Aurelia Butler

US president Joe Biden expects G7 leaders to debate steps to “stabilise global energy markets” as Washington seeks more co-operation to contain the high commodity prices weighing on the global economy.A senior Biden administration official told reporters on Wednesday that the US would announce a “concrete set of proposals” to raise economic pressure on Russia over its war in Ukraine, hinting at a possible sanctions package when G7 leaders gather in Germany this weekend.The US also expects energy, the cost of which has soared since the war began in February as countries scrambled to reduce their dependence on Russian imports, to be “very much at the heart of the discussions”, the official added.“[We] expect [G7 leaders] to speak to how can we take steps that further reduce Russia’s energy revenues, and do so in a way that stabilises global energy markets and lessens the disruptions and pressures that we’ve seen,” the senior Biden administration official said.The US has banned the import of Russian energy and supported the EU’s efforts to curb its own dependence on the country’s oil and gas. But American officials are concerned that some of the measures, including an EU ban on insuring Russian oil cargoes, could be counterproductive, leading to sharp price increases that fill Moscow’s coffers and create economic and political spillovers in the west.The US has been discussing possible solutions with the EU and G7 nations, such as price caps and tariffs on Russian oil, but there has been no agreement on any new measures. Biden has been focused on energy prices domestically, including a call on Wednesday for Congress to suspend petrol taxes for three months.Biden’s trip to the G7, to be held at Schloss Elmau in the Bavarian Alps, will begin with a bilateral meeting between the US president and Olaf Scholz, the German chancellor and host of the gathering. Volodymyr Zelenskyy, Ukraine’s president, is also expected to speak to the group virtually.Senior US officials said food security would also be high on the agenda, given price rises and supply chain crunches, as well as enhanced co-operation in the approach to China.The G7 meeting comes ahead of a Nato summit in Madrid next week, where the transatlantic military alliance is due to endorse a new “strategic concept”, a document outlining its mission that was last updated in 2010. For the first time, the document will address how the alliance views China’s efforts to extend its military reach.“Russia obviously continues to be the most serious and immediate threat to the alliance, but the strategic concept will also address the multi-faceted and longer-term challenges posed by the [People’s Republic of China] to Euro-Atlantic security,” a senior administration official said.

The Nato summit will include leaders from the Asia-Pacific region for the first time, including from South Korea, Japan, New Zealand and Australia, aimed at highlighting the alliance’s long-term focus on China.There will also be an announcement on new force commitments “to strengthen Nato’s defence and deterrent posture”, the official said. The US has about 100,000 troops in Europe, up from 70,000 before Russia’s invasion of Ukraine. Nato has 40,000 troops in eastern Europe under its direct command.Biden administration officials declined to say whether they expected progress on efforts to assuage Turkey’s concerns with Finland and Sweden’s applications to join Nato, but noted that US secretary of state Antony Blinken and national security adviser Jake Sullivan spoke with their Turkish counterparts in recent days to try to make progress. More

BENGALURU (Reuters) – The European Central Bank will raise its deposit rate above zero for the first time in a decade in September, according to most economists polled by Reuters, who expect it to be at least 50 basis points higher than previously anticipated by year-end.While economists say euro zone inflation is yet to peak the ECB has given itself some room to catch up with its global peers, who are rapidly hiking rates to neutral, by planning a new instrument to limit the divergence in the bloc’s bond yields.The June 15-22 poll showed all but two of the 55 economists expected the ECB to deliver a quarter-point raise on July 21 to -0.25%. Two expected it to hike by 50 basis points, compared to none in the last poll.A strong majority of 91% or 50 of 55 economists expected the Bank to hike its policy rate by 50 basis points in September, taking the deposit rate out of negative territory to 0.25%.Last month forecasters were expecting the ECB to wait until the fourth quarter to bring the deposit rate, currently -0.50%, to positive territory.About 60% or 33 of 55 economists saw another 25 basis point hike in October and about 85% or 47 of 55 expected the same rise in December, bringing the deposit rate to 0.75% by end-year.But some forecasts for where it would be by end-December were as high as 1.25%, underscoring the possibility of bigger moves. “The ECB is engaging in a dash to neutral to stem the rise in underlying inflationary pressures … Risks to the near-term outlook are skewed towards a faster increase,” said Paul Hollingsworth of BNP Paribas (OTC:BNPQY).”Not least because of likely upside surprises from inflation, but also because the presence of a backstop facility assuages concerns to some extent about potential spillovers to peripheral spreads.”RECESSION?The bank’s neutral deposit rate is within 1.00% to 1.75%, the poll of a smaller sample showed, and it is seen being raised to within that range next year.The poll predicted 25 basis point hikes in the first, second and third quarters next year, pushing the deposit rate to 1.50%, within the terminal rate range of 1.25%-1.50%.”We expect weakness in growth to become clearer in the coming months, which should keep the ECB cautious … A modest recession is now our baseline projection,” said Bas van Geffen of Rabobank.”A recession will cause the ECB to halt its hiking cycle, but if inflation or expectations show no signs of abating, the ECB could be forced to continue regardless of such a downturn.”Economists replying to an extra question said there was about a one-in-three chance of recession within a year, slightly higher than in the last poll. Only two respondents had two consecutive quarters of contraction in their forecasts, the technical definition of recession.The economy was expected to grow 2.6% on average during 2022 and then expand 1.8% next year, median forecasts of about 70 economists showed.Over 70% or 25 of 34 economists said in response to an extra question that euro zone inflation was yet to peak. Twenty said it would happen in the third quarter, four said this quarter and one said in the fourth quarter.Inflation, which hit a record high of high of 8.1% last month, is set to average 8.3% next quarter – more than four times the ECB’s 2.0% target. It is then seen easing gradually, but will not be near target until the tail end of 2023. (For other stories from the Reuters global economic poll:) More

GamCare said it had increasingly received calls from people receiving state welfare payments who had gambled in the hope they could cover soaring energy and food bills, and lost.The charity reported that some people who it had helped successfully in the past had relapsed into gambling again under the growing financial pressure.British households are grappling with the highest rate of inflation out of the Group of Seven advanced economies, which hit a new 40-year high of 9.1% in May. The Bank of England has warned of inflation exceeding 11% by October.A YouGov survey of more than 4,000 people commissioned by GamCare and published on Thursday showed 46% were worried about their financial situation. More than half of those polled said they had gambled over the past 12 months, and most of this group had lost money.”Our helpline advisers are hearing that the cost of living is impacting people’s gambling behaviours – particularly those gamblers who have recovered,” said Anna Hemmings, chief executive of GamCare.”We also know that our team are hearing from more and more people who are reaching out for help around crypto trading.”Someone who paid in sterling to invest in Bitcoin six months ago to help hedge against the rising cost of living would have lost 55% of their investment as of Thursday.GamCare said 43% of problem gamblers had invested in cryptocurrency, and 25% out of this group said they wanted to invest more to chase losses – compared with only 7% of the wider population of crypto investors. More

Taiwan has long campaigned for such a deal, in what would be a strong show of support for the Chinese-claimed island in the face of unrelenting diplomatic and military pressure from Beijing. It says it is a reliable partner for the United States with shared democratic values.While Taiwan has strong bipartisan support in Congress and the Senate, the Biden administration last month excluded Taipei from its Asia-focused economic plan designed to counter China’s growing influence, the Indo-Pacific Economic Framework, or IPEF.AmCham Taiwan said they called “urgently” for the administration to start talks on a Bilateral Trade Agreement (BTA) with Taiwan, with a “completed text presented for passage in 2024”. Such a deal would encourage other like-minded partners to enter into similar arrangements with Taiwan, further open Taiwan’s economy and “effectively” address the economic and security implications of the island’s key chip industry.”In addition to these strategic trade elements with their clear implications for U.S. defence preparedness, a BTA would bolster both the U.S.’ and Taiwan’s economic and thus overall security vis-à-vis China.”However, the chamber, which has members from more than 500 international companies, noted the lack of progress on such an agreement, saying its passage was their top request to Washington.Chamber President Andrew Wylegala told reporters in Taipei there were “no clear indicators” the Biden administration was contemplating a BTA in the near term, but one could come further down the line.”I would put Taiwan in that small and rare group of partners that the U.S. would view as particularly desirable to pull into an FTA,” he added, referring to a free trade agreement. Taiwan and the United States are due to hold high-level trade talks in Washington at the end of this month under a new U.S.-Taiwan Initiative on 21st-Century Trade.(This story corrects first sentence to say by 2024, not next year). More

    A year and a half after Britain left the EU, Johnson is looking to boost trade with the Commonwealth, a network of 54 countries that are mostly former British colonies.     The Commonwealth, headed by Queen Elizabeth, is not a formal trading bloc with a free-trade agreement. But the network includes about a third of the world’s population and some of its fastest-growing economies.    A day before the heads of Commonwealth governments meeting begins in Kigali on Friday, Johnson will say he wants to start a new trade system to reduce costs and simplify rules for 65 developing countries, including many in the Commonwealth. This will reduce tariffs on foods, clothes and other items by 750 million pounds a year, he will say.The new system would see Britain replace the European Union’s Generalised System of Preferences, which applies import duties at reduced rates, with what will be known as the Developing Countries Trading Scheme.     “It is an under-appreciated fact that our unique union of nations is buzzing with economic activity,” Johnson will say.”The new initiatives we are launching today will ensure the UK is at the forefront of seizing opportunities, driving shared growth and prosperity for the benefit of all of our people.”Earlier this year, Britain struck a 120 million pound ($148 million) deal with Rwanda to deport asylum seekers to the East African country but the first such flight was halted last week by the European Court of Human Rights.The scheme has been widely criticised as inhumane. Prince Charles, the heir to the throne, who is representing his mother at the Commonwealth summit, privately described the plan as “appalling”, according to newspaper reports. More