Economy

The Melbourne-headquartered miner said the shortage of supplies was due to transport disruptions from protests in Peru. Protesters have been blocking traffic in and out of the copper mine. Peru, the world’s second-largest copper producer, has been gripped by growing unrest following weeks of sometimes violent anti-government protests triggered by the ouster of the country’s former president last month.Glencore (OTC:GLNCY) suspended operations at its Antapaccay copper mine on Jan. 20 after protestors attacked the premises for a third time. A source at MMG had told Reuters production would continue as long as there was a stock of supplies, but MMG said on Monday that supplies were running low. The mine is expected to enter maintainance if the protests do not ease. More

The number of profit warnings from UK-listed companies rose 50 per cent in 2022 to a total of 305, as a combination of rising costs and falling consumer confidence hit British business.During the year, close to 18 per cent of the UK’s 1,193 listed businesses issued a profit warning, according to analysis by EY Parthenon, equal to the figure during the global financial crisis.Companies are expected to continue to be under pressure this year as the UK faces recession, high inflation and disruption from strikes.“2022 was a challenging year for UK companies with rising operational costs, changing consumer behaviour, and the cost of living crisis having an acute impact on consumer-facing sectors,” said Jo Robinson, EY-Parthenon partner.At the height of the pandemic in 2020, 35 per cent of listed UK businesses gave profit warnings.Increasing costs were cited as the biggest factor behind company difficulties last 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.

More than a third of UK-listed companies in consumer sectors issued a profit warning during the year. On Friday, Superdry became the latest retailer to warn over its profit forecast for the year, sending its shares down 17 per cent.But while consumer-facing sectors continued to be most affected, EY said that stress was “deepening” across all sectors.Half of the warnings issued in 2022 were because of rising costs — double 2021’s figure.

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 slowdown in the economy became apparent in the performance of many British companies in the last months of 2022.A quarter of the 83 profit warnings in the last three months of 2022 related to delayed or cancelled contracts, with another quarter blamed on weaker consumer confidence and two-fifths citing rising costs. In a sign that rising interest rates are already having an impact, about 11 per cent of profit warnings cited “credit tightening” as a factor, the highest proportion since the depths of the credit crunch at the start of 2009.Robinson said: “We are now seeing stress deepen and spread into other areas of the economy, such as industrial sectors, which saw the biggest rise in warnings in the fourth quarter. Cost pressures are passing through supply chains, business confidence is weak, and credit markets are tightening.”

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

In the second half of 2022, 169 warnings were issued, the highest second-half total since 2015.FTSE-listed retailers issued the highest number of warnings in 2022 followed by companies in the travel and leisure sectors, then those in software and computer services; industrial support services; and personal care, drug and grocery stores.The research also shows that companies already in distress have tended to continue to struggle. In 2022, 31 listed companies issued their third consecutive profit warning in 12 months, EY said, compared with 23 in 2021.Of those warning for a third time in 2022, about 13 per cent have already gone through a restructuring process, 19 per cent have breached covenants, and a third had changed chief executive or chief financial officer. More

(Reuters) – Israeli electric vehicle (EV) startup City Transformer aims to launch production of its small urban CT-2 model in Western Europe by the end of 2024 and will soon launch a Series B funding round to raise $50 million, the company said on Monday.Chief Executive Asaf Formoza told Reuters the company, which has so far raised $20 million, has selected a factory in Western Europe where it will have initial annual production of 15,000 vehicles, but cannot disclose its location yet.The additional funds the startup is raising should help speed up series production, Formoza added.The CT-2, which is already approved for use in the European Union and Britain, has a range of 180 kilometers (112 miles) and is 1 meter (3.28 ft) wide in “city mode.” This makes it narrow enough for four of them to fit into a conventional car’s parking spot, Formoza said.But the EV’s wheel base expands to 1.4 meters for “performance mode,” which doubles its top speed to 90 kilometers (56 miles) per hour. The EV can fit two people sitting in tandem, or could be used for last-mile delivery or other businesses, the company said. The CT-2 weighs in at 450 kilograms (0.5 ton), or less than the battery in a Tesla (NASDAQ:TSLA) Model 3. “Is there a reason a person like you or me needs to maneuver in the city in a two-ton car and 600 kilograms of battery?” Formoza said. The CT-2 will cost 16,000 euros ($17,400) before taxes and Formoza said major carmakers have created space for startups like City Transformer by shifting away from smaller cars.”The B (small car) segment is vanishing because carmakers make more on SUVs, so there’s going to be a huge void that us and others will look to fill,” he said.City Transformer is lobbying the EU for subsidies for smaller EVs like the CT-2 that are currently available for larger models, Formoza added.($1 = 0.9203 euro) More

WASHINGTON/WILMINGTON, Del. (Reuters) -President Joe Biden and House of Representatives Speaker Kevin McCarthy will meet at the White House on Wednesday for talks in the standoff over the federal debt ceiling and prospect for a U.S. default.Hardline Republican lawmakers are withholding support for a measure that would let the country pay its debts until Democrats agree to spending cuts going forward.The White House has said raising the debt limit is non-negotiable, citing the risk to the U.S. economy from a default.Analysts are skeptical that the face-to-face talks between the Democratic president and Republican leader, confirmed by both sides on Sunday, will soon end a high-stakes crisis where members of both parties see opportunities to score political points before the U.S. Treasury runs out of money to pay its bills this summer.”The President will ask Speaker McCarthy if he intends to meet his Constitutional obligation to prevent a national default, as every other House and Senate leader in U.S. history has done,” a White House spokesperson who declined to be named said on Sunday. “He will underscore that the economic security of all Americans cannot be held hostage to force unpopular cuts on working families.”On Sunday, McCarthy said that Republicans will not allow a U.S. default and that cuts to Social Security and Medicare would be “off the table” in any debt ceiling negotiations.But he added that Republicans want to “strengthen” the costly retirement and health benefit programs for seniors – a statement that the White House called a euphemism for cuts.”I know the president said he didn’t want to have any discussions” on cuts, McCarthy said on CBS’ “Face the Nation” program. “I want to find a reasonable and a responsible way that we can lift the debt ceiling (and) take control of this runaway spending.”The U.S. Treasury this month activated extraordinary cash management measures to avoid breaching the $31.4 trillion limit on federal debt imposed by Congress. But without an increase by early June, the Treasury has said it may run short of cash to pay the government’s bills, risking the biggest threat of default since a 2011 standoff.”There will not be a default,” McCarthy said without elaborating. “But what is really irresponsible is what the Democrats are doing right now, saying you should just raise the limit.”Biden had previously pledged to hold the meeting with McCarthy as part of a series of engagements with the new Congress.On Sunday, the president’s spokesperson said the talks would cover “a range of issues” and were aimed at “strengthening his working relationship” with McCarthy, whose party is ramping up investigations into Biden since they took control of the House from Democrats following November’s midterm elections.Biden, who is contemplating seeking re-election in 2024, has been sharply critical of McCarthy’s Republican caucus. He characterized them as “fiscally demented” earlier this month, threatened to veto their legislation and accused them of trying to balloon the deficit, favoring billionaires, raising middle-class taxes and threatening popular benefit programs.McCarthy and other Republicans both in the House and Senatehave said they will not support an increase in the debt ceiling without budget cuts or spending reforms.The Republican threat to block efforts to raise the debt limit is unusual; such increases have been approved on a bipartisan basis in Congress for decades, with the exception of a 2011 vote that included spending cuts for several years ahead.UNDEFINED DEMANDSMcCarthy did not provide details on specific demands and ruled out an increase in the retirement age for Social Security and Medicare benefits.White House spokesman Andrew Bates said that McCarthy’s pledge to strengthen the programs would lead to cuts.”For years, congressional Republicans have advocated for slashing earned benefits using Washington code words like ‘strengthen,’ when their policies would privatize Medicare and Social Security, raise the retirement age, or cut benefits,” Bates said in a statement.The House speaker, who agreed to rules that make it easier for his party to oust him over policy disagreements, said he would focus on discretionary spending, which has increased dramatically in the past two years with infrastructure and semiconductor legislation passed with bipartisan support and a green-energy bill passed by Democrats.”I think everything, when you look at discretionary, is sitting there,” McCarthy said. “We shouldn’t just print more money, we should balance our budget. So I want to look at every single department. Where can we become more efficient, more effective and more accountable?”He said he also would look at defense spending to eliminate waste.Asked if he would support a short-term extension of the debt limit until September as some lawmakers have suggested to buy time to pass spending bills, McCarthy said: “I don’t want to sit and negotiate here. I’d rather sit down with the president and let’s have those discussions.” More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.It looks like a quiet start to the week in Asia on Monday, but don’t be fooled – it may be the calm before the storm. A raft of regional economic indicators including Japanese unemployment and PMIs from China, Australia and India, as well as U.S. non-farm payrolls and U.S., euro zone and UK interest rates decisions will surely provide fireworks later in the week.In that light, investors on Monday may opt to reduce exposure to the glut of event risk, especially with month-end approaching and given how far stocks have risen since the turn of the year.The MSCI Asia ex-Japan index is at a nine-month high and up more than 30% from the October low. It has risen in 11 of the last 13 weeks and is on course for a monthly gain of 11%. GRAPHIC-Global markets in 2023 https://fingfx.thomsonreuters.com/gfx/mkt/zjvqjerrgpx/Pasted%20image%201674813566094.png That’s comfortably outperforming the S&P 500, euro zone and UK stocks, Japan’s Nikkei 225 and the MSCI World index, so a little profit-taking may be on the cards.In India, Gautam Adani faces a critical day on Monday with his flagship company’s $2.5 billion share sale’s second day of bidding overshadowed by a $48 billion rout in the Indian billionaire’s stocks sparked by a U.S. short seller’s report.China reopens after the Lunar New Year holiday, so trading volumes in Asia will return to something resembling normal. Just in time for a potentially choppy 24-hour period over Wednesday and Thursday when the Federal Reserve, European Central Bank and Bank of England announce their latest policy decisions.The debate over U.S. recession or soft landing, and Fed “pivot” or “higher for longer” may acquire more clarity after Fed Chair Jerome Powell’s press conference on Wednesday. Right now, investors’ glasses are half full. GRAPHIC-World stocks add $4 trillion since start of year https://fingfx.thomsonreuters.com/gfx/mkt/znvnbzyjavl/Pasted%20image%201674844455175.png Wall Street’s “fear index” – the VIX volatility index – on Friday fell below 18.0 for the first time in over a year, and perhaps a little under the radar, U.S. bond market volatility is now its lowest since last June. On the Asian data front this week, Chinese purchasing managers indices will give the most up-to-date snapshot of how the region’s largest economy is emerging from zero-COVID restrictions, while Japanese unemployment and retail sales figures are out on Tuesday.There is a deluge of Japanese earnings reports this week, from corporate titans including SoftBank, Sony (NYSE:SONY), Sumitomo and financial institutions Mizuho, Daiwa and Mitsubishi UFJ (NYSE:MUFG). Three key developments that could provide more direction to markets on Monday:- New Zealand trade (December)- Germany GDP (Q4)- Euro zone sentiment indicators (January) More

Good morning. The Chinese government has vowed to make consumption the “main driving force” of the economy as hopes grow that Beijing’s abandonment of zero Covid policies will unleash a flood of spending by Chinese consumers, fuelling a global rebound. “The greatest potential of the Chinese economy lies in the consumption by the 1.4 billion people,” Li Keqiang, China’s premier said during a meeting of China’s cabinet, the state council, according to a statement released late on Saturday. While China has long sought to boost consumer spending, the comments from its outgoing premier come at a crucial moment as Beijing seeks to rebuild the economy after years of punishing lockdowns. The Chinese economy grew by just 3 per cent in 2022, underscoring the impact of the government’s zero-Covid strategy before it was abandoned last month. Last year’s collapse of the property market, which has contributed around one quarter of GDP over the past decade, has also added to economic stress. Economists hope that China’s pent-up consumer activity will buoy global demand. Multinationals including Unilever have said in recent weeks they were expecting a rebound in demand in the country and banks including Morgan Stanley have increased their Chinese growth forecasts. Still doubts remain over the willingness of Chinese consumers to start spending again. Experts have long warned that China’s desire to move away from property-driven growth towards greater consumer spending will be challenging. Household spending accounted for 38 per cent of Chinese gross domestic product in 2021. By comparison, it accounted for nearly 70 per cent of US GDP in 2022. The last few years of Covid has also bred economic caution as incomes and house prices came under pressure in the real estate crash.Thank you for reading FirstFT Asia. Here is the rest of today’s news. — AmandaFive more stories in the news1. Adani Group says short seller’s report was ‘calculated attack on India’ India’s Adani Group has published an angry rebuttal of allegations of wrongdoing by short seller Hindenberg Research that wiped about 20 per cent, or more than $50bn, from its value last week. The 54-page rebuttal called the allegations of stock manipulation and accounting fraud a “calculated attack on India.”2. Israel to strengthen West Bank settlements and loosen civilian gun laws Israel says it will make it easier for civilians to carry guns and strengthen settlements in the occupied West Bank, after Jerusalem was hit by two shootings in less than 24 hours. The surge in violence has exacerbated fears that long-simmering Israeli-Palestinian tensions could erupt into a broader conflict. 3. Drones target Iranian military site in Isfahan Iran acknowledged a drone strike had targeted one of its military sites in Isfahan late Saturday night, but stopped short of accusing any foreign or opposition groups of engineering the attack. The strike caused no casualties and comes at a time when international and domestic pressure is mounting on the Islamic republic on several fronts. 4. Commodity trade costs surge as industry seeks up to $500bn in extra finance High interest rates, volatile prices, and the war in Ukraine have made it more expensive to move goods around the world. The commodity trading sector needs an extra $300bn to $500bn in financing to transport cargoes, according to a new study by McKinsey. 5. Russia’s internal struggle over classified financial data For months, Russia has withheld economic data as a defence against western sanctions. Now, its central bank governor is leading the push to declassify more data in order for markets to grow. The debate highlights the extent to which economic data has become part of Russia’s information war accompanying Vladimir Putin’s offensive in Ukraine and the west’s efforts to slow it down. The day ahead Nato visits South Korea and Japan Nato secretary-general Jens Stoltenberg will travel to Tokyo today after delivering remarks at the CHEY Institute in Seoul. In Tokyo, Stoltenberg will meet Prime Minister Fumio Kishida and other senior officials. The visit follows South Korea and Japan’s involvement for the first time in European Nato summits and demonstrates Nato’s support in the face of security challenges posed by China and North Korea. China’s stock markets reopen Stock markets in China will resume trade after being closed for the lunar new year holiday. India’s Martyr’s Day India will observe Martyr’s Day, which this year will mark the 75th anniversary of the murder of Mahatma Gandhi. Go deeper: While Gandhi remains officially the “father of the nation”, he is becoming increasingly unpopular in his homeland as Hindu nationalism surges. What else we’re readingChina’s film industry shoots for post-Covid recovery China’s box office receipts tumbled more than a third in 2022 from the previous year. As the country sheds Covid restrictions, film producers and analysts worry declining financing, censorship, and changing tastes could scupper the industry’s hopes of a strong recovery. Japanese firms step up intelligence gathering A growing number of Japanese businesses are strengthening their intelligence gathering as the country finds itself increasingly exposed to the mounting tensions between the US and China. Nearly a third of Japanese-listed companies with sales of more than ¥500bn cited “geopolitics” in their annual reports, compared to 11 per cent a year earlier, according to PwC Advisory.Inside the ‘Qatargate’ graft scandal rocking the EU Eva Kaili lived life more like a movie star than a member of European parliament. The Greek politician is currently in prison after allegations from Brussels of accepting cash and gifts from Qatar and Morocco in exchange for votes. The scandal has rocked the EU and forced it to confront uncomfortable truths about how it manages lobbying by foreign powers. Hungary’s soaring inflation puts squeeze on Viktor Orbán Public discontent is mounting in Hungary as prices for food and power continue to soar. Food and power prices are up 50 per cent in December year-over-year, according to government data. The economic troubles will limit Orbán’s scope to pacify the public with costly populist measures, just as his party prepares for municipal and European elections in 2024. The problem with Kishida’s ‘new capitalism’ philosophy Japanese companies have largely stuck to their line that employees should carry equal weight with shareholders among the priorities of CEOs. Now, mass tech lay-offs in the US are forcing Japanese executives to rethink their corporate culture, writes Leo Lewis. Take a break from the newsFrom hip-hop in Manhattan to Vermeer in Amsterdam, here are four cultural spots to hit this spring.

Wyclef Jean (left) and Lauryn Hill in New York, 1993 © Lisa Leone More

Hello and welcome to the working week.Can we afford to be more optimistic about the future? The next seven days are beginning more positively for global geopolitics with a visit by Nato secretary-general Jens Stoltenberg to South Korea and Japan. He will travel from Seoul to Tokyo on Monday to reinforce the transatlantic security alliance’s ties with its key partners in Asia. The meetings, which follow Japan and South Korea’s involvement for the first time in European Nato summits, demonstrate the alliance’s support for these countries in the face of security challenges posed by China and North Korea.The war in Ukraine will be high on the agenda, with Tokyo and Seoul likely to confirm the release of additional non-lethal equipment for Kyiv.On the flip side, this week will also provide reminders of the continued and very real challenge posed by populism and nationalists. India commemorates Martyrs’ Day on Monday on the 75th anniversary of the murder of Mahatma Gandhi. As writer Ramachandra Guha notes in his FT Weekend essay, veneration of the anti-colonial revolutionary has waned as Hindu nationalism has surged. In the US, the figure of former president Donald Trump will loom large again as his adviser Peter Navarro is set to go on trial on Monday for his failure to comply with a subpoena from the House committee that investigated the January 6 2021 attack on the Capitol.In the UK it is yet another week of strikes, beginning on Monday with driving instructors at the Driver and Vehicle Standards Agency. The biggest day of action will come on Wednesday when schoolteachers, train drivers and university lecturers down tools while the TUC trades union body stages a Protect the Right to Strike Day in opposition to a contentious government bill to curb industrial action on essential services.Thank you to those who send messages of support and advice about the contents of this newsletter. Email me at [email protected] or if you’ve received this in your inbox, hit reply.Economic dataThe rate-setting schedules have aligned again for the monetary policy committees of the Federal Reserve, the European Central Bank and the Bank of England. The ECB is expected to stick with extra-large rate rises while the Fed downshifts, having signalled it would end its pace of 0.75 percentage point increases in December.The Bank of England is expected to push through a 0.5 percentage point increase, owing to the stubborn persistence of high inflation, strong wage growth and the unexpected resilience of the UK economy.CompaniesWe are in the thick of earnings season and this week is peak Big Tech with quarterly figures from Alphabet, Amazon.com, Apple, Meta and Spotify. It has been a sobering time for the sector, not least the admission that they massively over hired during the Zoom years of the pandemic. Apple will be notable given that it is expected to break a 14-quarter growth streak in the lucrative December period owing to a shortage of high-end iPhones. A November outbreak of Covid-19 in the Zhengzhou factory (known locally as iPhone city) is to blame, creating a handset shortage of somewhere between 5mn and 10mn units. At about $1,000 a pop, this works out at a $10bn hiccup, and is not good news for Apple given its handset war with Google. Revenue in this quarter in 2021 was a nudge under $124bn; forecasts are slightly lower for 2022 but the hit to net profit could be greater.Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayChina, stock markets reopen after being closed for the lunar new year holidayGermany, monthly retail sales figuresSpain, flash January consumer price index (CPI) inflation rate dataSweden, flash Q4 GDP figuresResults: NEC Q3, Philips Q4, Ryanair Q3TuesdayIMF publishes an update to its World Economic Outlook growth projectionsCanada, November GDP figuresEU, flash Q4 GDP figuresFrance, flash Q4 GDP figures plus January Harmonised Index of Consumer Prices (HICP) inflation rate dataGermany, flash Q4 GDP figures plus January labour market statistics and January HICP inflation rate dataIndia, Economic Survey of how the economy fared in the last year and how it is projected to grow during the next fiscal yearJapan, December labour force survey (AM local time)UK, Q3 estimate of government debt and the deficit, plus Q4 insolvency dataResults: AMD Q4, Canadian Pacific Railway Q4, Caterpillar Q4, Corning Q4, ExxonMobil Q4, Fujitsu Q3, General Motors Q4, McDonald’s Q4, Mondelez Q4, Origin Energy Q2 revenue and production report, Pets at Home Q3, Pfizer Q4, Samsung Electronics Q4, Snap Q4, Spotify Q4, UBS Q4, UniCredit Q4, UPS Q4, Whirlpool Q4WednesdayBrazil, monetary policy committee inflation rate decisionCanada, Brazil, China, eurozone, India, France, Germany, Italy, Japan, Spain, UK, US: S&P Global/SIPS manufacturing purchasing managers’ index (PMI) dataEU, December unemployment figures plus HICP inflation rate dataUK, Nationwide House Price IndexUS, Federal Open Market Commission announces latest rate decisionResults: Entain Q4 trading update, Glencore FY production report, GSK Q4, Hitachi Q3, Meta Q4, Netgear Q4, Nomura Q3, Novartis Q4, Novo Nordisk Q4, Orsted Q4, Peloton Q2, SK Hynix Q4, Virgin Money Q1 trading update, Vodafone Q3 trading updateThursdayEU, European Central Bank monetary policy committee interest rate decisionGermany, trade balance dataSouth Korea, December CPI inflation rate dataSpain, monthly unemployment figuresUK, Bank of England monetary policy committee interest rate decisionUS, Q4 unit labour costs and non-farm productivity dataResults: ABB Q4, Alphabet Q4, Amazon.com Q4, Anglo American Q4 production report, Apple Q1, Banco Santander Q4, Bristol Myers Squibb Q4, BT Group Q3 trading update, Canada Goose Q3, Chubb Q4, ConocoPhillips Q4, Danske Bank Q4, Dassault Systemes Q4, Deutsche Bank FY, Electrolux FY, Eli Lilly & Co Q4, Estee Lauder Q2, Fast Retailing January sales data, Ferrari Q4, Ford Motor Company Q4, Geox FY, Honeywell Q4, ING Q4, Japan Airlines Q3, Merck & Co Q4 MetLife Q4, NCC H1, OMV Q4, Publicis Groupe FY, Qualcomm Q1, Shell Q4, Sony Q3, Starbucks Q1, World Wrestling Entertainment Q4FridayEurozone, France, Germany, Italy, Japan, Spain, UK, US: S&P Global/Cips services PMI dataEU, December producer price index (PPI) inflation rate dataTurkey, January CPI and PPI inflation rate dataUS, quarterly employment figuresResults: Aon Q4, Cigna Q4, Mitsubishi Q3, Skanska FYWorld eventsFinally, here is a rundown of other events and milestones this week. MondayIndia, Martyrs’ Day this year takes place on the 75th anniversary of the murder of Mahatma GandhiJapan, Nato secretary-general Jens Stoltenberg travels from South Korea, where he has been meeting foreign minister Park Jin and minister of national defence Lee Jong-Sup, to Tokyo to meet Japan’s prime minister Fumio Kishida and other senior officials in his government.South Africa, trial set to resume of former president Jacob Zuma on corruption charges related to a 1990s arms dealUK, workers at the Driver and Vehicle Standards Agency, including driving examiners, staff in the call centre, driving instructor examiners and local driving test managers, stage latest industrial action over pay. Separately, a strike ballot issued by the Fire Brigades Union closes in its members’ pay dispute.US, former president Donald Trump’s adviser Peter Navarro to go on trial for his failure to comply with a subpoena from the House committee that investigated the January 6 2021 attack on the CapitolTuesdayDemocratic Republic of Congo, Pope Francis begins the first papal visit to Congo in 37 years, accompanied by the Archbishop of Canterbury, Justin Welby, and the moderator of the Presbyterian Church of Scotland, Iain Greenshields. The pontiff will meet the country’s authorities, victims of the conflict in the eastern part of the country and representatives of charities operating in the African nation. He will then visit South Sudan.UK, Manchester mayor Andy Burnham speaks at the Cities Outlook report launch, an annual health-check of British cities by Centre for CitiesWednesdayIndia, Narendra Modi’s government presents its last full budget before the country’s next general electionsUK, widespread strikes. More than 100,000 civil service members of the PCS union are to walk out for a day, the largest civil service strike for years and a significant escalation of industrial action over pay, pensions, redundancy terms and job security. Train drivers at operating companies will strike in a dispute over pay and working practices involving the RMT and Aslef unions. There will also be classroom disruption with the first of several national strikes by teachers across England and Wales, ongoing action by teachers in Scotland and over 70,000 staff at 150 universities will strike in a dispute over pay, pensions and working conditions. Also, the TUC is co-ordinating a Protect the right to strike day of action in opposition to the Westminster government’s plan to impose new minimum service levels on most of the public sector.ThursdayRussia, 80th anniversary of the Soviet government announcing the final defeat of the German 6th Army at StalingradUK, secondary school performance tables published for EnglandUS, Groundhog Day celebrated in Punxsutawney, Pennsylvania. According to legend, there will be six more weeks of winter weather if the groundhog sees his shadow and an early spring if he does not.FridayUkraine, representatives from the EU and Ukraine hold a summit in KyivUK, further industrial action on national railways as train drivers in the RMT and Aslef unions strike over pay and working practices. Also, four days of strike action among legal advisers and court associates that are members of the PCS union will begin in more than 80 courts across England and Wales.SaturdayUK, Six Nations Rugby tournament begins with matches between Wales and Ireland and England and ScotlandWorld Cancer Day, raising awareness and campaigning for government actionSundayCyprus, first round of presidential elections. A run-off will be held on February 12 if needed.EU bans imports of all Russian seaborne refined oil and petroleum products from today, part of measures against Russia following its invasion of UkraineUS, 65th Grammy Awards for the music industry to be held in Los Angeles More

Will the Fed’s rate decision bring it closer to a ‘soft landing’ for the US economy?The Federal Reserve is widely expected to slow its pace of interest rate increases at its meeting on Tuesday and Wednesday this week, delivering a 0.25 percentage-point increase amid mounting evidence that inflation in the US has begun to cool. Federal Open Market Committee voters — including the hawkish Christopher Waller — have come out ahead of this week’s meeting in favour of a 0.25 percentage point increase. This raise would mark a return to a more normal tempo of policymaking after the Fed last year delivered four consecutive 0.75 percentage point increases before decelerating to 0.5 percentage points in December. The shift in the Fed’s approach can be attributed in part to the recent chill in inflation. Consumer price growth in December slowed for the sixth straight month, with inflation clocking in at 6.5 per cent. Though inflation remains far from the Fed’s 2 per cent target, December’s level was the lowest since October 2021. The meeting will also come on the heels of news that the US economy grew more than expected in the fourth quarter — with gross domestic product increasing at an annual rate of 2.9 per cent, compared with the 2.6 per cent forecast by economists. Slower inflation and a better economic outlook mean that the Fed’s hope of engineering a “soft landing” — raising rates enough to stamp out inflation but not enough to push the US into recession — can live on. Kate DuguidWhat will the ECB’s rate decision indicate about the future pace of monetary tightening?Economists largely consider it a “done deal” that the European Central Bank will raise rates by 0.5 percentage points on Thursday at its next monetary policy meeting.Christine Lagarde, president of the ECB, signalled this month that the bank will “stay the course” of large interest rate increases, suggesting the same half percentage-point increase as at the last meeting which would take the deposit rate to 2.5 per cent up from minus 0.5 in June last year.With little uncertainty on the rate change, the main point of interest of the ECB meeting will be any messaging about further rates decisions said Andrew Kenningham, chief Europe economist at Capital Economics. “We now think that the resilience of the economy and persistence of core inflation means the Bank will raise the deposit rate by a further [0.5 percentage points] in March and [0.25 percentage points] at the next two meetings, bringing it to a peak of 3.5 per cent,” he added.But the pace of monetary tightening will depend on the resilience of the eurozone economy and the persistence of high price pressures, with most of the key data being released this week. Economists polled by Reuters expect GDP data released on Monday to show that the German economy stalled in the fourth quarter of 2022. The same figure for the eurozone — out on Tuesday — is also forecast to show no growth over the same period, confirming a much smaller hit from the surge in energy costs and rising borrowing costs than what was forecast a few months ago.Analysts also expect eurozone inflation to have eased to 9.1 per cent in January down from 9.2 per cent in the previous month and further below the all time peak of 10.6 per cent recorded in October. Valentina RomeiBy how much will the Bank of England lift interest rates?Markets are pricing in that the Bank of England will raise interest rates by 0.5 percentage points at its meeting on Thursday.That would take the bank rate to 4 per cent, up from the historical low of 0.1 per cent in late 2021 and the highest since 2008. “We believe the Monetary Policy Committee will raise the bank rate by [0.5 percentage points] in February in response to stubbornly high services inflation and wage growth,” said Andrew Goodwin, chief UK Economist at Oxford Economics.Supported by a tight labour market, whereby unemployment levels are relatively low and job vacancies high, UK nominal wages rose at a near record pace in November with private sector pay reaching an annual rate of 7.2 per cent. Headline inflation ticked down in December, but services inflation, a better measure of underlying price pressure, accelerated.Goodwin added that February’s rise might be followed by a smaller rise in March, “but that should bring the current cycle of rising borrowing costs to a close”.He also noted that the MPC has avoided tightening less than market expectations in recent meetings and may still be reluctant to take what they perceive as the risk of appearing more dovish than expected.However, Elizabeth Martins, economist at HSBC, thinks the MPC will go for a quarter of a percentage point rate increase on Thursday. She conceded that there are “significant risks” of a larger rise but noted that “the combination of lower near-term inflation, receding inflation expectations, the rapid slowdown in the housing market and the BoE’s own sub-target, medium-term inflation forecast, mean that the MPC will opt for a slower pace of tightening”. Valentina Romei More