Aurelia Butler

WASHINGTON (Reuters) -The Republican-controlled U.S. House of Representatives will vote on legislation on Wednesday that pairs a must-pass spending bill with tighter voting rules, setting up an election year clash with the Democratic-majority Senate that risks a partial government shutdown.Congress must pass spending legislation before the start of the new fiscal year on Oct. 1 to avoid furloughing thousands of federal workers and shutting down a wide swath of government operations just weeks before the Nov. 5 election.But lawmakers are at odds over an attached Republican voting bill that would require those registering to vote to provide proof of U.S. citizenship. Spurred by Republican presidential candidate Donald Trump’s false claims about election fraud, House Republicans say the bill is a necessary step to prevent people living in the country illegally from voting. For their part, Democrats say it aims to drive down voter participation. A 2017 study found 30 possible instances of noncitizens voting out of more than 25 million ballots cast.It is not clear whether Republicans will even muster enough support to pass the bill out of the House. With a narrow 220-211 majority, Republicans have few votes to spare and some have said they will vote against it. House Republicans have spent much of the past two years paralyzed by infighting, and Speaker Mike Johnson shelved a vote on the package last week due to lack of support.”I certainly hope that it passes,” he told CNBC in an interview.Even if the bill clears the House this time, it is certain to be rejected by the Senate, leaving the two chambers at odds with less than two weeks before government funding expires.Senate Republican Leader Mitch McConnell on Tuesday appeared to show little enthusiasm for the fight, saying his party would likely be blamed if Congress allows the government to shut down shortly before the election. “I’m for whatever avoids a government shutdown,” he told reporters.Johnson said House Republicans were looking “to run the right bill at the right time on the right principle … We’re going to get the job done.”Congress faces an even more critical self-imposed deadline on Jan. 1, before which they must act to raise or extend the nation’s debt ceiling or risk defaulting on more than $35 trillion in federal government debt. More

The FCA, which last year launched a review of the cash savings market, said it had worked with Lloyds (LON:LLOY), HSBC, NatWest, Santander (BME:SAN) UK, Barclays, Nationwide Building Society, TSB, Virgin Money (LON:VM) UK and the Cooperative Bank.Under the FCA’s Consumer Duty, which came into force last July and is one of the regulator’s top priorities, banks, asset managers and other regulated financial services companies have to ensure customers receive fair value and that no group is receiving a worse deal than others on the same product.Savers will receive a total of around 4 billion pounds ($5.3 billion) per year in extra interest payments after average rates on easy access savings accounts rose to 2.11% in June from 1.66% last July. Almost 175 instant access accounts offered rates above 4%, the FCA said. But the largest firms can still pay below the market average for standard easy access products and the watchdog queried how some firms assessed the value of their products.”We expect firms will improve fair value assessments over time and we will take appropriate action where we consider this is not the case,” the FCA said.Regulatory action can range from working with firms to improve customer value to penalties.The Bank of England cut bank rates to 5% from a 16-year high of 5.25% in August and economists expect further easing this year, amid hopes that Britain’s battle with weak growth and high inflation might be coming to an end.($1 = 0.7560 pounds) More

Lawmakers must reach an agreement by September 30 to prevent such a disruption, with expectations leaning towards a deal materializing, albeit “likely not till the last minute,” according to Evercore ISI strategists.“There’s little appetite on either side to have a shutdown five weeks before an election, and lawmakers with close races want to spend October on the campaign trail with few distractions from Washington,” strategists said in a Tuesday note.Although a “relatively clean” continuing resolution (CR) ultimately gets passed, Speaker Johnson’s politics remain complicated, Evercore points out.Johnson is aiming to distance himself from the internal conflicts that plagued his predecessor, Speaker McCarthy, especially as Republicans strive to maintain their majority. However, Johnson’s leadership could be undermined if he appears overly accommodating to Democrats, which might jeopardize his position in the next term, assuming Republicans stay in control.Complicating matters, former President Trump has advised Republicans against supporting a CR unless it includes new voter ID requirements, a demand that Democrats find unacceptable. Johnson has scheduled a vote for a six-month CR with these voter ID stipulations on Wednesday, risking further political strife.Historically, government shutdowns have had a minor and short-lived impact on the macroeconomy. Nonetheless, they create significant disruptions for households and businesses and cast doubt on U.S. fiscal management.“If there is a shutdown, perhaps the biggest market impact would be uncertainty arising from a lack of official economic data – most immediately, the next jobs report on October 4 could be postponed,” strategists continued.As negotiations are expected to reach a climax next week, a key point of contention is the duration of the CR. Johnson has proposed a six-month CR, aligning with Republicans who believe they will have greater leverage next year. However, this is contested by Democrats and some Republican defense advocates who worry that a six-month CR would set up another funding battle too close to an April 30 deadline.That deadline is important as it could trigger a 1% cut in discretionary spending compared to levels in the fiscal 2023 year (FY23) if a budget is not passed due to the terms set under the 2023 debt limit deal. This mechanism was designed to pressure Congress into passing appropriations bills, which they did for FY24 in March, but the outcome for FY25 remains uncertain. More

The ECB cut rates for the second time this year on Thursday and markets are now trying to guess when the next move is coming, with most bets focused on December and some also putting money on another cut in October. Nagel would not, like some of his colleagues, close the door on December, but noted that hurdles remained.”Inflation is currently not where we want it to be,” he told a speech in Frankfurt.While inflation fell to 2.2% in August and may fall even closer to the ECB’s 2% target this month, it will likely rise again towards the end of the year and could end 2024 around 2.5%.A key issue is that wage growth remains rapid and could put upward pressure on private consumption, and thus prices. “In Germany, high wage increases were agreed in the most recent collective bargaining agreements,” Nagel said. “And relatively high new agreements are also expected in the upcoming negotiations.”He added that labour shortages in Germany would likely keep upward pressure on wages even in the longer term.While Nagel declined to say he preferred only quarterly interest rate cuts, like some other prominent conservatives, he did argue for “staying power” to defeat inflation.”Depending on the incoming data, the time intervals between the potential steps may vary,” he said. “This is because the monetary policy course must remain sufficiently tight for long enough for the inflation rate to return to the 2% target in the medium term.”We now need to show that we have enough staying power,” Nagel said. More

HAVANA (Reuters) – Cuba’s booming private businesses braced for impact on Wednesday as the island’s communist-run government implemented a raft of new laws aimed at more tightly regulating the private sector amid a deepening economic crisis.The new rules come after less than three years of the legalization of private businesses following a decades-long ban put in place by former leader Fidel Castro. The measures end incentives for the creation of new businesses, restrict independent wholesalers and add new requirements for applicants seeking to start a company. They also boost taxes, bolster worker’s rights, tighten accounting requirements and sharpen oversight of the private sector. The fresh regulations come into effect as Cuba navigates its worst economic crisis in decades, with severe shortages of food, fuel and medicine and a record-breaking exodus of its citizens. The government says the reforms are necessary to correct distortions and boost the economy, while ensuring private enterprise benefits the broader population. Cities and towns can now deny a license to a business that doesn’t fit within a local development plan, and municipalities may set prices in some cases.”This is not a crusade against non-state forms of management … but rather, it brings them within the framework of legality,” said Economy and Planning Minister Joaquin Alonso Vazquez, adding the measures would help develop the country.William LeoGrande, a professor of Latin American politics and U.S. foreign policy at Washington’s American University said the regulations “all have a similar effect of constraining the private sector, rather than unleashing it.” “The Cuban government needs the private sector to help the economy recover, but distrusts it and wants to keep it under tight state control,” he added.The stakes are high, says Oniel Diaz, co-founder of private business consultancy AUGE, which advises more than 200 Cuban small business clients. Diaz said some of the rules, such as fighting tax evasion, are understandable while others will only slow further the ailing economy.”The question is … whether or not these measures … contribute to getting the country out of the economic crisis in which it has been mired and the answer is no,” said Diaz.FILLING A VOIDThe private sector has been a rare bright spot in an otherwise anemic economy that has failed to recover from the COVID-19 pandemic and remains saddled by a decades-long U.S. trade embargo that has complicated financial transactions by the Cuban government.Cuba in three years has approved 11,355 private businesses. The sector’s employees, together with 600,000 self-employed workers in Cuba, now account for 25% of jobs and 15% of imports, according to official data.Small private retailers – a last remaining reliable and varied source of food – may be hardest hit by new accounting hurdles and a rule that requires wholesalers to work through state companies when importing from abroad, according to experts and business owners consulted by Reuters.These small grocers and corner stores – common now in many Cuban cities – have filled a void left by a near-bankrupt state, importing and distributing more than a billion dollars of food and beverages in 2023, Diaz said. “The(government) wants to restrict the activity … and allow spaces for (the state) to recover lost ground,” Diaz said.Reuters spoke with several business owners who said they were still unclear how the regulations would be applied and how they might affect their business. They declined to speak on the record.For many Cubans, who worry more about putting food on the table, any opportunity to buy goods is welcome – as long as the price is right.”I think small business is the best thing going,” said Alexander Silega, a 36-year-old self-employed Havana resident. “But we need some regulation in terms of prices.” More

The average contract rate on a 30-year fixed-rate mortgage dropped 14 basis points in the week ended Sept. 13, to 6.15%, the Mortgage Bankers Association said on Wednesday. That was the lowest rate since Sept 2022, and followed a 14-basis-point drop the previous week.Applications for home loans, refinancing, and purchases all jumped last week, the MBA said, citing lower borrowing costs and improved housing affordability as home prices rose more slowly. US mortgage rates peaked about 11 months ago at near 8%, and have since fallen as the Fed signaled its 2022-2023 rate-hike campaign had ended and that its next move would be a rate cut, once policymakers became confident inflation was under control.The Fed wraps up its Sept 17-18 meeting later on Wednesday, and along with a rate cut is also expected to publish fresh projections for the policy rate path over the next few years. More