Aurelia Butler

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The £70bn price tag for Britain’s beleaguered High-Speed Rail 2 project is set to be revised upwards to account for inflation within months to a figure closer to £91bn, according to calculations by the Financial Times. The expected rise in the headline figure comes as UK prime minister Rishi Sunak and chancellor Jeremy Hunt are considering further major cuts to HS2 to bring down the ballooning cost of the project.HS2 was meant to speed passengers between London and northern cities including Manchester. But now ministers and officials are refusing to guarantee the line will be built beyond Birmingham, undermining the most visible symbol of the government’s pledge to “level up” Britain’s regions.Sunak’s review of the scheme follows more than a decade of budget overruns, time delays, contract fiascos and management failings. An internal report last year found HS2 was struggling to control costs on the London-to-Birmingham initial phase on which construction started in 2020.At the heart of Sunak’s dilemma is a question that has always dogged HS2: would the tens of billions of pounds of future spending be better spent on smaller capital projects — for example electric car charging infrastructure?“Rishi is someone who is very money-focused and I don’t think he is remotely happy with the amount being spent on the project for the return,” said one close ally.In June rail minister Huw Merriman announced several further delays to the programme, including pausing indefinitely the redevelopment of Euston station, where there is still no finalised plan. At the time he said HS2 was costed in 2019 values and that the Treasury would update the price to account for “significant inflation”.Treasury officials say the complex calculation may not be completed until before the next spending round, expected next year.The latest HS2 estimate for the project in 2019 prices is £53bn to £72bn. Applying inflation to the project pushes the overall price tag up to a range of £67bn to £91bn, in current prices, according to FT calculations based on the Office for National Statistics’ construction output price indices. One person familiar with the process said the FT’s estimate was “not unreasonable” as a ballpark figure. But they cautioned that applying a single indice to the headline figure did not account for the differing inflation pressures on HS2’s various input costs.An HS2 spokesman said the organisation was carrying out a “detailed assessment” of inflation, the impact of the Covid-19 pandemic and the rephasing of parts of the project.“This is a hugely complex, cross-sector project with a significant lifespan. As such it is subject to thousands of variables and using a single measure of inflation to calculate costs is not sufficient,” the spokesman said.The HS2 project has been paused at Euston station despite demolition that has razed businesses and homes to the ground and left the area a building site. More

TORONTO (Reuters) -Oracle is ready to cater to Canadian banks for their open banking needs and provide tools as needed when the country make its available, a financial services executive with the cloud computing giant said.”We are open banking ready,” Sonny Singh, executive vice president of Oracle (NYSE:ORCL) Financial Services said in an interview. “It just depends whether the policies that Canada decides to deploy will require banks to go down that path.” Singh was speaking at SIBOS in Toronto where fintech, financial firms and tech companies gathered to discuss sustainable finance, risk management in an unpredictable landscape, among other key topics.Open banking allows consumers and small businesses to securely and efficiently transfer their financial data among financial institutions and third party service providers.It is not yet available in Canada, and is available in other countries, like Australia and Britain.”From a technology perspective, this is about having banking applications that are exposed through API and have a robust mechanism of monetization,” Singh said.Oracle’s suite of financial products – used in 140 countries, billing and managing $500 billion in revenue – includes purpose-built products for financial services from financial crime, compliance applications and risk management. Canadian banks are partnering with fintech firms as they look to address the banking needs of thousands of newcomers in the country and facilitate easy banking access. Oracle already counts some Canadian banks as clients for one or many of its services, that includes cloud to enterprise applications. The American company lost billions in market value earlier this month after its weak forecast suggested that strong competition in the cloud-computing industry and a digital spending pullback were weighing on its revenue growth. Oracle, known for its database software, has been playing catch-up with cloud majors such as Amazon (NASDAQ:AMZN) Web Services, Microsoft (NASDAQ:MSFT)’s Azure and Alphabet (NASDAQ:GOOGL)’s Google Cloud at a time businesses are dialing back tech spending over concerns about the economy. More

TOKYO (Reuters) – Japan’s exports fell in August for a second straight month, weighed by declines in China’s demand for steel and heavy oil and stoking fears of a downturn in the face of elevated interest rates.Ministry of Finance (MOF) data showed on Wednesday exports fell 0.8% year-on-year in August, slower than economists’ median estimates of 1.7% decline and following a 0.3% drop in Japan’s overseas shipments. It was the second straight month of annual declines.By destination, Japan’s shipments to China, its largest trading partner, fell 11% year-on-year in August, marking a third straight month of double-digit drops.”The growth of the Chinese economy itself is weak, or at least that is what is being reflected,” said Takeshi Minami, chief economist at Norinchukin Research Institute.”Therefore … the double-digit decrease in exports suggests that the situation continues to be quite bad, and that the situation does not seem to have bottomed out.”Exports to the United States rose 5.1% year-on-year in August, driven by shipments of cars, mining and construction machinery.Japanese policymakers are counting on external demand to pick up the slack and offset weak consumer spending.However, the trade data dashes hope for prospects for an export-led recovery.Partly reflecting weak domestic demand, imports fell 17.8%, weighed by energy costs, whose base effects fade away.As a results, the trade balance came to the deficit of 930 billion yen ($6.29 billion), marking two straight months in the red, the trade data showed.($1 = 147.7900 yen) More

NEW YORK (Reuters) – U.S. Treasury Secretary Janet Yellen said on Tuesday that she trusts the leaders of the World Bank and the International Monetary Fund to adjust their Oct. 9-15 annual meetings in Morocco in an appropriate way given the country’s devastating earthquake.IMF Managing Director Kristalina Georgieva, World Bank President Ajay Banga and Moroccan Economy Minister Nadia Fettah Alaoui announced on Monday that the meetings in Marrakech would proceed despite the Sept. 8 earthquake that killed over 2,900 people in the nearby High Atlas (NYSE:ATCO) Mountains.In their statement, they said they would make some changes to their meeting plans to adapt content “to the circumstances,” of the disaster. Asked what changes should be made to the meeting, which is expected to bring over 10,000 people to Marrakech, Yellen told reporters: “I’m leaving it to the heads of the World Bank and the IMF to work with the government of Morocco and figure out what’s appropriate and possible. “Of course, we need to be respectful of the tragedies that occurred in this country and the need that there is for first responders to be able to attend to people who’ve been impacted by the earthquake,” she added.Yellen, who controls the dominant U.S. shareholding in both institutions, said after a climate finance event in New York that she would have found it understandable if a decision had been made to hold the meetings elsewhere, and would support any changes that the IMF, World Bank and Morocco deem appropriate.”This is what the government of Morocco strongly wants. It wants the meetings to go on and feels it’s able to do what’s necessary,” she said. “We want to be helpful for the people in Morocco.” Georgieva on Friday told Reuters that Morocco’s prime minister told her it would be “quite devastating” for Morocco’s hospitality sector if the meetings were moved to a different location. More

TOKYO (Reuters) – The dollar remained firm on Wednesday but softened slightly against the yen ahead of a much-anticipated rate decision by the Federal Reserve later in the day.The U.S. dollar index, which measures the greenback against a basket of rivals, stayed mostly flat at 105.13 as traders awaited the Fed’s rate decision. Markets expect the Fed will almost certainly keep rates on hold at 5.25% to 5.50%, putting the focus on the central bank’s forward guidance.Futures markets are pricing in a 30% likelihood of a quarter-point increase in November or 40% chance it will be in December, according to CME FedWatch tool.”We expect the FOMC to retain its forecast of one extra 25 hike by year-end, though it will not follow through with it in our view,” said Carol Kong, economist and currency strategist at the Commonwealth Bank of Australia (OTC:CMWAY).Dollar/yen could see some upside pressure after a hawkish FOMC meeting, she added. The yen last sat nearly 0.1% higher at 147.77 versus the greenback, off Tuesday’s low of 147.92 though hovering near the 10-month trough against the dollar ahead of the FOMC announcement.Speculation increased about a possible sooner-than-expected exit from the Bank of Japan’s ultra-loose policy, but the central bank will most likely keep interest rates ultra-low on Friday and reassure markets that monetary stimulus will stay for the time being amid economic uncertainty.Japan’s top financial diplomat, Masato Kanda, reiterated warnings on Wednesday, saying Japanese authorities are always in close communication on currencies with U.S. and overseas policymakers while keeping a close watch on market moves with a “high sense of urgency”.Meanwhile, the Australian dollar, a proxy for China growth, rose almost 0.1%, holding onto gains after minutes of the Reserve Bank of Australia’s latest policy meeting signalled more interest rate increases to come.The New Zealand dollar ticked up over 0.2% against the dollar near $0.5950. The euro and sterling stood mostly unchanged in the Asian morning, at $1.0680 and $1.2391 respectively.Market eyes will be on UK CPI released on Wednesday, the last bit of inflation data to squeeze in before the Bank of England makes their rate decision on Thursday.In cryptocurrencies, bitcoin BTC=BTSP hovered around $27,210, after touching a three-week high on Tuesday. More