Aurelia Butler

BARNSLEY, England (Reuters) – Frustrated with England’s education system, Simon Biltcliffe spends a lot of time training new hires at his marketing firm in the “soft skills” he and many employers say the country’s sluggish economy badly needs.Finding that new starters often struggle to think on their feet, he sets them workplace challenges to learn to solve problems at pace and in teams. Many don’t adapt, leading to high attrition after three- and six-month reviews. Across Britain, Biltcliffe’s frustrations are shared by businesses who say the nation’s schools, technical colleges and apprentice schemes are not turning out the workers they need, from software coders and designers to skilled machinists.”There needs to be a step change,” Biltcliffe said, speaking at the offices of Webmart – which advises clients on the carbon footprint of their marketing operations – in an industrial estate in Barnsley, a former coal town in northern England. Neighbouring businesses include an IT security firm and other companies far removed from the region’s mining past. Biltcliffe described the education system as “not fit for purpose” in a changing economy where the growth of automation and artificial intelligence will make creative skills and adaptability all the more important.While Britain boasts world-leading universities, top scientists and a growing share of young people who continue academic studies after 18, less than a fifth of 25-64 year-olds have a vocational qualification, compared with more than half in Germany, according to the Organisation for Economic Co-operation and Development. UK lags peers on vocational training https://www.reuters.com/graphics/BRITAIN-ECONOMY/EDUCATION/movakqgzrva/chart.png Finance minister Jeremy Hunt is expected to address this skills shortage in a budget statement on Wednesday that he will frame as a growth plan for Britain’s economy – still the only one in the Group of Seven yet to recover its pre-coronavirus pandemic size.But past attempts to train up more workers have seen the problem get worse by some measures, and any big improvement to the post-16 skills system is likely to take years.The shortage of qualified workers is not unique to Britain but it has been exacerbated by the country’s exit from the European Union, which has created more paperwork and cost for employers hiring workers from the bloc. That has contributed to a surge in unfilled vacancies to record levels last year.Digital roles are growing four times faster than the workforce as a whole, and there are an average of 173,000 vacancies per month for digital occupations, costing the economy tens of billions of pounds each year, according to the government. Biltcliffe and other employers argue that changes need to be made not only in post-school training, but in schools themselves, which they and some educational campaigners criticise for increasingly promoting memorisation for tests at the expense of creative thinking and practical learning.The Edge Foundation, which seeks to improve ties between education and employers, says time for subjects such as computing and practical science work has been squeezed over the past decade, and that 71% fewer pupils studied design and technology courses to exam level in 2022 than in 2010.Subjects that have seen big increases over the past decade included geography and history.Despite the focus on exams, around 100,000 people leave school every year without required standards in English and maths and Britain has one of the highest rates of young people not in education, employment or training among the world’s leading economies.     Youth out of school and work https://www.reuters.com/graphics/BRITAIN-ECONOMY/EDUCATION/akveqoklzvr/chart.png “We don’t do nearly as well for the 50% of school leavers who do not go to university as we do for those who do,” Hunt said in January.    In response to a question from Reuters about the Edge Foundation data, the education ministry said every state-funded school was “required to teach a broad and balanced curriculum.”     TRAINING REVAMP    Without a rapid overhaul of the training system, Britain’s pool of highly skilled adults is likely to shrink further relative to other countries, the OECD has warned.Employers groups are calling on Hunt to tackle a key part of how training is funded in his budget speech.    Since 2017, firms with an annual pay bill of more than 3 million pounds have been required to pay an Apprenticeship Levy – a tax placed in a fund the companies can draw on for training. Employers say they often cannot find suitable training courses, and over 2 billion pounds of unused funds raised have gone to government coffers. A House of Commons Library report said in January that the government acknowledged the number of apprenticeships had fallen since the levy was introduced, but argued that the quality of apprenticeships had improved.    The Confederation of British Industry, a business lobby group, wants Hunt to allow firms to invest the money in a wider range of training, not just apprenticeships, citing its own research predicting nine out of 10 British workers will need to retrain by 2030 to adapt to changes in the economy.The Treasury said on Saturday that Hunt will announce training for older people returning to work that would be more flexible and shorter than other programmes, alongside the expansion of a scheme for reskilling in industries such as construction and technology.     Corporate leaders acknowledge employers also need to do more themselves, and prioritize training even in lean times.    “Training is the first thing that goes when the budget is squeezed,” Robert West, head of education and skills at the CBI, said.     BRIGHT SPOTS    At Webmart – with 43 staff and annual sales of about 20 million pounds – Biltcliffe says getting new hires up to speed in how to engage with clients or meet deadlines acts as a brake at a time when demands are getting ever more immediate.    “You’re slowing down really quite a lot to go at the pace of the education system,” he said of his company, which began as a print management firm in 1996.    Olly Newton, executive director of the Edge Foundation, says there are bright spots, including schools trying out new ideas. “I think there’s a real head of steam to do something different,” Newton said.    One such school is the publicly funded XP (NASDAQ:XP) in Doncaster, 20 miles from Barnsley.     Children joining XP at age 11 immediately go on a trip to the mountains of England or Wales to learn to cope with new challenges and the importance of teamwork.    Inspired by project-based learning schools in the United States, XP sends students out of classrooms to dig into issues such as migration or the impact of the closure of the local mining industry, requiring them to engage with adults and understand the world around them.    “Our students are more reflective than a lot of adults,” Claira Salter, XP’s principal, said. “Our students can walk into any interview with confidence and talk about themselves.”    By the time they leave XP at 16, all pupils have experience of speaking to groups of 250 people about their work.Last year, all 50 students who graduated from XP stayed in education or went into employment or training while Doncaster’s not in education, employment or training rate for 16-17 year-olds stood at nearly 5% in early 2022.   “We’re interested really in things that go on beyond normal school life and equipping kids for their future,” Salter said. 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WASHINGTON (Reuters) – Two years after enactment of U.S. President Joe Biden’s $1.9 trillion American Rescue Plan (ARP), the program has delivered over 10.3 million payments to renters in need and aided more than 30,000 state and local governments, data showed on Monday.Treasury said 99% of the $350 billion of ARP money set aside for state and local authorities and Tribal governments has been delivered, and states have already budgeted for 90% of those funds, although funds may flow out over time.New Treasury data through the end of December show that $24.3 billion has been budgeted for 7,000 big infrastructure initiatives in broadband, water and sewer, expanding high-speed internet access for over 1.4 million families and businesses, with nearly $16 billion budgeted for 2,100 housing projects.Additional budget plans by states and local governments include $12 billion for 5,300 public health projects and $11 billion more for 3,500 workforce development projects training workers for new, higher-paying jobs, Treasury said.Biden’s COVID relief package passed without any Republican votes, raising the prospect that Republican-controlled states and local governments could refuse to participate, as they did with Medicaid funds under former President Barack Obama.But Treasury data show both Democratic- and Republican-controlled states and local governments have tapped ARP funds to provide pandemic relief and invest in projects with long-term impact, such as boosting access to high-speed Internet.Wyoming’s Republican Governor Mark Gordon last month announced his statement had been awarded $70.5 million in ARP funds to build broadband infrastructure in locations that lack access to adequate service, bringing high-speed internet to an estimated 11,700 Wyoming homes and businesses. More

Investing.com — The collapse of three U.S. banks over the last week may deliver the long-awaited ‘pivot’ from the Federal Reserve as early as next week, according to analysts at Nomura. The Japanese bank said in a note to clients that, whereas it had previously expected a hike of 50 basis points, the Fed will cut the target range for fed funds by 25 basis points to 4.25%-4.50% at a two-day meeting next Tuesday and Wednesday. It also expects the Fed to pause the reduction of its balance sheet by selling bonds back into the market. The analysts argued that further measures will be necessary to head off looming financial stability risks, after the announcements made at the weekend failed to stop heavy selling of second-tier bank stocks on Monday. First Republic Bank (NYSE:FRC) stock fell over 60%, despite several halts in trading, while a string of other banks – especially those concentrated on the West Coast, with higher exposure to the technology sector – fell between 20% and 47%. Nomura thinks the central bank may announce a new lending facility on top of the Bank Term Funding Program that it unveiled at the weekend. Nomura’s pivot is the most dramatic seen yet among the major brokerages. Analysts at Goldman Sachs had said at the weekend that they no longer expect a hike at next week’s meeting, but had warned that the ongoing strength of inflation would not allow it to start cutting interest rates yet. Morgan Stanley analysts still see a 50 basis point hike as possible. Short-term interest rate futures currently imply a toss-up between either no change or a 25 basis point hike.The U.S. is due to release consumer price inflation numbers for February at 08:30 ET (12:30 GMT). The CPI is expected to have fallen to 6.0% from 6.4% in January, but any overshoot is likely to be badly received, given that January’s number was itself well above forecasts, and given that the jobs report for February last Friday still showed the labor market in rude health.  More

BRUSSELS (Reuters) -European Union finance ministers are converging on broad principles of a reform of Europe’s fiscal rules to make them fit better with post-pandemic economic realities, but crucial details remain to be negotiated, a document showed.Draft conclusions of a meeting of the EU’s 27 finance ministers on Tuesday showed EU countries support much of the European Commission’s proposal presented last November, but its practical implementation is still a challenge.”We need stable fiscal rules … that are fit for the new realities and I think this will be the commitment of the council this morning,” European Economic Commissioner Paolo Gentiloni told reporters on entering the talks.The rules, created in 1997 and revised three times since, are facing a new challenge after government support for the economy during the COVID-19 pandemic and the 2022 cost of living crisis boosted public debt, while efforts to stop climate change require huge public investment.Under the proposal from November, the EU’s existing limit of 3% of GDP for budget deficits and 60% of GDP for debt would stay unchanged.But governments with debt above the limit would negotiate with the Commission individual debt reduction paths linked to reforms and investments, departing from a one-size-fits-all rule of annual debt cuts of 1/20th of the excess above 60% of GDP.Since many EU countries have debt well above the EU limit, they would get between four and seven years to put it on a downward path that would be negotiated with the Commission on the basis of a Commission debt sustainability analysis.Debt would gradually fall through limits set on annual net primary expenditure – spending that excludes one-off revenues, interest or outlays on cyclical unemployment – which the government has under direct control. This would be an improvement on the unobservable and revision-prone structural deficit which is the focus now, and which finance ministers strongly dislike. A government could negotiate more time to cut debt if it promises reforms and investment that boost growth or resilience, strengthen public finances or addresses EU strategic priorities, like the green and digital transition or defence capabilities.In case of shocks to the economy that are outside a government’s power, there would be an “escape clause” allowing a temporary deviation from the agreed debt cutting deal, though it would have to be approved by other governments.TRICKY DETAILSWhile there is convergence among EU finance ministers on these points, there are equally many on which they disagree.Chief among them is the methodology of the Commission’s debt sustainability analysis on which so much of the debt cutting deal is to depend and which would limit a government’s borrowing and spending power.Equally controversial is the issue of whether there should be any numerical benchmarks for debt reduction that would be common to all countries even if they negotiate individual paths, and if yes, what they should be.Other open questions include the new framework’s requirements for those countries which do not have any major debt problems, how to define the expenditure aggregate, when exactly a government should get more time for debt reduction and how to enforce the agreed plans.Once finance ministers agree on the broad principles on Tuesday and EU leaders back them at their summit on March 23-24, the Commission will start drafting concrete proposals on the still open questions.”That’s when the real discussions will start,” one euro zone official involved in the talks said. More

UK wage growth slowed in the three months to January as economic pressures made employers more uncertain about hiring, official data showed on Tuesday.The Office for National Statistics said the unemployment rate remained near record lows at 3.7 per cent, despite the difficult economic climate, while the employment rate was 0.1 percentage point higher than the previous three-month period at 75.7 per cent.Over the past two years, this tight labour market has left many employers struggling to fill posts, while helping workers win wage rises that at least partly cushioned the shock to living standards caused by soaring inflation. Policymakers at the Bank of England believe rapid wage growth could make high inflation more persistent and it is one of the key indicators that will determine how much further interest rates rise.The latest data could give policymakers some reassurance. The ONS said annual growth in average total pay — including bonuses — was 5.7 per cent in the three months to January, down from 6 per cent the previous month. Excluding bonuses, pay growth eased from 6.7 per cent to 6.5 per cent.Samuel Tombs, at the consultancy Pantheon Macroeconomics, said this was a “clear slowdown” that strengthened the case for the BoE’s Monetary Policy Committee to keep interest rates on hold when it met next week.Along with slower wage growth, the data showed hiring pressures have continued to ease, with the number of vacancies falling for an eighth consecutive month. Lay-offs have also pushed the redundancy rate back to levels not seen since before the Covid pandemic.The cost-of-living squeeze could also be spurring some people who had left the labour market to look for work — a welcome development, because a post-pandemic rise in economic inactivity has threatened to weigh on the UK’s long-term growth and worsen inflationary pressures.The ONS figures showed the proportion of the working age population classed as economically inactive — because they are neither in work nor looking for a job — fell by 0.2 percentage points from the previous three-month period, to 21.3 per cent. This was largely because there were fewer students outside the workforce, but there was also a drop in the number of people who said they were retired.Thomas Pugh, economist at the audit firm RSM, said that while the labour market was still “too tight for the MPC to relax”, slower wage growth, combined with lower vacancies and economic inactivity, would make next week’s interest rate decision a close call.“Throw in the sharp deterioration of financial conditions, due to the collapse of SVB, and there is a very good case for the BoE to tread much more cautiously now,” he said.However, others think the labour market remains too hot for comfort — with more than a million jobs unfilled and the workforce still smaller by almost quarter of a million than before the pandemic.David Bharier, head of research at the British Chambers of Commerce, said the figures underlined the need for chancellor Jeremy Hunt to take action in the Budget on Wednesday by doing more to bring down childcare costs and to tackle record levels of ill health in the workforce. More

MANCHESTER, England (Reuters) – Dealers expect Britain to ramp up issuance of government bonds in the coming financial year, although by less than suggested by Debt Management Office (DMO) forecasts published in November, a Reuters poll showed on Tuesday.Finance minister Jeremy Hunt looks set to keep his grip on public finances in Wednesday’s budget, holding off on any big tax cuts or spending increases until the next election comes closer into view.The median forecast among banks that can bid directly at government bond auctions – known as gilt-edged market makers (GEMMs) – saw gilt issuance in 2023/24 at 231.9 billion pounds ($282 billion), up from the 169.5 billion pounds 2022/23 remit.While that would be the second-largest gilt sale remit on record after the coronavirus-hit 2020/21 financial year, it would still be less than the 238 billion pounds that the dealers forecast before Hunt’s previous fiscal update in November.”To be sure, the size of the issuance envelope will be historically high. But the good news is that it’s likely to be a lot lower than many, including us, feared late last year,” said Sanjay Raja, senior economist at Deutsche Bank (ETR:DBKGn).Thanks to falling energy prices and stronger-than-expected tax receipts, Tuesday’s poll suggested the DMO will announce a gross financing requirement estimate for 2023/24 that will be about 30 billion pounds less than the 305.1 billion pounds it had pencilled in November.The gross financing requirement is an estimate of the funds the government needs to raise to plug its budget deficit and roll-over bonds that are due to mature. It comprises issuance of gilts, Treasury bills and savings products for consumers via National Savings and Investment (NS&I), the government’s retail finance arm.Forecasts in the poll for gilt issuance ranged from 166.5 billion pounds to 260 billion pounds, reflecting uncertainty around how the government intends to raise funds in 2023/24.Some forecasters thought issuance of T-bills and via NS&I would shoulder more of the financing requirement, therefore creating less gilt issuance.Overall the survey pointed to a median 19 billion pounds in additional net T-bill issuance and 12.5 billion pounds from additional NS&I fundraising.All figures in bln stg GROSS NET T-BILL NS&I PSNB-e GILT x ISSUANCE MEDIAN 231.9 19.0 12.5 123.9 MEAN 226.7 19.5 14.7 120.0 MAX 260 40 45 140 MIN 166.5 167.5 168.5 169.5 COUNT 13 12 12 8 BofA-ML 166.5 35 45 Barclays (LON:BARC) 230.8 25 7.5 BNP Paribas (OTC:BNPQY) 233.1 20 15 127 Citi 246 13 10 123 Deutsche Bank 217 40 10 125 JP Morgan 105 Lloyds (LON:LLOY) Bank 238 10 15 Morgan Stanley (NYSE:MS) 242.5 12.5 10 124.8 NatWest 231.9 20 15 Nomura 240 17.9 6 108 RBC 226 10 15 107 Santander (BME:SAN) 205 20 20 140 TD 210 UBS 260 10 7.5 ($1 = 0.8226 pounds) More

Good morning. News to start: the EU should be able to police overseas investment decisions to prevent companies from providing critical technologies to countries such as China, the bloc’s trade commissioner has told the Financial Times.Today, our Brussels bureau chief parses confident statements that the US banking chaos won’t spread to Europe, and I explain why calls for a new Russia sanctions package face stiff resistance.Not our problemEurozone policymakers were at pains to drum home one clear message last night: the EU’s banks are very different beasts from US regional banks that are currently at the centre of a crash in investor confidence. The question, writes Sam Fleming, is whether the markets agree.Paschal Donohoe, the eurogroup president, repeatedly stressed that the situation in Europe was “very, very different” from that in the US. Banks in the region have no direct exposure to failed Californian lender Silicon Valley Bank, he said, insisting euro-area lenders enjoy abundant liquidity levels and are meticulously supervised according to Basel standards.“The problems arise from the specific business model of the Silicon Valley Bank, and the picture here in Europe is very different,” he said. “Our banks are overall in good shape.”The confident assessment that there is no reason for transatlantic contagion from the failure of SVB and the closure of Signature Bank was also shared behind closed doors.But it remains to be seen if investors draw the same conclusions. Some European lenders’ share prices saw double-digit declines yesterday, including Spain’s Banco Sabadell and Commerzbank of Germany, as the Stoxx banking index lost 7 per cent. It was the worst day for European banking stocks in more than a year.The meltdown has underscored the risks in the financial system as central banks rapidly lift borrowing costs to tame inflation. Banks that face big losses on portfolios of government bonds due to higher rates or those with a hefty share of uninsured deposits (like SVB) will come under scrutiny. Even if the eurogroup’s confidence proves well placed, that hardly means there are no policy consequences from the events. The obvious one will be seen on Thursday, when the European Central Bank next sets rates. While analysts expect president Christine Lagarde to go ahead with a previously planned half-point rate rise, the central bank may be more non-committal on its policy intentions thereafter, given the financial stability risks clouding the outlook.The events in California may feel very distant, but chaos in the US financial system rarely remains a local matter. Chart du jour: Battery champion

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In Sweden’s sub-Arctic pine forest lies Europe’s first homegrown battery factory; a critical test case for the continent’s ambitions to compete with the US and Asia in the green transition. Read Richard Milne’s deep dive into Swedish start-up Northvolt.Elusive eleventhEighteen days after agreeing the EU’s last sanctions package against Russia, a handful of eastern states are banging the drum for the next salvo. But the chances they will get their way are slim.Context: since Russia’s full-scale invasion of Ukraine in February last year the EU has passed 10 packages of sanctions, targeting individuals, companies and entire sectors of the economy. They have also included bans on trading certain products, and price caps on exports such as crude oil.A group of countries including Poland will use a meeting of ambassadors tomorrow to reiterate demands for measures targeting Russia’s nuclear energy and diamond industries and for a review of the level of the price cap on Russian oil exports.The issue is that the first has already been vetoed by states whose nuclear plants rely on Russian supplies, action on the second has been outsourced to the G7 group of countries, and the US has made clear it thinks the third is unnecessary. “None of the suggestions are new, we’ve heard them all before,” said an EU diplomat. “They’re welcome to raise them again but nobody is seriously considering another package.”Those against new sanctions say that increasing the effectiveness of existing measures and closing loopholes are more important.Furthermore, adding more sanctions against individuals (as we explained yesterday) and embargoes on specific products that Russia could repurpose for military use can be done ad hoc, officials say, and don’t need to be packaged.That attitude is grating on sanctions proponents, who are also fighting against efforts to add exemptions and derogations to existing measures that they see as watering down their impact.And for countries that are neither pushing for more sanctions nor in principle against them, the huge diplomatic effort required to get the 10th package over the line last month (a few hours before a midnight deadline and after weeks of haggling) has lessened the appetite.“That was supposed to be an ‘easy’ package,” said one official involved in those tortuous negotiations. “And we all know how it turned out.”What to watch today EU finance ministers meet in Brussels.Lithuanian president Gitanas Nausėda speaks at the European parliament in Strasbourg, from 10am. Now read theseSo nicht: Tensions inside Germany’s ruling coalition are increasingly derailing EU negotiations.Bad record: Turkey’s current account deficit has hit its highest-ever level, intensifying scrutiny of President Recep Tayyip Erdoğan.Leave the guns: Switzerland’s president doubles down on a ban to sell Swiss-made weapons to Ukraine. More

Lebanon’s commercial lenders have closed their doors to customers for an open-ended strike that presents the latest obstacle for beleaguered depositors struggling to withdraw their money from the country’s zombie banking system.The closure of the banks from Tuesday, for an indefinite period, is largely in response to what the industry said were “arbitrary” judicial decisions against them, which had drained their already dwindling foreign currency reserves.The banks also complain that borrowers are allowed to repay their foreign currency loans at the old exchange rate from before last month’s official devaluation, while the lenders were still required to meet their obligations in foreign currencies.The Lebanese pound has plummeted more than 98 per cent against the US dollar since the country went into economic meltdown in 2019 after decades of state-sponsored corruption and financial mismanagement by successive governments. Lebanon’s banks have been at the forefront of the financial crisis. In the absence of formal capital controls, banks restricted foreign currency account holders’ withdrawals to limited sums in Lebanese pounds at an exchange rate far lower than the street value used for most transactions. Some depositors — in Lebanon and abroad — responded by suing banks to pressure them into releasing their trapped savings. Some even resorted to holding up their lenders at gunpoint in an effort to release their own funds.As a result, Lebanese banks are mostly limited to distributing account holders’ paltry monthly allowances and salaries at the end of each month, leading them to be labelled “zombie banks”.Lebanon’s banks have blocked attempts to blame their shareholders for the crisis, as outlined in an economic recovery plan agreed with the IMF, insisting that the government and individual depositors should carry the largest burden for the estimated $72bn financial hole.The Association of Banks in Lebanon, which represents the industry, has pleaded with the government to “shoulder their responsibilities” for the country’s mounting woes and find a “comprehensive solution to a systemic crisis”. “Arbitrary judicial decisions . . . reduce the chances for depositors to recover their deposits in foreign currencies — and even eliminate them,” the ABL said in a statement. It also complained about money-laundering charges levied against two of its lenders. Banks closed their doors to customers before to protest a Lebanese court ruling that forced Fransabank, one of the country’s largest, to pay out two of its depositors’ trapped savings in cash. They agreed to suspend the strike a week later at the request of caretaker prime minister Najib Mikati. They also went on strike following the armed confrontations.

The Lebanese pound this week fell to a record low of 96,000 to the US dollar on the parallel market that dominates most transactions. The official exchange rate is 15,000 Lebanese pounds to the dollar following last month’s devaluation, although different exchange rates govern telecommunications, public sector salaries and fuel prices, among others. Lebanon’s economic crisis has pushed three-quarters of its population of 6mn below the poverty line. The government reached a draft agreement with the IMF almost a year ago but the deal to unlock a $3bn loan facility was contingent upon economic and political reforms, including a restructuring of the banking sector.However, sluggish progress on these has led many in Lebanon to fear that the IMF agreement will not be finalised. More