Economy

LONDON (Reuters) -High inflation in Britain has not been vanquished and it is more likely to overshoot than undershoot Bank of England forecasts over the medium term, BoE interest rate-setter Catherine Mann said on Wednesday.Mann cast the lone vote against cutting borrowing costs at a meeting of the BoE’s Monetary Policy Committee last week which decided by an 8-1 margin to lower the Bank Rate to 4.75% from 5%, and she also opposed an initial rate cut in August. “We have an upside bias to inflation … which tends to enable inflation to become embedded, and in that environment it’s important to hold (interest rates) for longer,” Mann said at a conference hosted by BNP Paribas (OTC:BNPQY).”When I have evidence that there has been a removal or moderation of inflation persistence – sufficient moderation of inflation persistence – then I will move in a bigger step,” she said.Last week the BoE revised up its inflation forecasts due to a higher minimum wage and short-term fiscal stimulus in the first budget of the new Labour government. The BoE predicted inflation would rise from 1.7% in September to 2.5% by the end of the year and not return to its 2% target until mid 2027, a year later than it previously thought.Financial markets only expect the BoE to cut rates twice next year, compared with at least five quarter-point cuts they predict for the European Central Bank as the euro zone economy slows.Mann said services price inflation in Britain remained “pretty sticky”, though there were some early signs that hospitality businesses were finding it harder to push through price rises or pay higher wages.Energy prices were more likely to rise than fall over the coming years, adding to the overall risk of higher inflation, she said.”There are some possibilities about downward pressure on inflation coming from export prices coming out of China, for example. But against that … one piece of news that is downward bias, the rest of it is upward bias and likely to be more volatile going forward over the medium term,” Mann said.U.S. President-elect Donald Trump’s threat of high U.S. tariffs on imports from China might lead to more Chinese goods heading to Europe at discounted prices, analysts have said. More

BAKU (Reuters) – COP29 negotiators welcomed a pledge by major development banks to lift funding to poor and middle-income countries struggling with global warming as an early boost to the two-week summit.A group of lenders, including the World Bank, announced on Tuesday a joint goal of increasing this finance to $120 billion by 2030, a roughly 60% increase on the amount in 2023.”I think it’s a very good sign,” Irish Climate Minister Eamon Ryan told Reuters on Wednesday.”It’s very helpful. But that on its own won’t be enough”, Ryan said, adding countries and companies must also contribute.China’s Vice Premier Ding Xuexiang said on Tuesday that Beijing has already mobilized around $24.5 billion to help developing countries address climate change. Ryan’s view was echoed by Patrick Verkooijen, CEO of the Global Center on Adaptation who welcomed the announcement as “a shot in the arm for the climate finance discussion””But there is so much more work ahead,” he added.The chief aim of the conference in Azerbaijan is to secure a wide-ranging international climate financing agreement that ensures up to trillions of dollars for climate projects.Developing countries are hoping for big commitments from rich, industrialized nations that are the biggest historical contributors to global warming, and some of which are also huge producers of fossil fuels.”Developed countries have not only neglected their historical duty to reduce emissions, they are doubling down on fossil-fuel-driven growth,” said climate activist Harjeet Singh.Wealthy countries pledged in 2009 to contribute $100 billion a year to help developing nations transition to clean energy and adapt to the conditions of a warming world. But those payments were only fully met in 2022 and the pledge expires this year.’GET IT DONE’Hopes for a strong deal have been dimmed by Donald Trump’s U.S. election win. The President-elect has promised to again withdraw the U.S. from international climate cooperation.The United States is already the world’s largest oil and gas producer and Trump has vowed to maximize output. Officials representing President Joe Biden’s outgoing administration at COP29 have said China and the European Union may need to pick up the slack if Washington cedes leadership.”We have a clear choice between a safer, cleaner, fairer future and a dirtier, more dangerous, and more expensive one. We know what to do. Let’s get to work. Let’s get it done,” U.S. climate envoy John Podesta told the conference.With 2024 on track to be the hottest year on record, scientists say global warming and its impacts are unfolding faster than expected. Climate-fuelled wildfires forced evacuations in California and triggered air quality warnings in New York. In Spain, survivors are coming to terms with the worst floods in the country’s modern history.Indigenous leaders from Brazil, Australia, the Pacific and Eastern Europe said on Wednesday they intend to work together to ensure indigenous people have a say in future climate decisions.The group said it was pushing for an indigenous co-presidency at next year’s COP, which is meant to be held in Brazil’s Amazon (NASDAQ:AMZN), as well as at future COP conferences.Albania’s Prime Minister Edi Rama told the conference he was concerned that the international process to address global warming, now decades old, was not moving swiftly enough.”Life goes on with its old habits, and our speeches, filled with good words about fighting climate change, change nothing,” Rama said.  More

December futures on the S&P/TSX index were down 0.07% at 6:04 a.m. ET (11:04 GMT).Wall Street futures edged lower as an uptick in Treasury yields weighed on rate-sensitive equities. [.N]Investors are focused on the U.S. consumer price index, due at 8:30 a.m. ET, to gauge the Federal Reserve’s policy easing path. Traders see a 63% chance for a 25-basis-point rate cut in the United States next month. However, markets also assume that President-elect Donald Trump’s proposed policies could fuel economic growth and inflation, potentially impeding the path to lower Fed interest rates.Trump’s reelection comes with his proposed tariffs for all imports that could potentially hurt the United States’ trade relations, including with Canada.Canada’s energy sector grabbed the limelight on Wednesday as oil prices rose on signs of near-term supply tightness. [O/R]The materials sector could take its cues from gold prices that rose after falling to a near two-month low in the previous session and copper prices, which touched a two-month low against a stronger U.S. dollar.The TSX composite index notched a record closing high on Tuesday, boosted by the technology sector after e-commerce firm Shopify (NYSE:SHOP) reported strong quarterly results. In corporate news, Suncor Energy (NYSE:SU) raised its quarterly dividend after the integrated oil and gas firm beat estimates for third-quarter profit on higher oil production and demand for refined products.COMMODITIES Gold: $2,608.67; +0.44% [GOL/]US crude: $68.62; +0.73% [O/R]Brent crude: $72.4; +0.71% [O/R]FOR CANADIAN MARKETS NEWS, CLICK ON CODES:TSX market report (TO)Canadian dollar and bonds report [CAD/] [CA/]Reuters global stocks poll for CanadaCanadian markets directory($1 = 1.3955 Canadian dollars) More

CHICAGO/EVANSVILLE, Wisconsin (Reuters) – American farmers are worried that President-elect Donald Trump’s sweeping tariff plans will curb their access to top soy buyer China, but tariffs could also lure companies to build more U.S. crushing plants, hungry for domestic supplies.Trump’s plans to roll out blanket import tariffs could slam the door on imported vegetable oil supplies, which renewable energy analysts said could in turn lure the U.S. crush industry to revive lagging plans to build new plants and expand capacity.Such expansion has faltered over the past year, as the U.S. market was flooded with cheaper global supplies of diesel feedstocks like used cooking oil (UCO) from China, tallow from Brazil and canola oil from Canada. Now, these supplies are likely targets for Trump’s tariffs while global supplies of other vegoils are tightening and prices climbing, analysts said. USDA data projects that global rapeseed oil supplies will shrink by 13% over the coming year with sunflower seed oil stocks down 24%. Indonesian palm oil shipments have dropped as that country plans to boost biodiesel production next year.Potential new demand helped send Chicago Board of Trade soyoil futures jumping nearly 6% last week to the highest in seven months, traders said.Analysts cautioned it remained too soon to know how, or if, the Trump Administration will change President Joe Biden’s law providing a decade of lucrative subsidies for clean-energy projects. Building domestic demand for such crops is key for eating through excess stocks, especially without access to the Chinese export market, agricultural economists said. Hefty global competition could dent incomes for farmers who just harvested the second-largest U.S. soybean crop ever at a time when crop prices hover near four-year lows.If tariffs prompt retaliation by global U.S. soybean importers, big soy processors such as Bunge (NYSE:BG) Global and Archer-Daniels-Midland Co could benefit from a larger and likely cheaper supply of beans for them to crush in the U.S., industry analysts said. “If Trump goes the tariff direction, it is friendly for the U.S. crushing industry and capacity,” said Kent Woods, owner of advisory firm CrushTraders. Woods added that U.S. soyoil demand would also rise if Trump blocks imported oils from benefiting from renewable fuel tax credits.Farmers in rural Evansville, Wisconsin, were still waiting for the state’s first commercial-scale soybean crushing plant, which had been slated to break ground last year. For Nancy Kavazanjian and husband Charlie Hammer, the plant would mean an end to the nearly 400-mile round-trip to haul their soybeans to an Illinois buyer. The savings would be huge, Kavazanjian said. “It’s manpower, it’s fuel and it’s time.”PROMISE OF RICHESSoaring vegoil demand from biofuels makers triggered a flood of projects to build new soy processing plants three years ago.A mix of state and federal programs aimed at boosting lower carbon intensity fuels got a lift from Biden’s Inflation Reduction Act (IRA) climate legislation in 2022. Since 2021, U.S. renewable diesel production capacity soared 200%.Six new soybean processing facilities or plant expansions in Iowa, Nebraska and North Dakota opened in less than two years. At least four more projects in Nebraska, Ohio, Indiana and Louisiana are slated to launch through 2026.Yet in about a half-dozen Midwestern towns, the lucrative promise of riches has stalled. Crushers blame the delays on the flood of biofuel feedstock imports, soaring construction costs and the end of cheap financing as interest rates surged to a 23-year high.U.S. farmers looking to boost domestic soyoil demand have unsuccessfully tried to get Biden’s Treasury Department to exclude imported biofuel feedstocks from IRA subsidies known as 45Z. It remains too soon to know if Trump will try to alter the IRA’s clean energy provisions or limit imports of used cooking oil, said Susan Stroud, founding analyst at No Bull Ag consulting. ELECTION RESULTSSome firms slammed on the brakes on oilseeds plant expansions in order to wait and see how the election will impact biofuels policy. Permitting delays have stalled plant expansions by global oilseeds processor Bunge and joint venture partner Chevron (NYSE:CVX) in Destrehan, Louisiana, and Cairo, Illinois, along with slow approvals by the two companies, Bunge told Reuters.Industry sources said Bunge scrapped plans to expand its massive plant in Council Bluffs, Iowa. Bunge declined to comment.Work on United Cooperative’s smaller-scale plant in Waupun, Wisconsin, lagged after construction costs rose and interest rates soared, said Woods of advisory firm CrushTraders.United Coop CEO David Cramer said it will be online within two years; the only delays were in getting equipment.Soy processors also expect higher construction costs next year. Tariffs on imported steel and processing plant equipment could prove unpalatable for crushers that have yet to break ground.Evansville Mayor Dianne Duggan said CHS had spoken about approving construction of the local facility as early as spring of 2023. The plant would be able to crush 70 million bushels of soybeans annually – or about two-thirds of Wisconsin’s total crop production, according to company and government data. Today, it’s an empty field. CHS said the project is still under consideration. More

Citing a document, the news service said Lighthizer and his allies have been circulating memos regarding plans to persuade both lawmakers and the US public that higher tariffs will boost economic activity, rather than hinder it.On the campaign trail, Trump proposed rolling out blanket levies of up to 20% on imports coming into the US, as well as a 60% duty on items from China.Although critics have flagged tariffs could ultimately reignite recently waning inflationary pressures, a source close to policy planning told Politico that Lighthizer and his allies will argue that economic models have failed to “accurately predict changes in the economy.”Politico added that the circulated document will point to a study conducted by the US International Trade Commission which showed that tariffs imposed during Trump’s first term in office contributed to an increase in domestic production in “every single industry.”Meanwhile, Lighthizer and Trump’s transition team have also been in talks with Congressional staff regarding Congress potentially backing the incoming administration’s tariff policies through legislation, Politico reported. This action would both break from years of precedent set by both Republicans and Democrats and make it more difficult for future presidents to reverse the tariffs.Congress has not imposed a tariff in almost a century, rather choosing to allow the president to adopt such measures — albeit only under extraordinary circumstances.Lighthizer was also named as a possible candidate for a number of key economic positions in the new Trump White House, including secretary of Commerce, Treasury, or a senior adviser role, Politico said.In a note to clients, analysts at ING said Lighthizer’s return to the forefront of US economic policymaking “shouldn’t have come as a surprise but serves as a reminder that US protectionism is on its way.” More

Ahead of the ribbon-cutting at the Port of Chancay — a Chinese-built megaport on Peru’s Pacific coast that is set to transform regional trade — Chinese-made ZPMC unmanned cranes line the quay.BYD pick-up trucks sit ready to shuttle engineers around, while Huawei 5G internet towers have been freshly constructed to handle the automated operation.“Everything is made in China,” said a beaming Mario de las Casas, public affairs manager of the port for Cosco Shipping, the Chinese state-owned shipping giant that will operate Chancay once it opens on Thursday. “This is a huge opportunity not just for Peru but for the whole region,” he added, as Peruvian and Chinese flags flapped from street lights.Peruvian officials argue the port, built by Cosco with local miner Volcan, will transform Peru — a big producer of copper and fruit — into the Singapore of South America, and will upend maritime trade along the continent’s Pacific coast as it can accommodate larger vessels in its deep waters.Some content could not load. Check your internet connection or browser settings.But analysts and officials raised concerns that the $3.6bn project, which follows a series of other Chinese infrastructure investments, in effect represents a ceding of Peruvian sovereignty over the port.The US, for whom growing Chinese influence in Latin America presents a strategic problem, has warned the port could be used by Chinese warships. And the development may present an area of contention with US president-elect Donald Trump as he takes a tougher line against China. “The risks to Peru are at multiple levels,” said Evan Ellis, professor of Latin American studies at the US Army War College. “Risk number one is the country not reaping the benefits of its abundant resources and geographic position, but rather the Chinese getting those benefits.”Chinese President Xi Jinping, in Peru this week to attend the Apec summit ahead of a state visit, will appear with Peruvian President Dina Boluarte at Chancay’s inauguration on Thursday via video link from Lima, 80km away. US President Joe Biden will also be in town for the Apec summit on his first and last visit to South America as president — with little to offer.In May, amid a dispute with Cosco, Peruvian lawmakers passed legislation granting it exclusive rights to operate Chancay, something Ellis said was “previously unthinkable and against the very essence of Peru’s assertion of sovereignty over its own ports, which are its window to the world”.Mario de las Casas, public affairs manager of the port for Cosco Shipping. He says the port will provide opportunity for the whole region More

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