Aurelia Butler

SYDNEY (Reuters) – The head of Australia’s central bank will find out in July whether he will be reappointed to a second term, as customary, or pick a new leader to manage the biggest shake-up of the institution in decades.Treasurer Jim Chalmers told reporters on Thursday he would announce his decision on Reserve Bank of Australia (RBA) Governor Philip Lowe’s (NYSE:LOW) future in coming weeks, but would not be drawn on whether Lowe would keep his job.Lowe, a four-decade veteran at the bank, has been under a cloud since repeatedly saying in 2021 that interest rates would not rise until 2024, only to reverse course and hike in mid-2022 when inflation unexpectedly surged.The RBA has since lifted rates by an eye-watering 400 basis points to an 11-year high of 4.1%, causing financial pain for mortgage holders who feel they were enticed into borrowing by Lowe’s sanguine outlook.In a testy appearance before lawmakers last November, Lowe took the unusual step of apologising for any harm done. “I’m certainly sorry if people listened to what we’d said and then acted on that,” Lowe conceded at the time.The clamour of criticism, particularly in the media, led Chalmers to launch an independent review of the central bank which recommended sweeping changes in its operation and the way policy was formed.It has also led for calls for Lowe to be ousted when his current term ends in September, and perhaps be replaced by someone from outside the bank. The previous two governors, both insiders, were reappointed to another seven-year term and chose to step down after serving three years.Lowe has stated publicly that he would accept reappointment if offered, but Chalmers has been non-committal.Speaking on Thursday, Chalmers said he held Lowe in high regard but stopped short of endorsing him.”Obviously, the Reserve Bank Governor needs to be well placed to implement the recommendations of the review and to take the Reserve Bank into the future,” said Chalmers.”It’s a key institution and obviously makes decisions which matter a great deal to the living standards of the Australian people.”Possible replacements being touted are the current deputy governor Michele Bullock, Treasury official Jenny Wilkinson and former Bank of Canada official Carolyn Wilkins, who also led the review into the RBA. More

The project received 57 votes in favor and 17 votes against. Since the senators modified the text that Brazilian deputies approved, it will require another round of voting in the lower house.The bill is seen as essential in signaling a path toward sustainability of public accounts, particularly after Lula secured congressional approval for boosting social expenditures to assist the poorest people.Under the proposal, government expenditures would not be allowed to rise by more than 70% of any increase in revenue, with spending growth also limited to between 0.6% and 2.5% per year above inflation.If budget goals are not met, expenditure growth would be restricted to 50% of revenue increases.The proposal’s progress in Congress has been praised by S&P, which last week upgraded Brazil’s credit rating outlook.The sponsor of the bill, Senator Omar Aziz, has expanded a list of exceptions to the cap, including an education fund, a constitutional fund for the Federal District and expenditures related to science and technology. Aziz has not modified the timeframe for adjusting expenditures based on inflation, a point that the Planning Ministry said would help the government draft the 2024 budget bill, due to be presented by August.The Brazilian government needs to cut some 32 billion to 40 billion reais ($6.6 billion-$8.3 billion) from next year’s budget, according to Planning Minister Simone Tebet. More

The comments, which were due Wednesday, respond to a March request from the U.S. agency for information on security issues and competition in the lucrative market for data storage and computing power in the so-called cloud.They also follow scrutiny worldwide, including a recent probe by Europe’s antitrust authority into Microsoft’s licensing agreements that allegedly discouraged rival cloud usage. Fees to take data out of various providers’ clouds have also drawn industry criticism.In one example of the public comments Tuesday, trade group NetChoice took aim at Microsoft and Oracle (NYSE:ORCL).”Despite vibrant competition in the cloud industry, a few vendors use anticompetitive practices in order to entrench their position, most often by preventing customers from switching providers in search of lower costs, stronger service offerings, and more innovative solutions for their businesses,” said NetChoice, whose members include market leader Amazon.com (NASDAQ:AMZN), Meta Platforms, Google and other smaller tech players.Google echoed the sentiment in its own filing, saying that “licensing terms enforced by Microsoft, Oracle, and other legacy on-premises software providers distort competition in the cloud.”For instance, businesses that bought software from Microsoft for their own data centers face restrictions and surcharges when migrating those licenses to Microsoft’s top cloud competitors, Google said, in line with comments it made previously. Amazon has made similar criticism.Microsoft and Oracle did not immediately return Reuters requests for comment. Microsoft has updated some terms in response to the criticism and has said, for instance, that it is committed to a broader cloud community success, but rivals have called its changes insufficient.The FTC declined to comment. The Information earlier reported Google’s filing. More

WASHINGTON (Reuters) – The U.S. House of Representatives approved a Republican effort on Wednesday to censure Representative Adam Schiff, a rare move intended to punish the Democrat for his leading role in investigating the conduct of Donald Trump when he was president.The measure’s sponsor, far-right Republican Representative Anna Paulina Luna, argued that a congressional investigation that Schiff led into potential ties between Trump’s 2016 campaign and the Russian government was politically motivated and that the representative had falsely led Americans into believing there was collusion between the two entities.In practice, the measure, which was passed 213-209 along party lines, will result in a probe into Schiff by the Ethics Committee. Shortly after the vote, Democrats, who fiercely and unanimously defended their colleague, shouted “Shame!” at House Speaker Kevin McCarthy, who presided over the proceedings.Schiff has been a frequent Republican target since 2019, when he headed the investigation that led to Trump’s impeachment over his alleged effort to pressure Ukraine to help him win re-election. Trump remained in office because the Senate declined to convict him.Trump was impeached a second time by the House over his actions leading up to the Jan. 6, 2021, deadly riot at the U.S. Capitol. Again, the Senate voted against conviction.The House had defeated a separate censure effort against Schiff last week, when 20 Republicans joined 205 Democrats in opposition. The earlier censure effort came with a $16 million fine, since stripped out. It was unclear how that fine would have been enforced and even Republicans had doubts about its constitutionality. Censures in the House are historically rare.Republican Representative Paul Gosar was censured in 2021 after he posted a cartoon video that showed him killing Democratic Representative Alexandria Ocasio-Cortez, the first time the censure had been used in a decade. More

LONDON (Reuters) – The Bank of England is set to raise interest rates for a 13th time in a row on Thursday, a day after inflation data came in higher than expected again, with investors split on just how big the new hike will be.Economists polled by Reuters last week were unanimous that the BoE would raise rates to 4.75%, their highest since 2008, from 4.5%.But after inflation held at 8.7% in May, financial markets priced in a nearly 50% chance that the BoE would opt for a bigger move and raise rates by half a percentage point.”I think it’s a very finely balanced decision,” said Tomasz Wieladek, chief European economist at U.S investment firm T. Rowe Price, who predicts at least three of the Monetary Policy Committee’s nine members will vote for a half-point hike.Britain’s economy, which has been hit by the shock of Brexit as well as the COVID-19 pandemic and the surge in gas prices caused by Russia’s invasion of Ukraine, has dodged a widely expected recession so far in 2023 though growth looks set to be a minimal 0.25% this year, according to the BoE’s forecasts.Unlike most other big rich economies, output has barely recovered to pre-pandemic levels. However, two inflation readings since the BoE’s last rate hike in May have both been higher than expected, raising fears that Britain faces a more persistent price growth problem than the United States or the euro zone.Households are now also seeing their mortgage bills rise, with average new two-year fixed-rates rising to 6.15% on Wednesday in anticipation of further rate hikes.Financial markets were estimating that the BoE would keep raising rates until they hit 6% – their highest since 2001 – more than the U.S. Federal Reserve which is seen tightening by just a quarter point more and the European Central Bank which investors expect may move twice more.”The UK has a uniquely bad inflation problem,” Krishna Guha, a vice chairman at U.S. investment banking advisory firm Evercore, said.Prime Minister Rishi Sunak – who has pledged to halve inflation this year in an attempt to win back voter support ahead of a national election expected in 2024 – has said he fully backs the BoE’s efforts to tame prices.However, Sky News said on Wednesday that unnamed members of the government thought Governor Andrew Bailey was failing at his job.FALLING FASTER?The central bank last month forecast that consumer price inflation, which peaked at a 41-year high of 11.1% in October 2022, would fall to just over 5% by the end of this year and be below its 2% target in early 2025.A significant inflation drop is almost inevitable as energy prices come down from last year’s peaks.But incoming BoE policymaker Megan Greene – who will join the MPC next month – said last week that getting inflation from 5% to 2% may prove a tougher task than the initial fall.Core inflation – which strips out more volatile prices to show an underlying trend – rose to a 31-year high in May. Wieladek, who worked at the BoE from 2008 to 2015, said wages looked set to keep on growing at an annual rate of around 6%, almost twice the level consistent with 2% inflation, given the shortage of workers available to many employers.In previous decades, British wage growth has only slowed after a large rise in unemployment, and Wieladek estimated the BoE would need to engineer a recession that pushed unemployment up to 6.0%-6.5% from its current 3.8% to achieve this now.”Unfortunately, the Bank of England is in a situation where they will have to hike until something breaks,” he said. Most economists are less gloomy and think rates are more likely to peak near 5% as recent falls in energy and raw material costs affect the price of other goods and services.”Market pricing for a lot more rate hikes could reverse quite quickly – especially if weaker inflation is ultimately allied with easing wage pressures,” strategists at Nomura wrote. More

The Bank of England is expected to raise interest rates by a quarter point to 4.75 per cent on Thursday, with increasing calls for tougher action to fight persistent high inflation.Headline inflation stuck at 8.7 per cent in May, according to worse than expected data on Wednesday, with core inflation — which excludes volatile food and energy prices — rising to 7.1 per cent, the highest level since 1992.Some economists said the inflation figures had been so bad that the BoE might surprise with a 0.5 percentage point rise at its midday announcement or signal a large move to come at the next Monetary Policy Committee meeting in August. Allan Monks, UK economist at JPMorgan, said the two inflation figures since the BoE’s last meeting left him “feel[ing] strongly that the MPC should act forcefully by hiking 0.5 percentage points this week”.But he said the MPC would probably stick with a smaller increase, “purely on the basis that the BoE has provided no signal of a step up, no forward guidance on the issue”.With financial markets now expecting interest rates to hit 6 per cent by the end of the year, driving up the cost of mortgage payments, ministers are braced for a backlash among core Conservative voters ahead of next year’s election.Rishi Sunak, prime minister, will say on Thursday that he feels “a deep moral responsibility” to tackle inflation, arguing that any delay in dealing with the problem will make matters worse.“That’s why our number one priority is to halve inflation this year and get back to the target of 2 per cent,” he will say. “And I’m completely confident that if we hold our nerve, we can do so.”

Almost half of all mortgage holders said they had found it difficult to pay bills and service their debts in the past few months, according to a survey from debt relief charity, StepChange, carried out before the latest concerns over mortgage rates.In response to the gathering mortgage misery for households coming to the end of fixed-rate deals, Labour, on Wednesday night, called on the government to require lenders to help struggling borrowers. This support could come for instance through lengthening the term of a mortgage or allowing them to switch to interest-only payments for a temporary period.The Conservatives argue that banks are already required to engage with customers struggling to pay their home loans under a regime policed by the Financial Conduct Authority. After Wednesday’s figures, the prime minister’s January pledge to halve inflation has become harder to hit. Successfully lowering inflation to 5.8 per cent in the fourth quarter would require bringing down the monthly rate from 0.7 per cent in May to 0.3 per cent for the next six months. Virgin Money, TSB and NatWest were among the mortgage lenders to announce higher interest rates on fixed-rate deals on Wednesday. Average rates on two-year fixes hit 6.15 per cent just ahead of the inflation announcement, up from 5.98 per cent on Friday, according to finance site Moneyfacts. Meanwhile Jeremy Hunt, chancellor, met MoneySavingExpert founder Martin Lewis to discuss rising mortgage rates. Lewis said this week that the “ticking time-bomb” he had warned about had now “exploded”.The combination of stubbornly high inflation, rising interest rates and the increasing cost of servicing government debt have undermined Hunt’s hopes of going into a 2024 election on the back of significant tax cuts.Meanwhile, the theft of meat, alcohol and confectionery from shops last year reached a decade-high of 1.1mn incidents, according to new data on Thursday from the Association of Convenience Stores. More