Economy

LONDON/WASHINGTON (Reuters) – The aviation industry will press regulators this week for urgent action to help tackle GPS “spoofing” amid a surge in such activity, which can send commercial airliners off-course, due to conflicts in Ukraine and the Middle East.International trade body IATA and European regulator EASA have organised a meeting in Cologne, Germany, on Thursday that will bring together airlines, plane manufacturers and aviation technology firms, as well as national and regional regulatory bodies, to discuss the issue. Spoofing might involve one country’s military sending false Global Positioning System (GPS) signals to an enemy plane or drone to hinder its ability to function. The problem for commercial aviation comes if that false signal is then picked up by a GPS receiver in a passenger plane, potentially confusing the pilot and air traffic control.And there are signs that’s becoming more common. In December, aviation advisory body OPSGROUP flagged a surge in GPS spoofing affecting private and commercial jets around the Middle East, including Iraq, Iran and Israel, and the Black Sea. AirBaltic, which flies out of Eastern Europe’s Baltic region, has also reported an increase in spoofing, as well as jamming of signals. While technology exists to mitigate such activity, it is mostly confined to military users or those who can afford to buy it privately, like business jet owners. Certifying new technologies for civil aircraft can take up to a decade, industry officials said. But with spoofing increasing, many told Reuters there is no time to wait. “The big challenge you always have with commercial airliners is the certification time,” said Xavier Orr, CEO of Advanced Navigation, which makes anti-spoofing technology.Export controls can be another block to making technologies available for passenger jets, defence firm Honeywell (NASDAQ:HON), which designs avionics solutions to jamming and spoofing, said. According to an agenda for Thursday’s meeting, both short-term and long-term solutions will be discussed, including what technologies exist and can be applied today. The difficulty will be coming up with a coordinated approach that is acceptable to regulators and also cost-effective for airlines. “Ultimately, stakeholders need to come together and agree on a standard,” said Matthias Schaefer, the managing director of SeRo Systems GmbH, another maker of anti-spoofing tech.IATA, the International Air Transport Association, said the meeting would focus on developing guidance for risk mitigation. The EU Aviation Safety Agency (EASA) confirmed the event was taking place, but did not respond to requests for a guest list or further details on the agenda. “The FAA (U.S. Federal Aviation Authority) is working with interagency and international partners on global navigation satellite system (GNSS) authentication capabilities and GNSS disruption identification, location and mitigation tools,” the FAA said in an emailed statement. A spokesperson for the NATO military alliance said it would not send a representative. AIRLINES Air France will be among airlines attending the meeting to raise its concerns and connect with those designing anti-spoofing technologies.”Air France … is working with manufacturers and regulatory agencies to improve the handling of interference, whether intentional or not,” a spokesperson said.AirBaltic said it had taken precautions since noticing an increase in incidents. “We have created an appropriate risk prevention plan and action algorithm, guided by the aircraft manufacturer’s instructions,” a spokesperson said, without giving more details.Plane manufacturers have issued guidance following OPSGROUP’s warning, but industry sources said this related more to temporary workarounds than a long-term solution.In addition to navigation, airliners rely on GPS for a host of on-board calculations. Two pilots, who declined to be named due to the sensitivity of the matter, told Reuters they had been switching off their GPS systems and using alternative navigation techniques when flying over areas where spoofing has been reported.Some industry players said that, rather than mandating airlines buy anti-spoofing technologies, regulators could opt to boost training for pilots so they can identify when they are being spoofed and move to alternative navigation methods. “If I know that I am transiting near Iran and that there have been incidences of GPS jamming, I probably would not rely on GPS,” said Matt Thompson, senior technical adviser for the Association of Old Crows, a U.S.-based nonprofit specialising in electronic warfare and tactical information operations. More

OTTAWA (Reuters) – The Bank of Canada (BoC) is expected to keep its overnight rate on hold on Wednesday when it also releases new inflation and growth forecasts that should provide insight into the central bank’s view on when borrowing costs may begin to ease.The BoC governing council has held rates steady at three consecutive policy meetings after last hiking in July to a 22-year high of 5.0%. Annual inflation in December was 3.4%, still higher than the central bank’s 2% target but below a peak of 8.1% in June 2022.”There’s no denying there’s been progress on bringing inflation lower; however, it’s also clear that there’s still plenty of work to do in order to get back to 2%,” Benjamin Reitzes, managing director and macro strategist at BMO Capital Markets, said in a note.”Rate cuts are very likely in 2024, but the Bank of Canada is going to remain as patient as possible for inflation and inflation expectations to retreat further,” he added.The rate decision will be announced 15 minutes earlier than has been custom, at 9:45 am ET (1445 GMT), when updated economic forecasts in the Monetary Policy Report (MPR) will also be released.Money markets are expecting a cut of 25 basis points in June after having pushed back bets for a cut in April following the release of December inflation data, which rose from November.The BoC will hold rates on Wednesday and at its next meeting in March, according to a Reuters poll of 34 economists. In the same survey, 12 analysts forecast that the first rate cut since March 2020 would come in April, while about two-thirds expect one in June or later. While inflation has been sticky, economic growth has been sluggish, and some economists warn that interest rates are going to have to start coming down soon to head off a more severe downturn.In the third quarter of last year, the economy contracted, and the BoC’s quarterly business survey showed that firms have fewer orders than a year ago. An increasing number of firms expect a recession over the next 12 months.The BoC, in its last round of forecasting in October, said it expects inflation to return to the 2% target by the end of 2025 and forecast 0.8% annualized growth in both the third and fourth quarters of last year.”It’s time for the Bank of Canada to drop the explicit threat of higher interest rates and replace it with a statement about keeping policy restrictive for as long as necessary,” Royce Mendes, head of macro strategy, said in a note. “The possibility of recession is very real.”As it held rates steady, the BoC has so far kept language in its policy announcements saying it is “prepared to raise the policy rate further if needed.” More

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ABUJA (Reuters) – Nigeria’s central bank is targeting an inflation decline to 21.4%, Governor Olayemi Cardoso said on Wednesday, adding that bank officials thought the country’s naira currency was undervalued.Cardoso faces pressure to raise interest rates when policymakers at the Central Bank of Nigeria (CBN) hold a rate-setting meeting next month for the first time since he took office in September.Inflation hit its highest level in more than 27 years in December at 28.92%.”Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4%,” Cardoso said in a speech, a copy of which the central bank shared by email.Cardoso added that improved agricultural output and the easing of global supply chain pressures would help boost consumer confidence and purchasing power.The central banker emphasised that the CBN was committed to improving liquidity in the foreign exchange market, reiterating a pledge to clear outstanding FX obligations estimated at $5 billion.”We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term,” he said in the speech at an event on the economic outlook. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.UK economic activity increased at the fastest pace for seven months in January despite the crisis in the Red Sea adding to manufacturing price pressures, according to a closely watched survey. The surprisingly strong growth, combined with concerns over sticky inflation, could fuel caution among Bank of England policymakers as they prepare for the next interest rate decision on February 1.The S&P Global flash UK composite output index rose to 52.5 in January from 52.1 in December, marginally higher than the 52.2 forecast by economists polled by Reuters. The figure was the highest reading since June and well above the 50 mark that indicates a majority of businesses reporting rising activity. The latest PMIs add to signs that the economy is recovering from last year’s stagnation, as price pressure eases and markets expect the BoE to cut interest rates from their current 15-year high of 5.25 per cent later this year. Chris Williamson, economist at S&P Global, noted that the strength of growth in January “may deter the Bank of England from cutting interest rates as soon as many are expecting, especially as supply disruptions in the Red Sea are reigniting inflation in the manufacturing sector”.The survey is looked to by policymakers as a near-real-time indicator of the health of the economy ahead of official data for December next month.Yields on rate-sensitive two-year gilts rose 0.03 percentage points to 4.4 per cent after the strong PMI data, reflecting declining prices. The pound strengthened 0.4 per cent against the dollar to $1.274.Williamson said the PMI reading pointed to the economy growing at a quarterly rate of 0.2 per cent at the start of 2024 after a flat fourth quarter, “therefore skirting recession and showing signs of renewed momentum”.Markets are pricing that the central bank will start cutting interest rates in June taking the rate to 4.25 per cent by the end of the year, marking a marginal retreat from what was expected last Friday. More

BEIJING (Reuters) -China’s central bank announced a deep cut to bank reserves on Wednesday, in a move that will inject about $140 billion of cash into the banking system and send a strong signal of support for a fragile economy and plunging stock markets.The central bank’s announcement, coming just as stock markets were closing for the day, led to a bounce in benchmark stock indexes and the yuan, even as analysts said more policy measures were needed.The People’s Bank of China (PBOC) said it was making a 50-basis points (bps) cut, the biggest in two years, in the amount of cash banks must hold as reserves, effective from Feb. 5.More importantly, PBOC Governor Pan Gongsheng said the bank would release policies on improving commercial property loans either on Wednesday or Thursday night, giving hope to investors who have been frustrated by China’s efforts to put a floor under a real estate sector that underpins consumption and household wealth.The first cut in banks’ reserve requirement ratio (RRR) this year comes as the world’s second-largest economy struggles to mount a strong post-COVID recovery amid a housing crisis, local government debt risks and weakening global demand.It also comes just days after China’s benchmark indexes hit 5-year lows as even the last hopeful investors waiting for clarity and an eventual economic rebound appeared to be giving up on the $9 trillion market. “It’s a welcome step, but it’s not going to be a game-changer,” said Chris Scicluna, head of economic research at Daiwa Capital Markets in London.”There are still questions about the extent to which the ‘National Team’, and various institutions can try to pull together to try to support the market and start up the buying of stocks and draw a line under the sell-off there.”Stock markets in Hong Kong and China had stabilised slightly on Tuesday on reports of a cabinet meeting chaired by Premier Li Qiang to stabilise markets and of state-owned investment vehicles, known as the “national team”, being pressed into action, as they were during the 2015 crash. GOOD START At Wednesday’s surprise press conference in Beijing, Pan said the RRR cut would free up 1 trillion yuan ($139.45 billion) in cash for the economy, exceeding most analysts’ expectations. “The RRR cut is a sign that PBOC will stick to a loose monetary stance throughout this year, despite having missed market expectation of an medium-term lending facility (MLF) rate cut earlier,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.”It’s also a sign that policymakers across the government want to ensure a good start for the economy by frontloading policy support. This is needed to achieve their ambitious growth target in a challenging year.”The cut in reserves follows earlier cuts of 25 bps for all banks in March and September last year. The PBOC would also cut re-lending and re-discount interest rates by 25 bps for the rural sector and small firms from Jan. 25, Pan said.”At present, China’s monetary policy still has enough room,” Pan said. “We will strengthen counter-cyclical and cross-cyclical adjustments, and create a good monetary and financial environment for economic operations.”MARKETS UP, BUT CIRCUMSPECTHong Kong’s Hang Seng Index extended gains after the RRR cut was announced, ending the session up 3.6% to clock its biggest one-day gain in two months. China’s stock market tumbled 13% in 2023 and had extended its slide in the new year amid relentless foreign selling. The blue chip CSI300 Index has risen 3.5% from five-year lows struck last week, but is still down more than 6% this year. China’s onshore yuan hit 7.1601, the strongest level since Jan. 12, after the announcement.Earlier in the day, Reuters reported China’s securities regulators had asked some hedge fund managers to restrict short selling in its stock index futures market.Since China has traditionally injected cash into the economy just before the Lunar New Year holiday week – which this time falls in early February – some analysts were circumspect about policymakers intent to defend markets.”We like to wait to see a full set of policy supports before concluding the impact on overall market,” said Kiyong Seong, lead Asia macro strategist at Societe Generale (OTC:SCGLY).MORE STIMULUS NEEDEDAnalysts say more stimulus is needed this year as the government aims to spur growth to fend off deflationary risks and keep a lid on unemployment as businesses remained wary of adding workers.In December, top Chinese leaders at a key meeting to chart the economic course for 2024 pledged to take more steps to support the recovery. Zhiwei Zhang, chief economist at Pinpoint Asset Management, said China’s fiscal policy should focus more on boosting consumption, which would help ease deflationary pressures.”China needs stronger domestic demand instead of more production capacity,” he said. So far, a slew of policy measures and steps to support the stock market have proven only modestly beneficial, raising pressure on authorities to roll out more stimulus. But the central bank faces a dilemma as more credit is flowing to manufacturing than into consumption, which could add to deflationary pressures and reduce the effectiveness of its monetary policy tools, analysts say. Pressure on the yuan continued to limit the scope of monetary easing as well. The economy grew 5.2% in 2023, meeting the official target, but the recovery has been shakier than investors had expected.Analysts polled by Reuters expect economic growth to slow to 4.6% this year.($1 = 7.1712 Chinese yuan renminbi) More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The eurozone economy showed signs of a nascent recovery at the start of the year after a contraction in business activity eased slightly and price pressures intensified, according to a closely watched survey of companies.S&P Global’s flash eurozone composite purchasing managers’ index, a measure of activity at businesses across the bloc, rose to a six-month high of 47.9, up from 47.6 a month earlier, after an improvement in manufacturing offset a deeper decline in services.Economists polled by Reuters had forecast a bigger rise to 48. The eighth consecutive reading below the 50 mark that separates contraction from expansion indicates the eurozone remains stuck in a rut at the start of this year after stagnating for much of 2023.Within the overall figures, a deeper downturn in French and German business activity offset an improvement in the rest of the single currency zone, which returned to modest growth.The euro rose 0.4 per cent against the dollar taking it above $1.09, as investors judged the data reduced the chances of early rate cuts. But Germany’s benchmark 10-year bond yields dipped on signs of economic weakness.Purchasing managers added to hopes of a pick-up in the wider eurozone economy by reporting the smallest fall in new orders since last June, a slight increase in employment levels and a brightening in the overall outlook for the year ahead. Attacks by Houthi rebels on commercial ships in the Red Sea have disrupted global supply chains, causing manufacturers’ delivery times to lengthen for the first time in a year, S&P Global said. But it added: “Manufacturing input costs continued to fall on average.”You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.The data is likely to shape discussions at this week’s meeting of the European Central Bank, which is expected to leave monetary policy unchanged and rebuff market expectations of an interest-rate cut at its next meeting in March.Businesses reported the steepest rise in selling prices since last May, mainly because of higher labour costs as wages rise, S&P said. This is likely to worry ECB officials about the risk of persistent inflation that is already making them wary of cutting interest rates too early.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Tomasz Wieladek, an economist at investor T Rowe Price, said increased hiring and falling output in the services sector would lower productivity and raise price pressures. “I therefore expect the ECB to continue to push back on market pricing of so many [rate] cuts later in the year,” he added.Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, which sponsors the survey, said it showed “a widespread easing of the downward trajectory witnessed in the past year”. But he added: “Companies have faced higher input prices and were able to pass them through to their customers.” More

NEW YORK (Reuters) – Despite a bullish U.S. stock market and strong economy, workers axed in mass layoffs are struggling to get back on their feet.Recent cuts include 13% of the workforce at online retailer Wayfair (NYSE:W), 20% at toy maker Hasbro (NASDAQ:HAS), 17% at digital music provider Spotify (NYSE:SPOT), and 35% at livestreaming platform Twitch.In the new book “Bounce Back,” money coach Lynnette Khalfani-Cox deals with downsizing and other life-changing issues such as debt, disability, death of a loved one, and unexpected disasters.”I personally have been through almost all of these situations, so telling my story was like a dam breaking,” the bestselling author said.Resilience, a quality critical to success, can grow out of such challenges, whether we are emotionally worn out from the pandemic, lonely and isolated, or scrounging to survive without any savings.Here are a few tips to bounce back better and faster from adversities.THINK BEYOND FINANCESFirst, be kind to yourself, the book’s first two chapters urge, because while money is important, resilience is even more basic.”You are more resilient when you are healthy, eating right, getting sleep and exercising,” said Khalfani-Cox. “That clearer state of mind will help you make better financial choices. If you don’t take care of yourself, nothing else will matter because you are going to make bad choices by default.”STRESS-TEST YOUR OWN LIFEAfter the financial crisis of 2007-2008, the big banks focused more on ‘stress-testing’ their balance sheets: If the worst happened, how would they fare?Individuals should do the same, Khalfani-Cox said. “Be the chief financial officer of your own world. If you or your partner lost your job, how would rent or mortgage get paid? How would childcare be covered? Could you live on one income?Plan now, she advised, noting that few people have a strategy for such scenarios.BUILD OUT YOUR SOCIAL NETWORKGilded Age novelist Horatio Alger wove rags-to-riches stories that have become prototypes for American success based on pulling yourself up by the bootstraps to climb the social ladder. The reality is that we all need others, especially in hard times. Establishing a deep and wide social network helps.”It doesn’t matter if you have been laid off from your job, or displaced from your home because of a flood,” said Khalfani-Cox. “Having people in your life can make all the difference in the world. Your ability to bounce back faster is aided by having the right people in your corner.”WORK ON YOUR NEST EGGEmergency savings are the first line of defense against any life shock. Without that, divorce, disease, damaged credit and other ‘Dreaded Ds’ cited in Khalfani-Cox’s book can cascade into bad financial moves because you have no other choice.”Many Americans don’t even have $400 saved for an emergency, which is why when something goes wrong, they are forced to resort to plastic,” she said. “Then you just dig yourself deeper and deeper. That’s why building up your coffers even just a little can be enormously helpful.”DO NOT DO IT ALONETrying to become a “financial Hercules” on your own is a mistake, Khalfani-Cox said. Therapists, financial planners and debt-management counselors are experts who can save you valuable time and money.Research federal, state and local government programs that can help with education, healthcare or social safety nets. “It’s important to give people that capability to bounce back,” she said, citing such programs. “It’s not just an individual effort alone.” More