate pressures playing their part, the recent decision by the Bank of England…is likely to help businesses feel more upbeat about the future,” he said.More details about the recent performance of Britain’s economy are due at 0600 GMT when the Office for National Statistics publishes comprehensive growth data for the second quarter.While Lloyds said its gauge of pricing expectations inched higher in September, hiring intentions cooled. The proportion of companies planning to raise salaries also fell, although remained around the average for the year.The survey was conducted Sept. 1-15. More

Taxes are likely to amount to 37% of national income when voters go the polls in the next election which is expected in 2024, up from around 33% in 2019 when the Conservative Party won the last election under its then leader Boris Johnson, the Institute for Fiscal Studies said.The increase means the government run by the Conservatives, who traditionally favour low taxes, will be raising more than 100 billion pounds more each year and the tax burden will be the biggest since at least the 1950s, the independent IFS said.”This is not, for the most part, a direct consequence of the pandemic,” Ben Zaranko, a senior IFS research economist, said. “Rather, it reflects decisions to increase government spending, in part driven by demographic change, pressures on the health service, and some unwinding of austerity.”The current parliament was likely to represent “a decisive and permanent shift to a higher-tax economy,” he said.Prime Minister Rishi Sunak and finance minister Jeremy Hunt are resisting calls from some Conservative lawmakers to cut taxes with the opposition Labour Party ahead in opinion polls.Last week, Hunt said it was “virtually impossible” for him to cut taxes at his Autumn Statement update on the budget on Nov. 22 because of rising debt costs after the surge in inflation and higher interest rates. ($1 = 0.8197 pounds) More

NEW YORK (Reuters) – Federal Reserve Bank of Richmond President Thomas Barkin said on Thursday that the central bank’s decision to hold steady on rates earlier this month was the right move, and it’s unclear whether more monetary policy changes will be needed in coming months. “The range of potential outcomes, to me, is still pretty broad” when it comes to the future of the economy, Barkin said in the text of a speech prepared for delivery before a gathering held by the Money Marketeers of NYU. “That’s why I supported our decision to hold rates steady at the last meeting,” Barkin said. “We have time to see if we’ve done enough, or whether there’s more work to be done,” he added. The Fed, at its policy meeting on Sept. 19-20, maintained its federal funds target rate range at 5.25%-5.50%. It also continued to pencil in another rate rise by year’s end, while suggesting in forecasts that a stronger-than-expected economic outlook means short-term rates will likely stay higher for longer than officials once thought. Aggressive Fed rate rises have been aimed at lowering inflation pressures, and Barkin said the path of inflation remains his key focus. “The path forward to me depends on whether we can convince ourselves inflationary pressures are behind us, or whether we see them persisting,” Barkin said. “I will be watching the labor market closely for those signals.” More

NEW YORK (Reuters) – The International Monetary Fund said on Thursday recent policy moves by Argentina’s government, including wide-ranging tax breaks for individuals and sectors, were aggravating the country’s already complex economic situation.Argentina, battling inflation at 124%, negative net foreign currency reserves, a looming recession and a sliding peso currency, is the IMF’s largest creditor with a $44 billion loan deal both sides are trying desperately to salvage.The South American country is also headed for crunch general elections next month. Economy Minister Sergio Massa, the presidential candidate for the ruling Peronist coalition, is battling to stay in the race against two right-wing rivals.The government in recent weeks has rolled out tax breaks for workers, certain sectors and preferential currency exchange measures for the energy sector, despite pledges to trim spending and improve the fiscal deficit.”The recently adopted policy measures and announcements add to Argentina’s challenges,” IMF spokesperson Julie Kozack said in a scheduled press briefing, citing “very challenging and complex” economic situations.”We are working to better understand and assess the impact of the recent measures and the need for offsetting actions that could be taken to strengthen stability and safeguard program objectives – while not adding to future vulnerabilities.”Kozack said ongoing engagement with Argentina “is in the interest of the fund,” adding that it was “too early to speculate” on the precise timing of the next program review.Asked about dollarization, a key election issue proposed by shock front-runner libertarian Javier Milei, Kozack said it is up to each country but “not a substitute for sound macroeconomic policies.”Massa and Milei face conservative former Security Minister Patricia Bullrich in what is seen as a competitive three-way battle for the presidency on Oct. 22. A November run-off will be held if no candidate wins outright. More