Aurelia Butler

‘If it’s going to drop, it’ll be by the end of next year but that feels like a long time away’ — Tunde, 38, in London’s Canary Wharf Several London commuters expressed unease that higher interest rates could prolong the cost of living crisis, with housing of particular concern.In the financial district of Canary Wharf, Tunde, 38, said his mortgage was due to be renewed next year. “I’m hoping [the interest rate] drops. If it’s going to drop, it’ll be by the end of next year but that feels like a long time away.” James, 44, believed the rate had “topped out” and that the Bank of England would hold at 5.25 per cent. “It’s high, and it has been a shock, but it’s not going to get any worse.” Some renters, however, said they were worried that landlords’ costs would continue trickling down to them. Imogen, 26, said: “Everyone’s rents are still going up.” While Annabel, 27, said she’s considering leaving London due to soaring rents. “Things are just so expensive.” More

In a statement on its website, the Central Bank of Nigeria did not say why the Sept. 25-26 meeting of its Monetary Policy Committee was delayed and a new date would be set later.The postponement comes days after President Bola Tinubu nominated a new central bank governor and four new deputy governors. The Senate is yet to hold confirmation hearings for Tinubu’s picks.In July, the central bank opted for a small rate hike at the first monetary policy meeting since Tinubu suspended central bank governor Godwin Emefiele.Emefiele oversaw a much-criticised system of multiple exchange rates used to keep the local naira currency artificially strong and lent directly to businesses to try to boost growth in Africa’s biggest economy.Tinubu criticised the central bank’s policies under Emefiele at his inauguration in May, saying they needed “thorough house-cleaning”. More

Initial claims for state unemployment benefits dropped 20,000 to a seasonally adjusted 201,000 for the week ended Sept. 16, the Labor Department said on Thursday. Economists polled by Reuters had forecast 225,000 claims for the latest week.The labor market remains tight, with claims in the lower end of their 194,000 to 265,000 range for this year. The Federal Reserve held interest rates steady on Wednesday but stiffened its hawkish stance, with a further rate increase projected by the end of the year and monetary policy to be kept significantly tighter through 2024 than previously expected.Since March 2022, the U.S. central bank has raised its benchmark overnight interest rate by 525 basis points to the current 5.25%-5.50% range. Fed Chair Jerome Powell told reporters on Wednesday that “the labor market remains tight, but supply and demand conditions continue to come into better balance.” Job growth and openings have been slowing. The UAW last week launched a targeted strike against Ford (NYSE:F), GM and Stellantis (NYSE:STLA), impacting one assembly plant at each company. It has threatened to broaden the work stoppages, which for now only involve about 12,700 of the affected 146,000 UAW members. Though striking workers are not eligible for unemployment benefits, the walkout has snarled the supply chain.Ford last Friday furloughed 600 workers who are not on strike, while GM said it expected to halt operations at its Kansas car plant, affecting 2,000 workers. Chrysler-parent Stellantis said it would temporarily lay off 68 employees in Ohio and expects to furlough another 300 workers in Indiana.The claims data covered the period during which the government surveyed business establishments for the nonfarm payrolls component of September’s employment report. The strike is unlikely to have an impact on payrolls as it started towards the end of the survey week. Workers most likely received pay for that week. Claims fell between the September and August survey period.Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, will offer more clues on the state of the labor market in September.The so-called continuing claims declined 21,000 to 1.662 million during the week ending Sept. 9, the claims report showed. Continuing claims remain historically low, a reminder that labor market conditions are still tight. More

The automotive sector witnessed a 28% year-over-year increase in fraudulent applications, paralleling the rise in legitimate applications. This trend underscores the audacity of fraudsters who are capitalizing on the pent-up demand for vehicles following supply chain challenges during the COVID-19 pandemic. “Auto theft rings are now more cunning than ever in their use of very convincing fake IDs,” said Carl Davies, Head of Fraud and Identity, Equifax Canada. Identity fraud constituted 16.2% of all fraudulent applications in Q2 2023 in the automotive space.In the credit card sector, fraudulent applications rose by 37.9%. The creation of synthetic identities, a blend of real and fake information, has become a prevalent method among fraudsters due to its effectiveness in evading detection. This type of identity fraud accounted for 68.5% of all fraudulent credit card applications as demand for credit cards surpassed pre-pandemic levels. “Credit card fraud is a pervasive and evolving challenge in the financial sector,” Davies stated.The mortgage sector experienced an 18.8% year-over-year rise in the fraud rate. First-party fraud made up 54% of all fraud types observed in Q2 2023, up from 46.5% in Q1 2023. Some homebuyers hoping to enter a pricey real estate market are willing to falsify their salary numbers on an application, contributing to this trend. “This isn’t just a ‘little white lie’— it’s fraud. It’s a serious crime. If interest rates remain high, this trend could easily accelerate in the months ahead,” Davies warned.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

ISTANBUL (Reuters) – Turkey’s central bank raised its key interest rate by a lofty 500 basis points to 30% on Thursday, marking a second month of aggressive tightening after President Tayyip Erdogan set aside his long opposition to tight policy.The bank reiterated it is ready to raise rates further as needed to rein in inflation that leapt to nearly 59% in August and is expected to rise into next year. It has hiked rates by 2,150 basis points since June. The lira slipped to 27.105 to the dollar after the decision, just shy of its all-time low touched last month. In a Reuters poll, economists forecast a 500-basis-point hike with forecasts ranging from 27.5% to 31%. The fourth rate hike in as many months “is probably not enough in itself to convince investors that inflation is being brought under control,” said James Wilson, EM sovereign strategist at ING.”We expect further rate hikes will be needed before the end of the year, although the overall direction of policy towards a more hawkish bias should in general be taken as a positive by investors.”Following his May re-election, Erdogan appointed former Wall Street banker Hafize Gaye Erkan to lead the central bank in June as authorities grappled with an economy strained by depleted FX reserves and soaring inflation expectations. Previously Erdogan had supported a low interest rate policy despite high inflation, which triggered a currency crisis in late 2021 and pushed inflation above 85% last year. Partly due to lira deprecation, annual consumer price inflation is seen rising to around 60% by year end.Last month the bank shocked with a 750-point hike that was seen signalling a new determination to battle inflation. Rates rose three times more than expected and sparked the biggest single-day lira rally since 2021.Two weeks later, Erdogan – who since 2018 has repeatedly described himself as an “enemy” of “evil” interest rates – instead said tight monetary policy will help bring down inflation. TIGHTENING CYCLEThe central bank said policy “will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved”. The lira has weakened nearly 70% in two years, primarily due to Erdogan’s long-standing opposition to high rates and influence over the central bank. It dropped again this summer as the new economic team loosened the state’s grip on forex markets and began shedding unorthodox policies and regulations. The central bank has also selectively tightened credit and began rolling back a costly scheme, adopted to halt the late-2021 currency crash, that protects lira deposits against forex depreciation.Based on last week’s Reuters poll, economists expect further monetary tightening to lift the policy rate to 35% by year-end, with forecasts ranging between 30% and 40%.Earlier this month, the government lifted its year-end inflation forecast to 65% and trimmed economic growth forecasts. Erdogan said at the time: “With the support of tight monetary policy, we will bring down inflation to single digits again.” More

JERUSALEM (Reuters) – Financial markets are hoping Prime Minister Benjamin Netanyahu keeps Bank of Israel Governor Amir Yaron for a second term to safeguard the bank’s independence and provide reassuring stability to an economy rattled by political turmoil this year.Yaron has not shied away from criticism of the divisive judicial overhaul plan pushed by Netanyahu’s national-religious coalition that has weighed on Israeli shares and sent the shekel to a three-year low against the dollar.Unease over the reforms, which have sparked one of the biggest waves of protest in Israel’s history, have had significant economic costs, he said.Yaron’s five-year term ends at the end of 2023 and he has been tight-lipped on his plans, only saying he would announce a decision on whether to put himself forward for a second term after the Jewish holiday season ends on Oct. 7. In 2018, when Netanyahu appointed Yaron, an Israeli professor at the Wharton School of the University of Pennsylvania who had lived in the United States for two decades, there was little fanfare and market reaction was muted.”In the current circumstances, the stakes are much higher because there is already fear about curtailing the independence of the central bank,” Karnit Flug, who preceded Yaron as governor from 2013-2018, told Reuters. “Therefore, markets and credit rating agencies are reading more into the question of ‘yes’ or ‘no’ to a second term. They look at what it means for the independence of the institution.”Rating agencies Moody’s (NYSE:MCO), S&P and Fitch have warned of damage to Israel’s institutional independence from the judicial reforms, which the government says is to stop overreach by unelected judges but which many see as a threat to Israel’s democratic values.YES-MAN OR BACKBONE? It is possible Yaron would not accept a second term even if asked, in which case the markets’ focus would switch to whether Netanyahu appoints a yes-man replacement or someone with backbone.”Who will be governor is a major concern for investors abroad,” said Leader Capital Markets Chief Economist Jonathan Katz. “The best scenario is another five years for Yaron,” he said, noting that Yaron represents an independent governor who doesn’t cave to political pressure and speaks his mind.”Second best is another internationally recognised figure who is viewed as a monetary expert,” Katz said.The option markets fear most, analysts say, would be if Netanyahu makes clear he did not want Yaron to serve a second term, and gives the post to a political ally.”He does not have to say ‘I’m not giving a second term’ but he can say it in a way that everybody understands that he did not intend to reappoint (Yaron) and if he does that then this would be terrible,” said Nadine Baudot-Trajtenberg, an economist who served as Flug’s deputy governor.Yaron has characterized his term as ‘challenging’. He has had to deal with the economic fallout of five election cycles, the Covid pandemic, the Ukraine-Russia conflict and a spike in inflation. Jacob Frenkel, Bank of Israel chief in 1991-2000, hopes Netanyahu will succeed in convincing Yaron to stay on, noting his contribution to the stability of Israel’s economy and stellar international reputation. “Israel cannot afford losing this important anchor of stability,” Frenkel said.SCENARIO PLANNINGIt is not clear if Netanyahu wishes to grant Yaron a second term, especially given Yaron’s criticism of the government’s plan to rein in the judiciary – an issue that has been investors’ top concern in 2023. With the weaker shekel helping to push up inflation and interest rates, Yaron has caught flak from some senior members of Netanyahu’s coalition – including threats of legislation – over a jump in rates that has hurt mortgage and other loan holders.It is possible Yaron no longer wants to put up with such political interference. When asked this month by Reuters what he wishes to see in a successor, Yaron said: “Whoever is the governor has to continue to be independent and to express the professional opinion in matters concerning the Israeli economy.”Flug, who opted against a second term and now is vice president of research at the Israel Democracy Institute, said “a lot of what I am thinking now is really something that I had concerns about five years ago, towards the end of my term as a governor.”A few years earlier in 2010, Stanley Fischer accepted a second term and helped Israel weather the global financial crisis. He stepped down mid-term and in 2014 became vice chairman of the U.S. Federal Reserve.Bringing in someone of the status of Fischer was a huge coup for the then finance minister Netanyahu and since then he has preferred internationally known figures who are Jewish or Israeli to lead the central bank.Israeli media have reported that Netanyahu is considering Efraim Benmelech – a professor of finance at Kellogg (NYSE:K) School of Management at Northwestern (NASDAQ:NWE) University. Benmelech told Reuters “there is nothing to report at this point” and has not received a formal offer. Netanyahu’s office declined to comment.If Yaron leaves and no successor is in place by year end, a similar situation to 2018, then deputy governor Andrew Abir would be acting governor. More