Economy

Doing so would bring euro-area interest rates “close to what we estimate” is a level that’s neither accommodative nor restrictive, the Slovenian central bank governor said Wednesday in an interview. It would also open the debate for further steps like shrinking the ECB’s balance sheet, he said.“The time to think about asset purchases as further steps of normalization of monetary policy will come after we reach the neutral interest rate and discuss hikes above it,” Vasle said. “We will have to think about shrinking the balance sheet, probably in 2023.”Facing inflation of almost 10%, ECB officials are expected to repeat September’s three-quarter-point boost to interest rates when they meet next week. Vasle isn’t alone in backing such a step, with hawkish officials Lithuania, Latvia and Austria — among others — thinking similarly.Vasle warned that euro-area inflation is becoming increasingly broad based, and that future data will determine how far above neutral the ECB will have to proceed to tame price pressures.“In Slovenia, more than 70% of products have seen price increases at levels above 5%, with upside risks not subsiding,” he said.©2022 Bloomberg L.P. More

Imagine that a superpower declared war on a great power and nobody noticed. Joe Biden this month launched a full-blown economic war on China — all but committing the US to stopping its rise — and for the most part, Americans did not react. To be sure, there is Russia’s war on Ukraine and inflation at home to preoccupy attention. But history is likely to record Biden’s move as the moment when US-China rivalry came out of the closet. America is now pledged to do everything short of fighting an actual war to stop China’s rise. It is not clear that corporate America, or its foreign counterparts, have fully digested what is about to hit them. For decades, serious businesses have based their growth models on having a China strategy — whether it be by exporting to China, or producing there, or both. Unless a company’s product is, say, luxury goods or agricultural commodities, Biden’s technological decoupling will hit their bottom line. His escalation also marks a final break with decades of US foreign policy that assumed China’s global integration would tame its rise as a great power. America’s conversion to China containment is bipartisan. It was one thing for Donald Trump to target Huawei and ZTE, the Chinese telecoms conglomerates, and aim for managed trade. It is another for Trump’s Democratic successor to isolate China’s entire high-tech sector. It is notable there are no prominent voices raised in either political party against US-China decoupling. Washington’s China politics is now about which party can get more to the right of the other. There are two big risks to Biden’s gamble. The first is that America is now close to making regime change in China its implicit goal. The new restrictions are not confined to the export of high-end US semiconductor chips. They extend to any advanced chips made with US equipment. This incorporates almost every non-Chinese high-end exporter, whether based in Taiwan, South Korea or the Netherlands. The ban also extends to “US persons”, which includes green card holders as well as US citizens. That presents a binary choice between America or China. Most will choose the US. But there are tens of thousands of Chinese green card holders who will now be inclined to believe Beijing’s claim that there can be no such thing as divided loyalty. The hit to China’s economy will be far bigger than the word “semiconductor” implies. Biden’s move draws on the premise that any advanced chip can be used by China’s military, including for nuclear weapon and hypersonic missile development. It is also meant to undercut China’s goal of dominating global artificial intelligence by 2030. But all such chips are dual use, which means that the US is now committed to blocking China in all kinds of civilian technologies that make up a modern economy. In most American and many western eyes, such steps look like a fair response to decades of Chinese intellectual property theft that has fuelled its military growth. In Chinese eyes, it will look like the US wants to keep communist China permanently down. It is no great leap from that to regime change. The more imminent risk is that Biden’s gamble could prompt Xi Jinping, China’s president, to accelerate his timetable for Taiwan reunification. The island state is by far the world’s largest maker of high-end chips. That Biden’s move took place shortly before China’s 20th party congress, which ends on Saturday with a likely third five-year term for Xi, is notable. Many China watchers think Xi wanted to put the party congress behind him before turning to his vow of fixing the Taiwan problem. Biden could have made a violent resolution to China’s Taiwan policy more likely. He could equally have given Xi pause for thought. We will find out. What we do know is that national security is once again the lens through which Washington sees the world. Rest in peace “the world is flat” and the “end of history”. The US has endorsed a zero-sum metric in which China’s rise is seen as being at America’s expense. You could say that Biden is belatedly reacting to what China has been talking about for years — with increasing unsubtlety by Xi. But that is hardly reassuring. It means that the world’s hegemon and its only serious rival now see each other through the same lens. As is usually the case in history, nobody else gets much of a say. Will Biden’s gamble work? I’m not relishing the prospect of finding out. For better or worse, the world has just changed with a whimper not a bang. Let us hope it stays that way. [email protected] More

Sam Grayson was collecting her daughter from school when a teacher stopped her and thrust a blanket into her hands: “I’m really worried about the children being home and being cold,” she said. A single mother from Middlesbrough, in north-east England, Grayson is one of many parents increasingly turning to schools to provide food and childcare to make ends meet as the cost of living crisis intensifies. Food inflation reached 14.6 per cent in September, a record high, with economic conditions across the UK worsening. By providing “breakfast clubs” — before-school groups where children receive a nutritious hot meal — discounted school trips and free after-class childcare, Brambles Primary Academy has become a lifeline for the likes of Grayson.But with budgets already overstretched, teachers are warning there is only so much they can do to support pupils. Analysts, meanwhile, have said that rising hardship among primary age children can affect their life-long chances and hamper the UK’s aim to build a thriving skills-based economy.According to a recent survey by teachers’ union NASUWT, six in 10 teachers reported that more children were coming to school hungry this summer than last year. Three quarters said they had witnessed an increase in the number of children with behavioural problems and 65 per cent said a greater number lacked proper equipment. “There is such a high need,” said Darren Higgins, Brambles’ acting headteacher. “Schools take an element of that on because it’s what’s best for the children.” That need is forcing some families into making difficult choices. About one in four parents cut back on food last month, according to a survey by polling company YouGov commissioned by the charities Food Foundation and National Energy Action — one in 10 said they had eaten cold meals to save on energy. Catherine Millar, north of England school officer for Magic Breakfast, a charity that provides breakfast clubs around the UK in co-operation with local businesses such as Greggs, said headteachers were “terrified of what winter will bring . . and schools are already seeing children going hungry”. The rising hardship that is evident in schools is a driver of the widening education gap between disadvantaged students and their peers, said Janeen Hayat, director of collective action at Fair Education Alliance charity. Attainment in reading fell from 62 per cent to 51 per cent among seven-year-olds pupils from a disadvantaged background last academic year, compared with 78 per cent to 72 per cent for more affluent students, according to government assessment data. Government figures identified disadvantaged children as those who were receiving free school meals, which are an income-based benefit available to families earning less than £7,400 a year after tax. In the long term, falling behind at primary school can limit the prospects of children over the course of their life, said economists. According to a study by the Institute for Fiscal Studies think-tank, the wealthiest 20 per cent of children are more than twice as likely to graduate from university by the age of 26, compared with the poorest. Those with degrees go on to earn twice as much as those without GCSEs, the research found.The think-tank said that tackling educational inequality is essential for raising the UK’s productivity and creating the skills-based economy necessary to foster future growth.The IFS estimated that real-terms spending per student will be 3 per cent below 2010 levels in two years’ time, with teachers warning that further cuts in funding will have negative consequences for pupils’ wellbeing. “It’s increasingly difficult to even maintain the status quo,” Hayat said. “We’ve heard across our membership that schools are having to scale back or cut spending on interventions to address these challenges.”The government said it had taken action against rising costs by providing more than £37bn in support, targeted towards vulnerable households in need, including by making payments to households in response to the cost of living crisis. It had also expanded free school meal access while investing up to £24mn in a national school breakfast programme, which has funded breakfasts in more than 2,000 of the most vulnerable schools. Emyr Fairburn: ‘Children pick up on their parents’ stress. This is going to have as much impact on learning as Covid did’In inner city London at King’s Cross Primary Academy, 17 per cent of pupils were already on free school meals before the coronavirus pandemic hit. The figure has since risen to 41 per cent.“There’s a lot of distraught parents,” headteacher Emyr Fairburn said. “They’ve never had to use a food bank before . . . Now they’re worrying about school uniforms,” he added.King’s Cross Academy Trust, the school’s sponsorship body, has been recently been covering the cost of free meals for all pupils at the primary school in response to the cost of living crisis. “Children pick up on their parents’ stress,” he said. “This is going to have as much impact on learning as Covid did . . . It’s not really our job to [provide the extra support] but they’re [the children] not making the progress we’d expect them to.”But with energy costs still rising, Higgins said the financial sustainability of the school’s current operations is an “unknown”. More

UK prime minister Liz Truss committed to increasing state pensions in line with prices next year as Britain’s inflation rate rose to a 40-year high of 10.1 per cent in September.Speaking during prime minister’s questions in the House of Commons on Wednesday, Truss sought to reassure pensioners their incomes would not fall behind inflation — even though other ministers have declined to provide such a guarantee in recent days.“We were clear in our manifesto that we will maintain the triple lock,” she said, referring to the mechanism through which pensions are increased each year by whatever is highest of inflation, earnings growth or 2.5 per cent. “I am committed to it. So is the chancellor.”Earlier in the day Jeremy Hunt, whom Truss appointed as chancellor on Friday, declined to confirm the government would honour its manifesto promise to keep the triple lock as he responded to inflation figures released in the morning. Hunt is trying to find £40bn of savings to put public finances on a sustainable footing following the failure of the government’s “mini” Budget last month, which has piled pressure on Truss.According to the consumer price index, the rate of inflation rose from 9.9 per cent in August to 10.1 per cent in September, driven by the highest food price increases in decades, exceeding economists’ expectations. The government’s standard practice is to use the September inflation figure to determine the increase in pensions and benefits the following April.But Truss did not make any similar commitment to the level of non-pensioner benefits.George Dibb, head of the Centre for Economic Justice at the IPPR think-tank, said the “steeper rise in essentials such as food and drink where prices are now rising at over 14 per cent . . . underlines the need for greater support for the most vulnerable households this winter over and above the energy price cap”. The details of the inflation figures showed there was an increase in the core index as well as higher food prices. The core rate, excluding energy, food, alcohol and tobacco, rose from an annual rate of 6.3 per cent in August to 6.5 per cent in September. The Office for National Statistics, which released the figures, said the overall consumer price index rose 0.5 per cent in September compared with August, a larger increase over the month than in 2021 when the index rose only 0.3 per cent.At more than five times the Bank of England’s 2 per cent target, the double-digit inflation rate will also add to pressure on the central bank for a large interest rate rise on November 3.The BoE will need to weigh the additional price pressures against the government’s U-turns on unfunded tax cuts and less generous relief on household energy costs, which will reduce medium-term pressures on prices.Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the “MPC still is a long way from being able to claim victory” over inflation, but urged the central bank to worry more about “weakening consumer demand and emerging slack in the labour market” than the current high level of inflation.Paul Dales, chief UK economist at Capital Economics, said the rate of inflation would rise to 10.5 per cent in October and to 11 per cent in April once the government’s energy price guarantee expired.“Today’s release highlights the danger that underlying inflation remains strong even as the economy weakens,” he said. More

BUENOS AIRES (Reuters) – Jose Zegarra, a Peruvian tourist in Argentina’s capital Buenos Aires, found out the hard way that the value of the country’s peso isn’t always what it seems as tough capital controls spawn an array of wildly diverging exchange rates.Charged near the official 150 pesos per U.S. dollar when he paid for a meal by credit card, he discovered his dollar fetched him twice as many pesos at one of the city’s flourishing money changers at what locals know as the “blue” exchange rate.”It made me feel a bit foolish,” Zegarra told Reuters.The South American country imposed controls in 2019 to protect its beleaguered currency, limiting access to dollars and sparking a boom in informal foreign exchange markets where the peso is valued at far below the official rate.In recent months the government has introduced various additional levies for converting to foreign currency, leading to an explosion of different rates from a so-called “Qatar” World Cup rate for travel to a so-called “Netflix (NASDAQ:NFLX)” rate for overseas services like streaming.The blossoming of parallel foreign exchange rates has gained pace in recent weeks, becoming the target of memes online, one calling the array a “tutti-frutti”. But it also reflects a serious risk the government faces to protect dwindling dollar reserves needed to pay back debt.Investment bank Morgan Stanley (NYSE:MS) estimated in a September report that the central bank’s liquid net forex reserves had dropped to negative $3.5 billion, something the government has looked to reverse with faster grains sales.The government and central bank argue that the controls are needed to protect foreign reserves and stabilize the economy. It wants to avoid a sharp devaluation, though the peso has slowly but surely lost some 50% against the dollar this year anyway.”It is clear that the central bank has a duty to preserve its reserves and that is why it is working hard to do so,” said a central bank source who asked not to be named, adding parallel rates were simply caused by market “supply and demand”. The bank declined to comment. Graphic: Argentina’s dollar rates https://graphics.reuters.com/ARGENTINA-CURRENCY/zjpqkxxqlpx/chart.png ‘COLDPLAY’ DOLLARArgentines have long mistrusted their own currency, often choosing to save in dollars to protect against inflation – heading towards 100% this year – and devaluation. Previous tough and sudden capital controls have also made savers wary.Swirling economic crises in recent years, including a debt default and a major deal with the International Monetary Fund (IMF), has put more pressure on the currency and reserves.”All these different exchange rates shows a political desperation for dollars,” said Eduardo Maehler, 37, a self-employed worker in Buenos Aires.The government has tightened access to the dollar and added levies, especially on overseas travel and luxuries. It created a temporary “soy” dollar in September to boost soy exports by giving producers more pesos for their dollar-based sales.Some have popped up more organically: a so-called “Coldplay” dollar for paying sports stars or music performers in the country. The British band is performing ten concerts later this month. A “Netflix” dollar, meanwhile, refers to a rate elevated by various taxes on overseas streaming services. Graphic: Argentina – currency split https://graphics.reuters.com/ARGENTINA-ECONOMY/akvezloqqpr/chart.png This month, the government added a 25% levy on monthly spending over $300 on overseas trips, goods in foreign currencies and luxury goods, on top of an existing 45% rate and 30% tax. The timing of the move ahead of the soccer World Cup next month led to it being dubbed the “Qatar” rate.”Clearly this has made travel more expensive in local currency,” said Federico Rossi, owner of a travel agency in the city, adding some people would give up their trips as a result.Aldo Abram, executive director of consultancy Fundación Libertad y Progreso, said measures to keep the peso “artificially cheap” were not sustainable and would feed inflation.”We know the cost of imposing these controls over time: it always ends in a very deep crisis,” he said.Pedro Cristino, a grandfather in Buenos Aires, was stoical. He blamed persistently high debt levels going back decades for putting the current center-left government in a bind.”The government is looking for many ways to solve things, some are healthy some are wrong,” he said. “All I know is I wouldn’t want to be trying to govern right now.” More

Tucked within 12 dense pages describing the Fed’s September policy meeting last week was a statement concerning a seemingly innocuous yet vital estimate that the staff use as a building block for internal economic forecasts.Their gauge of US potential output was “revised down significantly,” the minutes showed, due to disappointing productivity growth and slow gains in labor force participation.Potential gross domestic product is essentially an estimate of how fast the economy can run without breaking a sweat in the form of tightening resources and higher inflation. The new estimate was not disclosed — nor was the prior one. Even so, “the policy implication is significant,” said Anna Wong, Bloomberg chief US economist. “Lower potential growth means the economy has been more overheated last year and this year than realized, and it will take more rate hikes or a longer period of below-trend growth to close the output gap,” said Wong, a former Fed economist.Fed staff don’t set policy. That’s the job of the 19 officials who sit on the Federal Open Market Committee. But they do provide very important inputs that help shape the thinking of policymakers, who are currently raising interest rates at the fastest pace since the 1980s to curb runaway inflation.Wong estimates the US central bank will deliver a fourth consecutive 75 basis-point rate increase next month and keep going until they get rates in the 5% range next year.Officials last month projected rates peaking in 2023 at 4.6%, compared to a current target range of 3% to 3.25%. Their median estimate for long-term sustainable growth was 1.8%, though the diversity of views is wide with a range of 1.6% to 2.2%.The US economy grew at a 5.7% pace in the final quarter of 2021, compared with the fourth quarter of the previous year. If the staff revised down its estimate for potential, it suggests the economy was above its longer-run trend by even more than initially thought and remains above it, even though growth is slowing.Like a rocket whose trajectory is overshooting its target, if the economy’s level is still above its longer-run trend, that explains why inflation continues to be broad and stubborn.“We got way above potential in 2021, the level of GDP is still way above potential, and that explains the persistence of inflation,” said John Roberts, an economic consultant and former head of the Fed Board’s macroeconomic modeling team.The core consumer price index, which excludes food and energy, increased 6.6% from a year ago, the fastest pace since 1982. The broader gauge was up 8.2% from a year earlier.Growing much faster than potential also helps explain why employers added 562,000 jobs a month on average in 2021 as the labor market recovered from a brief pandemic-induced recession.The staff also said that unemployment was expected to rise more slowly than they previously estimated and stay below their estimate of a level of joblessness that won’t stoke inflation pressures until the end of 2025.Nevertheless, inflation measured by the Fed’s preferred gauge was expected to be 2.6% next year, a remarkable deceleration from 6.2% in August. The minutes said the staff estimate is based on a view that supply and demand fall back into balance with lower energy prices.“The staff has been relatively optimistic,” said William English, a professor at the Yale School of Management. “There is some evidence that suggests near term inflation expectations are getting built into wage inflation and that could perpetuate.”English, who was previously ran the Fed’s powerful Division of Monetary Affairs, also pointed out that the economy appears fairly resilient, and the labor market may need to slow substantially to reduce demand and wage pressures.“I see a federal funds rate that is going higher, an unemployment rate that is going higher, and a path of inflation that is going down slower” compared to what officials projected in their September forecasts, English said.©2022 Bloomberg L.P. More

LONDON (Reuters) – British Prime Minister Liz Truss sought to reassert authority over her fraught party on Wednesday with Conservative enforcers telling lawmakers they had to support her fracking policy as a vote treated as a test of confidence in the government.Truss is trying to shore up support from within her party after she was forced to scrap her vast tax-cutting plan, leading some Conservative lawmakers to call for her to be replaced as leader just weeks after she took office.She has admitted her radical economic plans had gone “too far and too fast” after investors dumped the pound and government bonds.However, with mortgage rates soaring and official figures showing inflation back to a 40-year high, Truss, who was elected by Conservative members on a promise of tax cuts and maintaining public spending, faces a struggle to convince the public and her party she could address the cost of living crisis.Polls indicate Conservatives are some 30 points behind the opposition Labour Party, and her own ratings are calamitous.”What I’m not convinced by … is that going through another leadership campaign, defenestrating another prime minister, will either convince the British people that we’re thinking about them rather than ourselves or convince the markets to stay calm,” foreign minister James Cleverly told Sky News.But, speculation about the prime minister’s future continues to grow, with media reporting that rebellious Conservatives are weighing up who should replace her, not if she should go.”I think her position is becoming increasingly untenable,” Conservative lawmaker Steve Double told Times radio. “We’ve seen a complete reversal of just about everything she stood for in her leadership election campaign. I think many of us are asking exactly what does Liz Truss now believe and stand for?”Truss will face parliament later on Wednesday for her usual weekly question and answer session, and later the main opposition Labour Party will seek to hold a vote on an outright ban on fracking, after the government last month lifted a moratorium in England that had been in place since 2019.Conservative ‘whips’, responsible for enforcing discipline among members of parliament, sent a message to their lawmakers saying the vote would be treated as a “confidence motion in the government”. More

Good morning. Joe Biden is to announce the sale of more oil from the government’s strategic reserves in a speech later today addressing rising costs. The US president will also outline a plan to replenish the dwindling emergency stockpile in an effort to tame petrol prices, which have been a political liability for Democrats ahead of next month’s midterm elections.In March, Biden ordered the release of 180mn barrels of oil from the Strategic Petroleum Reserve following Russia’s invasion of Ukraine, which led to a surge in energy prices and a scramble for supplies. The latest release of 15mn barrels from the SPR completes the president’s target but leaves reserves at their lowest level since 1984.The latest intervention in the energy market by the White House follows the decision by Opec and its allies last week to cut oil production, a move that angered Washington.The US government’s decision to lean on the SPR to bring down domestic petrol prices has come under fire from Republicans, who argue reserves have fallen to dangerously low levels.Yesterday the White House responded to some of these criticisms by announcing a new mechanism that will be used to replenish supplies. Under the new arrangement the SPR would purchase oil if it fell to between $67 and $72 per barrel in spot transactions, but would also enter into contracts to purchase oil based on its forward price in the futures market. US oil prices rose to $83.50 ahead of Biden’s announcement.Do you think Joe Biden is correct to sell oil reserves to help lower prices? Have your say in our latest poll. Here’s the rest of the day’s news — Gordon

Five more stories in the news1. ‘We’re done with shrinking quarters’ Reed Hastings, chief executive of Netflix, announced the streaming giant added subscribers for the first time in two quarters alongside results. The success of Stranger Things and Dahmer — Monster: The Jeffrey Dahmer Story helped Netflix add 2.4mn subscribers in the third quarter, taking the total of paying customers to 223mn. The company’s shares surged as much as 15.5 per cent in after-hours trading.2. UK inflation rate hits double figures UK inflation rose to 10.1 per cent, putting pressure on the government’s stretched finances and on the Bank of England to announce a large interest rate increase at its next meeting in November. The UK has the highest inflation in the G7, five times the central bank’s target of 2 per cent.

3. Hong Kong launches scheme to stem professional exodus Hong Kong announced a HK$30bn (US$3.8bn) plan to attract international investors and businesses back to the city, after strict pandemic policies and a security crackdown sparked an exodus of residents. John Lee, the city’s new chief executive, who oversaw a crackdown against political protesters, said 140,000 people had left in the past two years. 4. Goldman pulls back from consumer lending Goldman Sachs said it was pulling back from its highly touted foray into retail banking to focus on its traditional strengths of serving big corporations and wealthy investors. The decision is part of a reorganisation under chief executive David Solomon that will see the trading and investment banking business folded into one unit as the bank shrinks from four divisions to three.Go deeper: This is the second significant restructuring at Goldman Sachs under David Solomon and is an attempt to narrow the valuation gap with Wall Street rivals.5. Female climber met by cheering crowds on return to Iran Female Iranian climber Elnaz Rekabi was greeted by crowds of cheering supporters at a Tehran airport today on her return to the country. Rekabi’s decision to take part in an international competition in Seoul without wearing a headscarf was widely seen as a show of support for protests in Iran.

Elnaz Rekabi gives an interview on arrival at Imam Khomeini International Airport in Tehran © AFP via Getty Images

The day aheadCompany earnings After saying it delivered a record number of autos in the third quarter, Tesla is expected to report increased quarterly revenue. Investors expect to hear detail on consumer demand and the status of its production ramp-up at new factories in Texas and Germany. Procter & Gamble is expected to provide insight into consumers’ response to price rises as it reports earnings for its first fiscal quarter. Earlier today Nestlé, the world’s largest foodmaker, said it increased prices by 7.5 per cent in the first nine months of the year. Chipmaker IBM and US pipeline operator Kinder Morgan report after the closing bell.Federal Reserve: The US central bank will release its penultimate Beige Book of the year, an anecdotal assessment of regional economic conditions gathered by each central bank branch. Meanwhile, Minneapolis Fed president Neel Kashkari will take questions on inflation, interest rates and the US economy before a Travelers Institute employee town hall in Minneapolis. Separately, Chicago Fed president Charles Evans will participate in a question-and-answer session on current economic conditions and monetary policy at the Jefferson Scholars Foundation in Virginia.Economic data Economy watchers should gain further signs on the health of the US property market and the impact of rising mortgage rates on would-be home buyers. The annualised rate of new home construction is expected to have fallen to 1.48mn in September from 1.58mn in August. Separately, the number of new home building permits are expected to decrease to 1.53mn from 1.542mn.Trump deposition Former US president Donald Trump is scheduled to be deposed by attorneys for E Jean Carroll, a writer who has alleged Trump raped her in the 1990s. Carroll brought a federal defamation lawsuit against Trump in New York. Trump had requested that the deposition be delayed while a federal appeals court in Washington, DC, considered dismissing the case, but a New York federal judge rejected the motion. What else we’re readingMurdoch pitches reuniting empire to dubious investors At 91, media mogul Rupert Murdoch appears to be putting the pieces in place for his succession and has asked the boards of News Corp and Fox to consider combining forces after nearly a decade apart. But investors are sceptical, with some deriding the move as “family drama”.

The merger of Fox and News Corp would build scale but ‘raises more questions than answers’ © FT montage/Bloomberg

KKR to push further into Japan US private equity group KKR, which manages nearly $500bn in assets, plans to boost its exposure to Japan, taking advantage of low corporate valuations and weakness in the yen to increase its investment in the country. “Our commitment to Japan continues to go up, not only in private equity but in real estate, infrastructure and our credit business,” KKR’s chief investment officer Henry McVey told the FT. Banks discover that holding cash can be lucrative again As recently as last year, many US and European banks were actively trying to get out of holding clients’ cash because they were awash with deposits, writes Brooke Masters. Now the worm has turned. China’s GDP data delay fuels concern for economy Viewed in some quarters as an attempt to avoid distracting from China’s biggest political event in years, the delay in releasing the country’s third-quarter GDP data came at a time when growth has become an uncomfortable topic in Beijing.Go deeper: The expected reaffirmation of Xi Jinping at this week’s National Congress of the Chinese Communist party is a watershed moment politically, militarily and economically for the world’s emerging superpower.Eurozone economies must tackle the supply shock together With fragmentation always a risk, a common energy policy is essential if EU citizens are to be protected against the worst of the economic crisis, writes Martin Wolf.Food & DrinkFrom Barcelona to Bali, HTSI has pulled together 24 plant-based menus in its global guide to great vegan food. Do you have a favourite vegan restaurant? Email [email protected] or reply to this email and your recommendation may appear in a future edition of FirstFT.

Baltic soul food in Tallinn old town, Estonia More