Economy

The economy is expected to slow to 0.8% growth this year following the worst drought in decades while inflation- mostly due to external factors- is expected to surge to 6.3% this year, according to most recent central bank data.The draft budget will push forward with targeted subsidies through the implementation of a national register and the generalisation of social safety nets as well as the upgrade of health services, the minister was quoted as saying in a Royal palace statement.The palace also announced the appointment of former finance minister and current Moroccan ambassador to Paris, Mohamed Benchaaboun, as head of the newly created Mohammed VI fund for investment.The fund aims notably to increase the private sector’s share of total investment in the economy to two-thirds by 2035 from only one-third now.Read more:Morocco’s central bank raises benchmark interest rate by 50 bps to 2%Morocco’s trade deficit widens 56% in August More

LONDON (Reuters) -The Bank of England said it would start selling some of its huge stock of British government bonds from Nov. 1 but would not sell this year any longer-duration gilts that have been in the eye of a recent storm in the British government bond market.The BoE said it was delaying its start date for the launch of its so-called quantitative tightening programme by a day from its previous schedule to avoid clashing with a government fiscal statement on Oct. 31.The central bank wants to reduce its 838 billion pounds ($948 billion) of government bonds acquired over more than a decade of crisis-fighting, from the global financial crisis to the coronavirus pandemic and its aftermath.The BoE said sales in 2022 would be in short- and medium-maturity sectors, not bonds of more than 20 years. They suffered the biggest sell-offs in the recent market upheaval caused by the government’s now-abandoned tax-cutting mini-budget.Last month, the BoE sought to stop the bond market rout from damaging pension funds by starting an emergency round of buying long-dated debt, delaying its “quantitative tightening” (QT) sales by almost a month.Those purchases ended on Friday last week.Analysts at consultancy Evercore said the plan looked “punchy” given the still volatile market conditions.”We assess that the Bank sees pressing ahead with substantial QT as essential to uphold its independence and credibility amid the UK’s fiscal misadventures,” they said.BoE officials have stressed their bond-buying is not aimed at underwriting the increased borrowing of the British government in recent years.The central bank confirmed on Tuesday that it would start the tightening scheme in a statement after markets closed. “The maturity split of gilt sales for subsequent quarters will be considered ahead of Q1 2023,” it said.Earlier the central bank described as inaccurate a report in the Financial Times which said top officials at the BoE had decided that a delay to QT was likely to be needed after judging the gilts market to be “very distressed” in recent weeks. British government bonds – or gilts – suffered historic losses after the Sept. 23 publication of Prime Minister Liz Truss’ new economic growth plan.Gilts have recouped some of their losses following a major U-turn announced by new finance minister Jeremy Hunt on Monday.”The Bank will continue to monitor market conditions closely, and where appropriate factor that into the design of its sales operations,” the BoE statement said.BoE Deputy Governor Jon Cunliffe said on Tuesday financial markets could remain volatile in the coming weeks but the risk of another gilts “fire sale” had been significantly reduced. The central bank has previously said there would be a “high bar” for any delays to its sales plans.”There’s not a huge amount of sales to come this quarter, which could support their view that sales go ahead but perhaps it’s a bit early to be sure,” said Chris Scicluna, head of economic research at Daiwa Capital Markets, London.BoE Governor Andrew Bailey said on Saturday that the central bank was not using its stock of bonds as an active tool of monetary policy at present and its benchmark Bank Rate remained its primary instrument of policy. ($1 = 0.8842 pounds) More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeeverWhisper it, but the rebound underway on Wall Street – which is lifting markets and risk appetite everywhere – may have legs.Even if it does turn out to be a mini rally in a broader bear market, there’s a growing sense that it has further to run in the near term. This should put Asian markets on a positive footing on Wednesday.U.S. earnings are rolling in nicely, with some notable beats like Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS). Apple (NASDAQ:AAPL)’s iPhone 14 production news on Tuesday is a reminder of the challenges companies face, but more positive earnings surprises could keep the bears at bay a bit longer.Research and investor surveys from three major U.S. banks in the last 24 hours capture the growing bullishness currently filtering through markets:- Morgan Stanley (NYSE:MS) equity guru Mike Wilson expects the S&P 500’s bear market rally to extend to 4000, or even the 200-day moving average around 4150- Bank of America’s global fund manager survey shows the highest cash levels since 2001, and conditions for a “capitulation” of extreme bearish sentiment lately- JP Morgan says U.S. inflation has peaked and should fall sharply to 3.2% in 12 months’ timeInterestingly, Wall Street rose on Tuesday even though bond yields and the VIX volatility index barely came down. Perhaps this is another sign of increasing resilience.Investors would do well to not get carried away. The issues that crushed markets this year – rapid tightening of policy and financial conditions, growth fears, sticky inflation and messy fiscal policy – haven’t gone away. Famous last words, but the immediate storm looks to have passed.Key developments that could provide more direction to markets on Wednesday:Canada, UK, euro zone inflation (September)U.S. 20-year Treasury bond auctionU.S. TICs data (August)BoE’s Cunliffe, Woods, Wilkins and Mann speakFed’s Kashkari speaks More

The delay in announcing routine growth data this week was only the latest example of how hard it has become to peer into China’s economy, the world’s second largest.For the past quarter-century, China was run by a well-oiled government bureaucracy that predictably focused on the economy as its top priority.That may no longer be the case.Xi Jinping, China’s top leader, made clear on Sunday at the opening of the Communist Party’s national congress, a twice-a-decade gathering of the country’s ruling elite, that politics and national security were paramount. That point was reinforced the next day when Beijing made the unusual move of delaying what should have been a routine, closely stage-managed release of data on how the economy fared in the past three months.“It does show the primacy of politics in influencing the very competent, institutional technocracy that China has,” said Victor Shih, a specialist in Chinese elite politics and finance at the University of California, San Diego.“The very likely reason the numbers were delayed was the State Council leaders were afraid the numbers would detract from the triumphant tone of the party congress,” he added. The State Council is China’s cabinet.It is extremely rare for any large economy to delay the release of such an important economic report. The data included not just China’s economic growth from July through September but also the country’s factory production, retail sales, fixed-asset investment and property prices for September.Mr. Xi, who is expected to claim a third term in power, has sought to project confidence in China’s outlook. On Monday, a Chinese economic planning official reiterated the Communist Party’s talking points about how well China’s economy was faring, saying it improved in the last quarter.Xi Jinping, China’s leader, speaking during the opening ceremony of the 20th National Congress of the Communist Party of China in Beijing.Kevin Frayer/Getty ImagesBut that optimistic message was quickly undercut by news of the delayed release of gross domestic product data, and how the delay was handled. Reporters who called government employees on Friday and Monday about the release were told they had no information.Contacted again late Monday afternoon, the workers said only that the release had been postponed indefinitely. The National Bureau of Statistics still has not explained the delay or announced a rescheduled date. On Friday, the government also failed to release data on exports and imports for September, and has not said when it would do so.China’s refusal to provide statistics, combined with the haphazard way the postponements were communicated, suggested either that part of the bureaucracy was in disarray or that China’s economy was in worse shape than most people had realized. It also raised questions about the reliability of the data.“It’s a horrible blunder,” said Taisu Zhang, a Yale University law professor who specializes in comparative legal and economic history. “I don’t know if they are massaging the numbers — even if they need to massage the figures, the better thing to do would be to massage them within the usual time frame.”Beijing set a target in March that growth would be “about 5.5 percent” this year. Yet Western economists have estimated that China’s economy grew only a little more than 3 percent in the third quarter.That still would have been better than growth of 0.4 percent logged in the second quarter, when Shanghai was locked down for two months to stamp out a Covid-19 outbreak.Mr. Xi has put a premium on social stability and national security, often with actions that have had a side effect of slowing economic growth and employment. Regulators have clamped down on the tech sector, contributing to widespread layoffs among young employees. Dozens of the country’s private property developers have defaulted on debts this year after Beijing discouraged real estate speculation. Tycoons have been fleeing the country. Municipal lockdowns to stop outbreaks of Covid-19 have taken a heavy toll.A commercial and office complex in Beijing. China’s refusal to provide data on its economy suggests that it could be in worse shape than most people had realized.Gilles Sabrié for The New York TimesQuestions have long been raised about whether China’s economic growth statistics may be inflated somewhat or smoothed from one year to the next. But until recently China had also released more granular data that made it possible to draw conclusions about the economy’s overall health.One such measure is the rising value of new office complexes, rail lines and other investment projects. But last year, China stopped releasing data on inflation in construction costs.That has made it hard to calculate the true value of the new investments, said Diana Choyleva, chief economist at Enodo Economics, a London consulting firm. So while the total money invested is still available, it is no longer clear what that money is buying.Underlying data had been available for China’s international trade, its main engine of growth. But growing inconsistencies started to become apparent over the summer.China’s General Administration of Customs reported sharp increases through August in exports to the United States and Europe. But the number of containers leaving Chinese ports for these destinations was flat.Average prices charged by factories in China to wholesalers have been little changed. Few economists think that China is earning more money from exports through inflation. The plateau in containers even as export statistics are rising is consistent with previous periods of economic weakness in China, as exporters exaggerate the value of their shipments to customs officials as part of complex strategies to move money out of China.There are other signs that actual exports of goods are now in trouble. Taiwan has very similar trade patterns to mainland China, and on Oct. 7, Taiwan reported a sharp, unexpected drop in its imports and exports during September.The cost of shipping each container from China to the United States or Europe has also fallen steeply over the past year. It dropped much further in September. The cost of loading a container onto a ship in eastern China for delivery to Los Angeles has plunged by more than half this year, according to Container xChange, an online container logistics platform. This suggests few factories are bidding for space aboard ships.Cargo ships loading containers at the port on the Beijing-Hangzhou Canal. The cost of shipping from China to the United States or Europe has fallen steeply over the past year. Alex Plavevski/EPA, via Shutterstock“The retailers and the bigger buyers or shippers are more cautious about the outlook on demand and are ordering less,” said Christian Roeloffs, the chief executive and co-founder of Container xChange.Another problem is that even when China releases data, it sometimes provides less explanation now of how the data is calculated. Derek Scissors, a senior fellow specializing in China and India at the American Enterprise Institute in Washington, said he used to be able to get answers from Chinese officials on how certain investment statistics were calculated. But in the past couple of years, they are no longer willing to discuss their data.Monday’s postponement of the release of economic data had little discernible effect on Chinese financial markets on Tuesday. Share prices rose sharply in Hong Kong as a change in British tax policy preceded a global rally in stock markets. The Shanghai and Shenzhen stock markets, more insulated from international events and also heavily managed by the Chinese authorities, were little changed.But delays can have a corrosive effect on China’s image in financial markets.“If delays start to become a regular occurrence,” said Julian Evans-Pritchard, the senior China economist at Capital Economics, “then that could reduce confidence in the official economic data and the professionalism of China’s bureaucracy.” More

The decision to limit the “energy price guarantee” scheme to six months will leave 11mn British households in fuel poverty from next April unless the government ensures all of them receive targeted support, campaigners have warned.New chancellor Jeremy Hunt announced on Monday that the government would renege on the commitment made last month to shield households from soaring energy bills for two years by limiting the average annual bill to £2,500.From April, he said the state would provide more targeted help only for the most needy households without providing any details. He said the Treasury would launch a review to decide how to reshape the scheme, which would “cost the taxpayer significantly less”.The decision to scrap the two-year universal scheme will see the average annual energy bill jump to more than £4,300 from April, according to the consultancy Cornwall Insight.That curtailing of the domestic support scheme brings it in line with the separate package for businesses, under which companies will only get universal support for six months before ministers switch to a more targeted programme for “vulnerable” industries.The End Fuel Poverty Coalition estimated that the number of people in fuel poverty would jump from 7mn to 10.7mn in April without fresh support from the government.“The government may have brought some stability to the markets, but it has come at the cost of huge instability in households’ finances,” said Simon Francis, co-ordinator of the End Fuel Poverty Coalition.“The new chancellor must work quickly, and with consumer groups and charities, to design a new package of support and energy market reforms that will help those in fuel poverty now and post April.”

Downing Street on Tuesday repeated Hunt’s assurances that the most vulnerable people would continue to receive support beyond April. “We want to provide certainty for the public about what goes next,” a spokesperson for prime minister Liz Truss said.But the spokesperson said they could not provide any guidance on how many people would continue to receive help beyond April, or what form it would take. “The Treasury is working with Beis [the business department] and others. We are conscious we want to provide detail when possible.”Sir Ed Davey, leader of the Liberal Democrats, called on the government to keep the energy price guarantee for a year instead of six months. “Millions of struggling families are facing a double whammy next year of sky-high energy bills and soaring mortgage rates,” he said. “The reality is a huge number of people are going to be in dire need of help.”Tory MPs are also concerned about many families higher up the income scale who may not be eligible for the new help but would still struggle with a spike in energy bills at a time when mortgage rates are rising. “Cutting back the energy support may help steady the financial markets but it’s going to make the political situation even worse next spring,” said one Conservative backbencher. Helena Bennett, head of climate policy at think-tank Green Alliance, urged the government to roll out a programme to make homes more efficient: “Swiftly announcing a nationwide programme of home insulation would help to plug the hole in the nation’s finances.”The End Fuel Poverty Coalition said changes should also be made to the way bills were calculated, including abolishing the so-called standing charge for a connection to the energy networks, regardless of whether any gas or electricity is used. This has risen by around 86 per cent since winter last year and adds around £371 a year to bills.The standing charge also includes the cost of rescuing customers of suppliers that have collapsed. This adds around £94 a year to bills but will rise next year once the cost of Bulb, one of the largest failed suppliers is included. More

By a 2-to-1 ratio, the group had its second defeat since a surprise victory in April on Staten Island.Workers at an Amazon facility near Albany, N.Y., have voted decisively against being represented by the upstart Amazon Labor Union, denting efforts to expand unionization across the giant e-commerce company.Employees at the warehouse cast 206 votes to be represented by the union and 406 against, according to a count released on Tuesday by the National Labor Relations Board. Almost 950 workers were eligible to vote.The vote was the Amazon Labor Union’s second unsuccessful election since a surprise victory in April, when workers at an Amazon facility on Staten Island voted to form the first union of the company’s warehouse employees in the United States.“We’re glad that our team in Albany was able to have their voices heard, and that they chose to keep the direct relationship with Amazon,” Kelly Nantel, an Amazon spokeswoman, said in a statement.In recent months, the Amazon Labor Union has debated whether to focus on winning a contract at the Staten Island facility, known as JFK8, or on expanding its reach to other warehouses around the country through additional elections.Christian Smalls, the union’s president, “is very much in favor of trying to create opportunities for as many workers as possible to vote,” said Cassio Mendoza, a JFK8 worker and the union’s communications director. At the same time, the union has felt pressure to demonstrate progress to workers on Staten Island, and has recently stepped up its internal organizing there after months of minimal public activity.The result on Tuesday from the ALB1 warehouse in Castleton-on-Hudson, N.Y., about 10 miles south of Albany, did not appear to dissuade the union from reaching beyond JFK8.More on Big TechIn Australia: Dozens of workers at Apple walked off the job after negotiations over pay and working conditions stalled. This is why the action is significant.Inside Meta’s Struggles: After a rocky year, employees at Meta are expressing skepticism, confusion and frustration over Mark Zuckerberg’s vision for the metaverse.A Deal for Twitter?: In a surprise move, Elon Musk has offered to acquire Twitter at his original price of $44 billion, which could bring to an end the acrimonious legal fight between the billionaire and the company.Hiring Freezes: Amazon is halting corporate hiring in its retail business for the rest of the year, joining Meta as the latest tech companies to pull back amid the economic uncertainty.“We are filled with resolve to continue and expand our campaign for fair treatment for all Amazon workers,” Mr. Smalls said in a statement. “You miss 100 percent of the shots you don’t take.”About 80 percent of the union’s budget of more than half a million dollars has been focused on Staten Island, union officials have said. The rest has been set aside for expansion efforts, including at ALB1 and a facility in Southern California that submitted a petition for an election last week.Mr. Smalls said the election “wasn’t free and fair.” Even before the ballots were tallied on Tuesday, the union expressed concern that Amazon had improperly interfered with the vote, potentially laying the groundwork for a legal objection to the result.Labor board staff members have been investigating 27 charges of unfair labor practices that the union filed against Amazon before the voting began, the agency said last week. The union has since lodged additional concerns.One included an accusation that a worker had been suspended for complaining that one of Amazon’s anti-union consultants followed him around and harassed him during the voting period, according to Retu Singla, a lawyer representing the union.“They try to whip votes during the election,” said Mr. Mendoza, who added that the consultant appeared to be wearing worker clothes and an Amazon vest.Another employee, who was not directly involved with the union campaign and requested anonymity, said on the first day of voting that he had seen what appeared to be “fake employees” who were wearing Amazon vests but did not know the basics of the jobs and cast doubt on the union’s ability to negotiate a contract.Matthew Bodie, a former N.L.R.B. lawyer now at the University of Minnesota Law School, said that while one-on-one conversations with workers during the voting period were allowed, seeking to deceive employees by misrepresenting the identity of company agents could amount to interference in the election.Amazon declined to comment on the accusations.The ALB1 warehouse handles oversize items like outdoor equipment and televisions. A recent report by a worker advocacy group found that the facility had the highest rate of serious injuries of any Amazon warehouse in New York for which the group was able to obtain government data.Amazon has emphasized its minimum starting wage and benefits, and has said it has improved its safety record more than other retailers in recent years. In its messaging to workers, it has questioned the Amazon Labor Union’s experience and has said workers could be worse off if they voted for a union.In interviews outside the warehouse in September, some Amazon workers said they were supporting the union because pay was too low, especially in light of how physically taxing the work could be. The company recently raised its starting base wage at the warehouse to $17 an hour, from $15.70.“I think we need a union — we need more pay,” said Masud Abdullah, an employee at the warehouse. He said he had made about $22 an hour at an industrial bakery, but left that job because the hours did not fit with his parenting responsibilities.He and other workers also said they felt Amazon’s disciplinary policies were sometimes arbitrary. “It’s like you don’t have nobody representing you,” Mr. Abdullah said. “They could get you in and out for anything.”Other workers said they didn’t believe a union was necessary because Amazon already provided solid pay and benefits, such as health care and college tuition subsidies. Even some union supporters acknowledged that the company often treated workers well.Some workers expressed skepticism that the Amazon Labor Union would deliver on its promises, such as improving pay. “I feel like I haven’t seen any evidence,” said Jacob Carpenter, who works at the warehouse. He added that he planned to vote no.Amazon has been fighting the union’s successful vote on Staten Island. After a lengthy hearing on the company’s objections to that election, a labor board official recently endorsed the union’s victory. A regional official must still weigh in, but Amazon told workers at JFK8 that it intended to appeal. The union has recently pushed a petition to pressure Amazon to negotiate a contract. More

Retailers have navigated pandemic closures and supply chain snarls in recent years. But dealing with the fallout from inflation could be an even tougher test.In 2020, it was pandemic closures and social distancing. Last year, it was the supply chain. Now, the problem is demand.For retailers, that may make this holiday season their biggest test yet.The holidays are the most important time of the year for retail. November and December can account for up to a quarter of the annual sales of department stores and specialty retailers. Companies place orders for seasonal and holiday merchandise months in advance so that they have enough stock on hand. The primacy of the holiday season has pretty much held steady, even during the turbulence of the pandemic. Whether through curbside pickup operations or a pivot to more expensive air deliveries during last season’s crunch, retailers still benefited from people ready to spend on all manner of products.Now, as Americans head into the season when they’re prodded to spend with abandon on holiday gifts, they aren’t showing the same willingness to do so.“You’ve had consumers that have had to weather a lot,” said Vivek Pandya, a lead analyst at Adobe Digital Insights, pointing to higher prices for gas, groceries and everyday services that have defied the Federal Reserve’s efforts to control inflation.Overall consumer demand for everyday goods and services remains robust and prices continue to increase at a faster-than-expected pace, but nearly 60 percent of U.S. shoppers say finances are factoring into their holiday shopping decisions, according to a survey by Sensormatic Solutions released this month. That’s up from 14 percent last year. One in five holiday shoppers will spend less this season because of a changed economic situation, a recent survey from the NPD Group, a marketing research firm, found.This holiday season, retailers “have to think about and pivot a little bit more to win the consumer compared to only thinking about the profit margin from the purchase,” Mr. Pandya said. “Now, with demand being weaker, they really have to go out of their way to advertise to consumers and get consumers with the highest likelihood to spend.”But discounts eat into retailers’ profit margins, and they have been able to employ that strategy only sparingly in recent years. During last year’s holiday season, in particular, retailers recorded bigger margins thanks to supply chain logjams. Inventory was low, and shoppers were clamoring to get their hands on products. The result: fewer discounts.“A lot of that is going to reverse, if not more than reverse, across department stores and specialty apparel,” said David Silverman, a senior director at Fitch Ratings. “Consumers are less compelled to buy, and they’re going to need the call to action.”A difficult holiday season for retailers could lead to restructurings and layoffs in 2023.John Taggart for The New York TimesIt’s a very difficult time for any company that sells things. The Fed has spent this year trying to combat near-record inflation by raising interest rates to tamp down consumer spending. Retailers have too much merchandise that shoppers no longer want. Consumer spending on durable goods has been easing over the past couple of months, according to data from the St. Louis Fed. Many retailers have recently revised their full-year financial outlooks, halted hiring and closed stores.Amazon is freezing corporate hiring for its retail business for the rest of the year. Peloton is laying off about 12 percent of its work force in its fourth round of job cuts this year. FedEx is halting hiring and closing stores as demand falls. Walmart plans to hire fewer seasonal workers this year. The Gap is cutting 500 corporate positions.Inflation F.A.Q.Card 1 of 5What is inflation? More

Xi Jinping is set at this week’s 20th National Congress of the Chinese Communist party to be reappointed to a third term as leader. The expected reaffirmation is a watershed moment politically, militarily and economically for the world’s emerging superpower.Politically, the congress will end a two-decade period defined by predictable transitions from one leader to another after two terms in office. Xi’s expected reaffirmation, enabled by his scrapping of the two-term limit in 2018, means that he continues not only as leader but also as head of the Central Military Commission, controlling the armed forces. His reappointment to the presidency, a more ceremonial role, is likely to follow in March.A measure of Xi’s dominance is shown by the fact that relatively little attention has focused on the many personnel changes due at the congress. A new central committee, comprising about 200 full members and 170 alternates, a 25-member Politburo and a seven-person Politburo Standing Committee are all due to be unveiled.But the congress’s importance is defined by its endorsement of policies reshaping China and its posture towards the world. The most important of these is what Merics, a think-tank, calls the “securitisation of everything”. Xi’s “comprehensive national security” concept now comprises no fewer than 16 different fields including politics, the economy, culture, technology, space, and overseas interests. In his speech to the congress on Sunday, Xi warned of “grave international developments” not seen in the past 100 years. China’s most powerful leader since Mao Zedong also inveighed against the “bullying” of foreign powers and reiterated his commitment to taking control of Taiwan, potentially by military force. It is this threat mentality that dominates Xi’s world view. A national security strategy for 2021 to 2025 — which was adopted in late 2021 but has not been made public — seeks to galvanise party and state bodies to combat all internal and external threats to China’s expanding security sphere. New rules and mass movements are in prospect as Beijing builds a “fortress China” able to withstand what it sees as the efforts of the US-led west to hobble its progress. One recent example has been orders to farmers to grow more staple crops to boost food security.

Beijing is justified in viewing recent US actions as adversarial. The White House laid out a national security strategy last week, aimed partly at checking an ascendant China. New restrictions this month ban the export to China of US semiconductor equipment that cannot be provided by any foreign competitor. They also impose licence requirements on exports to China-based plants that make advanced chips.If, however, Beijing’s response is to hunker down and throw a security straitjacket over its economy and people, it risks smothering the entrepreneurial spirit that has driven the country’s remarkable economic transformation over the past three decades. Already, a structural slowdown has prompted the World Bank to predict that this year China’s GDP growth rate will lag behind the rest of Asia for the first time since 1990. Much of this slowdown is the result of a necessary property-market rationalisation. But it is also the case that Beijing’s emphasis on state-ownership and administrative control is stilling entrepreneurship.China should remember that building a fortress economy led by officials who perceive threats everywhere is what characterised its privations under Mao. The west should recognise that if China sputters, the world will lose its most powerful source of economic growth. More