Aurelia Butler

Borrowers covered under the forbearance program have not been required to make payments on their loans since March 2020, but the suspension of repayments is set to expire at the end of April.Over the period, an estimated $195 billion worth of payments have been waived, the New York Fed said.Borrowers in a separate smaller pool of about 10 million loans provided privately or through the Federal Family Education Loan (FFEL) system and not covered by the forbearance program struggled with their debt payments over the past two years. In particular, from March last year delinquency rates for FFEL borrowers have been on the rise and returned to pre-pandemic levels by the end of December.By contrast, delinquency rates fell among borrowers covered by the two-year forbearance program to a low of 3.6% at the end of last year.That bodes ill for those covered by the program who had higher debt balances, lower credit scores and were making less progress on repayments than FFEL borrowers before the pandemic began.”As such, we believe that … borrowers are likely to experience a meaningful rise in delinquencies, both for student loans and for other debt, once forbearance ends,” New York Fed economists wrote in a blog post. More

The US has agreed to ease steep tariffs on UK steel and aluminium products as the countries attempt to resolve a Trump-era trade dispute and bolster transatlantic relations.Washington will suspend its 25 per cent levy on UK steel imports of up to 500,000 tonnes a year and a 10 per cent levy on aluminium products of up to about 21,600 tonnes a year, according to the deal announced on Tuesday.The suspension, which will also see the UK lift its retaliatory tariffs on US bourbon, agricultural and other goods, will go into effect on June 1.The deal states that any UK steel company owned by a Chinese entity must undertake an audit of its financial records to “assess influence from the People’s Republic of China”. The results will be shared with the US.Chinese company Jingye Group acquired British Steel, the UK’s second-largest steelmaker, in late 2019.Donald Trump’s administration imposed tariffs on a range of countries in 2018 on the grounds that cheap foreign metal imports posed a threat to national security.Anne-Marie Trevelyan, the UK’s international trade secretary, said the move was “good news” for the British industries that had been “unfairly” hit with duties by the US. “It means our manufacturers can now enjoy a high level of tariff-free access to the US market once again.”Gina Raimondo, US Commerce Secretary, said President Joe Biden had made it a “top priority” to “counter China’s unfair trade practices and ensure that America is able to compete globally in the 21st century”.Biden administration officials have previously accused China of dumping steel produced by its state-subsidised industry into global markets.The Biden administration has already struck similar deals with the EU and Japan, although it only began talks with the UK on lifting the tariffs in January.

In December, the Financial Times reported that the US was delaying the talks because of concerns over the UK’s threats to change post-Brexit trading rules in Northern Ireland.Washington believed repeated threats by Brexit minister Lord David Frost to suspend the Northern Ireland protocol, which ensures there is no trade border on the island of Ireland, compromised the Good Friday Agreement of 1998, which brought peace to the region.Frost resigned just before Christmas and Liz Truss, the foreign secretary now in charge of talks, has taken a more conciliatory tone.The announcement follows a visit by Trevelyan to Baltimore and Washington this week, where she met with Katherine Tai, US trade representative, and Raimondo.In a press conference held earlier on Tuesday to mark the end of the two-day “trade dialogue”, Tai said the two sides had also discussed how best to respond to new shocks to the global economic system, such as Covid-19 and the war in Ukraine.When asked if the new dialogue set up by the UK and US would lead to the continuation of the stalled free trade agreement talks, Tai said she did “not want to prejudge, predetermine or prescript where these dialogues might take us”.But she added that a free trade agreement was “a very 20th-century tool” which “has its place . . . in the toolbox”. “What I would like to do is to ensure that the conversations and the approaches that we bring today . . . are maximally responsive and that we don’t spend years and spend a lot of blood, sweat and tears working on something that isn’t going to be relevant to the needs of our people in our economy,” Tai said.In response to the announcement, Gareth Stace, director-general of the trade body UK Steel, said: “This deal represents a hugely positive outcome . . . The tireless work of the [UK] trade secretary and her department has resulted in a strong deal for the UK which removes longstanding export barriers and opens up access to this important market once more.” More

Rishi Sunak is planning to set aside a large part of a windfall in UK public finances this year, risking a backlash from Tory MPs who want the chancellor to use all funds available to cushion the cost of living crisis hurting British families.The official forecasts in the Spring Statement will show the deficit is at least £20bn better than expected this year, but Sunak will use only some of the money to help households facing soaring gas, electricity, and fuel bills.Sunak will instead highlight the importance of “more resilient public finances” as he worries about a surge in the cost of servicing government debt instead of spending the entire windfall. He is set to say he will “stand by” families, with a cut in fuel tax expected to be part of new measures he will announce on Wednesday.His speech will focus on the theme of “security” as he offers Britain’s “unwavering” support to Ukraine amid a promise to continue supplying weapons and aid to the war-stricken country. Many Tory MPs are pushing for bolder fiscal action, including cutting taxes or reducing the impact of the planned 1.25 percentage point rise in national insurance contributions, which takes effect next month and is intended to raise £12bn for the NHS and social care. Some want Sunak to ditch the measure altogether, although a second choice would be to increase the threshold at which people pay NICs from £9,600 to the income tax threshold of £12,500.

Iain Duncan Smith, a former Conservative leader, said Sunak had “headroom” and should use the fiscal good news this year to pump money into the economy to avoid “stagflation” — when prices rise amid a recession.“He should act boldly and decisively,” Duncan Smith said, adding that the chancellor should either scrap the national insurance rise or raise the threshold. “By the autumn it could be too late.”Official figures on Tuesday showed a £13.2bn downward revision in borrowing, putting the government on course to release more than £20bn for new one-off measures to help households. Robert Halfon, a longstanding campaigner against increases in fuel duty, said: “Boris and the chancellor should make it their defining domestic mission to use this windfall to cut the cost of living for workers — not just for this emergency situation but for the long term.”The Treasury is nervous about these demands and worries that higher inflation in 2022-23 and higher interest rates will raise the forecast cost of servicing debt by more than the extra tax revenues it will receive. However, forecasts for the 2024-25 financial year are set to show an improvement in borrowing because additional tax revenues will outweigh the higher cost of servicing debt.Sir Charlie Bean, a former member of the Office for Budget Responsibility’s forecasting team, nevertheless said he expected the chancellor to have significant “wriggle room” in the public finance forecasts to help households. Sunak is also expected to announce a shake-up of training in an attempt to raise the country’s skills levels and growth potential, including a review of the operation of the apprenticeship levy. He will argue that providing incentives to the private sector to carry out more training is part of a plan to create “a new culture of enterprise”, including a new regime of tax breaks to boost investment and innovation.Last month the chancellor said he feared the apprenticeship levy was not doing enough to “incentivise business to invest in the right kinds of training”. Most new measures will be introduced in his autumn Budget. More

Reforming the current system, Pension Fund Administrators (AFP), was one of the biggest demands demonstrators had during the 2019 protests. One of the biggest complaints against the system is its low-paying pensions.Leftist President Gabriel Boric proposed eliminating the private system in favor of a public one in his government plan, but Marcel refrained from specifics during a presentation before deputies. The finance minister pointed out that one of the problems of the current system is the low level of contributions from workers and companies compared to other countries. When it came to the reform, he said that the government was going to start a “social dialogue” to find governing principles for a new system.”From there we are going to work on a reform project that can reach Congress during the next year,” Marcel said.”We don’t want this consultation process to go beyond a couple of months, because we are aware that there is a lot of anxiety to finally see a proposal on the table.”Congress has also approved three partial withdrawals of pension savings to help households during the pandemic, and a new withdrawal is currently under discussion.Boric’s government, which took power on March 11, has a complicated agenda filled with promises of social reforms while struggling with a sputtering economy after it registered historic growth last year. (Report by Fabián Andrés Cambero,; Edited by Natalia Ramos and Alistair Bell) More

(Reuters) – Cleveland Federal Reserve Bank President Loretta Mester on Tuesday said she would like to raise interest rates to about 2.5% by year end, with bigger rate hikes in the first half, and further tightening next year to bring down high inflation and keep it from getting entrenched.”I find it appealing to front-load some of the needed increases earlier rather than later in the process because it puts policy in a better position to adjust if the economy evolves differently than expected,” Mester said in remarks prepared for delivery at John Carroll University. “If by the middle of the year, inflation is not beginning to moderate, we could speed up our rate increases. But if inflation is moving down faster than expected, we could slow the pace of rate increases in the second half of the year compared to the first half.” The Fed raised rates last week by a quarter of a percentage point, to a target range of 0.25% to 0.5%, a move Mester said she strongly supported. Her remarks added to a rising chorus supporting a faster pace at coming Fed meetings. Fed Chair Jerome Powell on Monday said the Fed should raise rates “expeditiously” toward neutral and, if needed, above it. Russia’s invasion of Ukraine adds to upward pressure on inflation, Mester said, which is already running at a 40-year high and three times the Fed’s 2% inflation target. “With inflation already at very high levels and demand outstripping supply, there are rising risks that too-high inflation will become embedded in the economy and persist,” she said. More