Economy

The offshore renminbi exchange rate fell to a record low on Wednesday, putting further pressure on China’s central bank to directly intervene to prop up the country’s currency.The offshore rate fell as much as 0.7 per cent to Rmb7.2281 against the dollar, the lowest on record since Hong Kong clearing banks were first allowed to freely open renminbi accounts in 2010.Meanwhile, the more tightly regulated onshore rate also fell 0.7 per cent to Rmb7.225. That drop took the onshore rate down 13.6 per cent for the year to date, underscoring the impact of widening policy divergence between a dovish China seeking to shore up growth and a hawkish US Federal Reserve.Measures taken by the People’s Bank of China have so far stopped short of deploying significant foreign exchange reserves, instead relying on indirect measures to discourage bets on continued falls and slow the pace of depreciation. On Monday, the central bank introduced new measures effectively making it more expensive to short the currency.The offshore renminbi, introduced to facilitate greater international use of China’s currency, is not subject to the onshore rate’s dollar trading band, which limits moves to 2 per cent in either direction from a midpoint set each morning by the central bank. Following a serious sell-off in 2015 spurred by a one-off devaluation, however, Chinese authorities throttled liquidity in the Hong Kong market and the offshore renminbi has since closely followed the onshore rate.“Since the PBoC can do little to change the fundamental forces driving the dollar’s gains, attempts to reverse market trends would likely fail, undermining its credibility,” Wei He, an analyst at Gavekal Dragonomics, said. “The better course is probably to allow the current trend to play out, while limiting volatility and waiting for the inevitable reversal of direction.” More

LONDON (Reuters) -The International Monetary Fund openly criticised Britain’s new economic strategy on Tuesday, following another slide in bond markets that forced the Bank of England to promise a “significant” response to stabilise the economy.Pressure piled on new finance minister Kwasi Kwarteng to reassess his policy, which unleashed turmoil in financial markets, as leading economists, investors and executives said that rock-bottom investor confidence would recover only if the plan was scrapped.New British Prime Minister Liz Truss of the Conservative Party came into office on Sept. 6 saying she wanted to snap the economy out of years of stagnant growth with deep tax cuts and deregulation.Kwarteng’s plan, designed to support households and businesses with energy bills while doubling the long-run rate of economic growth. It requires an additional 72 billion pounds ($77.17 billion) in government debt issuance in this fiscal year alone, shocking investors, sending the costs of such borrowing even higher.The IMF said the proposals, which sent the pound to touch an all-time low of $1.0327 on Monday, would likely increase inequality and it questioned the wisdom of such policies.”Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,” an IMF spokesperson said.”We are closely monitoring recent economic developments in the UK and are engaged with the authorities,” the spokesperson said.The IMF holds symbolic importance in British politics: its bailout of Britain in 1976 following a balance-of-payments crisis had long been regarded as a low point of modern British economic history.BUDGETThe Fund said a budget due from Kwarteng on Nov. 23 would provide an “early opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high-income earners.”Earlier in the day, BoE Chief Economist Huw Pill said the central bank was likely to deliver a “significant” rate increase when it meets next in November, adding that financial market upheaval would have a big impact on the economy and would be factored into its next forecasts.British government bonds have sold off at a ferocious pace since the fiscal plans sparked a crisis of confidence in Truss’s handling of the economy.”It is hard not to draw the conclusion that this will require a significant monetary policy response,” Pill told the CEPR Barclays (LON:BARC) Monetary Policy Forum.With analysts still speculating about Britain’s future financial direction, and markets volatile, a growing number of mortgage providers, unable to price loans, suspended sales. REVERSE COURSE?U.S. economist Larry Summers, a former U.S. Treasury Secretary, said rocketing interest rates on long-dated British debt were a sign that credibility had been lost.Shai Weiss, head of airline Virgin Atlantic, urged the government to stabilise economic affairs and accept that a move to fund huge tax cuts with vast government borrowing had left Britain in a weaker position.”All of us in this room should be humble enough to say that if I said something that is not working, maybe I should reverse course, that is not a bad thing to do,” he said at a press conference to announce an alliance with SkyTeam. Two years before a general election is due, the opposition Labour Party has a 17-point lead over the Conservatives, a level not seen in more than two decades, according to a YouGov opinion poll for The Times newspaper. The Bank of England and Treasury had released statements on Monday afternoon in the hope of reassuring investors, with the central bank saying it would not hesitate to raise interest rates if needed.That immediately knocked the pound further, however, as some investors had bet on an emergency rate hike. It recovered slightly on Tuesday and was up 0.4% on the day at $1.0726 at around 2006 GMT. Kwarteng met leading bankers, insurers and asset managers on Tuesday and said he was “confident” that his economic strategy would work when combined with supply side reforms.But many remain unconvinced.”(There) is still no clear sign that the source of the problem – the government’s fiscal strategy – is being reversed or reconsidered,” J.P. Morgan economist Allan Monks said.”This will need to happen before November in order to avoid a much worse outcome for the economy.”($1 = 0.9330 pounds) More

Demonstrators marched on Japan’s parliament yesterday to protest against the state funeral of Shinzo Abe, while tens of thousands of supporters queued nearby to honour one of the country’s most powerful and divisive leaders since the second world war. After an initial period of shock and public grief that followed Abe’s assassination in early July, the government’s decision to hold a ¥1.6bn ($11mn) funeral sparked a public outcry and a sharp fall in popularity for Prime Minister Fumio Kishida. In a ceremony held at Tokyo’s Budokan arena, Kishida spoke in front of more than 4,000 guests including world leaders, Japanese politicians, business figures and members of the imperial family. Among the foreign dignitaries in attendance were US vice-president Kamala Harris, Indian prime minister Narendra Modi, Australian prime minister Anthony Albanese and UK foreign secretary James Cleverly.What do you think about Japan’s decision to hold a $11mn state funeral for former prime minister Shinzo Abe? Tell me what you think at [email protected]. Thanks for reading FirstFT Asia. Here is the rest of the day’s news — EmilyFive more stories in the news1. IMF urges UK to ‘re-evaluate’ tax cuts The IMF has launched a biting attack on the UK’s plan to implement £45bn of debt-funded tax cuts, warning the “untargeted” package threatens to stoke soaring inflation. The multilateral lender said it was “engaged with the authorities” since the tax cuts were unveiled last week, sparking a collapse in the value of sterling and a spike in the country’s borrowing costs.2. Sabotage warnings surface after Nord Stream leaks Danish, German and Polish officials have signalled that suspicious leaks on two Russian gas pipelines in the Baltic Sea are highly likely to be the result of sabotage, heightening concerns over the vulnerability of Europe’s energy infrastructure.Russian-held referendum results: Voters in four Russian-occupied provinces of southern and eastern Ukraine overwhelmingly agreed to their regions joining Russia in referendums regarded as sham votes by Kyiv and its western partners.3. Renminbi falls against dollar despite new support measures The renminbi lost further ground against the dollar yesterday, putting pressure on China’s central bank to deploy significant foreign exchange reserves for the first time since 2017. The renminbi’s fall of 11.5 per cent year to date to trade at Rmb7.1631 against the dollar has come as a result of widening policy divergence between a hawkish US Federal Reserve and dovish China. China economy news: China’s economic output will lag behind the rest of Asia for the first time since 1990, according to new World Bank forecasts.

4. SoftBank-backed Grab targets first profit Grab, one of south-east Asia’s biggest tech groups valued at $10.8bn, said the 10-year-old business would be profitable by 2024, even as growth slows against mounting global recession fears and rising inflation. 5. Do Kwon says he is not hiding as crypto manhunt intensifies The co-founder of collapsed cryptocurrency operator Terraform Labs said he is not in hiding after Interpol issued a red notice against him. Do Kwon has remained active on social media, writing Twitter on Monday that he was making “zero effort to hide. I go on walks and malls”, as the threat of prison hangs over him in South KoreaThe day aheadBank of Japan minutes The central bank will publish the minutes of its last monetary policy meeting when Japan intervened to strengthen the yen for the first time in 24 years.US-Pacific Island Country summit President Joe Biden will host the first ever US-Pacific Island summit today in Washington, where the US will continue its efforts to counter China’s influence in the region. (Politico) What else we’re readingThe cost of China’s information vacuum Global expertise about the country accumulated by scholars, diplomats and businesspeople has become more important than ever — yet many of those sources are now running dry as censorship has been tightened and access for foreigners has been sharply restricted.‘Sense of crisis’ grips South Korea chip industry, warns minister There is growing fear among Korean officials and industry executives that the country will shed production facilities as domestic chipmakers, lured by subsidies and tax incentives, rush to build semiconductor plants in the US. Generous state funding is also allowing China to catch up fast in the memory chip sector.Russians run and hide from Putin’s zealous draft officials Nearly a week after President Vladimir Putin announced the “partial” mobilisation of army reservists to bolster his forces in Ukraine, tens of thousands of Russians are refusing to enlist. In the face of the civil disobedience, the Kremlin is faced with a dilemma: should it crack down on the dissenters or backtrack?

Travellers from Russia cross the border to Georgia at Verkhny Lars on Monday © Irakli Gedenidze/Reuters

China’s Nio warns energy crisis slowing European expansion William Li, the group’s founder and chief executive, said that soaring energy costs are impeding the company’s rollout of battery swapping stations across Europe. In contrast to rival carmakers that rely on recharging their batteries, Nio uses a system of swap stations in which batteries are replaced in a process that takes just minutes.Two arrested on fraud charges linked to ‘$100mn deli’ in New Jersey A New Jersey sandwich shop which became a symbol of stock market exuberance was at the centre of an international conspiracy that defrauded investors and wrecked the ambitions of two high schoolteachers, according to an indictment unsealed in US federal court.Cocktails in Tokyo FT Globetrotter is celebrating all things Tokyo this autumn, and would love to hear from you. Share your favourite place to drink cocktails in the Japanese capital, including what to drink there, when to go and why it is so great. The best answers will be published in FT Globetrotter soon. More

Borrowing costs in Britain are projected to nearly triple to 6.25 per cent by May, after the Bank of England’s chief economist warned that the government’s new debt-laden economic plan required a “significant monetary response”.Huw Pill’s intervention came as Kwasi Kwarteng, chancellor, prepared to reassure markets that he would control debt in a new medium-term fiscal plan, with ministers hoping to pledge that debt will fall within five years.The new plan, to be published in November, implies tight public spending controls continuing into the second half of this decade, as the chancellor tries to restore order to the public finances after announcing £45bn of debt-funded tax cuts.Futures markets are now forecasting interest rates will hit 6.25 per cent by May, the highest level in 25 years, as the BoE attempts to prop up the pound and rein in inflation. Rates currently stand at 2.25 per cent, already the highest since the global financial crisis.And the IMF on Tuesday evening said it was “closely monitoring recent economic developments in the UK”. “Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,” the global institution said. The turmoil on the markets has created the first tensions between Kwarteng and Liz Truss, prime minister, as they grappled with the fallout of the chancellor’s economic statement last week.Truss was initially reluctant for the Treasury and BoE to issue statements on Monday to support the pound — preferring not to react to market turmoil — but eventually agreed with Kwarteng that it was the right course of action.The tensions, first reported by Sky News, have been confirmed by senior government officials. One said the exchanges were “testy” and that relations between No 10 and No 11 were under strain.That was denied as “weapons-grade bollocks” by allies of Truss, while others said there had been no raised voices in the meeting; Kwarteng and Truss are longstanding allies.In the Treasury statement issued on Monday, Kwarteng promised to publish a new road map for dealing with debt on November 23, replacing existing fiscal rules that say debt must be falling as a share of GDP within three years.Those familiar with Kwarteng’s thinking have told the Financial Times the new rules will say debt must be falling within the five-year forecast period of the independent Office for Budget Responsibility, which will publish its forecasts on the same day.Kwarteng told City bosses on Tuesday he would publish “a credible plan to get debt to gross domestic product falling”. Tight public spending totals already agreed will remain in place until 2025, with tough controls expected to remain into the future.Futures markets are now betting on a wave of interest rate increases by the bank in coming months, following Pill’s comments at the Barclays-CEPR International Monetary Policy Forum.Speaking a day after sterling hit an all-time low against the dollar, Pill had said the BoE’s Monetary Policy Committee was “certainly not indifferent” to the sell-off in the pound and gilt markets.

As the gilt sell-off intensified, 10-year yields rose 0.26 percentage points to 4.5 per cent, the highest level since 2008. Thirty-year borrowing costs rose to 5 per cent, the highest since 2002, ahead of a sale of new 30-year debt later this week. Pill highlighted the combined effect of the government’s new fiscal stance, “significant” reaction in the markets and the broader context of rising interest rates in other countries. “All this will require a significant monetary response.” However, he signalled that the central bank did not plan to act before its next scheduled meeting in November, pushing back against calls from some investors for an emergency interest rate rise to shore up the currency and restore confidence in the UK economy.He said the best time to carry out a “necessarily comprehensive assessment” of not just fiscal policy but also energy and labour market developments would be when the BoE updates its forecasts alongside its November decision on interest rates. Pill said that when the BoE last published forecasts for the UK economy in August they had shown the economy falling into a prolonged recession, partly because the government had yet to set out measures to protect households and businesses from higher energy prices.This had created a difficult trade-off, because aggressive action to curb inflation would spark a severe downturn, he said.Now that the government had set out fiscal plans that would support household incomes, “that has freed monetary policy to do its job”, said Pill, adding: “That freedom will have to be used.” The pound was trading flat by late afternoon trading in London at just under $1.07 giving up earlier gains. Sterling has fallen about 20 per cent against the US currency this year and remains close to its lowest levels since 1985.UK high-street banks have begun pulling mortgage loans in response to rising yields, with mortgage rates expected to rise substantially. More

Publicly traded corporate landlords are reporting some of their highest margins ever, while smaller operators say rent increases are eaten up by costs.Of all the categories driving inflation in recent months, among the largest — and most persistent — is rent.In buildings with more than 50 units, tenants in one-bedroom apartments have been handed new leases costing about 17 percent more on average than they did in March 2020, according to CoStar Group, a Washington-based real estate data company. The Labor Department’s rent indicator — which includes ongoing leases, not just renewals — has steadily risen, to 6.7 percent last month over the previous August.So while tenants absorb rent increases that often exceed their income gains, are landlords minting money? It depends on the landlord.Publicly traded owners of sprawling real estate portfolios, like Invitation Homes, have enjoyed some of their best returns over the past few quarters. Things look very different, however, for Neal Verma, whose company manages 6,000 apartments in the Houston area.Earlier this year, Mr. Verma experimented with raising rents enough to cover the cost of spiking wages, property taxes, insurance and maintenance. Turnover doubled in the properties where he tried it, as people left for nearby buildings.“It’s crushing our margins,” Mr. Verma said. “Our profits from last year have evaporated, and we’re running at break-even at a number of properties. There’s some people who think landlords must be making money. No. We’ve only gone up 12 to 14 percent, and our expenses have gone up 30 percent.”Overall, the ferocious run-up in rents has been driven by tenants’ desire for more space and location flexibility created by remote work; rising interest rates that have locked would-be buyers out of the for-sale market; and cost increases on delayed maintenance. But the one factor landlords track most closely is their customers’ ability to absorb higher rents.Higher-earning tenants, who flock to newer buildings with more amenities, have been more willing to accept rent increases. Low-income renters, while seeing faster wage growth, have borne the brunt of higher prices for necessities like groceries and gasoline, and rents in older buildings are rising at a slower rate than in newer, nicer ones.“The reality is that rents can only rise as incomes rise,” said Jay Parsons, chief economist at the real estate data firm RealPage, noting that rent averages 23 percent of the monthly incomes across the apartments that RealPage tracks. “If people can’t afford it, you can’t lease it.”Geography also matters. Even among the largest landlords, those with a presence in Sun Belt cities such as Miami, Tampa, Nashville and Phoenix saw far faster rent growth than high-cost coastal markets like San Francisco, where rents fell substantially during the pandemic lockdowns as white-collar workers fled for remote locations.Inflation F.A.Q.Card 1 of 5What is inflation? More

Nigeria’s central bank has raised interest rates to an all-time high of 15.5 per cent as it struggles to contain a surge in inflation. The bank raised its benchmark interest rate by 150 basis points — its third consecutive rate rise — to combat price pressures that have left citizens facing soaring costs for fuel and food. Central bank governor Godwin Emefiele said after a two-day meeting that the committee could not rule out further tightening, adding that it was “imperative” to rein in price pressures. “Inflation in the last four months has gone up aggressively. It is difficult for us to not go in the aggressive way we have today. This is the best option at this time,” Emefiele told reporters at a press briefing.Annual inflation in August was 20.5 per cent. Core inflation, which excludes volatile food and energy prices, is 17.2 per cent. The naira currency had weakened sharply to a fresh low against the US dollar ahead of the interest rate decision, threatening to raise the price of imported products further.Emefiele said the decision to raise rates was unanimous, but committee members disagreed about the scale of tightening needed. Ten of the committee’s 12 members voted to raise rates by 150 basis points, one voted to lift by 100 basis points and the other a 50 basis points increase.

Analysts had predicted a modest hike of between 50 to 100 basis points. Virág Fórizs, Africa economist at Capital Economics, a research firm, said Nigeria’s central bank was “reluctantly hawkish” and forecast a lowering of interest rates early next year.Many economies are struggling because of the strength of the US dollar and the impact of higher US rates on global borrowing costs. However, Nigeria’s economic woes have been compounded by the lacklustre performance of its oil sector in 2022. Africa’s most populous nation usually earns more than 80 per cent of its foreign currency from crude but has not benefited from rising oil prices this year because of massive theft of an estimated 400,000 barrels per day, under-investment in infrastructure and the cost of fuel subsidies. Nigeria lost its crown as Africa’s largest oil producer to Angola last month when it produced 1.1mn barrels of crude a day, far short of its Opec quota of 1.8mn. Low oil production has led to a scarcity of US dollars in its import-heavy economy. Imports have become more expensive as businesses raise prices to reflect the high cost of sourcing dollars from the black market where it trades freely and is almost 50 per cent higher than the central bank’s official exchange rate. The Nigerian currency has depreciated almost 25 per cent against the dollar on the black market since the start of the year. Nigeria’s decision comes amid soaring inflation across west Africa. Ghana is experiencing 33.9 per cent inflation, its highest since 2001, forcing its central bank to raise rates by 300 basis points to 22 per cent at an emergency meeting last month.Economic insecurity will be a key issue as Nigeria goes to the polls to replace outgoing president Muhammadu Buhari in February. More

In times of trouble, the dollar is the world’s refuge and strength. This is true even when the US is the source of the trouble, as happened in the financial crisis of 2007-09. It is true again now. A series of shocks, including high inflation in the US, has triggered a familiar upward movement in the dollar. Moreover, this has not been just against the currencies of emerging economies, but also against those of other high-income countries. Meanwhile, the general story of the dollar cycle underlies some specific ones. Messing up one’s macroeconomic policies, especially fiscal management, proves particularly dangerous when the dollar is strong, interest rates are rising and investors seek safety. Kwasi Kwarteng, please note.The nominal effective exchange rate of the US dollar appreciated by 12 per cent between the end of last year and Monday, according to JPMorgan estimates. Over the same period, the yen’s effective rate depreciated by 12 per cent, the pound’s by 9 per cent and the euro’s by 3 per cent. Against the dollar alone, movements are larger: sterling has depreciated by 21 per cent, the yen by 20 per cent and the euro by 16 per cent. The dollar is king of the castle.So why has this happened? Does it matter? What can be done about it?As to the why, the answer is that the world economy has suffered four linked shocks since 2020: the pandemic; a huge fiscal and monetary expansion; to post-pandemic supply side, in which pent-up (and lopsided) demand hit supply constraints in industrial inputs and commodities; and, finally, Russia’s invasion of Ukraine, which hit energy, particularly for Europe.The results have included enhanced uncertainty, strong inflationary pressure in the US, a need for monetary policy, particularly that of the Federal Reserve, to catch up, and powerful recessionary forces, especially in Europe. With the Fed’s tightening ahead of that of its peers in the high-income countries, the dollar has strengthened. Meanwhile, the divergent outcomes of emerging economies are determined by how well their economies are managed, whether they export commodities and their indebtedness.Within the G20, surprisingly, currencies of many emerging countries have fared better than those of the high-income ones. Russia’s rouble has appreciated sharply. At the bottom are sterling, the Turkish lira and Argentine peso. What company the pound now keeps!Does the dollar’s strength matter?Yes, it does, because, as a recent paper co-authored by Maurice Obstfeld, former chief economist of the IMF, notes, it tends to impose contractionary pressure on the world economy. The roles of US capital markets and the dollar are far bigger than the relative size of its economy suggests. Its capital markets are those of the world and its currency is the world’s safe haven. Thus, whenever financial flows change direction from or to the US, everybody is affected. One reason is that most countries care about their exchange rates, particularly when inflation is a worry: only the Bank of Japan can be happy about its weak currency. The danger is greater for those with heavy liabilities to foreigners, even more so if denominated in dollars. Sensible countries avoid this vulnerability. But many developing countries will now need help.These recessionary forces emanating from the US and the rising dollar come on top of those created by the big real shocks. In Europe, above all, there is the way in which higher energy prices are simultaneously raising inflation and weakening real demand. Meanwhile, the determination of China’s leader to eliminate a virus circulating freely in the rest of the world is hitting its economy. The Chinese Communist party may control the Chinese people. But it cannot hope to control the forces of nature in this way indefinitely.What can be done? Not that much.There is some talk of co-ordinated currency intervention, as happened in the 1980s, with the Plazaand then Louvre accords, first to weaken the dollar and then to stabilise it. The difference is that the former, in particular, suited what the US then wanted. This made intervention credibly consistent with its domestic goals. Until the Fed is content with where inflation is going, that cannot be the case this time. Currency intervention aimed at weakening the dollar by just one or even several countries is unlikely to achieve that much.A more important question is whether monetary tightening is going too far and, in particular, whether the principal central banks are ignoring the cumulative impact of their simultaneous shift towards tightening. An obvious vulnerability is in the eurozone, where domestic inflationary pressure is weak and a significant recession is probable next year. Nevertheless, as Christine Lagarde, ECB president, underlined last week: “We will not let this phase of high inflation feed into economic behaviour and create a lasting inflation problem. Our monetary policy will be set with one goal in mind: to deliver on our price stability mandate.” This may indeed turn out to be overkill. But central banks have little option: they have to do “whatever it takes” to curb inflation expectations.No one knows how much tightening that might need. No one knows either how far the debt overhang will help, by acting as a powerful transmission belt, or harm, by causing a financial meltdown. What is known is that the central banks’ ability to support the markets and economy are for a while gone. In such a time the perceived sobriety of borrowers matters once again. This is true for households, businesses and, not least, governments. Even previously credible G7 governments, such as the UK’s, are learning this truth. The financial tide is going out: only now do we notice who has been swimming [email protected] Martin Wolf with myFT and on Twitter More

(Reuters) – Wells Fargo (NYSE:WFC) expects steeper rate hikes by the Federal Reserve due to resiliency of the U.S. economy and the central bank’s increased resolve to wring out inflation, the Wall Street bank’s economists said in a note on Tuesday.They had earlier forecast a 100-basis-point hike between now and early next year, but now expect the Federal Open Market Committee (FOMC) to raise rates by about 175 bps.The Fed has aggressively hiked interest rates by 300 basis points so far this year and sees its rate hiking cycle ending 2023 at 4.50%-4.75% as it battles to quell the highest bout of inflation since the 1980s.The analysts expect the target range to hit 4.75%-5.00% by the first quarter of 2023, including a 75 bps hike at the Nov. 2 meeting and a 50 bps raise at the Dec. 14 policy meeting.”The economy is showing signs of resiliency, which will necessitate more monetary tightening to slow growth sufficiently to bring inflation back toward the Fed’s target of 2%,” said the analysts, led by chief economist Jay Bryson.”Our updated forecast for the fed funds rate also reflects the Fed’s apparent willingness to do “whatever it takes” to rein in inflation.” Fed funds futures imply a 70% chance of a 75 bps hike in November and a peak around 4.5% in the benchmark rate in early 2023. [FEDWATCH]Last week, Goldman Sachs (NYSE:GS), Barclays (LON:BARC) and a bunch of investment banks also raised their estimates for U.S. policy rates following Fed’s hawkish message on Sept. 21.The FOMC will not cut rates at the first sign of economic weakness, analysts at Wells Fargo added. They expect a U-turn in Fed’s policy only towards the end of next year. More