Aurelia Butler

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$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More

BUENOS AIRES (Reuters) – Mexico’s economy will stay sluggish this year, a Reuters poll of economists found, as the country braces for a possible radical shift in U.S. tariff and migration rules that could dramatically worsen the outlook.Private spending and investment, already weakened by this high uncertainty and elevated interest rates, is likely to receive some support from steps focused on low-wage earners and on certain industrial sectors.But Mexicans are waiting for U.S. President-elect Donald Trump’s inauguration on Jan. 20 to see if he carries through on a threat to levy 25% tariffs on goods crossing the border. Mexico currently has a free trade agreement with the U.S. and Canada.In Mexico, Latin America’s No.2 economy after Brazil, gross domestic product is set to expand 1.2% in 2025 compared to 1.6% last year, according to the median estimate of 32 economists polled Jan. 9-16.”Growth prospects are weighed down by three main factors: reduced private consumption resilience, weaker export performance, and declining fixed investment influenced by U.S. political uncertainty and Mexico’s legislative agenda,” wrote Pamela Diaz Loubet, Mexico economist at BNP Paribas (OTC:BNPQY).”Although nearshoring remains a long-term opportunity, political noise and investor hesitation are delaying expected capital inflows, which were previously seen as drivers of recovery.”The administration of Mexico’s President Claudia Sheinbaum has signalled it expects to avoid the tariffs threatened by Trump with actions on illegal migration and drug trafficking to placate U.S. concerns.In another apparent nod, Mexico presented a plan to curb imports from China following Trump’s allegations it had become a back door for Chinese goods entering the United States.But even with a government currently focused on fiscal restraint and global bond yields on the rise, the poll suggests the central bank, Banxico, has limited room to ease policy more aggressively to support activity in a worst-case scenario.The bank cut its benchmark rate to 10% from a record high of 11.25% in five quarter-percentage point moves last year. It is forecast to reduce them by another 150 basis points to 8.50% by the end of 2025, poll medians showed. Asked how would the central bank react if Washington announces new tariffs on Mexico this month, seven of 11 respondents said it should maintain the currently expected path for monetary easing.Three said it would cut rates less than currently expected, while only one expected deeper reductions.”Even though higher tariffs would add headwinds to growth in Mexico, the immediate response is to at most maintain the pace of cuts – no acceleration to 50 basis points moves,” said Alberto Ramos, head of Latin America economic research at Goldman Sachs.”It will be difficult for Banxico to pursue a very dovish path. In doing so they would elicit a negative market reaction that could lead to tighter rather than looser financial conditions, and soon force the central bank to return to a conservative stance.”(Other stories from the Reuters global economic poll) (Reporting and polling by Gabriel Burin in Buenos Aires; additional reporting and polling by Noe Torres in Mexico City; Editing by Ross Finley and Tomasz Janowski) More

Shares of the Winona, Minnesota-based company fell 5.7% in premarket trading.U.S. construction activity has slowed due to increased financing costs for big projects amid higher interest rates, hurting demand for industrial supplies. “Slow rate of growth was exacerbated by many of our largest customers enacting unusually sharp production cuts in the last two weeks of December during holiday-related plant shutdowns,” Fastenal said.Sales of fasteners, one of the core segments of the wholesale distributor, fell to 29.9% of the company’s total sales, compared with 31.1% a year earlier.Fastenal posted a profit of 46 cents per share in the fourth quarter, while analysts on average had expected 48 cents, as per data compiled by LSEG. Its total revenue for the quarter rose 3.7% from a year earlier to about $1.82 billion, but missed estimates of $1.84 billion. More

LONDON (Reuters) -The Bank of England said on Friday it would delay tougher bank capital rules by a year to January 2027 to get clarity on what the United States will do under Donald Trump as president, prompting the European Union to say it would also weigh its options.The standards written by the global Basel Committee are the final set of international reforms designed to make the banking system safer after the 2008 global financial crisis, and are meant to be implemented by member jurisdictions.The European Union – which currently plans to implement the reforms a year earlier from January 2026 – said it would consider its next steps, but said it was in “everyone’s interest” to implement them fully and on time.”(The EU) is now considering which steps to take on this in light of developments in other jurisdictions, including the US and the UK,” a European Commission spokesperson said.An EU official, who declined to be named, expressed surprise and disappointment at the BoE’s delay, given its long-standing insistence on high standards, but said it raised level playing field issues that needed to be considered.John Cronin, a financials industry analyst at SeaPoint Insights, said: “While EU policymakers have been holding a firm line… the competitive position of the EU banking sector overshadows ideals – and the EU will, in my view, follow the US and UK’s lead.” The reforms have faced fierce opposition from U.S. banks, and analysts have said they could be watered down or scrapped under Donald Trump’s incoming administration, after the departure of top banking regulator Michael Barr. Britain’s Labour government has been pressuring British regulators to do more to promote growth, with finance minister Rachel Reeves reiterating on Thursday that watchdogs had a key role to play.MODEST GAINS BY BRITISH BANKS’ SHARES Shares in British banks made modest gains after the BoE announcement, with Barclays (LON:BARC) up 1.8%, Lloyds (LON:LLOY) up 1.5% and HSBC up 0.7%, compared to a 1.3% gain for the wider FTSE 100 index.Gary Greenwood, an analyst at Shore Capital, said bank share reactions were likely to be muted as the BoE had played down the potential impact of the reforms on bank capital requirements.The BoE’s statement was published by its regulatory arm, the Prudential (LON:PRU) Regulation Authority (PRA), having made the decision in consultation with Britain’s Treasury. The PRA said it had taken into account competitiveness and growth considerations. Implementation of the reforms in Britain had previously been delayed last summer by about six months to January 2026.Bank lobby group UK Finance welcomed the fresh delay. “Given the cross-border nature of banking, international coordination on capital rules is important,” said Simon Hills, director of prudential policy at UK Finance.Bank of England Deputy Governor Sam Woods said earlier this month that Britain should avoid participating in a “race to the bottom” on financial regulation. More