Aurelia Butler

“I do not think we have to match. That is my view and we have to monitor other indicators like inflation,” Finance Secretary Benjamin Diokno told reporters on Friday during his weekly media briefing. His comments were embargoed until Monday.Diokno sits in the policy-making Monetary Board that will meet on Aug. 17 to set the central bank’s benchmark rate that stands at 6.25% following a total of 425 basis points hikes since May last year.The Monetary Board has four current members, including the central bank governor, but three seats are still vacant.Inflation is expected to return to within the central bank’s 2% to 4% target range in the fourth quarter, Diokno said.Headline inflation eased for a fifth straight month at 5.4% in June. First half inflation stood at 7.2%.On Friday, Bangko Sentral ng Pilipinas Governor Eli Remolona said it is too soon to declare victory in the battle to curb consumer price pressures amid high core inflation and persistent upside risks.”We will look at all the numbers. We are data dependent,” Diokno said, adding that authorities will take stock of the Fed rate hike’s impact on both global and domestic economy.The Fed delivered a quarter-percentage-point rate increase, as expected, on July 26, and has not ruled out raising rates further if data warranted. More

France’s new automotive subsidies are “paving the way” for Europe’s car industry to withstand the threat of an influx of cheaper Chinese electric vehicle imports, according to finance minister Bruno Le Maire.Under a package of measures outlined in May to support green industries, the French government will only pay subsidies for new electric vehicles based on the emissions of their producers. That will hit manufacturers from China, where the industry relies on electricity largely powered by coal.Speaking in Beijing, where he met Chinese leaders to discuss trade and investment this weekend, Le Maire said he was “not concerned” about the threat to Europe’s carmakers from Chinese electric vehicle imports.“I think with our new legislative decisions, we pave the way in Europe for a less naive approach, taking into account the level of emissions of the industry,” he said.European manufacturers are alarmed by Chinese advances in EVs, with the country taking the lead in battery production and its carmakers outselling western rivals in China’s domestic market. While Chinese EV sales are still at an early stage in Europe, they could reach 1.5mn vehicles by 2030, equivalent to 13.5 per cent of the EU’s 2022 sales, according to Allianz.For European carmakers, the simultaneous loss of market share at home and in China would have a severe impact. The groups face additional pressure from an EU policy requiring the phasing out of internal combustion engines by 2035.Under the new French law, which is due to be fully adopted by parliament by year-end, however, Chinese-made electric vehicles would probably not qualify for incentives, which are worth between €5,000 and €7,000 per car for new electric vehicles.“Each year I’m spending €1.2bn to support the green industry and to support the EVs, never mind whether they have been produced by industry which is emitting a lot of CO₂ or by industry that is emitting less CO₂,” Le Maire said, explaining why he was changing the policy. “I’m determined to support the European car industry and the French car industry.” But Le Maire said he would welcome more Chinese direct investment in Europe’s EV industry. China’s XTC New Energy Materials recently announced joint ventures with French nuclear group Orano to produce battery materials.China’s EV leader, BYD, based in the southern technology hub Shenzhen, is considering building a factory in Europe, while China’s Envision is building a battery plant in the north of France as part of a partnership with Renault. “We expect to have more Chinese investments in France more specifically in the field of green transition and green mobility,” said Le Maire, who also travelled to Shenzhen on Sunday to meet the chief executives of BYD and XTC.

The finance minister, whose visit followed a meeting in China this year between Emmanuel Macron and Xi Jinping, on Saturday met vice-premier He Lifeng, who oversees economic policy.“We need China as a key partner for global growth,” Le Maire said.He added that the two sides had reached an agreement to resolve what France calls “regulatory discrepancies in the cosmetics sector”. French exporters are concerned that China’s regulatory standards may require them to hand over trade secrets, Bloomberg has reported. “The total amount of trade of cosmetic goods to China is around €3bn a year,” Le Maire said, noting that the Chinese market represented between 30 and 35 per cent of total revenues for many French cosmetic companies. “So I’m not talking about peanuts.” More

The writer is a former US ambassador to the EU in the Clinton administrationA new transatlantic framework between the US and EU, comparable to Nato, is needed in order to address the challenges of the 21st century. Nato is currently performing indispensable service in supporting Ukraine against Russian aggression, as it did in the 1990s in ending the wars in Bosnia and Kosovo. But the alliance is consuming all the attention of leaders on both sides of the Atlantic at a time when we face issues that go beyond its mandate. Military security, economic security and prosperity are intertwined and must be co-ordinated, not kept in separate silos.Consider the challenges we face: the rise of China; the existential threat of climate change; securing fragile supply chains and critical minerals; transformational technologies like artificial intelligence; looming nuclear threats from Iran and North Korea; and the task of rebuilding Ukraine. All of these demand greater US-EU co-operation than ever before. Precedents for building this new relationship are plentiful: the 1990 Transatlantic Declaration under President George HW Bush; the 1995 New Transatlantic Agenda under Bill Clinton (which I helped negotiate); and the 2021 announcement of a “renewed Transatlantic partnership” that created the joint Trade and Technology Council, which is doing important work in a number of areas. More recently, the US and EU have worked closely together to impose on Russia the stiffest economic sanctions ever. Vladimir Putin’s efforts to break the transatlantic relationship have failed. The US is the EU’s largest bilateral trade and investment partner. A third of transatlantic trade consists of intra-company transfers. And the percentage of investment in each other’s markets accounts for more than 30 per cent of total global investment. American companies invest more than three times as much in Ireland as they do in China.But more is needed. While attendance by American presidents and European heads of state at Nato summits is automatic, summit meetings between US and EU leaders are sporadic at best. There is no common vision for the future and we each go our own ways on important initiatives without advance consultation with governments and businesses on the other side of the Atlantic. In the past few weeks, with no US input, the European parliament adopted a sweeping law regulating AI, while the White House focused on a voluntary approach, with Congress yet to formally address the issue. Last year, Congress passed the Inflation Reduction Act to provide over $360bn in subsidies and tax incentives to US-based companies to encourage clean technologies, in effect excluding European ones. With the COP28 summit approaching, the US and EU have starkly different approaches to climate change. Europe recently approved a carbon border adjustment mechanism to tax carbon intensive imports from the US and elsewhere, and has a cap and trade system, which America has rejected. This autumn’s EU-US Summit should be the occasion for weatherproofing the transatlantic relationship against the political turbulence that lies ahead. Here are six steps that should be taken.First, the increasingly important role that the EU plays in the security area should be recognised. Second, mechanisms should be developed, including a transatlantic impact statement, that would prevent surprises caused by the promulgation of laws without advance consultation across the Atlantic.Third, we should further integrate our economies by negotiating a reformulated transatlantic free trade and investment initiative, with the goal of achieving a tariff-free transatlantic marketplace within 10 years, while protecting national environmental laws; lift restrictions on barriers to investment; integrate capital markets with mutually recognised accounting standards; and allow products to be mutually accepted with one set of tests in one market that satisfies both. This can create western rather than Chinese standards for products sold around the world.Fourth, recreate the transatlantic private sector organisations from the 1995 New Transatlantic Agenda for business, labour, consumer and environmental groups. Fifth, build on the Transatlantic Legislators’ Dialogue to create a Transatlantic Assembly modelled on Nato’s North Atlantic Assembly. And finally, institute annual EU-US Summits.These measures would build a stronger geopolitical and economic transatlantic partnership, supplementing our successful military alliance, ready to meet the global challenges of the 21st century. More

The regional leaders meeting in Nigeria’s capital Abuja said punitive measures against Niger’s new military leaders could include financial and travel sanctions and a no-fly zone.With military action a possibility too, ECOWAS defence chiefs would meet immediately, they said in a communique, also condemning support for the coup from some foreign nations and military contractors.The coup in Niger has been widely condemned by neighbours and international partners including the United States, the United Nations, the African Union, the European Union and former colonial power France.But the boss of Russia’s private Wagner mercenary force, Yevgeny Prigozhin hailed the coup as good news and offered his fighters’ services. More

OTTAWA (Reuters) – Canadian Prime Minister Justin Trudeau made massive changes to his cabinet last week in a move political analysts say is more theater than substance, but the Liberal leader’s close advisers say it shows his determination to seek a fourth election victory.With a string of recent polls showing the left-leaning Liberals trailing their right-of-center Conservative rivals after almost eight years in power, Trudeau changed or shifted three-quarters of his cabinet.A cost-of-living crisis, a sharp rise in interest rates, and a chronic housing shortage have given the opposition Conservative leader Pierre Poilievre ammunition to attack Trudeau, accusing him of feeding price increases with profligate government spending, calling it “Justin-flation.”Poilievre’s blows are leaving a mark. An Abacus Data survey published on Wednesday showing a 38% to 28% lead in public support for the Conservatives, enough to ensure their victory were an election held now. Other polls have shown a more narrow difference between the two parties.”There’s huge fatigue with this government,” said Frank Graves, president of EKOS Research polling company. With the shuffle, “they’re trying to make it look new, even though it’s not,” he said.Trudeau described the shake-up as a way to build up his core economic team in response to cost-of-living challenges that Canadians have grappled with for more than two years. But with the influential Finance Minister Chrystia Freeland, who is also deputy prime minister, keeping her job, some analysts are questioning the real impact of the changes.”I don’t sense any change of direction. Given that the main players – the finance minister and the prime minister – are signaling that it’s business as usual,” said Robert Asselin, senior vice president of policy at the Business Council of Canada. He said the shuffle was “a bit of theater.”Trudeau’s minority government has a deal with left-leaning New Democrats, who have promised to keep the Liberals in power until 2025. But the deal is not binding and Trudeau needs his campaign team ready to go at any time.Trudeau, 51, is pressing the reset button to gear up for a fight to become the first leader since 1908 to win four consecutive elections, two senior government sources said.People close to Trudeau said he is showing no signs of stepping down and letting someone else take over after winning a majority in 2015, and minorities in 2019 and 2021. Trudeau isn’t making a “beeline for the exit,” one of the sources said. “He’s in it to win it.” The new cabinet is “ready to go out on the campaign trail,” the second source said. Neither source was authorized to speak on the record.By the time the next election is due in 2025, Trudeau will have been in power for 10 years, and Canadians could be in the mood for a change. No Canadian prime minister since Wilfrid Laurier in 1908 has won four consecutive elections. Even in the 2021 race, Liberal lawmakers who campaigned door-to-door said they had spoken with many voters who had grown weary with Trudeau. However, the central bank has said that the headline inflation will return to its 2% target before the next election is due.”Cost of living is a household wallet issue, and for now it is the ballot issue. But only for now,” said Shachi Kurl, president of Angus Reid Institute polling company.”Any advantage the Conservatives have on this may well evaporate if we see inflation and interest rates ‘normalize’ by the next election.” More

US hiring is expected to have slowed again in July, which could help make the case for the Federal Reserve to keep interest rates on hold this autumn.The labour department is forecast to report on Friday that the US added 184,000 jobs in July, according to economists polled by Reuters, down from the 209,000 added in June. The unemployment rate is expected to be steady at 3.6 per cent, while month-over-month average hourly earnings are expected to have slowed to 0.3 per cent from 0.4 per cent the month prior. US employment has remained resilient this year, even as the Fed has raised interest rates to the highest levels in 22 years. But after months of expectation-beating reports, hiring in June cooled more than expected. Investors and economists will be watching closely to see if that slowdown persists. The Fed will also be watching the employment figures. The US central bank this week raised interest rates by 0.25 percentage points to a range of 5.25 to 5 per cent. Traders are divided over whether this will be the last increase of the cycle, and chair Jay Powell at this week’s meeting made clear the Fed had not yet decided whether the committee would raise rates again in September. A strong report this month would add to the case for further hikes, while a weak report would lower conviction about further tightening. Kate DuguidWill the Bank of England deliver another extra large rate rise? Attention turns back to the Bank of England next week with markets split on how much officials will raise interest rates by. Following a surprise 0.5 percentage point rate rise to 5 per cent in June, traders upped bets that the BoE would move by the same amount on August 3, boosted by faster-than-expected pay growth data earlier this month. But expectations dialled back following June’s inflation print, which showed the rate had cooled by more than economists had forecast, to 7.9 per cent.Markets are now tipping in favour of a 0.25 percentage point rate increase, giving such a move a 70 per cent probability, and economists polled by Reuters are also plumping for 0.25 percentage point increase.This would keep the BoE in line with the increases by the US Federal Reserve and European Central Bank this week. But some big banks including NatWest, Barclays and BNP Paribas still expect another 0.5 percentage point increase, to 5.5 per cent. “Core inflation [which strips out volatile food and energy prices] surprised to the downside in June and came in lower than the previous month, but this good news should not be overstated,” said Imogen Bachra, head of UK rates strategy at NatWest. “Still-high services inflation combines with higher-than-expected wage inflation to keep a 50 basis point hike in August more likely than not, we think,” she added. Service inflation is a key focus of the BoE’s monetary policy committee, with the rate easing to 7.2 per cent in June, still significantly higher than the 6.7 per cent forecast the BoE had in its May monetary policy report. Mary McDougallWill the eurozone return to growth?The eurozone is expected to return to slight growth in the second quarter, while inflation among its members is set to keep falling in July, boosting the single currency bloc which has struggled since Russia’s full-scale invasion of Ukraine last year. Gross domestic product in the 20 countries that share the euro stagnated or even mildly contracted in the past two quarters. Yet economists polled by Reuters predict growth of 0.1 per cent in the three months to June when that data is released on Monday.Inflation is also expected to be heading in the right direction, following falls in German and French price growth in July, despite it rising in Spain in the period. Economists forecast consumer prices in the bloc rose 5.2 per cent in July, down from 5.5 per cent in June. That would be the slowest rate of eurozone inflation since January 2022.The numbers will be closely watched by policymakers at the European Central Bank who this week raised the possibility of pausing their interest rate rises in September after announcing a quarter percentage point increase.Riccardo Marcelli Fabiani, an economist at consultants Oxford Economics, said this week’s national inflation data were “a mixed bag” while adding they provided “no reason for fearing the broad disinflationary trend the eurozone is going through at the moment may grind to a halt”. Martin Arnold More