Economy

(Reuters) – As Federal Reserve officials near the midway point between their last policy meeting and the final one of the year, they appear to be converging on a message of patience, a signal they intend to leave interest rates unchanged as they wait for more evidence inflation is cooling.”We can take our time to do it right,” San Francisco Fed President Mary Daly on Friday told a central banking conference in Frankfurt, Germany, referring to the U.S. central bank’s battle to bring down high inflation. The Fed is not certain it’s done enough to get inflation on track toward its 2% goal, she said, but the full effect of its rapid rate increases to date may be yet ahead. That uncertainty calls for “patience” and “measured” policy adjustments, she said. At the same time, Daly said she wants to communicate “resolve,” a word that central bankers typically surface to show they are not ruling out a rate hike if needed, or mean to suggest rate cuts could come soon.Speaking on CNBC, Boston Fed President Susan Collins also said the U.S. central bank must be “patient and resolute, and I wouldn’t take additional firming off the table.”The Fed raised short-term borrowing costs aggressively last year, and in July it delivered what many analysts now believe was the final rate hike in its current inflation battle.Inflation by the Fed’s preferred measure was 3.4% in September, down from its 7.1% peak last summer, but above the central bank’s target. With labor markets rebalancing but inflation still too high, Collins said, “the key point is we need to really stay the course.”After the Fed’s decision in September to keep the policy rate in what is still the current 5.25%-5.50% range, a number of U.S. central bankers cited the rise in longer-term bond yields as one reason it may not need to do any more policy tightening of its own.Minutes of the Fed’s Oct. 31-Nov. 1 meeting are due to be released on Tuesday, and are expected to shed light on how much impact the higher bond yields had on the Fed’s decision to stand pat at that meeting.YIELDS DECLINE Since then, the yield on the 10-year Treasury note has dropped by about half a percentage point from its mid-October near-5% peak, to the potential discomfort of Fed policymakers. But, as analysts at Deutsche Bank wrote on Friday, “while the recent easing could produce a more hawkish Fed in theory, the Fed can afford to be less concerned with this easing given recent data showing progress on the labor market and inflation.”Collins did not directly comment on the recent retreat in yields but did note that she was “seeing evidence of the kind of restrictiveness that’s consistent with the orderly slowdown that we’re looking for to realign demand with supply and continue the inflation moderation that we need.”And while Chicago Fed President Austan Goolsbee on Friday acknowledged the decline in the 10-year Treasury note yield, he said he felt inflation is on track toward the Fed’s target, as long as housing price pressures ease, which he expects. And he expressed increased confidence that the Fed can meet its inflation goal without the kind of rise in unemployment seen in the U.S. central bank’s prior battles with inflation. In October, the jobless rate was 3.9%, only a few tenths of a percentage point higher than where it was when the Fed began raising rates in March 2022.Speaking on Thursday, Cleveland Fed President Loretta Mester, one of the central bank’s more hawkish policymakers, said she had not yet assessed whether she would continue to pencil in a further rate hike. Fresh economic and interest rate projections are due to be the released at the Dec. 12-13 policy meeting. More

NEW YORK (Reuters) – Are U.S. stocks poised to continue their dramatic run, or is a pause ahead? That’s the question investors are asking as the S&P 500 heads into the close of the year with fresh highs coming into view.Signs of cooling inflation have fueled hopes that the Federal Reserve is done raising interest rates, helping extend a rally that has seen the S&P 500 gain over 9% since late October. The index is now up nearly 18% for the year and less than 2% away from its year-high, reached in July. Its record closing level, from January 2022, is some 6% away. Whether it can reach those levels in coming weeks depends in-part on how convinced investors are that the U.S. economy is on track for a so-called soft landing, where the Fed brings down inflation without badly damaging growth. So far, the economy has proven resilient in the face of tighter monetary policy, though some measures of employment and consumer demand have softened. Rising valuations and still-elevated Treasury yields pose another obstacle. Other factors, however, including historical seasonal trends, could support more gains. “We have this balance right now between a lower inflation outlook and a better interest rate trajectory … juxtaposed against a slowing economy,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management. Investor optimism on equities has grown over the last few weeks, as markets rebounded from a months-long drop that ran from August through much of October. Stock exposure by active investment managers has shot to its highest level since August, from a one-year low hit last month, the National Association of Active Investment Managers exposure index showed. U.S. equity funds drew about $9.33 billion in net inflows in the week to Nov. 15, the largest weekly net purchase since Sept. 13, according to LSEG data.Treasury yields, whose steady rise over the last few months has weighed on stocks, have rapidly retreated: the benchmark 10-year Treasury yield stood at 4.43% early Friday, from a 16-year high of just above 5% last month. Yields move inversely to bond prices. Analysts at Ned Davis Research, which has been recommending an overweight to stocks, this week said investors should further shift into equities and away from bonds. A key factor: softer-than-expected consumer price data for October, released earlier this week, makes it unlikely that the Fed will need to raise rates further.“Investors have been grappling with whether the Fed can pull off a soft landing,” wrote Ed Clissold, chief U.S. strategist at Ned Davis Research. “The CPI report … supports the case that the tightening cycle is over, and that the higher-for-longer mantra may not be as long as previously feared.”Robert Pavlik, senior portfolio manager at Dakota Wealth, said a number of investor concerns have fallen away, including worries over a third-quarter earnings season that turned out better than expected. “Both retail and institutional portfolio managers are going to realize that stocks are the best place to be between now and year-end,” said Pavlik, who is “fully invested” in his equity portfolios.Seasonality is also in stocks’ favor: November and December have posted the year’s second- and third-biggest monthly returns since 1950, rising 1.5% and 1.4% on average, according to the Stock Trader’s Almanac.Equities face a number of tests next week. Chip heavyweight Nvidia (NASDAQ:NVDA) reports quarterly results on Tuesday, the last report this earnings season from the “Magnificent Seven” megacap companies, whose massive share price gains led equity indexes higher this year.The health of the consumer-driven economy comes into view with Black Friday, the day after Thanksgiving that is the traditional start of U.S. holiday shopping. Data on Wednesday showed U.S. retail sales fell for the first time in seven months in October.One source of worry has been a renewed climb in stocks’ valuations. The S&P 500 trades at 18.7 times forward 12-months earnings estimates, a roughly two-month high and well above its long-term average of 15.6, according to LSEG Datastream.Jason Pride, chief of investment strategy and research at Glenmede, said his firm is underweight equities and has larger than normal allocations to cash and short-term fixed income.”Rates are still high enough, financial conditions are still tight enough that the near-term horizon … is troubling and probably doesn’t justify the high level of valuations,” he said.The recent surge in stocks means “the bar for positive surprises is also higher,” according to Keith Lerner, co-chief investment officer at Truist Advisory Services, who recommends adding to equity positions on pullbacks. “It would be perfectly normal for stocks to take a breather here,” he said. More

NEW YORK (Reuters) – A string of hefty bets on a doubling of Wall Street’s best known volatility index is raising eyebrows in the U.S. equity options markets, though analysts say they are probably not wagers on a market crash. Some 100,000 January call options on the Cboe Volatility Index changed hands on Friday, with a strike price of 27. That is nearly twice the current level of the VIX, which has fallen close to a two-month low of 13.69 following a rally that has seen the S&P 500 advance to within 2% of its year high.Similarly large positions in January VIX options were opened on Wednesday and Thursday. In all, the trader or traders paid about $37 million to buy more than 500,000 VIX January calls. Past periods when the VIX has doubled within the space of two months have been marked by intense stock market selloffs, such as the COVID-19 market crash of March 2020 and the selloff in March 2018. The recent large trades, however, are more likely hedges on a portfolio of stocks, rather than wagers on a massive equity selloff, options strategists said.”By definition this is a disaster hedge but I don’t think it’s someone who is expecting the VIX to double … there are other trades to do if you are expecting the VIX to explode,” Chris Murphy, co-head of derivative strategy at Susquehanna Financial Group. “This could even be a big macro fund adding long exposure and in order to add long exposure they need to have more of a hedge on,” Murphy said.The trades are unusually large and make up about 5% of this month’s overall trading volume in VIX options, according to Trade Alert data.The recent surge in stock prices on growing investor conviction that the Federal Reserve is done hiking interest rates has crushed volatility levels, making the price of options hedges relatively attractive. “Realized volatility has come crashing in and the market has been one way … on paper, these calls look fantastic,” said Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald. Tym cautioned that with volatility spikes few and far between, these types of positions have done poorly this year. More

(Reuters) -A tight U.S. labor market, the expiry of union contracts and high living costs have led to tough negotiations for pay hikes and benefits, triggering strikes and protests across industries.Nearly 444,900 workers have been involved in work stoppages and strikes through October this year, according to preliminary data from the U.S. Bureau of Labor Statistics, putting 2023 on track to becoming the busiest year for strikes since 2018.Here are some sectors and companies that faced tough negotiations in 2023:MEDIAMembers of the Writers Guild of America (WGA) approved a new three-year contract with major studios on Oct. 9. Film and television writers had walked off the job in May over compensation, staffing and residual payments, among other issues. They returned to work on Sept. 27 after negotiators reached a tentative agreement.Hollywood actors reached a tentative agreement with major studios on Nov. 8 to resolve the second of two strikes that rocked the entertainment industry as writers and performers demanded higher pay in the streaming TV era.Valued at more than $1 billion, the three-year contract includes increases in minimum salaries and a new bonus paid by streaming services, the union said.AUTOMOTIVEGeneral Motors (NYSE:GM), Ford (NYSE:F) and Chrysler-owner Stellantis (NYSE:STLA) ratified deals with United Auto Workers (UAW) members in November.The UAW said on Nov. 15 that about 3,900 of its members working at Mack Trucks ratified a new five-year contract, ending a month-long strike at the Volvo (OTC:VLVLY) Group-owned company.PARCEL DELIVERYTeamsters union workers at United Parcel Service (NYSE:UPS) ratified a new five-year contract in August, a deal that raises pay, eliminates a two-tier wage system for drivers, provides another paid holiday and ends forced overtime.FedEx (NYSE:FDX) pilots have been involved in a standoff with the parcel delivery firm over wages and legacy pensions. Pilots rejected a tentative deal in July and negotiations are ongoing.AIRLINES & AEROSPACE FIRMSPilots at several airlines including American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL), United Airlines Holdings (NASDAQ:UAL), Spirit Airlines (NYSE:SAVE) and Jetblue Airways negotiated new job contracts this year.Members of some unions like the Southwest Airlines (NYSE:LUV) Pilots Association have voted to authorize a strike if a new contract is not reached.Spirit AeroSystems (NYSE:SPR) negotiated a new contract to end a strike that led to a week-long work stoppage at its plant in Wichita, Kansas.MANUFACTURINGU.S. steel producer Cleveland-Cliffs (NYSE:CLF) has reached a tentative agreement with the United Steelworkers union on a new three-year labor agreement for its Northshore mining operations.U.S. Steel, which is reviewing multiple proposals ranging from partial acquisition to an entire buyout, is embroiled in a tussle with the United Steelworkers union. The company’s unionized workers say they essentially have the power to veto any transaction they do not approve of.CONSUMER & RETAILIn Las Vegas, thousands of workers reached agreements with casino operators and resorts Caesars (NASDAQ:CZR) Entertainment, MGM Resorts (NYSE:MGM) and Wynn Resorts (NASDAQ:WYNN) in November to avoid strikes that could have crippled tourism in the city.The Detroit Casino Council reached a tentative agreement for a new contract covering 3,700 workers at MGM Grand Detroit operated by MGM Resorts, Hollywood Casino at Greektown operated by Penn and MotorCity Casino on Nov. 17. The Detroit Casino Council had called the first strike in its history last month after negotiations that had begun in the summer did not yield a new contract.More than 3,000 workers at more than 150 Starbucks (NASDAQ:SBUX) stores in the U.S. held strikes in June, following claims the company had banned Pride Month decorations at some of its cafes.Workers at hundreds of Starbucks stores walked off their jobs during a key promotional event on Nov. 16, demanding improved staffing and schedules. Thousands of Los Angeles-area hotel staffers went on a three-day strike in July over improved wages, benefits and working conditions. Union leaders representing the workers have threatened further walkouts.HEALTHCAREKaiser Permanente’s healthcare workers voted to ratify a new contract with the hospital chain on Nov. 9, ending a months-long negotiation that resulted in the largest recorded strike in the U.S. medical sector.More than 7,000 nurses went on a three-day strike in New York City over staffing levels and pay hikes in January.Workers at CVS Health (NYSE:CVS) and Walgreens Boots Alliance (NASDAQ:WBA) announced a three-day walkout from Oct. 30, dubbed “Pharmageddon”, to improve working conditions and add more staff.CANNABISUnions representing cannabis workers have also increased pressure on companies in the sector this year.Workers at Green Thumb Industries (OTC:GTBIF)’ Chicago-area RISE dispensaries went on a 13-day unfair labor practices (ULP) strike in April, which was the longest ULP strike at a cannabis retailer in U.S. history.Labor unions secured new contract agreements at multistate operator-owned cannabis dispensaries in Illinois and in New Jersey in July.ENERGYUnionized workers at Phillips 66 (NYSE:PSX)’s refinery in Roxana, Illinois, ratified a contract with the refiner in late-stage negotiations, averting a potential strike.The union had been in talks with the refiner since summer, when it rejected a company proposal and sought additional benefits for holiday and vacation hours and pay, among other improvements. 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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Moments of clear agreement in markets are rare and typically fleeting. This week saw one, however, when soft US inflation data convinced investors that the Federal Reserve will not raise interest rates in December. Any consensus in the outlook for the past weeks of a rollercoaster year is a real relief. Investors can enjoy it — while it lasts. Tuesday’s inflation numbers painted a better than expected picture with the core rate falling to a two-year low of 4 per cent in October. Analysts joked they could now plan holiday parties for the week of the Fed’s mid-December meeting. Markets made merry right away, with the S&P 500 enjoying its best day in more than six months while two-year Treasury yields tumbled almost 0.25 percentage points.Futures markets just two weeks ago had reflected expectations of a one-third chance of a higher rate by year-end. Now the market is pricing in a 100 per cent probability that benchmark rates will be kept on hold at the Fed’s policy meeting next month at the current target range of between 5.25 per cent and 5.5 per cent, according to the CME’s FedWatch tool.Why so certain when we’ve been here before? In this rate cycle alone, this is the seventh time that investors have anticipated the Fed turning dovish, according to Deutsche Bank’s analysts.The most recent occasion, in March, was related to fears that US banking turmoil would spread and before that, in September last year, to worries that trouble in the UK gilt market would have wider ramifications. Three earlier episodes in 2022, as rate rises got under way, were the result of concerns the US economy was not strong enough to handle tighter monetary conditions, especially with the start of war in Ukraine. During most of the occasions when investors bet that rates had peaked, stocks rallied strongly on hopes that easier conditions would boost growth. On this occasion, several softer pieces of data have helped support the belief that this time is really the turning point. US unemployment has crept up to 3.9 per cent, retail sales growth has slowed and manufacturing surveys are weakening. All of those should help convince the Fed the economy is coming off the boil. Just over two weeks ago, Fed chair Jay Powell himself described the central bank’s stance as “proceeding carefully” “in light of the uncertainties and risks, and how far we have come”.The danger for investors though comes as markets move past any pause to expecting rapid rate cuts. The CME’s FedWatch tool suggests a two-thirds chance that rates will be a full percentage point lower by the end of next year, with the first cut coming as soon as June.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.It could well be that futures markets in fact reflect very divided views — with some investors thinking the fight against inflation will require the Fed to hold rates higher for longer while others bet that the full impact of the most punishing rate rise cycle in modern history will soon send the economy and interest rates sharply lower.That would help explain why fund managers at present hold their most overweight position in bonds since the aftermath of the 2008 financial crisis, as revealed this week in Bank of America’s monthly survey. Bondholders stand to gain from the high yields on offer as well price gains, if interest rates start moving lower, dragging yields with them.There is also an expectation that the Fed will cut speedily when it gets going. In 2019, it held the pinnacle of 2.25 per cent for just seven months before easing. Ahead of the 2008 crisis, rates peaked at 5.25 per cent for an unusually long 15 months before being slashed as turmoil spread.But what if the coming years turn out less like the pattern of peaks followed by sharp reversals that has been the norm in the recent past, and more like the mid-1990s? Then, a swift series of rate rises in 1994 took the Fed’s target from 3 per cent to 6 per cent by early 1995. This was followed by just three cautious quarter-point cuts before a rise again in 1997. That pattern repeated until the dotcom bubble burst in 2001. “Our sense is that the 1990s is actually a pretty good template for what [the Fed] might do. They may move up and down a little bit as they reassess how restrictive their stance of policy is,” says Marc Giannoni, chief US economist at Barclays, which is forecasting a single rate cut from the Fed in 2024. “If the economy weakens, but inflation stalls at, let’s say, 3 per cent or above. I don’t think [the Fed] is going to be able to ease monetary policy.”That uncertainty is not good for equity or debt markets much beyond the cheer seen this week. “Everyone is desperate for a rally but stocks and bonds both gaining means that yet again we’ve just eased financial conditions and made the Fed’s job harder,” says Julian Brigden, co-founder and head of research at MI2 Partners. “We still have low unemployment so to squeeze out inflation, we need lower nominal growth — and tighter conditions to get that.” Powell’s August description of the Fed “navigating by the stars under cloudy skies” attracted some mockery at the time, but it is worth bearing in mind when faced with another bout of markets’ sunny forecasts for interest rates. [email protected] More

NEW YORK (Reuters) – Rising U.S. government debt and fiscal deficits that have helped lift government bond yields this year will likely become secondary factors for investors, as their focus shifts to economic fundamentals, Citi analysts said.Concerns over increased government bond supply and larger fiscal deficits contributed to a surge in government bond yields – which move inversely to prices – to 16-year highs this year, while pushing rating agencies Fitch and Moody’s (NYSE:MCO) to turn negative on U.S. government creditworthiness.Even though those challenges are unlikely to recede, investors will eventually grow accustomed to the risks, partly because of lack of alternatives given the U.S. dollar’s status of global reserve currency and the depth and liquidity of the U.S. government bond market, said Nathan Sheets, global chief economist at Citi.”The dollar and Treasuries are the reserve assets … in some sense investors don’t have a lot of other options, and this makes us think the most likely scenario is that these risks recede in the background,” said Sheets.”Our baseline is that over time investors accept these fiscal risks as a fact of life and that ultimately it is not supply and demand that determine Treasury yields but it’s more about the fundamentals of the economy,” he said.The nonpartisan Congressional Budget Office (CBO) has estimated that cumulative budget deficits will total about $20 trillion in the coming decade. Moody’s, which last week lowered its outlook on U.S. credit, expects the government to continue to run wide fiscal deficits due to increased spending and higher debt interest payments.Meanwhile, investors have in recent months sounded alarm bells on the U.S. fiscal position. Hedge fund Bridgewater Associates’ Ray Dalio expects a U.S. debt crisis. “As we look forward we have a debt problem, because you can’t keep adding to debt faster than you add to income,” he told CNBC on Friday.Treasury yields, however, have retrenched in recent weeks on expectations that the Federal Reserve has reached a peak in its interest-rate hiking cycle, and as the Treasury announced a more modest year-end schedule of Treasury debt sales.Some Fed officials have also said rising bond yields, which make access to credit more expensive, could be a substitute for increasing interest rates further.”The fact that authorities have to respond to this is potentially how we see the lifecycle of any crisis playing out in the U.S. moving forward,” said Jabaz Mathai, head of G10 rates strategy at Citi.Where authorities have less influence, however, is on the demand side. As the Federal Reserve keeps reducing its bond holdings as it seeks to curb inflation, price-sensitive private investors have to pick up the slack. “There is going to be an extraction of higher yields from these investors,” cautioned Mathai. More

The LatestElectricians and dockworkers across Sweden on Friday joined a widening effort by unions in the country to pressure Tesla to sign a collective bargaining agreement with its mechanics.The labor action expanded three weeks after the autoworkers’ union, IF Metall, called a strike against Tesla in an effort to secure a collective arrangement over pay and working conditions for its roughly 120 members who work as mechanics for the electric vehicle maker. In the latest move, dockworkers at dozens of ports refused to unload cars from ships and electricians stopped repair work at the company’s charging stations, highlighting the power of organized labor in a country where collective agreements cover nine in 10 of all employees.Port workers blocking a ship from loading Tesla vehicles onto a ship moored at the port of Malmo in Sweden, in early November.Johan Nilsson/TT News Agency, via Associated PressTesla in Sweden: No production but many sales.Tesla does not produce any vehicles in Sweden, but runs several facilities where the cars are serviced. So far this year, the Tesla Model Y is the best-selling new car in Sweden, with more than 14,000 registrations through October, according to Mobility Sweden, an industry group.At the outset of the mechanics’ strike, a Tesla representative told Swedish media that the company followed labor laws in the country, and that it chose not to sign a collective agreement. The company said it would do what it could to keep its business operating.Quotable: ‘It is both important and obvious that we help.’The Swedish Transport Workers’ Union, whose members work at Sweden’s docks, said in a statement that “it is both important and obvious that we help, to stand up for the collective agreement and the Swedish labor market model.”How It Started: Mechanics at Tesla went on strike on Oct. 27.In late October, IF Metall, which represents 300,000 workers in Sweden, including some of Tesla’s mechanics, said talks with company representatives had ended without resolution. The union began the strike action at Tesla’s 12 service centers on Oct. 27.Dockworkers initially refused to unload any Teslas at four major Swedish ports starting on Nov. 7, which on Friday expanded to 55 ports.Unions representing cleaners have also refused to service Tesla facilities, and the postal workers’ union stopped any deliveries from reaching the company’s sites.Both IF Metall and the Transport Workers’ Union have acknowledged that Tesla has found ways around the strikes. Tesla appeared to be bringing in other mechanics to staff its facilities and bringing new vehicles into Sweden by truck, they said.The strike efforts have also been hampered by some union members who work for Tesla and refused to join, Swedish media have reported.What Other Unions Say: Germans have voiced support.In Germany, where Tesla produces the Model Y at a gigafactory outside Berlin, union leaders have been seeking to organize the roughly 11,500 employees who work there. Tesla’s leadership has not engaged with the German autoworkers’ union, IG Metall. Last month, several hundred workers wore union stickers calling for “safe and fair work.”Dirk Schulze, the regional head of IG Metall in Brandenburg, where Tesla has its factory, has expressed his solidarity with the striking workers in Sweden. The strike in Sweden has given workers in Germany “the courage and confidence to organize themselves into a union and take their fate into their own hands,” Mr. Schulze said in a statement.The union has not announced any further measures.What Happens Next: More strikes are planned in Sweden.This week, IF Metall said 50 of its members at Hydro Extrusions, a company that produces an aluminum component for Tesla, would walk off their jobs next Friday. More

This article is an onsite version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesFor up-to-the-minute news updates, visit our live blogGood evening.It was confirmed today that inflation in the Eurozone fell sharply last month, adding to evidence of slower price rises across major economies and to expectations that interest rates may have peaked.The slowdown across all major markets has strengthened the case for global monetary loosening, and has prompted central banks to address their timelines for lowering interest rates.Today’s figures confirmed that Eurozone annual inflation for October was 2.9 per cent, down from 4.3 per cent the month before and from a peak of 10.6 per cent in October last year.Slowdown in price rises, which has again shifted attention on to the European Central Bank, comes as markets have already bet on interest rate cuts.Last week Christine Lagarde, president of the ECB, dismissed the prospect of near term rate cuts, telling the Financial Times Global Boardroom event that the bank would not begin cutting rates for at least “the next couple of quarters”.Earlier in the week US inflation fell to 3.2 per cent, slightly below expectations of 3.3 per cent, marking the first decline in four months.Following “very, very encouraging” numbers, the US Federal Reserve was quick to say that it remained cautious and was not going to declare a premature victory over price rises. Mary Daly, president of the Federal Reserve Bank of San Francisco, told the FT that she was unable to rule out increasing rates, which have been held steady at a 22-year high of 5.25-5.5 per cent since July.However, in a blow for those wanting to see interest rate cuts, the drop in inflation sent US Treasury yields tumbling on Tuesday, shortly after Fed officials had suggested that sustained higher yields might reduce the need to increase interest rates further.Inflation also fell sharply in the UK this week. The consumer price index rose 4.6 per cent in October compared to the previous year, down from the 6.7 per cent pace recorded for September and lower than the 4.8 per cent predicted by economists.The year-on-year rise in the consumer prices index has now fallen such that Prime Minister Rishi Sunak can declare he has met his pledge — which some economists said would be easy to achieve — to halve the rate of price rises by year end.The figures added to the financial market’s conviction that the Bank of England is now done with rate rises, and sent sterling down 0.3 per cent against the dollar to $1.246 on Wednesday. The current rate of inflation, although moving in the right direction, remains more than double the BoE’s 2 per cent target.Price rises and high interest rates pushed British retail sales to their lowest level since February 2021, as household finances were hit by both. The weaker spending shown in today’s figures strengthened expectations that the BoE will cut interest rates next year.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Need to know: UK and Europe economyThe head of the London Stock Exchange Group, David Schwimmer, has said that companies going public in New York do not receive a higher valuation than they would in London. “The notion that you get a better valuation in the US, it’s a myth,” he said.Richard Moriarty, the new chief executive of the UK’s accounting watchdog, has signalled he is relaxed about allowing the Big Four to continue dominating Britain’s audit market. Deloitte, EY, KPMG and PwC still audited 98 companies in the blue-chip FTSE 100.More than half of the UK’s low-income households with mortgages have fallen behind on one or more of their bills, according to a survey from the Joseph Rowntree Foundation charity. The data comes as building society Nationwide reported an uptick in mortgage arrears in its half-year results.UK Chancellor Jeremy Hunt is looking at cutting inheritance tax and business taxes in Wednesday’s Autumn Statement, after finding himself with more fiscal “headroom” than expected.Hunt is also planning to spend an extra £2.5bn on employment support for people suffering from long-term sickness and joblessness in an attempt to cut the welfare bill and boost the workforce.ECB president Christine Lagarde has said that Europe needs its own version of the US Securities and Exchange Commission.Need to know: Global economyUS business leaders welcomed Xi Jinping with a standing ovation in San Francisco, after he told them that China is a big market and a friend.The sister of Javier Milei, the radical libertarian candidate in Argentina’s presidential race, has tabled a formal accusation of voter fraud ahead of Sunday’s presidential poll.US Republican candidate Nikki Haley’s strong performances in the presidential debates have won over a number of big donors as well as other Wall Street figures this week.The US Treasury department has sanctioned three shipowners based in the United Arab Emirates in an attempt to enforce the Russian oil price cap, accusing them of exporting Russian crude oil priced above the $60 per barrel limit.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Need to know: businessSouth Korean prosecutors are seeking a five-year jail term for Samsung chair Lee Jae-yong, who is accused of stock manipulation and orchestrating a $3.9bn accounting fraud at the group’s biopharmaceutical unit in 2015. The president of Goldman Sachs Japan, Masanori Mochida, has resigned after 38 years at the US investment bank, bringing to an end the career of one of the biggest figures in Tokyo’s financial industry.Octopus Energy announced that it is launching a new fund to invest £3bn in offshore wind by the end of the decade, after the UK energy company said in July that it planned to deploy £15bn of investments in offshore wind by 2030.Chinese ecommerce group Alibaba has paused the listing of its supermarket unit and scrapped its plan to spin off its cloud business amid waning investor enthusiasm for the radical restructuring plan.Everton football club has been docked 10 points for breaching the Premier League’s financial rules. It’s the toughest sanction to be given out to a top-tier English club. Collapsed Middle Eastern hospital operator, NMC Health Plc, has been found by the UK Financial Conduct Authority to have committed market abuse by understating its debt by as much as $4bn.Science round upThe UN predicted greenhouse gas emissions would rise 9 per cent by 2030 from 2010 levels, massively short of the 45 per cut needed to limit warming to the 1.5C goal set as part of the Paris Agreement. “The world is failing to get to grips with the climate crisis” and national pledges were “strikingly misaligned with the science”, UN secretary-general António Guterres said.AI is more accurate at medium-range weather forecasting (up to 10 days ahead) than the numerical predictions run on supercomputers, which are used today, according to a DeepMind paper. AI is also able to cut the number of missed early stage breast cancers, with new research demonstrating the technology’s potential to improve and accelerate medical diagnoses.South Korea and the US pledged to expand their defence alliance into orbit in response to emerging threats from adversaries including North Korea and China. South Korea has raised its ambitions for independent launch and surveillance capacities.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.A robot chemist has used meteorite extractsfrom Mars to help make oxygen from water, raising hopes for the viability of a mission to the red planet and possible colonisation. A new TechTonic podcast series on superintelligent AI begins with a touch of doom: could artificial general intelligence (AGI) spell the end of humanity?Some good newsFire Weather: A True Story from a Hotter World, a “meticulously researched, thrillingly told” account of a devastating wildfire in Canada by author John Vaillant, has won this year’s Baillie Gifford prize, the UK’s leading award for non-fiction.Something for the weekendTry your hand at the range of FT Weekend and daily cryptic crosswords.Interactive crosswords on the FT appSubscribers can now solve the FT’s Daily Cryptic, Polymath and FT Weekend crosswords on the iOS and Android appsRecommended newslettersWorking it — Discover the big ideas shaping today’s workplaces with a weekly newsletter from work & careers editor Isabel Berwick. Sign up hereThe Climate Graphic: Explained — Understanding the most important climate data of the week. Sign up hereThanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues. And please share your feedback with us at [email protected]. Thank you More