Economy

Today’s top storiesThe UK has paid the highest borrowing cost on two-year debt this century at an auction of £4bn of gilts, as the recent surge in bond yields feeds through to the government’s finances. The average five-year fixed UK mortgage topped 6 per cent for the first since last November, just as banks prepare for a meeting tomorrow with the financial watchdog about their failure to help struggling consumers.Ukraine’s president Volodymyr Zelenskyy warned that Russia might be preparing to blow up part of the Zaporizhzhia nuclear power plant, the biggest such facility in Europe. Chinese president Xi Jinping warned Vladimir Putin against using nuclear weapons in Ukraine, officials say.The UK’s Financial Conduct Authority laid out the scale of its investigation into troubled hedge fund Odey Asset Management and its founder Crispin Odey.For up-to-the-minute news updates, visit our live blogGood evening.There was more encouraging news today for eurozone policymakers battling to restrain inflation, even as new survey data highlighted pressures on the bloc’s services sector.Growth in producer prices, which tend to foreshadow patterns in consumer inflation, turned negative in May for the first time since 2020. The bigger than expected drop of 1.5 per cent, driven by a 13.3 per cent fall in energy prices, will be welcomed by the European Central Bank as a sign that its programme of increasing interest rates is bearing fruit. It follows last week’s news of eurozone CPI falling more than expected to 5.5 per cent in June. Consumer expectations, which help shape wage and price decisions, are also moving in the right direction. New ECB survey data today showed median expectations for inflation for the next year falling to 3.9 per cent — the lowest since the start of Russia’s war in Ukraine. Andrzej Szczepaniak, an economist at Nomura, described the news as “exactly what the ECB will have been looking for”.There is still a way to go. CPI is still well above the ECB’s 2 per cent target and core consumer prices remain elevated. High interest rates are also hurting the housing market: separate official data today showed eurozone house prices falling for the second quarter in a row — the first two consecutive contractions in almost a decade.A cooling of price pressures in the eurozone was also highlighted in new PMI survey data for the services sector in June. Input costs remained high but fell to a 25-month low, with businesses moderating price rises in response. The sector is still fragile, with growth slowing for a second month, although job creation remained solid. The slowdown in momentum was most noticeable in France, hit by pension reform protests and strikes, alongside tougher financing conditions and weaker demand.The highlight of today’s batch of PMI readings however was China, where slower than expected services activity reinforced concerns around the strength of the country’s recovery, dragging down stocks in Asia and Europe. In the UK, momentum was at its weakest in three months as growth in new orders slowed, although job creation was robust. Input cost inflation eased to its lowest level since May 2021, while survey respondents noted that business and consumer spending remained resilient.Need to know: UK and Europe economyMany UK home buyers may be suffering from higher interest rates, but wealthier cash customers are snapping up London’s high-end properties. Equity buyers bought 71 per cent of homes in prime central London locations between January and May this year, compared with 60 per cent in the same period of 2022.The rise in online shopping since the pandemic has led to increasing demands for warehouse space — and triggered a wave of protests in the UK against development projects.The EU wants the textile industry to pay for the processing of discarded clothing and footwear to cut the waste endemic in fast fashion, with millions of tonnes of clothes being thrown away as trends move on.Need to know: Global economyAt 2pm ET/7pm BST today The Federal Reserve publishes the minutes of its last policy meeting when it paused its programme of interest rate rises. FT.com will have the details.Pan Gongsheng, the new People’s Bank of China chief, has a daunting in-tray including calculating how much stimulus is needed to revive the economy while navigating regulatory changes. India’s ambitions to serve as a strong alternative to manufacturing in China have led to clashes with trade unions and opposition parties over relaxing labour laws.Why did consumer price inflation get so high? Will it be a lasting change? What should the policy response be? Chief economics commentator Martin Wolf attempts an answer, while economics editor Chris Giles explains why raising interest rates doesn’t seem to be the solution it once was.

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Need to know: businessThe Bank of England is considering forcing more international banks to create subsidiaries in the UK rather than branches, to enable local regulators to seize control in the case of collapse rather than leaving their fate to their parents’ supervisors.Trade officials in Taiwan, South Korea and Japan are assessing the fallout from China’s curbs on exports of key metals used in chipmaking. India said it was on track to producer its first chips by the end of next year.

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Facebook suffered a further setback in how it uses data for online ads after a significant EU ruling on the use of personal information. Facebook parent Meta is launching a rival to Twitter called Threads.Like other passenger transport companies, train operator Eurostar incurred significant losses during the pandemic. Can a new chief executive and a focus on core routes get it back on track? Toyota said it could halve the size, cost and weight of batteries for its electric vehicles following a breakthrough in its solid-state battery technology. Shares in Tesla and start-up EV maker Rivian surged after reporting strong production and delivery numbers. They also have a new rival: Vietnam’s VinFast. Here’s one way of cutting your environmental footprint when travelling: rent clothes instead of taking them with you. Japan Airlines is beginning a year-long experiment whereby passengers can hire outfits in advance and have them delivered to their destination and collected at the end of the visit to be washed and recycled.The World of WorkWhat can workplaces do about the “epidemic of loneliness” that seems to have hit men more than women? Listen to the Working It podcast with guest Max Dickins, author of the memoir Billy No-Mates: How I Realised Men Have a Friendship Problem. Some good newsAn international team of scientists has discovered a new octopus nursery — just the third to be found — 2,800m below the surface of the Pacific Ocean off Costa Rica. The discovery of the brooding site brings the world’s known octopus nurseries to three © Schmidt Ocean Institute More

Amazon, Box, Salesforce, Oracle and others have recently rolled out A.I.-related products to help workplaces become more efficient and productive.Earlier this year, Mark Austin, the vice president of data science at AT&T, noticed that some of the company’s developers had started using the ChatGPT chatbot at work. When the developers got stuck, they asked ChatGPT to explain, fix or hone their code.It seemed to be a game-changer, Mr. Austin said. But since ChatGPT is a publicly available tool, he wondered if it was secure for businesses to use.So in January, AT&T tried a product from Microsoft called Azure OpenAI Services that lets businesses build their own A.I.-powered chatbots. AT&T used it to create a proprietary A.I. assistant, Ask AT&T, which helps its developers automate their coding process. AT&T’s customer service representatives also began using the chatbot to help summarize their calls, among other tasks.“Once they realize what it can do, they love it,” Mr. Austin said. Forms that once took hours to complete needed only two minutes with Ask AT&T so employees could focus on more complicated tasks, he said, and developers who used the chatbot increased their productivity by 20 to 50 percent.AT&T is one of many businesses eager to find ways to tap the power of generative artificial intelligence, the technology that powers chatbots and that has gripped Silicon Valley with excitement in recent months. Generative A.I. can produce its own text, photos and video in response to prompts, capabilities that can help automate tasks such as taking meeting minutes and cut down on paperwork.To meet this new demand, tech companies are racing to introduce products for businesses that incorporate generative A.I. Over the past three months, Amazon, Box and Cisco have unveiled plans for generative A.I.-powered products that produce code, analyze documents and summarize meetings. Salesforce also recently rolled out generative A.I. products used in sales, marketing and its Slack messaging service, while Oracle announced a new A.I. feature for human resources teams.These companies are also investing more in A.I. development. In May, Oracle and Salesforce Ventures, the venture capital arm of Salesforce, invested in Cohere, a Toronto start-up focused on generative A.I. for business use. Oracle is also reselling Cohere’s technology.Salesforce recently rolled out generative A.I. products used in sales, marketing and its Slack messaging service.Jeenah Moon for The New York Times“I think this is a complete breakthrough in enterprise software,” Aaron Levie, chief executive of Box, said of generative A.I. He called it “this incredibly exciting opportunity where, for the first time ever, you can actually start to understand what’s inside of your data in a way that wasn’t possible before.”Many of these tech companies are following Microsoft, which has invested $13 billion in OpenAI, the maker of ChatGPT. In January, Microsoft made Azure OpenAI Service available to customers, who can then access OpenAI’s technology to build their own versions of ChatGPT. As of May, the service had 4,500 customers, said John Montgomery, a Microsoft corporate vice president.Aaron Levie, chief executive of Box, said generative A.I. creates “a complete breakthrough in enterprise software.”Michael Short/BloombergFor the most part, tech companies are now rolling out four kinds of generative A.I. products for businesses: features and services that generate code for software engineers, create new content such as sales emails and product descriptions for marketing teams, search company data to answer employee questions, and summarize meeting notes and lengthy documents.“It is going to be a tool that is used by people to accomplish what they are already doing,” said Bern Elliot, a vice president and analyst at the I.T. research and consulting firm Gartner.But using generative A.I. in workplaces has risks. Chatbots can produce inaccuracies and misinformation, provide inappropriate responses and leak data. A.I. remains largely unregulated.In response to these issues, tech companies have taken some steps. To prevent data leakage and to enhance security, some have engineered generative A.I. products so they do not keep a customer’s data.When Salesforce last month introduced AI Cloud, a service with nine generative A.I.-powered products for businesses, the company included a “trust layer” to help mask sensitive corporate information to stop leaks and promised that what users typed into these products would not be used to retrain the underlying A.I. model.Similarly, Oracle said that customer data would be kept in a secure environment while training its A.I. model and added that it would not be able to see the information.Salesforce offers AI Cloud starting at $360,000 annually, with the cost rising depending on the amount of usage. Microsoft charges for Azure OpenAI Service based on the version of OpenAI technology that a customer chooses, as well as the amount of usage.For now, generative A.I. is used mainly in workplace scenarios that carry low risks — instead of highly regulated industries — with a human in the loop, said Beena Ammanath, the executive director of the Deloitte A.I. Institute, a research center of the consulting firm. A recent Gartner survey of 43 companies found that over half the respondents have no internal policy on generative A.I.“It is not just about being able to use these new tools efficiently, but it is also about preparing your work force for the new kinds of work that might evolve,” Ms. Ammanath said. “There is going to be new skills needed.”Panasonic Connect began using Microsoft’s Azure OpenAI Service to make its own chatbot in February.Panasonic ConnectPanasonic Connect, part of the Japanese electronics company Panasonic, began using Microsoft’s Azure OpenAI Service to make its own chatbot in February. Today, its employees ask the chatbot 5,000 questions a day about everything from drafting emails to writing code.While Panasonic Connect had expected its engineers to be the main users of the chatbot, other departments — such as legal, accounting and quality assurance — also turned to it to help summarize legal documents, brainstorm solutions to improve product quality and other tasks, said Judah Reynolds, Panasonic Connect’s marketing and communications chief.“Everyone started using it in ways that we didn’t even foresee ourselves,” he said. “So people are really taking advantage of it.” More

Last week the Federal Reserve revealed yet another financial conditions index. By Alphaville’s count, this is roughly the 6000th gauge of how relaxed or restrictive financial conditions are. It’s not even the first (or second, or third) out of the Federal Reserve system. Even Norway has one these days. It’s like an AI strategy, but for economics: you need to have one, even if it’s just for show. Financial conditions indices all tend to measure the same things, meaning they are inherently backward-looking and have limited-to-zero utility as indicators. The only practical use for FCIs seems to be to occasionally signal that Fed officials DO take financial conditions into consideration after 2008, they swear. As Dan Davies wrote in AV earlier this year:Financial conditions indices, a wise economist once told me, are like dreams and assholes. Everyone has them, they’re not as unique as you’d think, and people are much more enthusiastic about studying their own than anyone else’s.But this is a mainFed-designed (and implicitly blessed) FCI, while the others were invented by regional banks. So it could plausibly have implications for monetary policy. As Evercore ISI’s Krishna Guha writes, this is “likely to prove one of the most market-relevant staff papers in a long time”. In other words, we’re going to have to take a closer look at this asshole. Here’s what it looks like:So what is new and different with the Fed’s own FCI? Here’s what the authors (Andrea Ajello, Michele Cavallo, Giovanni Favara, William Peterman, John Schindler IV, and Nitish Sinha) have to say: While existing FCIs typically measure whether financial conditions are tight or loose relative to their historical distributions, the new index assesses the extent to which financial conditions pose headwinds or tailwinds to economic activity. Another important difference of this new index, compared with other commonly used FCIs, is its explicit consideration of the lags through which changes in financial variables are estimated to affect future economic activity. In the models used to construct the FCI-G, past changes typically receive decreasing weights, reflecting the diminishing effects that changes in financial variables have on economic activity over time.Goldman Sachs — which has been hot for FCIs ever since Bill Dudley was its economics supremo — says that the Fed’s gauge is similar to their own, with three notable differences: First, the Fed’s FCI-G suggests that financial conditions affect growth with a longer lag than our FCI impulse by about one to two quarters, leading the Fed’s measure to imply a roughly 0.5pp larger drag on GDP growth than our FCI impulse over the next year. Our review of economic studies of the lags with which financial conditions affect growth suggests that most estimates of the lag are closer to the lag implied by our model. Second, the FCI-G includes the Zillow monthly index of house prices and mortgage rates, which our FCI does not include. We choose to consider house prices and housing affordability separately from financial conditions in our consumption and investment forecasts, in part because house price indices are only released monthly and are subject to substantial revisions. Third, while the Fed’s FCI-G implicitly assumes that financial conditions affect growth but not the other way around, our approach allows changes in market prices to affect growth and vice versa.MainFed’s FCI also indicates that while conditions have eased a bit lately, they are much tighter than the Goldman Sachs, Bloomberg, Chicago Fed, Kansas City Fed and St Louis Fed indices show, and are now tighter than at any time since the global financial crisis.Evercore ISI’s Guha highlights that lags between financial conditions and actual economic activity means that the current tightness will weigh on growth for some time. And that means the Fed won’t have to raise rates much higher, and that officials will be relaxed about the recent market rally, he argues: Given these lags and the dominant weight that various short-term and in particular long-term interest rates have in the Fed’s concept of financial conditions, as long as these rates remain elevated, the Fed — within reason — will be relatively tolerant of stock market gains that have a relatively modest impact on the FCI-G index and the outlook for activity.In other words, the Fed is less likely to oppose the stock market rally — unless it gets completely out of hand — than widely feared. More

LONDON (Reuters) -Global regulators on Wednesday proposed tougher rules for investment funds to increase their resilience to market shocks as they clamp down on “non banks” which account for about half the world’s financial sector.Central banks had to inject liquidity into markets in March 2020 during COVID-19 lockdowns as money market funds struggled in the face of a “dash for cash” to meet promises of daily redemptions.Property funds aimed at retail investors have also been offering daily redemptions and some have faced multiple suspensions in recent years due to market turbulence.The Financial Stability Board (FSB) of financial regulators from the G20 countries has proposed revising its principles from 2017 to end “liquidity mismatches”, so that open-ended funds only offer investors redemption terms that reflect the ability of their assets to pay on time, particularly in stressed markets.The IMF has said open-ended funds contained $41 trillion in assets last year, a fifth of non-bank assets, and that liquidity mismatches posed risks to financial stability.In a document out to public consultation, the FSB proposed a new categorisation for funds across three “buckets” to reflect liquidity of assets, each with specific redemption terms and conditions.For funds that invest over 50% in liquid assets, daily dealing would remain appropriate.Funds that invest mainly in less liquid assets could still offer daily redemptions if they can show regulators an ability to use specified “anti-dilution” liquidity management tools (LMTs), or else they must tighten redemption terms, the FSB said.LMTs include being able to deduct a fee from redemptions to end “first-mover advantage”, or investors who rush for the exits leaving those remaining worse off.The third “bucket” is for funds investing 30% or more in illiquid assets, and they should create and redeem shares less frequently than on a daily basis, or require long notice or settlement periods, the FSB said.A spokesperson for ICI, a global funds industry body, said regulators should not mandate any single tool as the preferred LMT as a flexible approach would be more valuable, and that the “unsubstantiated” hypothesis of first mover advantage should not be the basis of public policy.To accompany the proposals, global securities watchdog IOSCO proposed detailed guidance for asset managers to calculate and apply LMTs.”There are parts of the world where these LMT tools are hardly used and for those parts of the world it’s a big lift,” Martin Moloney, IOSCO secretary general, told reporters. More

LONDON (Reuters) – Britain sold a government bond at auction on Wednesday that will pay investors an annual return of 5.668% – the highest yield of any gilt sold since 2007, as markets demand extra returns in anticipation of further Bank of England rate rises.The United Kingdom Debt Management Office sold 4 billion pounds ($5.08 billion) of a government bond which will mature in October 2025, which attracted strong demand at 2.77 times the volume of offer, up from 2.34 times when the gilt was previously sold on June 7.The last time the average yield at a gilt auction was higher was in June 2007, when 2.5 billion pounds of five-year gilts sold at an average yield of 5.790%.Before that, the highest yield was in September 1999 when 2.7 billion pounds of 10-year gilts were sold at an average yield of 5.694%.Less than two years ago – before the BoE had started to raise interest rates, and when inflation was near its 2% target – government bonds sold at auction with yields of less than 1%. The auction highlights how the cost of British government borrowing has shot up this year. When the October 2025 gilt was sold at auction last month the yield was 4.874%, and at its launch in January it paid investors a yield of 3.634%.Last month the BoE unexpectedly raised its main interest rate to 5% from 4.5%, as Governor Andrew Bailey said inflation looked more persistent than expected, and financial markets currently expect rates to peak at 6.25% in December.Consumer price inflation held at 8.7% in May, and the BoE’s most recent forecasts showed it dropping to just over 5% by the end of this year and below 2% by early 2025.As a result, the real inflation-adjusted return for investors is likely to be far lower than when gilts last regularly had similar nominal yields in the late 1990s.The October 2025 gilt is also unusual in paying a higher yield than other gilts of similar maturity. Bond strategists at NatWest last week described it as “one of the cheapest bonds on the UK fitted curve”.Yields on benchmark two-year gilts peaked at 5.406% on Monday, their highest since June 2008, and were 4 basis points lower on the day at 0945 GMT on Wednesday at 5.28%.($1 = 0.7873 pounds) (This story has been corrected to show yield highest since 2007, not 1999, in the headline and in paragraphs 1, 3 and 4) More

COLOMBO (Reuters) – Sri Lanka’s central bank is widely expected to loosen monetary policy further on Thursday, following a massive 250-basis-point interest rate cut in June, as it looks to revive growth amid a rapid fall in inflation.Sri Lanka’s economy nosedived last year after its foreign exchange reserves fell to record lows, pushing the island into its worst financial crisis in more than seven decades.However, since it secured a $2.9 billion bailout from the International Monetary Fund (IMF) in March, the island has been steadily rebuilding its reserves, strengthening the currency. Its once soaring inflation dipped to 12% year on year in June.The median estimate in a Reuters poll is for a 200-basis-point rate cut. Seven economists called for a 200 bps reduction, three expect a 100 bps cut while one said the central bank (CBSL) could cut by 300 bps.The decision will be announced via a statement at 7:30 a.m. (0200 GMT).At its last meeting in June, the CBSL reduced its standing deposit facility rate and standing lending facility rate (SLFR) in a surprise move to 13% and 14%, respectively.”Economic contraction, lower than expected inflation is giving the central bank space to cut rates. It’s the right thing to do for growth,” said Murtaza Jafferjee CEO of J.B. Securities. The central bank expects Sri Lanka’s economy to shrink by 2% this year following a 7.8% contraction in 2022.Sri Lanka’s domestic debt restructuring plan, which received parliamentary approval on Saturday, has pushed down domestic bond market interest rates to 12%-13% levels from 22% earlier, analysts said.”We are waiting to see how the foreign creditors respond to debt restructuring in the next two months. That will be critical to how interest rates will play out,” said Visaahan Arumainayagam, analyst for Colombo-based broking firm Asha Securities.The median estimate is for the SLFR to end the year at 10%, around 300 bps lower from current levels.The island aims to complete restructuring debt talks by September in time for the first review of the IMF program. The central bank raised rates by a record 950 basis points last year to tame inflation and by 100 bps on March 3.For the detailed list of responses, please see below:Organisation SDFR on July 06 SLFR on July 06 SLFR at end-2023 Acuity 12.00% 13% 10% Advocata Institute 11.00% 12% 9% CAL Group 11.00% 12% 10% HSBC 13.00% 14% First Capital 11.00% 12% 11% Asha Securites 11.00% 12% 10% Capital Economics 13.00% 14% Lanka Securities 11.00% 12% 10% University of 10.00% 11% 8% Colombo JB Securities 11.00% 12% 9% Frontier Research 12.00% 13% 10% CSE 12.00% 13% Asia Securities 11.00% 12% 9% Median 11.00% 12% 10% More

SYDNEY (Reuters) – PwC Australia provided Google (NASDAQ:GOOGL) confidential information about the start date of a new tax law leaked from Australian government tax briefings, according to two sources familiar with the matter.This is the first time a company has been directly linked to the national scandal involving the “big four” accounting firm that was first revealed in January.PwC is under fire because several years ago a former partner, Peter Collins, who advised the Australian government on anti-tax avoidance laws shared confidential drafts with colleagues about the government’s plans that were then used to drum up business with multinational companies. In one instance, one of these colleagues emailed a Google employee in August 2015 to confirm the likely start date for the government’s Multinational Anti-Avoidance Law (MAAL), according to one of the sources.While the Jan. 1, 2016 start date for the law had been announced in the government’s budget papers in May 2015, the confirmation that the government would go ahead with that date came from confidential government briefings, the source said.At the time, a number of organisations had called for the government to delay the planned January 2016 start date.The former partner did not tell Google the information was confidential, the source said.The sources asked not to be named as the information has not been authorised for public release.PwC has not publicly identified any client in relation to the scandal, which was sparked by Collins breaching confidentiality agreements signed with the government between 2013 and 2018.Reuters could not establish if Google was a client of PwC Australia at the time, and if it used the information in any way.Google did not respond to questions about its relationship with PwC Australia.PwC Australia responded to a request for comment on this story and several questions about its relationship to Google by saying its clients “were not involved in any wrongdoing and no confidential information was used to enable clients to pay less tax”.Collins could not be reached for comment.First revealed by tax authorities in January, the scandal has forced out PwC Australia’s chief executive Tom Seymour, cost it at least five high-profile clients and triggered the sale of its lucrative government consulting wing for A$1 ($0.66).After receiving a 144-page cache of PwC emails released by the Tax Practitioners Board, lawmakers investigating the scandal asked PwC to list companies given confidential Australian Taxation Office information about the anti-avoidance law.PwC sent a written response in June. What sources told Reuters matches information in the letter, which was publicly released with the name of the company that received the confidential information redacted.Tax officials told parliament in May they foiled several attempts by unnamed multinational firms to subvert the multinational anti-avoidance law in early 2016, months after confidential information had leaked.($1 = 1.5051 Australian dollars) More

The EU wants the textile industry to pay for the processing of discarded clothing and footwear under new rules aimed at cutting the environmental footprint of fast-fashion brands.The proposal, presented by the European Commission on Wednesday, would push clothing companies to improve the recyclability of their products and catalyse a growing second market, it said. “You can’t ban people from buying new things if they can afford it and they feel like it,” said Virginijus Sinkevičius, the EU’s environment commissioner. “What I need to ensure is that even if they do, at the end of life of those goods can find a better way than being . . . incinerated or dumped in Africa.” Fast-fashion brands such as the online retailers Shein and Boohoo and high street clothing giants H&M and Inditex, which owns Zara, have come under increasing pressure to move away from low-cost business models that have resulted in millions of tonnes of clothes being trashed.The equivalent of 12kg of clothes and footwear per EU citizen is discarded each year of which more than three-quarters is incinerated or goes to landfill, according to commission data. The consumption of clothing and footwear is expected to increase by 63 per cent from 62mn tonnes in 2019 to 102mn tonnes in 2030, European Environment Agency data suggests.According to the proposal, companies that sell to consumers in the EU would be responsible for paying for the treatment of any waste textiles with the amount charged dependent on the amount of processing required.Similar measures are already in place in EU countries such as France and Spain, and member states are already obliged to put in place systems for collecting textile waste by 2025 under separate rules.An EU official said that by the commission’s estimates the cost of making companies pay for clothing waste would amount to the equivalent of around €0.12 per T-shirt but it would vary according to the product and what treatment was needed. Fees could be reduced if a garment was made more sustainably, the official said. “Fast fashion is a problem,” the person said, adding that modulating the charges would encourage retailers to think harder about the potential for reusing or recycling their products.EuroCommerce, the retail industry body, said it backed the idea but wanted the rules to be harmonised across all of the EU’s 27 member states when they were implemented.Companies wanted to sell more sustainable products, it said, but were hampered by the lack of recycling infrastructure. “Finance and investment are needed to achieve this high level of textile waste collection,” the trade body said.H&M also said it backed the measures and aimed for 30 per cent of its clothes to be made from recycled fibres by 2025. Euratex, the textile industry body, said that it was working on pilot projects with small fabric manufacturers in 11 textile producing regions to create a closed loop system with clothes better designed for recycling.But the proposed measures are likely to disappoint lawmakers in the European parliament who have called for an “end to fast fashion” and the setting of specific targets for textile waste collection, prevention and recycling.

The proposal was issued at the same time as a revision of food waste rules and new legislation governing the health of the bloc’s soils and use of new techniques for genetically modifying crops.It will have to be agreed in negotiations between EU member states — which last month backed a ban on the destruction of unsold clothing — and the European parliament before it becomes law.A report published this week by the European Court of Auditors suggested there was little appetite among EU countries to increase the proportion of recycled material that was circulating in their economies. The authors said that levels of circularity in seven countries, including Sweden and Denmark, had gone backwards.“EU action has been so far powerless, meaning the circular transition is unfortunately almost at a standstill in European countries,” said Annemie Turtelboom, a member of the ECA. More