Aurelia Butler

Georgieva told reporters that an adjustment to the central bank’s debt yield curve control regime was not driven by an increase in inflation, which remains very close to the bank’s 2% target.”BOJ rightly pursued accommodative policy. The pressure from labor on increases in labor compensation has not led to any dramatic change. In other words, there is no driver for inflation from there,” Georgieva said.The Bank of Japan shocked markets in late December with a surprise tweak to its bond yield controls that allowed long-term interest rates to rise more than expected. At the time, BOJ Governor Haruhiko Kuroda said the move was aimed at prompting increased bond purchases and was a fine-tuning of the central bank’s ultra-loose monetary policy rather than a withdrawal of stimulus.Georgieva said it was appropriate for the central bank to take a cautious approach to its monetary policy.”They are doing the right thing to keep an open mind into the situation, but they are not – BOJ is not – faced with a sharp increase in inflation or drivers of inflation,” she added. More

WASHINGTON (Reuters) – The International Monetary Fund is not expected to downgrade its forecast for 2.7% growth in 2023, the head of the global lender said on Thursday, noting that concerns about an oil price spike had failed to materialize and labor markets remained strong.IMF Managing Director Kristalina Georgieva said 2023 would be another “tough year” for the global economy, and inflation remained stubborn, but she did not expect another year of successive downgrades like those seen last year, barring unexpected developments.”Growth continues to slow down in 2023,” she told reporters at the IMF’s headquarters in Washington. “The more positive piece of the picture is in the resilience of labor markets. As long as people are employed, even if prices are high, people spend … and that has helped the performance.”She added that the IMF does not expect any major downgrades. “That’s the good news.”Georgieva said the IMF expected the slowdown in global growth to “bottom out” and “turn around towards the end of ’23 and into ’24.”Georgieva said there was much hope that China – which previously contributed some 35% to 40% of global growth, but had “disappointing” results last year – would once again contribute to global growth, likely from mid-2023. But that depended on Beijing not changing course and sticking to its plans to reverse its zero-COVID policies, she said.She said the United States – the biggest economy in the world – was likely to see a soft landing, and would suffer only a mild recession, if it did enter a technical recession.But Georgieva said great uncertainty remained, including a significant climate event, a major cyberattack or the danger of escalation in Russia’s war in Ukraine, for instance through the use of nuclear weapons.”We are now in a more shockprone world and we have to be open-minded that there could be risk turn that we are not even thinking about,” she said. “That’s the whole point of the last years. The unthinkable has happened twice.” She cited concerns about growing social unrest in Brazil, Peru and other countries, and the impact of tightening financial conditions remained unclear.But inflation remained “stubborn” and central banks should continue to press for price stability, she added. More

UK mortgage payments have risen to their highest level since the 2008 financial crisis, hitting homeowners’ budgets and making it harder for Britons to buy a first property, according to the mortgage provider Nationwide.First-time buyer mortgage payments represented 39 per cent of take-home pay in the final quarter of 2022, up from 33 per cent in the previous three months — and the highest since 2008 — data published on Friday showed. High mortgage payments are adding pressure to homeowners’ finances as well as making housing stock less affordable after the pandemic triggered a price boom. “After 13 years of ultra-low borrowing costs, monthly outgoings will rise by hundreds of pounds at a time when cost-of-living pressures are already biting,” said Tom Bill, head of UK residential research at Knight Frank.Andrew Harvey, senior economist at Nationwide, said the decline in housing affordability over the past year was mainly because of “the rise in the cost of servicing the typical mortgage as a result of the increase in mortgage rates”.Mortgage rates have been rising for the past year as the Bank of England raised interest rates to counteract high inflation. Rates then surged after Kwasi Kwarteng’s mini-Budget on September 23, which featured large unfunded tax cuts. They fell back after Jeremy Hunt became chancellor but remain elevated.UK house prices have risen by 19 per cent since the start of the pandemic, while income has gone up 9 per cent, according to Nationwide. As a result, the house price-to-earning ratio for first-time buyers was 5.6 per cent in the fourth quarter of 2022, just shy of the 40-year high of 5.9 per cent in the previous three months.Harvey expects affordability “to remain challenging” in the short term as many Britons struggle to save for a deposit. The cost of living is set to outpace earnings growth by a significant margin again this year, while labour market conditions are expected to weaken.A recent rise in rents, boosted by increased demand from people who cannot afford to buy, is set to act as a further drag on prospective homeowners, according to Nationwide.

The cost of servicing a typical mortgage is now above the long-term average in all regions, but most acute in London and the south of England, where it represents 66 and 47 per cent of pay, respectively, according to the report.Nationwide calculated it would take more than 15 years for a typical earner in London to save for a 20 per cent deposit — more than double the period in Scotland and the north of England. Earlier this week, the Financial Conduct Authority, the financial regulator, said more than three-quarters of a million UK households were at risk of defaulting on mortgage payments over the next two years. More

Georgieva told reporters that U.S. labor markets remain resilient and consumer demand remains strong despite increases in interest rates to fight inflation. She said there has been a healthy shift away from excess goods purchases, which had pressured prices, back toward services demand, and there were more diversified sources of growth in the economy.”It gives some argumentation of an expectation that the U.S. would avoid falling into recession,” Georgieva said during her first news briefing of 2023. “And actually, I would say even if it is in technical terms in recession, that will be a very mild recession.”She noted that determinations of recessions are normally the subject of intense debate but she said she was leaning toward a soft-landing scenario for the United States.The IMF in October forecast U.S. GDP growth for 2023 at 1.0%, a projection it will update this month. The World Bank on Tuesday forecast U.S. growth at 0.5% for 2023. More