Aurelia Butler

“First and foremost, I’d like to reiterate that I firmly believe in the stability and potential of the US market,” Sheikh Tahnoon, who rarely speaks publicly about investments, said in a statement to Reuters.”Despite current fluctuations, we have identified a number of outstanding investment opportunities that we plan to pursue.”Sheikh Tahnoon is one of the most powerful members of the UAE’s ruling Nahyan family and brother of UAE President Sheikh Mohamed bin Zayed. He is one of two deputy rulers of oil-rich Abu Dhabi and oversees a sprawling investment and business portfolio in the emirate.Royal Group’s businesses and subsidiaries span several sectors including healthcare, real estate and construction, AI, technology, hospitality and media, among others.”I want to make it clear that we do not support nor engage in shorting the market,” Sheikh Tahnoon also said, referring to recent market speculation.”We believe in investing for the long-term and actively seeking out opportunities that create meaningful, lasting impact.”In March, Sheikh Tahnoon was appointed chairman of the Abu Dhabi Investment Authority (ADIA), one of the largest sovereign wealth funds in the world, in addition to his role as chair of ADQ, another, smaller Abu Dhabi investment fund. In its 2021 Review released last October, ADIA said its long-term portfolio strategy sets exposure to North America at a range of 45% to 60%, to Europe at 15% to 30% and emerging markets at 10% to 20%. More

BARCELONA (Reuters) – European Central Bank Vice President Luis de Guindos on Thursday singled out the rising price of services as his top concern in the ECB’s fight against inflation, saying they were being driven up by higher wages.Inflation in the euro zone has fallen from record levels, but the price of services, which range from flight tickets to haircuts, are still rising strongly.”What worries me the most in the underlying inflation trend is the trend in service prices,” de Guindos said at an event in Barcelona.”Momentum in services… is rising. There’s demand and that’s because salary increases are accelerating.”The ECB raised interest rates for a seventh straight time last week, albeit at a reduced pace, and hinted at more hikes. Markets expect a fresh, 25-basis-point increase at the ECB’s June meeting and possibly one more by the end of the summer, followed by rate cuts starting early next year.De Guindos said it was too early to say how many more times the ECB would raise its interest rates as this would mainly depend on the reaction to increases in borrowing costs.”Don’t believe anybody who tells you what the terminal rate is going to be,” de Guindos said. “I don’t feel comfortable or uncomfortable (about current investor expectations) but markets can be wrong about this.” More

HONG KONG (Reuters) – China’s securities watchdog on Thursday said that it was willing to work with its counterparts in the United States to promote regulatory cooperation on audits and safeguard the rights and interests of global investors.The China Securities Regulatory Commission (CSRC) was commenting a day after a U.S. accounting watchdog said that it found unacceptable deficiencies in audits of U.S.-listed Chinese companies.”We noticed that the U.S. regulator said the deficiencies they found this time were normal for a first-time inspection,” it said in a statement responding to a Reuters’ request for comment, adding that Beijing would continue to work with the U.S.The U.S. Public Company Accounting Oversight Board (PCAOB) published the findings of its inspections on Wednesday, after gaining access to auditors’ records of the companies under a deal reached in September last year.That access, gained after more than a decade of negotiations with Chinese authorities, kept roughly 200 China-based public companies including Alibaba (NYSE:BABA) and JD (NASDAQ:JD).Com from potentially being kicked off U.S. stock exchanges.The CRSC statement said “the inspection report also didn’t conclude that the audit opinions by relevant auditors were inappropriate,” and that it believed the deficiencies found would help auditing firms rectify their problems and improve quality.Analysts said the deficiencies found by the U.S. watchdog were unlikely to derail the audit deal, but it would be challenging to turn around practices quickly amid continued U.S.- China tensions.”Generally, the PCAOB expected high rates and these are not surprising in the short-term,” said Jackson Johnson, a former PCAOB inspector and president of Johnson Global Accountancy, an audit advisory firm based in Nevada, adding that there was a lot of work to be done to improve the results before the next inspection. Law firm Wilson Sonsini’s senior partner Weiheng Chen said although the deficiency rate in the PCAOB findings was much higher than the average of its reviews, the results would not lead to the re-statement of a company’s financial statements.”So these deficiencies alone would not cause any stock delisting.”Paul Gills, a professor of accounting at Beijing International Studies University, said the PCAOB statement appeared to be strong-worded, but deficiencies had been expected.”I assume most of the issues have already been tackled by the auditors…Even though politics are not supposed to enter into it, they obviously do. And if they (PCAOB) appeared to be too accommodating, they would really get a lot of criticism…accusing them of being soft on China,” he said.Reuters reported in March that the PCAOB has started a new round of inspections in Hong Kong as part of the deal, which is a rare bright spot in Sino-US relations at a time when some business leaders have voiced concerns about the decoupling of the world’s two largest economies. More

The Bank of England on Thursday raised interest rates by a quarter of a percentage point to 4.5 per cent, and warned it would not hit its inflation target until 2025.A seven to two majority on the central bank’s Monetary Policy Committee took rates to the highest level since 2008, as the BoE admitted it had underestimated the strength and persistence of food price rises.Instead of inflation falling below its 2 per cent target within a year, which the BoE had forecast, the central bank now thinks it will only hit the goal at the start of 2025, after the latest date of the next general election. The BoE expects consumer price inflation to fall from the current level of 10.1 per cent to 5.1 per cent in the fourth quarter of 2023, instead of its previous forecast of 3.9 per cent. Any further deterioration in the inflation outlook would leave Rishi Sunak, UK prime minister, missing his pledge to halve inflation by the end of the year. “We have to stay the course to ensure inflation falls all the way back to our target,” said BoE governor Andrew Bailey. “We expect inflation to fall quickly this year.”The BoE now thinks the UK economy will avoid a recession relatively comfortably, forecasting that by mid-2026 gross domestic product will be 2.25 per cent higher than it expected in February. Jeremy Hunt, chancellor, said it was “good news that the Bank of England is no longer forecasting recession”.But he added the interest rate rise “will obviously be very disappointing for families with mortgages”, as he reaffirmed the government’s goal to halve inflation by year-end.Rachel Reeves, shadow chancellor, said families and businesses would be wracked with anxiety following the latest rate rise.“The prime minister should take his fingers out of his ears and admit his personal responsibility for a Tory mortgage crisis leaving so many worse off,” she added.Underscoring the concern over food price rises, John Glen, chief secretary to the Treasury, called a meeting with supermarket bosses.Government insiders said ministers did not intend to give bosses a dressing down over claims of price gouging by companies but rather discuss the drivers of grocery inflation. The BoE thinks food price rises will no longer be driving headline inflation in a year’s time. However, it expects the general improvement in the economic outlook will mean that inflation will stay above the BoE’s target for longer than expected. Financial markets anticipate more rises in the cost of borrowing, with interest rates peaking close to 5 per cent by the end of the year.

The BoE forecasts did not push against such expectations and the MPC warned that “if there were to be evidence of more persistent [inflationary] pressure, then further tightening in monetary policy would be required”.It said economic growth prospects had increased not just because of lower energy prices but also because of more robust consumer and corporate confidence and the March Budget’s public spending increases.BoE officials stressed the growth forecast was still weak with annual rates struggling to exceed 1 per cent over the next three years, while unemployment would edge higher from 3.8 per cent at present to 4.5 per cent by 2026. The main effects of the rises in interest rates from 0.1 per cent in December 2021 to 4.5 per cent now have not yet been felt by households, the BoE said. The MPC members voting to hold rates at 4.25 per cent, Swati Dhingra and Silvana Tenreyro, said the delayed effect of previous monetary tightening was still to come and this was likely to push inflation down too far. More

LONDON/ACCRA (Reuters) -Ghana’s official creditors are poised to grant financing assurances and form a committee co-chaired by France and China – key steps for the nation to secure a $3 billion International Monetary Fund (IMF) loan, sources told Reuters.The country’s bilateral lenders are expected to formally grant financing assurances as soon as Friday – confirmation that they will then start talks to give Ghana the relief needed to make its debt sustainable, said the sources with direct knowledge of the process speaking on condition of anonymity.The assurances could pave the way for the IMF executive board to approve the $3 billion loan next week, one of the sources said.IMF spokesperson Julie Kozack said in a Thursday news briefing that the Fund is hopeful its executive board can quickly consider the Ghana program once enough official bilateral creditor assurances have been secured. The package was agreed at the staff level in December.”We have seen strong progress toward creditors delivering on these financing assurances and we’re hopeful that they can be delivered very rapidly,” Kozack said.Ghana’s finance ministry and China’s finance ministry did not immediately reply to a request for comment. The Paris Club declined to comment. The West African nation is struggling through its worst economic crisis in a generation, defaulting on most of its external debt in December and completing a domestic debt exchange in February.IMF staff agreed to the $3 billion support package in December, but financing assurances from official creditors are needed before the fund’s board will approve disbursements.Like other smaller, riskier emerging market countries including Sri Lanka and Zambia, Ghana faces a debt overhaul after its already strained finances buckled under the economic fallout from COVID-19 and Russia’s invasion of Ukraine.The country is negotiating its international debt rework under the Group of 20’s Common Framework platform, with $5.4 billion debt to official creditors eligible for restructuring, according to government data. The nation is also in talks to rework $14.6 billion of debt to private overseas creditors. More

The past three months have not been kind to monetary policymakers at the Bank of England. In February, the central bank set interest rates at 4 per cent and suggested this level might well be the peak because its forecasts had inflation falling sharply, dropping below the central bank’s 2 per cent target at the start of 2024. Three months on, and the BoE raised interest rates on Thursday by a quarter of a percentage point to 4.5 per cent, and predicted inflation will be more than double its target early next year.It estimated close to a 50 per cent probability of inflation remaining above 2 per cent by mid-2026. That would leave the BoE Monetary Policy Committee with a record of above-target price rises for five consecutive years.

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

The latest central bank inflation forecast meant governor Andrew Bailey faced hostile questions from the media after the latest interest rate decision.Accepting that higher interest rates were a bitter pill for households struggling with the cost of living crisis, he insisted it was the right medicine to take. “If we don’t tackle inflation, it will be worse for people,” said Bailey. He was asked by journalists whether the BoE had any credibility fighting inflation given its record, and what policy mistakes it had made.Bailey reiterated the MPC’s determination to push consumer price inflation down from 10.1 per cent in March to its 2 per cent target.But when it came to the speed at which inflation should fall, the governor said a “debate” was happening within the MPC, adding that he thought “the path we’ve got is not unreasonable”. Bailey said financial markets showed little sign yet that the BoE had lost credibility, and that households expected the central bank to succeed in taming inflation. The governor also criticised “the language of blame” in relation to the MPC’s actions, saying the Covid pandemic and the war in Ukraine were events that had pushed up inflation and which the BoE could not have anticipated. Bailey appears correct in asserting that financial markets have not lost confidence in the BoE, but traders do not think inflation will drop without further rate rises. They are expecting the BoE will raise the cost of borrowing close to 5 per cent in two more increases. Bailey did nothing to push back against this, saying “we are not giving a directional steer on rates today”.Most economists took the BoE’s higher inflation forecast and lack of complaint at financial market expectations as a reason to believe the probability that the BoE would raise rates further was strong. That contrasts with the US Federal Reserve, which last week hinted it was ready to pause its rate rises.Kallum Pickering, economist at Berenberg Bank, a private lender, said the BoE appeared to want to be “data-dependent with a hawkish bias”. Martin Beck, economic adviser to the EY Item Club, a forecasting group, said “the hawkish skew of today’s announcement suggests one more rate rise may be in the offing”. In its latest assessment of the UK economic outlook, the BoE dropped its previous prediction of a recession.But the BoE accepted it had underestimated food price rises in its previous forecasts and that the pass-through of higher producer costs to consumer prices may take time. “This could result in food inflation remaining higher for longer than suggested by developments in input costs alone,” the BoE warned in its monetary policy report. That was the main reason for the increase in the inflation forecast over the coming year, said BoE officials.In 2024, higher inflation would come from more robust corporate and household spending than previously expected, the central bank said, which would exceed the additional capacity for the economy to grow that stemmed from lower energy prices. The boost to demand, the BoE reckoned, came from improved business and consumer confidence alongside the March Budget’s childcare subsidies and increase in corporate tax reliefs for investment. The MPC said this improved outlook increased the risk of reinforcing the so-called wage price spiral, in which workers demand pay rises to match higher living costs and companies raise prices to protect their profit margins in a repeating, self-fulfilling process.The seven people on the nine-member MPC who voted for the rate rise highlighted their nervousness about inflation in the minutes published alongside the decision.They said “there remained a risk that the . . . effects of external cost shocks on inflation in wages and domestic prices could take longer to unwind than they had to emerge”.Meanwhile, Bailey criticised BoE chief economist Huw Pill’s “choice of words” after he said last month that UK companies and households needed “to accept that they’re worse off and stop trying to maintain their real spending power”.However, the governor endorsed the sentiment behind Pill’s words, and the BoE is seeking to raise unemployment and lower corporate and household spending power through higher interest rates to create enough pain to halt the wage price spiral.The big question is whether the BoE has done enough to bring inflation under control, given the central bank no longer expects a recession and thinks unemployment will rise only from 3.8 per cent to 4.5 per cent.Most of those who watch the BoE closely believe it has not, and therefore will raise rates by at least another quarter of a percentage point before it pauses for breath. More

US Treasury secretary Janet Yellen has called for “co-ordinated action” by G7 nations against Beijing’s use of economic coercion, as Washington finalises a new outbound investment-screening mechanism aimed at China.Speaking in Niigata, central Japan, where she is attending a meeting of G7 finance ministers, Yellen said the new US investment restrictions would be “narrowly scoped” and “targeted at technologies where there are clear national security implications”. “Obviously, it would be most effective if there’s co-ordinated action by a group of like-minded countries and agreement that this is a useful approach,” she said on Thursday, adding she would continue “informal” discussions on the measures with other G7 members.The US has not finalised the investment-screening mechanism and is not expected to unveil it before a G7 leaders’ summit in Hiroshima next week. Host nation Japan and the US are keen to make economic security one of the summit’s main themes.The G7 plans to issue for the first time a separate statement on economic security alongside the main summit communiqué. The statement will include a commitment to “collectively deter, respond to and counter economic coercion”, according to documents seen by the Financial Times. In recent months, China has imposed new sanctions on US weapons companies Lockheed Martin and Raytheon, launched an investigation into US chipmaker Micron, raided US due diligence firm Mintz, and detained a local executive from Japan’s Astellas Pharma group. President Xi Jinping’s administration is now considering curbing western access to materials and technologies critical to the global car industry, according to a Chinese commerce ministry review.“I would say that many G7 members share a common concern with this kind of activity and are looking to see what we could jointly do to try to counter this kind of behaviour,” Yellen said.Ursula von der Leyen, the European Commission president, said in March that Brussels was examining the creation of its own mechanism for scrutinising overseas investment by EU companies in a small range of sensitive technologies that could enhance rivals’ military capabilities. She added that the bloc needed to ensure its companies’ capital, expertise and knowledge were not used to boost the military and intelligence capacity of “systemic rivals” such as China.A senior EU official involved with the drafting of the communiqué told the FT that they were confident of agreeing “joint language” regarding scrutiny of outbound investments, but not “a shared mechanism” with the US.

In late March, Japan also unveiled curbs on exporting 23 different kinds of technology, as part of a deal reached with the US and the Netherlands.The controls would give Japanese authorities oversight of sales of machinery to countries that could potentially produce high-end chips for military use in China and elsewhere. But officials in Tokyo have stressed that the measures are not targeting a specific country.Yellen also said the G7 would take additional steps to prevent Russia from evading sanctions imposed by the group of advanced economies following its invasion of Ukraine. “Because these sanctions are having an impact, Russia is trying to get around them. This year, a central part of our strategy is to take further actions to disrupt Russia’s attempts to evade our sanctions.” More