Aurelia Butler

WASHINGTON (Reuters) – British finance minister Rachel Reeves said she would be presenting her upcoming budget as a chance to reset the country’s economy and boost investment when she meets international partners in Washington on Thursday.Reeves is on a two-day trip to the International Monetary Fund and World Bank annual meetings, less than a week before she presents the Labour Party’s first budget after 14 years out of power.Government sources said last week she would be aiming to raise around 40 billion pounds ($52 billion) through a mix of tax rises and limited savings in public spending to boost public services and fill a budget hole left by the previous administration.Britain’s Guardian newspaper reported on Wednesday that Reeves would also use the IMF meetings to tee up a change to the fiscal rules which constrain government borrowing. Asked about the report, a Treasury spokesperson said the ministry did not comment on budget speculation.”I’ll be in Washington to tell the world that our upcoming Budget will be a reset for our economy as we invest in the foundations of future growth,” Reeves said in a statement released to mark the start of her trip.”It’s from this solid base that we will be able to best represent British interests and show leadership on the major issues like the conflicts in the Middle East and Ukraine.”Earlier this week Britain said it would lend Ukraine $3 billion to buy weapons as part of a wider loan by the Group of Seven rich nations, backed by frozen Russian central bank assets.Britain’s finance ministry said Reeves would support proposals in Washington to expand development financing for poorer countries to meet the United Nations’ sustainable development goals and encourage generally richer G20 countries to be more transparent about their own debt.On Tuesday the IMF upgraded its 2024 growth forecast for Britain more than for any other G7 country, although at 1.1% for 2024 and 1.5% for 2025 its forecasts remain modest by historic standards.The global lender also said Britain, like most other G7 countries, needed to stem a rise in public debt.Reeves has been eyeing changes to Britain’s domestic budget rules to make it easier to finance public investment, potentially by using a looser definition of public debt that allows a wider range of public assets to be offset against borrowing.The Guardian said Reeves planned to target a measure known as public sector net financial liabilities – which allows illiquid financial assets to count against debt – rather than the existing target of public sector net debt, excluding the Bank of England.Britain’s Institute for Fiscal Studies think tank previously estimated that such a change would potentially allow an extra 50 billion pounds of borrowing.($1 = 0.7746 pounds) More

The central bank in Latin America’s largest economy last month delivered a 25-basis-point increase to its benchmark interest rate, bringing it to 10.75%, and is expected to speed up the pace of tightening when its board meets in November.Brazil’s monetary authority has been trying to tackle a challenging inflation outlook driven by stronger-than-expected economic activity.Central bank Governor Roberto Campos Neto said that it was important to convince investors that policymakers will do “what is necessary” to reach inflation targets, echoing remarks made earlier by Paulo Picchetti, the central bank’s international affairs director.Both men indicated that the central bank would maintain its data-driven approach going forward, and noted they are worried about inflation expectations exceeding the target.”When you see the inflation de-anchoring and the risk premium where it is today, (those are) signs that worry us a lot,” Campos Neto said at an event hosted by UBS. A poll of private economists showed earlier this week that Brazil’s inflation rate is expected to close out the year at 4.5%, hitting the upper-end of the central bank’s 1.5%-4.5% target range, and decelerate to 3.99% by the end of next year.Markets are pricing in an 89% chance that the central bank will hike borrowing costs by 50 basis points next month, while the other 11% point to an even larger increase of 75 basis points.”We chose to be completely data-dependent” on the next policy steps, Picchetti told an event hosted by XP (NASDAQ:XP), “with a clear commitment to do what is necessary in terms of monetary policy to make inflation converge to the target.”Annual inflation in Brazil hit 4.42% in September. More

(Reuters) – A look at the day ahead in Asian markets. Asian markets are likely to open on the defensive on Thursday with sentiment badly dented by the continued rise in U.S. bond yields and mounting speculation the Federal Reserve won’t cut U.S. interest rates as much as investors had previously hoped.That shifting outlook sparked a sharp selloff in U.S. Big Tech stocks on Wednesday and the Nasdaq fell 1.6%, its biggest fall in nearly two months. World stocks, meanwhile, fell for a third straight day.That’s a bearish backdrop to Asian trading on Thursday, although the 8% surge in Tesla (NASDAQ:TSLA) shares after the close on Wednesday following the company’s third-quarter results may offer the tech sector some support.There’s a raft of top-tier local economic data due from Asia on Thursday, including purchasing managers index reports from Japan, India and Australia, third quarter GDP from South Korea, and inflation figures from Malaysia.In currency markets the spotlight remains fixed on dollar/yen. It rose above 152.00 on Wednesday, breaking technical resistance at the 200-day moving average in the process, which suggests the upward momentum has more room to run. This is fueling market chatter about possible intervention from Japanese authorities to slow the move. But with many top finance officials, including Bank of Japan Governor Kazuo Ueda, in Washington for the IMF and World Bank annual meetings and Japan’s general election only days away, intervention at this juncture may be a long shot.”I doubt they will do anything unless we were to fly through 160.00 for some reason,” reckons Brad Bechtel at Jefferies.Ministry of Finance officials were warning against what they described as speculative moves when the yen fell below 149 per dollar nearly three weeks ago. Japan last conducted yen-buying intervention in late July after the currency tumbled to a 38-year low below 161 per dollar.Ueda said in Washington on Wednesday it was “still taking time” for Japan to achieve its 2% inflation goal in a sustainable manner, adding that it is “very hard” to pin down the appropriate size of interest rate hikes from here on.Inflation figures for the capital Tokyo on Friday will give the latest steer on Japanese price pressures. A Reuters poll suggests consumer inflation in Tokyo in September was 1.7%, undershooting the BOJ’s 2% price target for the first time in five months. Elsewhere in Asian currencies, South Korea’s finance minister was reported on Wednesday as saying the won’s current level near 1,400 per dollar should be regarded as a “new normal”.Figures on Thursday are expected to show that the South Korean economy bounced back to growth in the third quarter after shrinking 0.2% in the second. Here are key developments that could provide more direction to markets on Thursday:- Japan, India, Australia PMIs (October)- South Korea GDP (Q3)- Malaysia inflation (September) More

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WASHINGTON (Reuters) -Bank of Japan Governor Kazuo Ueda said on Wednesday it was “still taking time” to sustainably achieve its 2% inflation target, signaling that the central bank will tread carefully in pushing up the country’s still near-zero interest rates.But he also warned of the cost of moving too slowly in raising rates, which could give speculators an excuse to trigger an unwelcome yen slide that pushes up import costs.”When there’s huge uncertainty, you usually want to proceed cautiously and gradually,” Ueda said at a panel at the International Monetary Fund on Wednesday.”But the problem here is if you proceed very, very gradually and create expectations that rates are going to stay at low levels for a very long time, this could lead to a huge build-up of speculative positions which could become problematic,” he said. “We need to strike the right balance.”The BOJ ended negative rates in March and raised short-term rates to 0.25% in July on the view Japan was making progress toward sustainably achieving its 2% inflation target.Ueda has said the bank will keep raising rates if the economy moves in line with its forecast. But he has also stressed the need to scrutinize global uncertainties, such as the U.S. economic outlook, in timing the next rate hike.Underlying inflation in Japan has been moving around zero before 2022, when it began to rise due to the spillover from global rises in energy and food prices, as well as a boost to wages from a tight labor market, Ueda said in the panel.”It’s still taking time for us to get to 2% in a sustainable manner,” Ueda said. “We want to use this opportunity to raise inflation expectations, underlying inflation, and move to a new equilibrium with 2% inflation in a sustainable way,” he said.”That’s why we maintain policy easy.”The BOJ is widely expected to keep interest rates steady at next week’s policy meeting. A slim majority of economists polled by Reuters saw the BOJ forgoing a hike this year, with most expecting the bank to raise rates again by March.When asked what keeps him awake at night, Ueda said, “What would be the right size of (policy) normalization going forward, and how best to allocate the total size” through rate hikes across time.He declined to elaborate, saying it was “very hard” to pin down the appropriate size of future hikes due to the difficulty of estimating Japan’s neutral rate of interest.”I have to say that we can’t telegraph all our future movements ex ante,” he said, referring to how the BOJ would not commit to a set timetable for raising rates. “What we can do is to explain carefully our basic monetary policy strategy.” More

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