Aurelia Butler

Many developing nations have been hit hard by the economic fallout from the global pandemic. And while wealthy creditor countries granted the poorest ones temporary relief through a Debt Service Suspension Initiative (DSSI), that programme is now expiring and governments must resume payments.The warning from the UK-based Jubilee Debt Campaign echoed a call to action earlier this month from the World Bank, which said the pandemic-induced downturn had left around 60% of low-income countries in or at high risk of debt distress.”The debt crisis continues to engulf lower income countries, with no end in sight unless there is urgent action on debt relief,” Heidi Chow, Jubilee’s Executive Director, said in a statement.Data compiled by Jubilee showed that developing country debt payments increased 120% between 2010 and 2021, reaching their highest level since 2001. Average government external debt payments represented 14.3% of government revenue in 2021, more than double the 6.8% recorded in 2010. The U.S. Federal Reserve is due to meet this week and markets are pricing in four interest rate hikes for this year. Higher Fed rates will likely make borrowing more expensive for emerging market countries, which will need to price debt at a premium as safe haven baseline U.S. Treasuries become more attractive to investors. Globally, 54 countries are now in debt crisis, according to Jubilee, meaning debt payments are undermining the ability of governments to protect the basic economic and social rights of their citizens. Kenya and Malawi have entered debt crisis this year with another 14 countries at risk of both a public and private debt crisis, the group said. World Bank President David Malpass https://www.reuters.com/article/world-bank-outlook-malpass-idUSL1N2TR18V this month warned that slow progress on debt relief for developing countries increased risks for their economies and made sovereign defaults more likely. Last year, the International Monetary Fund (IMF) approved a special allocation of $650 billion worth special drawing rights https://www.reuters.com/article/us-g20-finance-imf-reserves-idUSKBN2F404Q – the Fund’s unit of exchange backed by dollars, euros, yen, sterling and yuan. The measure aimed to boost global foreign exchange reserves amid the COVID-19 pandemic. Around $275 billion of the allocation are destined for emerging market and low-income countries. The IMF is also proposing a $50 billion Resilience and Sustainability Trust https://blogs.imf.org/2022/01/20/a-new-trust-to-help-countries-build-resilience-and-sustainability that will allow qualifying countries to borrow reallocated SDRs. More

GENEVA (Reuters) – The Omicron-fuelled wave of COVID-19 infections has led wealthy countries to intensify their recruitment of nurses from poorer parts of the world, worsening dire staffing shortages in overstretched workforces there, the International Council of Nurses said.Sickness, burnout and staff departures amid surging Omicron cases have driven absentee rates to levels not yet seen during the two-year pandemic, said Howard Catton, CEO of the Geneva-based group that represents 27 million nurses and 130 national organisations.To plug the gap, Western countries have responded by hiring army personnel as well as volunteers and retirees but many have also stepped up international recruitment as part of a trend that is worsening health inequity, he continued.”We have absolutely seen an increase in international recruitment to places like the UK, Germany, Canada and the United States,” Catton said in a Reuters interview based on a report he co-authored on COVID-19 and the global nursing force.”I really fear this ‘quick fix solution’ – it’s a bit similar to what we’ve been seeing with PPE (personal protective equipment) and vaccines where rich countries have used their economic might to buy and to hoard – if they do that with the nursing workforce it will just make the inequity even worse.”Even before the pandemic there was a global shortage of 6 million nurses, with nearly 90% of those shortages in low and lower-middle-income countries, according to ICN data.Some of the recent recruits to rich countries have come from sub-Saharan Africa, including Nigeria, and parts of the Caribbean, Catton said, saying that nurses were often motivated by higher salaries and better terms than at home.The ICN report said this process was also being facilitated by giving nurses preferred immigration status.”The bottom line is that some people would look at this and say this is rich countries offloading the costs of educating new nurses and health workers,” he said.Even wealthy countries will struggle to cope with the “mountains of backlog of unmet care” when the pandemic winds down, Catton warned, calling for more investment and a ten-year plan to strengthen the workforce.”We need a coordinated, collaborative, concerted global effort which is underpinned by serious investment, not just warm words and platitudes and applause,” he said. More

UK economic activity growth slowed to an 11-month low in January, as high numbers of coronavirus infections weighed down on consumer services, according to a closely watched survey.The flash IHS Markit/Cips UK composite purchasing manager index, or PMI, a measure of the health of manufacturing and services activity, dipped to 53.4 in January from 53.6 in the previous month.The reading fell short of the 55 forecast by economists polled by Reuters, and marked its lowest level since February 2021, when the country was still under lockdown with strict Covid-19 restrictions. Gabriella Dickens, economist at the consultancy Pantheon Macroeconomics, said the January data suggested “that the Omicron variant continued to weigh on activity in the first half of the month”. Dickens added that the PMIs, based on interviews conducted between January 12 and 20, were in line with her forecast for a further small month-to-month fall in gross domestic product after an expected contraction in December.Yet James Smith, economist at ING, noted that a “more modest fall in the PMIs, relative to past Covid waves” hinted that “the cumulative hit to UK monthly GDP from Omicron will be less than 1 per cent”.Dickens warned that the weak January reading would not dissuade the Bank of England’s Monetary Policy Committee from increasing interest rates at next week’s meeting, particularly in light of the persistent price pressure. The PMI sub-index for input costs across the economy rose at its second-fastest pace since records began in 1998, after reaching a peak last November, reflecting higher energy costs and staff wages, according to the report. The MPC “has little choice but to hike rates again in order to contain price pressures and anchor inflation expectations”, said Dickens.The survey showed that manufacturing was outperforming the services sector as the latter bore the brunt of a fresh wave of Covid-19 infections, which forced many people to self-isolate or avoid crowded places towards the end of last year. “Consumer-facing businesses have been hit hard by Omicron”, while others “have remained encouragingly robust,” said Chris Williamson, chief business economist at IHS Markit.In contrast to the decline in economic activity in January, a sustained rebound in the availability of materials led to the fastest rise in UK manufacturing output volumes since August.

Unlike the services sector, factories also reported a slowdown in input prices thanks to some easing of supply chain disruptions and a reduction in the cost of raw materials. Businesses in both the manufacturing and services industries commented on capacity constraints and rising backlogs of work as a result of staff absences due to the pandemic, according to the report. Some forward-looking indicators gave a more promising picture than the January output readings. Business expectations for the year ahead, for example, were their most upbeat since the summer, with respondents reporting that looser pandemic restrictions and strong projections for customer demand had helped to boost their confidence.While the PMIs suggest that the UK economy is still suffering from a “hangover from the surge in Omicron cases”, said Adam Hoyes, economist at research firm Capital Economics, “we still think GDP will recovery fairly swiftly over the rest of Q1”. More

Murria’s AdvancedAdvT said on Monday it had floated two options, one an all-share offer that values each M&C share at around 220 pence or an alternative structure that includes some cash and values them at around 200 pence. It said the paper offer represented a 20.7% increase on its previous proposal, but that the agency’s independent directors rejected it late on Sunday. The 220 pence price – valuing M&C Saatchi at about 270 million pounds ($364 million)- is based on the AdvancedAdvT stock price when it was halted from trading. M&C shares were up 2.5% at 179.5 pence in morning trading, before falling following the M&C statement. AdvancedAdvT, the vehicle of the software entrepreneur Murria that is also backed by private equity group Marwyn, has said it would combine its digital capabilities with the brand recognition of M&C, and invest heavily to help it better compete, including with acquisitions. Founded in 1995 by ad mogul brothers Maurice and Charles Saatchi, M&C has been recovering from a 2019 accounting scandal and argues the offer does not reflect its expected future growth. It has said it sees little merit in a deal that does not offer its shareholders a full premium.It said on Monday it had not seen any details about possible takeovers, and there was no guarantee this strategy would work. It also noted that major corporate change can unsettle key staff, a fundamental issue for a services company. Murria is M&C’s deputy chairman and biggest investor. She owns 12.5% of M&C directly, while AdvancedAdvT owns 9.8%. In Monday’s statement, AdvancedAdvT said it would want to keep Saatchi’s Moray MacLennan as CEO, with AdvancedAdvT’s Gavin Hugill as chief operating officer. Vin Murria would act as chairperson with a majority of independent directors.M&C Saatchi in a trading update on Friday lifted its 2021 headline profit before tax outlook, and said a regulatory investigation into the group’s accounting had closed without any enforcement action. Analysts at Peel Hunt said with the group’s recent strong trading and the closure of the investigation it believed a further improved offer would be required. AdvancedAdvT has until Feb 3 to provide a formal offer, they said.($1 = 0.7418 pounds) More

The highly anticipated Fed meeting concludes on Wednesday and the market will pay close attention to how worried the U.S. central bank is over surging inflation and how aggressive they will be in trying to contain it. Fed funds futures traders are fully pricing in a 25 basis point hike in March, in addition to three more rate increases by year-end. Stocks are off to a rough start in 2022, with the Nasdaq index now down 14.3% from its November closing peak as prospects of faster policy tightening steps spurred a rally in Treasury yields that dealt a sharp blow to Wall Street’s growth names.Last week, the S&P 500 and the Nasdaq posted their worst weekly performance since the onset of the pandemic in March 2020. The benchmark index has fallen 8.8% from a record high hit on Jan 4.The CBOE volatility index, also known as Wall Street’s fear gauge, climbed above 30 points to hit its highest level since early December, with global investors anxious after Russia massed troops near the border with Ukraine prompting tensions with Western powers. At 06:29 a.m. ET, Dow e-minis were down 109 points, or 0.32%, S&P 500 e-minis were down 17.25 points, or 0.39%, and Nasdaq 100 e-minis were down 73.25 points, or 0.51%.Technology companies Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL), International Business Machines (NYSE:IBM) Corp and Tesla (NASDAQ:TSLA) Inc were flat to down 3.1% in premarket trading ahead of their results this week.Growth heavyweights including Google-owner Alphabet (NASDAQ:GOOGL) Amazon.com (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Nvidia (NASDAQ:NVDA) Corp also fell more than 1% each, while Citigroup (NYSE:C), down 1.4%, led declines among major Wall Street lenders.Kohl’s Corp (NYSE:KSS) surged 28.4% after Reuters reported private equity firm Sycamore Partners is preparing to make a bid for the U.S. department store days after a consortium backed by activist investment firm Starboard Value proposed a buyout. Pfizer Inc (NYSE:PFE) slid 3.8% after U.S. health regulators declined to approve the treatment for growth hormone deficiency in children that it developed with partner OPKO Health Inc.Shares of OPKO dropped 12.0%.Meanwhile, flash reading on Markit composite PMI for January is also due after market open. More