Aurelia Butler

ABUJA (Reuters) – Nigeria’s finance minister said on Thursday she disagreed with what she called a “surprise” downgrade of the country’s credit rating by Moody’s (NYSE:MCO), insisting the government was already addressing the agency’s concerns.Moody’s downgraded the West African oil producer last week to Caa1 from B3, saying the government’s fiscal and debt position was expected to keep deteriorating, an announcement that sent Nigeria’s dollar-bond and currency forwards tumbling.”Moody’s downgrade came as a surprise to us because we had presented all the work that we have been doing to stablise the economy,” the minister, Zainab Ahmed, told reporters in Abuja.”But these are external rating agencies that don’t have the full understanding of what is happening in our domestic environment.”She said she expected S&P’s rating, due on Friday, would be more positive.”S&P’s assessment is not the same as Moody’s. They have come out with a much better assessment,” she said.Nigeria has faced oil production shortages due to crude theft in recent years, though production has started to recover.It has also suffered chronic dollar shortages coupled with high debt service which has eaten into government revenues.Moody’s cited these factors as reasons for its downgrade. More

Investing.com — The Bank of England raised its key interest rate by another 50 basis points on Thursday, warning that its battle against inflation still isn’t over, but held out the possibility of an end to its policy tightening.The move, which was as expected by financial markets, takes the Bank rate to 4%, the highest it’s been since the 2008 financial crash.The Bank’s calculations showed that current market expectations of a peak in rates around 4.5% in mid-2023 would push inflation below its 2% target in the medium term. That suggests it doesn’t see the need to raise the Bank rate much more, if at all, although it was careful to add that uncertainties around this outlook are high and that “the risks to inflation are skewed significantly to the upside.” “We have done a lot on rates already, and the full effects are still to come through,” Governor Andrew Bailey said in opening remarks at his regular press conference. “One last 25bp hike in Bank Rate in the March meeting still can’t be ruled out. But if, as we expect, signs of slowing price rises and accumulating labor market slack continue to emerge in line with its expectations, then the Monetary Policy Committee looks set to keep Bank Rate at 4% in March, and throughout the rest of this year,” said Pantheon Macroeconomics analysts Samuel Tombs in a note to clients. U.K. markets reacted strongly to the Bank’s guidance, which was the clearest signal yet it is approaching the end of its tightening cycle.By 08:00 ET (13:00 GMT), the pound was down 0.6% at $1.2298, while the yield on the 10-year Gilt was down 14 basis points at 3.16%, its lowest in nearly two months. The U.K.-focused FTSE 250 stock index rose 2.5% to its highest since last August.By raising the cost of mortgage and consumer credit, the Bank threatens to sharpen an already clear economic downturn in the U.K. The International Monetary Fund expects the U.K. to be the only G7 economy that will shrink this year, and household spending had already showed signs of slowing at the end of last year.However, it has been forced to keep raising interest rates because inflation is also running higher than in the U.S. or the rest of Europe and, at 10.5% in December, hasn’t come down as quickly as it has elsewhere. “Headline CPI inflation has begun to edge back and is likely to fall sharply over the rest of the year as a result of past movements in energy and other goods prices,” the Bank said in a statement accompanying the decisions. “However, the labor market remains tight and domestic price and wage pressures have been stronger than expected, suggesting risks of greater persistence in underlying inflation.”That judgment comes a day after the most widespread strikes in Britain for over a decade, with civil servants, teachers and other public-sector employees all pressing for higher pay.As a result of the improved inflation outlook – benchmark Natural Gas Futures in particular, have fallen by 50% since the Bank’s last Inflation Report in November – the Bank dropped from its statement a promise to act “forcefully” to bring inflation down further if need be. As in December, the Monetary Policy Committee was not unanimous in its decision, with two members voting for no change in the Bank rate.  More

European stocks are rising today and US futures are also higher after the Federal Reserve shifted to a slower pace of interest rate rises. The quarter-point increase in the federal funds rate to a range of between 4.5 per cent and 4.75 per cent, the highest level since September 2007, marked a return to a more orthodox approach to rate rises.However, in a statement, the Fed maintained that “ongoing increases in the target range will be appropriate” in order to ensure it is restraining activity enough to bring price pressures under control.In his press conference after the decision, Fed chair Jay Powell said while there had been some “encouraging” signs that price pressure were easing it would be “very premature to declare victory.”Despite Powell’s comments, markets rallied sharply during and after the press conference on signs of a more dovish approach from the Fed chair. The benchmark S&P 500 and tech-heavy Nasdaq rose to their highest levels since August and September 2022, respectively.The two-year Treasury yield, which moves with interest rate expectations, fell to its lowest level in two weeks. The dollar was also lower. Money markets are now expecting the fed funds rate to peak at just below 5 per cent in the second quarter and the US central bank to begin cutting interest rates by the end of the year.Commentary: There is a wide gap between the markets’ rate expectations and the Fed’s policy guidance, says Robert Armstrong, which is a challenge to the Fed’s credibility. (Premium subscribers can sign up to Rob’s Unhedged newsletter for daily market updates)Five more stories in the news1. Facebook shares soar Mark Zuckerberg announced 2023 would be the “year of efficiency” after unveiling full-year results that beat expectations. The chief executive of Meta, which owns Facebook, Instagram and WhatsApp, said more jobs would be cut this year as part of a cost-cutting drive. Investors liked what they heard and sent the shares nearly 20 per cent higher in after-market trading.2. Gautam Adani defends ‘robust’ business The Indian billionaire broke his silence earlier today and defended his industrial empire which has seen $100bn wiped off its value since short seller Hindenburg Research accused the conglomerate of using offshore entities in tax havens to inflate the share prices of its listed companies. The comments come after Adani Group last night cancelled a $2.4bn share sale. 3. Banks set to recoup little from Archegos Banks that lost billions from the meltdown of Archegos Capital Management will get back as little as 5 cents on the dollar from its restructuring, with brokers such as Goldman Sachs funding the payouts using cash left in the family office’s trading accounts. Global banks, including Credit Suisse and Morgan Stanley, are expecting to recoup between 5 per cent and 20 per cent of their losses, according to people familiar with the matter.4. Washington optimistic about western security pact The White House has expressed optimism that the US, UK and Australia will clear the main obstacle to their landmark Aukus security deal. US national security adviser Jake Sullivan said yesterday there had been progress in easing some technology export rules, creating a “pathway” for allies to build nuclear-powered submarines for Australia.5. FBI search Biden’s Delaware holiday home After a three-and-a-half hour search agents said “no documents with classified markings were found” at the property in Rehoboth, Delaware. The search is the latest development in a legal and political morass that has cast a long shadow over the White House as Biden gets ready to announce his bid for re-election in 2024.The day ahead Monetary policy The Bank of England and European Central Bank are expected to maintain a more aggressive policy approach than the Fed to stamping out inflation in the British and eurozone economies. Both banks are today expected to raise their policy rates by half a percentage point. Our live blog will be following the decisions.Earnings Tech results are set to dominate a busy day for company results. Apple, Google-owner Alphabet and Amazon all report earnings for the final quarter of last year. Pharmaceutical companies Eli Lilly, Merck and Bristol Myers Squibb also report. From the consumer sector Hershey, Estée Lauder and Starbucks release earnings and Rupert Murdoch’s News Corp also reports. Economic data New jobless claims, a proxy for lay-offs, are expected to rise for the week ending January 28 after falling to a historically low level of 186,000 the week before. Separately, economists forecast that factory orders increased by 2.2 per cent in December after declining by 1.8 per cent in November.Pope in Africa Pope Francis continues his trip to the continent, calling for peace and an end to “economic colonialism” at his first stop, the Democratic Republic of Congo. He will next visit South Sudan.What else we’re readingHow the US fell out of love with flying The aviation chaos that grounded thousands of flights during the US holiday season was the final straw for many travellers frustrated with problems across the industry. Are these disruptions a short-term consequence of the pandemic, or the culmination of long-term under-investment and shortcomings in regulatory scrutiny?

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New York property tycoon to give offices ‘back to the bank’ Scott Rechler, chief executive of property developer RXR, has concluded that in the era of remote working and rising interest rates it has become unprofitable to keep some of the New York properties his company owns. His views reflect a growing consensus that the world’s largest office market is heading for a calamitous period.Does Ukraine need western fighter jets? As soon as Ukraine extracted pledges of modern battle tanks from western allies, its military and political leaders turned their attention towards fighter jets. Until now, leading Nato powers have balked at providing fighter jets but in some capitals, those assessments are shifting.On the ground: The battle for Bakhmut is nearing a tipping point, reports Christopher Miller in Kyiv.‘Capture, who’s looking after the children?’ An FT drama starring Jodie Whittaker (Dr Who), Paul Ready (Motherland) and Shaniqua Okwok (It’s a Sin), looks at online harm, regulation and responsibility. The search for their missing son leads a mother and father to a tech company, and a digital gatekeeper who seems to have all the answers. Instagram founders launch Twitter rival Kevin Systrom and Mike Krieger, who founded Instagram and then sold it to Facebook for $1bn in 2012, have launched a new “text-based” news app called Artifact. They have declined to accept outside investment and have spent “single-digit millions” to build the platform which they believe can avoid so-called “filter bubbles” that have plagued existing social media platforms. Take a break from the newsFT Globetrotter is going down under! Stay tuned for the upcoming launch of FT Globetrotter’s guide to Melbourne. Whether you are a Melburnian or go there often for business or pleasure, we want to hear from you. Share your top tip on where to go to eat and drink, exercise, find great coffee, watch sport or enjoy the nearby great outdoors.

The city of Melbourne More

UK power supplier Centrica has apologised for the “deeply disturbing” behaviour of a third-party contractor alleged to have broken into vulnerable customers’ homes to install pre-pay energy meters on its behalf, and suspended the controversial practice of forced instalments.Chief executive Chris O’Shea said the owner of British Gas had immediately suspended work with Arvato after an undercover reporter from The Times witnessed the contractor’s agents breaking into the home of a single father of three young children to fit a pre-payment meter. The investigation, which also unearthed other evidence of forced instalments in the homes of highly vulnerable customers, has shone a further spotlight on the controversial practice of fitting pre-pay meters under court warrants. Ofgem rules stipulate suppliers cannot forcibly fit a pre-pay meter for people in “very vulnerable situations”.Citizens Advice, the consumer charity, has called for an immediate ban on the forced installations of such meters by all energy companies until new customer protections are introduced. Most customers pay for their energy after it has been used, commonly by direct debit, but consumer groups have detected a rise in suppliers forcing households on to more expensive pre-payment meters if they fall into arrears. Ofgem is investigating the practice, while business secretary Grant Shapps warned suppliers last month that forced instalments should only be a “last resort”.Shapps has summoned Centrica for a meeting with energy minister Graham Stuart following the publication of The Times’ investigation. Ofgem said it was launching an urgent investigation into Centrica following the “extremely serious” allegations and would not hesitate to take “firm enforcement action” against the company.Centrica said it had suspended forced installation until “at least” the end of the winter.Speaking on Radio 4’s Today programme on Thursday, O’Shea called the practices unearthed by the investigation “completely unacceptable” and “deeply disturbing”, adding that “there’s nothing that can be said to excuse” the actions reported The Times.Centrica had commissioned an independent report so it could get to the “bottom of what went wrong”, O’Shea said. The third-party contractor had “let us down”, O’Shea said, but he conceded that he was ultimately accountable.Simon Francis, co-ordinator of the End Fuel Poverty Coalition, a group of charities, local authorities and trade unions, said the government also needed to investigate the role of the courts in issuing warrants to energy suppliers. Government figures show more than 536,000 warrants were issued between July 2021 and the end of December 2022.A separate investigation by the i newspaper in December alleged that warrants were sometimes being signed off rapidly in large batches and that magistrates often had little oversight of customers’ vulnerability. “What we’re really concerned with is the role of the courts in all of this and that’s [outside] Ofgem’s remit,” said Francis. “That’s why we feel there needs to be something more comprehensive.”Gillian Cooper, head of energy policy at Citizens Advice, said it was “truly shocking to see the extent of bad practices amongst some energy suppliers”.“Our frontline advisers know only too well the desperate situations so many struggling customers have found themselves in,” she added. “Time and time again we have called for a ban on forced pre-payment meter installations until new protections for customers are brought in.”The investigation comes ahead of Centrica’s full-year results this month when it is expected to report a near-eightfold rise in earnings. Its gas production, energy trading and nuclear power divisions have benefited from soaring commodity prices in the wake of Russia’s assault on Ukraine.Arvato Financial Solutions said it acted “compliantly at all times in accordance with the regulatory requirements in the areas in which we are operationally active. In doing so, we respect and adhere to the regulations of Ofgem as well as other regulatory bodies.” But it added: “If there has been any verbal or any other type of misconduct by individual employees, we deeply regret it.” More