Economy

“The financial stability approach, the requirements for financial stability was very targeted, and temporary,” Mann said during an event organised by the Marshall Society at Cambridge University.The BoE announced it would intervene in Britain’s government bond market on Sept. 28 after prices slumped following the announcement of planned tax cuts by former finance minister Kwasi Kwarteng. Its purchase programme ended on Oct. 14. More

Office workers across the world’s biggest economies have not resumed their pre-pandemic commuting, instead embracing hybrid working as the new normal according to widely-watched commuting data.By mid-October trips to workplaces in the world’s seven largest economies were still well below their levels before the coronavirus took hold in early 2020, according to a Financial Times analysis of phone-tracking movements published by Google. In Japan, footfall was 7 per cent below pre-pandemic levels while in the UK it was down 24 per cent. Across major advanced economies office trips are more popular on the middle days of the week, while Monday and Friday tend to show large drops in attendance.Cities which host financial and business districts saw a larger loss of office footfall than in other major population areas, according to the Google figures. Economists said the shift towards remote working had become the new normal. “Working from home will ultimately stick,” said Cevat Giray Aksoy, an economist at the European Bank for Reconstruction and Development who has researched the trend. “Workplace-related mobility levels will remain lower than the pre-pandemic levels.”The big shift to working from home “presents challenges for dense urban centres that are organised to support a large volume of inward commuters and a high concentration of commercial activity”, said Aksoy.Aksoy’s research found a rising share of job postings in many countries offer employees the opportunity to work remotely one or more days per week. Sara Sutton, founder and chief executive of FlexJobs, a careers service specialising in remote and hybrid jobs, agreed. “We have definitely seen a tipping point towards a deeper and more permanent integration of remote and hybrid work into organisations,” she said.Survey data suggest that people like working from home and the practice helps to lower firms’ overheads and carbon emissions, but evidence on the impact on productivity is mixed. The Freespace index, which tracks office usage in big corporations around the world, shows that occupancy is about half its 2019 levels for both workspace stations and meeting rooms. Kastle data, which tracks fob access to US offices, particularly in big professional services businesses, shows that occupancy only returned to about half of pre-pandemic levels in mid-October.

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 survey by the Munich-based think-tank Ifo showed that in August one-quarter of employees in Germany still worked from home for at least part of the time.In the UK, a regular survey run by the Office for National Statistics showed that more than a fifth of UK workers were using a hybrid model of working in early October, largely unchanged since the spring. The proportion rose to more than half of the workforce for information and communication, with professional, scientific and technical activities being only a little lower. Google began to publish daily data on travel patterns in April 2020 as a tool for governments and policymakers to track the effects of Covid restrictions on the economy. It initially showed a collapse in visits to workplaces as people in many countries were forced to stay home. The mobility reports were used by the Bank of England and the European Central Bank as a snapshot of the impact the pandemic was having on the economy, as they were published months ahead of official figures. The data was a “fantastic” proxy for economic activity, said Bert Colijn, economist at ING. The daily count of trips to the workplace also provided one of the best indicators globally to show how incomplete the return to the workplace had been, he said.But as post-pandemic commuting patterns have become established, Google will not update the series further from now on. More

ROME (Reuters) -Giorgia Meloni was sworn in as Italy’s first woman prime minister on Saturday alongside her cabinet team, giving the country its most right-wing government since World War Two.She takes office at an especially fraught moment, with Italy’s debt-laden economy once again heading into recession, firms buckling under the weight of soaring energy bills, and splits within her coalition over the war in Ukraine.Standing beneath the crystal chandeliers of a frescoed chamber in the presidential palace, Meloni took her oath of office as her 6-year-old daughter looked on.Head of the nationalist Brothers of Italy, Meloni swept to victory in an election last month as part of a coalition that included Forza Italia, led by former Prime Minister Silvio Berlusconi, and Matteo Salvini’s anti-immigrant League.Her government, the 12th this century, replaces a national unity administration piloted by former European Central Bank chief Mario Draghi, who was at the forefront of European Union efforts to sanction Russia after it invaded Ukraine in February. While Meloni has pledged support for Ukraine, Berlusconi has repeatedly undercut her, earlier this week blaming Kyiv for the war and revealing he had exchanged gifts and “sweet letters” with his old friend, Russian President Vladimir Putin.After days of often tense talks, Meloni unveiled her team on Friday, giving five ministries each to the League and Forza Italia and reserving nine cabinet posts for her own party.Technocrats make up the rest of the 24-strong squad, which includes just six women and where the average age is 60.Italy’s perennially weak economy and ballooning national debt were entrusted to Giancarlo Giorgetti, seen as a moderate member of the League. The Foreign Ministry was handed to Forza Italia veteran Antonio Tajani, seen as a pro-European dove.Tajani told a local television channel his first act would be to call his Ukrainian counterpart to assure him of Italy’s continued solidarity.’PATRIOTS COMING TO POWER’Meloni’s party has neo-fascist roots, but she sought to project a moderate image during the election campaign, dropping previous anti-EU rhetoric and pledging to keep Italy at the heart of European and Western institutions.European Commission leaders in Brussels sent her messages of congratulations on Saturday.”I count on and look forward to constructive cooperation with the new government on the challenges we face together,” Commission President Ursula von der Leyen wrote on Twitter.Meloni also received plaudits from Europe’s nationalist conservatives, who hope her government will prove a powerful ally in their regular battles with Brussels.”Congratulations Giorgia Meloni on the formation of your government! Big day for the European Right!” Hungarian Prime Minister Viktor Orban wrote on Twitter. French far-right leader Marine Le Pen tweeted: “All over Europe, patriots are coming to power.”Meloni is due to hold her first cabinet meeting on Sunday following a formal handover of power with Draghi.She will then will face obligatory confidence votes in parliament during the week that she will easily win given her comfortable majority. More

BEIJING/HONG KONG (Reuters) – China’s central bank chief Yi Gang is likely to step down after he was dropped from an elite body of the ruling Communist Party, with a former central banker a leading contender to succeed him, sources close to the central bank said.The potential retirement in early 2023 of Yi, 64, has been the subject of intense speculation as he nears the official retirement age of 65 for minister-level officials. Some policy insiders and advisers had suggested Yi’s tenure might be extended, as was the case with his predecessor, Zhou Xiaochuan.Yi is among pro-reform policymakers not named on Saturday as full or alternate members of the party’s new Central Committee. Also excluded were outgoing Premier Li Keqiang, 67, economic czar Liu He, 70, and central bank party chief Guo Shuqing, 66.The changes at the end of the twice-a-decade party congress, were among moves that cemented Xi Jinping’s iron grip on power and appeared to be consolidating control among people close to Xi.”Yi’s departure looks inevitable,” said a policy insider. “The pro-reform camp is almost out at the party congress.”Yi was an alternate on the previous Central Committee. His exclusion from the new Central Committee lists means he is almost certain to step down at the annual parliament meeting in March, sources said.The People’s Bank of China did not immediately respond to a request for comment.The looming reshuffle comes as the PBOC seeks to bolster the COVID-ravaged economy while avoiding aggressive loosening that could fuel capital flight, as the Federal Reserve and other central banks raise interest rates to fight soaring inflation.Yin Yong, deputy party chief in the capital Beijing who worked as a deputy central bank governor from 2016 to 2018, is a leading candidate to replace Yi, sources close to the central bank said.Yin, 53, who holds a doctorate in engineering from Tsinghua University and a master’s degree in public administration from Harvard University, was elected as a full member of the Central Committee during the party congress.”Yin Yong is likely to replace Yi Gang,” said a source close to the PBOC who spoke on condition of anonymity.Other sources described Yin as well-positioned to replace Yi, given his status as a rising star and his previous experience at the central bank, the foreign exchange regulator and Beijing government. Yi has been PBOC governor since 2018 and is one of China’s highest-ranking “sea turtles” – a term for Chinese returning from overseas. He has a doctorate in economics from the University of Illinois. The PBOC has been overhauling its top management team in recent weeks. Xuan Changneng was named deputy central bank governor on Thursday.China faces the biggest overhaul of its economic leadership in a decade, with a generation of reform-minded policymakers expected to step down amid worsening growth prospects. More

BUDAPEST (Reuters) -Hungary will include variable-rate loans to small- and medium-sized businesses in a scheme designed to cap loan rates and avoid a recession, Minister for Economic Development Marton Nagy said, adding banks could “easily” bear the cost of the measure.With inflation above 20% and still rising, and the economy slowing, Prime Minister Viktor Orban’s government faces the challenge of curbing price growth while trying to stave off a recession. It has already capped the price of fuel and basic foodstuffs as well as mortgage rates. Energy bills are also capped for most households.On Saturday, the government announced subsidies worth 150 billion forints ($362 million) for large companies who invest to improve energy efficiency, and expanded its scheme of capped interest rates on loans. Nagy said rates on business loans will be capped at the 3-month interbank rate of June 28, which was 7.77%, as opposed to the current rate of 16.69%, after an emergency rate hike by the central bank on Oct 14. The cap is effective until July 1, 2023, similar to the existing cap on household mortgage rates.Banks will pay the cost of the scheme which will total about 80 billion forints to July 1, Nagy said, adding it was a sum they would “easily be able to bear”.”Rising interest rates bring extra profits for banks,” Nagy added. When asked if the government held talks with the banks before launching the new cap, he said it had “notified” the Bank Association about the move.Nagy said the stock of variable-rate loans amounted to close to 2 trillion forints held by about 60,000 small firms, and the measure aimed to avoid these businesses paying 20% or higher rates on their loans.”We would like to avoid the economy going into recession next year and we have every chance to have 1% growth,” Nagy told a briefing.”With this loan cap we want to prevent yet another shock to the corporate sector stemming from a surge in their repayments.”In May, the government announced windfall taxes worth 800 billion forints on what it called “extra profits” earned by banks, energy companies and other firms. These taxes, designed to plug a budget deficit, hit Budapest stocks and rattled investors. ($1 = 413.9900 forints) More

LONDON (Reuters) – Boris Johnson arrived back in Britain on Saturday as he considers an audacious attempt to win a second term as prime minister only weeks after he was forced to step down, with some colleagues warning his comeback could create more political chaos.The potential candidates to replace Prime Minister Liz Truss, who dramatically quit on Thursday after only six weeks in power, were embarking on a frantic weekend of lobbying to secure enough nominations to enter the leadership contest before Monday’s deadline.Johnson, who was on holiday in the Caribbean when Truss resigned, has not commented publicly about a bid for his old job. He has received the support of dozens of Conservative lawmakers, but needs to secure 100 nominations to be considered.The trade minister James Duddridge said on Friday Johnson had told him he was “up for it”.Johnson was booed by some passengers on the plane to Britain, according to a Sky News reporter on the flight which arrived in London on Saturday morning.Wearing a dark jacket and backpack, Johnson waved to photographers at the capital’s Gatwick Airport before driving away. It would be an extraordinary political resurrection for the former journalist and ex-Mayor of London, who left Downing Street shrouded in scandal but grumbling that his colleagues “changed the rules halfway through” a race – a swipe at the Conservative lawmakers who did not allow him to serve a full term.Former defence minister Penny Mordaunt became the first candidate to officially declare an intention to run to be the next leader of the Conservative Party, but Johnson and Rishi Sunak, once his finance minister, led potential contenders ahead of voting next week.Sunak, who was runner-up to Truss in the previous leadership contest and has yet to formally declare his candidacy this time, did not speak to reporters when leaving his London home on Saturday. The prospect of the return of Johnson to government is a polarising issue for many in the Conservative Party, which is deeply divided after seeing off four prime ministers in six years.For some Conservative lawmakers, Johnson is a vote-winner, able to appeal across the country not only with his celebrity but also with his brand of energetic optimism.For others he is a toxic figure and the question is whether he can convince the dozens of lawmakers who abandoned him that he is now the person who can unite the party and turn around its flagging fortunes.”DEATH SPIRAL”Ex-interior minister Priti Patel announced her support for her former boss on Saturday, saying he had “the mandate to deliver our elected manifesto and a proven track record getting the big decisions right.”But her colleague Andrew Bridgen said he would consider resigning from the parliamentary group if Johnson returns and warned the Conservatives against developing a “personality cult” around the former prime minister. Dominic Raab, a foreign minister under Johnson, said the party risked going “backwards” if he returned. The former Conservative leader William Hague said on Friday Johnson’s return was possibly the worst idea he had heard in almost half a century as a party member. He said it would lead to a “death spiral” for the Conservatives.If Johnson can secure the required number of nominations, he is likely to go head-to-head with Sunak, who quit as his finance minister in July, claiming that his former boss was unable to take tough decisions.Sunak is the first leadership candidate to hit the threshold of 100 nominations to enter the contest before Monday’s deadline, according to media reports. Johnson, who currently has about half the support needed, is currently under investigation by parliament’s Privileges Committee to establish whether he lied to the House of Commons over lockdown-breaking parties. If ministers are found to have knowingly misled parliament, they are expected to resign.The contest to become Britain’s fourth prime minister in four years has been accelerated to take only a week. Under the rules, only three candidates will be able to reach the first ballot of lawmakers on Monday afternoon, with the final two put to a vote of party members for a result by next Friday. More

A fifth of companies are giving staff extra benefits such as shopping vouchers, free parking and travel subsidies to help with the cost of living, according to a national survey of UK businesses, but most are still only offering below inflation pay increases.According to a poll conducted for the Financial Times by the Chartered Management Institute of more than 1,000 managers at companies and public sector organisations, only one in 10 said they had offered a pay rise of more than 5 per cent to their staff this year. A similar number had offered no basic pay increase at all.A third had offered wage increases of 3-5 per cent, with a similar number below that level. Inflation measured by the consumer price index rose more than 10 per cent year on year in September, squeezing many households as wage growth remains comparatively low. Companies are coming under pressure from their staff to increase wages to match the costs they are facing at home as the price of groceries and energy soars ahead of the winter.Some employers are also offering one-off bonuses or cost of living payments.PwC told staff on Thursday that those earning £50,000 or less a year would receive special payments of between £1,000 and £1,500 spread over the next five months to help with the cost of living. The payments will go to about half of the firm’s 24,000 staff and anyone with a salary of £40,000 or less will receive the full amount. “Given the exceptional economic environment, extra and targeted support feels the right thing to do, and we know many of our clients are doing the same,” said Kevin Ellis, PwC’s UK chair and senior partner.PwC and other professional services groups have announced higher than normal pay rises this year with some firms bringing forward their usual pay rises. Deloitte told staff this month that they could choose to receive extra cash payments instead of the firm’s usual contributions to their pensions. Other companies offering one-off payments of typically between £300 and £1,000 have included Amazon, Aviva, Grainger, John Lewis, housebuilders Barratt and Taylor Wimpey and banks such as Nationwide and Co-operative. Virgin Media O2 will give £1,400 to employees earning less than £35,000. However, the survey by the CMI showed this was still not the norm, with only a tenth of those surveyed offered one-off cost of living payments.Twice that number said they were trying to help through giving perks such as shopping vouchers and travel subsidies. John Lewis, for example, is also offering free food to all workers until 6 January to help with the cost of living. Aviva has scrapped car parking charges for its staff.“The squeeze on real incomes is hitting millions of households. Businesses are feeling the squeeze too. We are seeing many employers coming up with innovative means of softening the impact of the current situation on their employees beyond basic pay such as cash off on shopping and one-off in-year payments,” said Anthony Painter, director of policy, CMI. “Overall though, there is a sense of muddling through what everyone will hope is the worst of the crisis. We are nowhere near out of the woods yet.”Large organisations were found to be more likely to offer basic pay awards than smaller rivals, the CMI found. If pay awards were offered to some employees only, it was more likely in the private sector than public, while additional remuneration and benefits were also offered more often in the private sector than in the public sector. More

TOKYO (Reuters) -Japan intervened in the foreign exchange market on Friday to buy yen for the second time in a month after the currency hit a 32-year low near 152 to the dollar, a government official and another person familiar with the matter told Reuters. Japan has been attempting to shore up the battered currency as the central bank sticks with ultra-low interest rates, countering a global trend of tightening monetary policy and widening the gap between U.S. and Japanese interest rates.After the dollar rose to 151.94 yen, its highest since 1990, the intervention drove the Japanese currency down more than 7 yen to a low of 144.50 yen. The U.S. currency was last down 1.8% at 147.34 yen.The Ministry of Finance (MOF) intervened in several stages from around 9:35 p.m. (1235 GMT), one source said.”We are maintaining our stance of being ready to take appropriate action against excessive forex volatility,” Prime Minister Fumio Kishida told reporters on Saturday after meeting with Australia’s Anthony Albanese, reiterating that such volatility could not be tolerated.Kishida declined to comment further, saying, “I will not make any detailed comments on forex” when asked about Friday’s intervention.Japan’s top currency diplomat, Masato Kanda, also declined to say whether the MOF had intervened.”We won’t comment now on whether or not we conducted an intervention,” Kanda, the vice finance minister for international affairs, told Reuters on Saturday, saying that this was a stance the MOF has stuck to over the past several weeks.He added that the ministry would not confirm whether an intervention had taken place for some time yet, signalling possible “stealth intervention” to engage in a war of nerves against investors selling the yen.The MOF also bought yen on Sept. 22, as investors focussed on the widening divergence between the BOJ’s ultra-loose monetary policy and the U.S. Federal Reserve’s aggressive rate hikes.Finance Minister Shunichi Suzuki and Kanda have repeatedly signalled the government’s readiness to intervene, warning against excessive volatility. Suzuki said before the intervention on Friday the authorities were ready to act “strictly” against speculators.Many market players doubt whether Tokyo can reverse the yen’s downtrend with solo intervention, even with Japan’s $1.33 trillion in foreign reserves.The Group of Seven industrial powers agreed this month to closely monitor recent volatility but stopped short of indicating they were prepared for joint intervention. Japan bought a record 3.6 trillion yen ($24 billion) in the September action, Tokyo money market brokerage firms estimated.($1 = 147.6400 yen) More