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    Xi tries to restore investor confidence in China

    This article is an on-site version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesFormer UBS and Citigroup trader Tom Hayes failed in his attempt to overturn his conviction for rigging an interest rate benchmark in a London appeals court. Hayes became the first person in the world to be found guilty by a jury over the Libor scandal and served five-and-a-half years in prison.Piero Cipollone, the European Central Bank’s newest board member, warned against an “excessive focus” on waiting for slower wage growth before it starts cutting interest rates, suggesting he may argue for a reduction at the ECB’s April meeting.Five of Germany’s top research institutes slashed their growth forecasts for Europe’s largest economy as exports and domestic demand remain weak. They predict growth this year of 0.1 per cent, down from their earlier expectation of 1.3 per cent six months ago. For up-to-the-minute news updates, visit our live blogGood evening.China’s economy has not “peaked” and its growth prospects remain “bright”. That was the message delivered by President Xi Jinping today to US business leaders gathered in Beijing amid concerns that the country is investing heavily in manufacturing to overcome a deep property slowdown, leading to oversupply and potential dumping in international markets.As our latest Big Read details, Xi is betting big on a “made in China” strategy but it is unclear whether the rest of the world would accept more Chinese-made goods. Industrial oversupply could even lead to a “slow-motion train accident for world trade”, according to the president of the EU Chamber of Commerce in China.Xi also promised that “China’s reforms will not stall, and our opening up will not stop” after IMF chief Kristalina Georgieva had warned on Sunday that his country was at a “fork in the road”, where it must choose between past policies or “pro-market reforms” to unlock growth.Georgieva and a host of western guests were in Beijing for the China Development Forum, the country’s flagship international business conference. US executives are back in greater numbers in a sign that bilateral tensions have eased slightly after falling to new lows last year due to a spy balloon incident. Apple boss Tim Cook is among those trying to build bridges, emphasising China’s “critical” role in its business.Beijing has been at pains to present a more welcoming picture to investors after data showed foreign direct investment at its lowest level in decades. Xi also met US business leaders in San Francisco in November during his summit trip to meet US President Joe Biden in an attempt to allay some of the national security concerns expressed by China hawks in Congress. Tensions continue to flare however over subjects such as Chinese electric vehicle imports. A report yesterday suggested a quarter of EVs sold in the EU this year will be made in China, including western brands such as Tesla. Chinese-branded vehicles, led by BYD, are set to take around 20 per cent of the market by 2027. China this week filed a World Trade Organization case against US EV subsidies, after being on the receiving end of similar charges from the US and EU.Other points of conflict include shipbuilding, the solar industry and social media platform TikTok, which lawmakers insist should be divested by Chinese parent company ByteDance if it is to continue operating in the US.Xi’s pivot to manufacturing may pose a threat to western interests through a wave of high-tech low-cost exports, but some economists doubt it will be enough to deliver on China’s growth targets. Others say the plan makes sense in terms of Xi’s aims for regime stability and national security. “The long-term goal is a world economic order that really favours China,” says one academic. “We are just at the very beginning.”Disrupted Times is taking a short Easter break and will be back in your inboxes on Friday April 5.Need to know: UK and Europe economyThe Bank of England warned of the risks to British businesses by a potential reversal of the long-running private equity boom, with implications for leverage, transparency and valuations. It said that the likelihood of a “sharp correction” in some markets had increased since December.Whatever happened to “Global Britain”? Politicians are failing to champion UK trade and inward investment, argues the British Chambers of Commerce, because they are frightened of reawakening old divisions on Brexit.Gloom also surrounds Europe’s second-largest economy after France’s budget deficit widened more than expected. Finance minister Bruno Le Maire said the fiscal hole was caused by tax revenues falling as inflation slowed, but argued that spending was not out of control and growth had been maintained. Bulgaria’s government has collapsed after coalition problems, heralding a likely sixth election in three years. Our Europe Express newsletter (for Premium subscribers) explains what it means for the rest of the EU.Need to know: global economyThe US faces a Liz Truss-style market shock if the government ignores the country’s surging federal debt, warned the head of Congress’s independent fiscal watchdog. The debt pile shot up following Donald Trump’s tax cuts in 2017 and huge stimulus spending during the pandemic. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.BlackRock chief Larry Fink said the world faced a looming “retirement crisis” that requires a rethink of pensions and working patterns as people live longer. One in six people globally will be older than 65 by 2050, up from one in 11 in 2019.The FT revealed that Russia has started supplying oil directly to North Korea in defiance of UN sanctions, dealing a new blow to international efforts to contain Pyongyang. Recent shipments are the first documented direct seaborne deliveries from Russia since the UN Security Council — with Moscow’s approval — imposed a cap on oil transfers in 2017 in response to Pyongyang’s nuclear weapons tests.The price of cocoa surged past $10,000 a tonne for the first time thanks to poor harvests in Africa. The “out of control” market means higher price tags on the way for chocolate bars. Chief economics commentator Martin Wolf turns his mind to global politics to send out a warning: we may not be witnessing a return of fascism in the historical sense, but we are seeing the rise of authoritarianism with fascistic characteristics, he argues.Need to know: businessInsurers and carmakers are bracing for the impact of the Baltimore bridge disaster, where at least six people are presumed dead. Motor suppliers face bottlenecks in a crucial entry point for vehicles while repair estimates are soaring. Read our explainer on what happened and what it says about the quality of US infrastructure.Donald Trump may be mired in legal problems but the US presidential hopeful has received a huge boost from his social media business after it soared more than 50 per cent on its New York stock market debut, making his stake worth more than $4.6bn. Here’s a new Big Read on Trump’s new inner circle.WTO chief Ngozi Okonjo-Iweala said the first customs duties on digital products such as online films and software downloads will hit consumers and businesses in 2026, increasing prices in some countries. China’s Longi Green Technology, the world’s largest solar manufacturer, is laying off thousands of workers as it grapples with overcapacity and fierce competition, piling pressure on billionaire founder Li Zhenguo. Robin Zeng, China’s “battery king”, told the FT that the much-hyped solid-state battery for electric was still years away. Japanese carmaker Toyota has trumpeted its progress, pledging to deliver the technology as early as 2027.Artificial intelligence is helping speed up the energy transition, say industry leaders, as it transforms key functions such as lowering carbon emissions, dealing with cyber attacks and predicting mechanical failures. Read more in our special report: The Future of AIThe World of WorkPandemic predictions of the death of the commute were greatly exaggerated, according to FT analysis of transit data, but new hybrid work options still pose challenges to policymakers and transport authorities.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Managing people is normally a prerequisite for climbing the corporate ladder, but is it possible to dodge it? Listen to the new Working It podcast.Some good newsDamage to the optic nerve can lead to irreversible blindness but US researchers have shown that a protein previously thought unimportant can stimulate regrowth of nerve cells, giving hope to sufferers of diseases such as glaucoma.Recommended newslettersWorking it — Discover the big ideas shaping today’s workplaces with a weekly newsletter from work & careers editor Isabel Berwick. Sign up hereThe Climate Graphic: Explained — Understanding the most important climate data of the week. Sign up hereThanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues. And please share your feedback with us at disruptedtimes@ft.com. Thank you More

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    Swedish central bank flags good chance of cut in May if inflation eases

    STOCKHOLM (Reuters) -Sweden’s central bank held its key rate at 4.00% on Wednesday, as expected, and said that if inflation continued to drop toward the 2% target there was a good chance of a series of rate cuts starting in May.With inflation seemingly tamed, central banks around the world are weighing up when to start easing policy. The Swiss National Bank was the first out of the blocks last week, with the U.S. Federal Reserve and the European Central Bank expected to follow suit in June.After peaking at over 10% in late 2022, headline inflation in Sweden is close to target and the Riksbank is almost ready to start reversing two years of policy tightening.”What we are saying is that if our forecasts in a broad sense turn out to be right, there is a high chance there will be a cut in May,” Governor Erik Thedeen told reporters.The central bank’s rate path gives a roughly 50% chance of a cut in May and a total of three rate cuts this year.Many analysts believe inflation will fall faster and that the Riksbank will speed up rate cuts. “We stick to our call that the Riksbank will start cutting rates in May,” Nordea economist Torbjorn Isaksson said. “We see the policy rate at 2.50% at year-end 2024.”The last time the central bank reduced rates was in 2016.CAUTIONThe Riksbank’s outlook has shifted radically in the last few months. In November, it warned rates could rise further but said in February that it might be possible to relax policy in the first half of the year.Thedeen said it had been too early to cut at Wednesday’s meeting and the Riksbank “wanted to be even more sure” inflation would remain low and stable. Rates are likely to come down gradually, he said.The central bank is worried, however, that the prospect of lower borrowing costs could prompt a spending spree by households.”To a certain extent it is good that we get improved demand and purchasing power when rates go down, but we don’t want it to go too fast so we get setbacks,” Thedeen said.Easier policy could also further weaken the Swedish crown, pushing up import prices. Analysts in a Reuters poll had forecast no change in rates this month, and for the central bank to flag a cut in May or June.The Riksbank announces its next monetary policy decision on May 8.(; editing by Mark Heinrich) More

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    Newest ECB board member says it can cut rates ‘swiftly’ despite rising wages

    Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The European Central Bank’s newest board member has warned against an “excessive focus” on waiting for slower wage growth before it starts cutting interest rates. Piero Cipollone said in his first monetary policy speech since joining the ECB’s board from the Italian central bank in November that eurozone wage growth seemed to have peaked and if it kept slowing in line with its forecasts “we should be ready to swiftly dial back our restrictive monetary policy stance”.His comments on Tuesday indicate he may be prepared to argue for cutting rates at the central bank’s next meeting in April, if data on inflation and wages indicate that price pressures continue to fade in line with the ECB’s expectations.He warned that if wages slowed too quickly it would leave workers with permanently lower purchasing power and “mechanically put downward pressure on productivity growth or on employment”, which could endanger the return of inflation to the ECB’s 2 per cent target.“An excessive focus on short-term wage developments may not take into full consideration the recovery in wages that can — and needs to — take place for the euro area’s currently fragile recovery to gain a stronger footing,” he said.Cipollone’s speech in Brussels establishes him as one of the most dovish members of the ECB board. His position contrasts with statements by several colleagues that they do not expect to be able to cut rates until they see data showing that wages continued to slow in the first quarter, which will only be available shortly before their June meeting.The Italian economist said wage growth needed to moderate from a level of more than 5 per cent last year, but warned of the risk that workers’ pay fails to catch up with inflation, leaving household purchasing power permanently lower and hampering economic growth. “Waiting for further data before starting the normalisation of our policy rates, gives us additional insurance against upside risks to inflation,” he said. “But we should remain proportionate going forward given an economy that has stagnated for 18 months, risks to the economic outlook that are skewed to the downside, and credit conditions that are in restrictive territory.”He pointed out that as eurozone inflation declines — it dropped to a more than two-year low of 2.6 per cent in February from a peak higher than 10 per cent in 2022 — the ECB’s monetary policy stance “becomes tighter relative to the inflation outlook” and this “strengthens the case for adjusting our policy rates”.“If we hold them for too long, we might put the recovery at risk and delay the associated cyclical rebound in productivity growth,” he said. “This would be economically costly and induce risks for the sustained convergence of inflation to our target.”He said the pace of rate cuts should be “calibrated” by the speed with which inflation was falling towards its target and it could opt for a “faster pace” if this happened quicker than forecast.Spanish data published on Wednesday showed inflation in the eurozone’s fourth-largest economy increased slightly less than widely forecast to 3.2 per cent in March from 2.9 per cent in February, adding to hopes that overall inflation in the bloc will continue falling when those figures are released next week.Core inflation, which strips out energy and fresh food prices to give a better picture of underlying price pressures, slowed in Spain from 3.5 per cent in February to 3.3 per cent in March. More

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    Happy-Go-Lucky Australia Is Feeling Neither Happy, Nor Lucky

    After enjoying decades of prosperity, the country has hit stubborn economic turbulence.For nearly three decades, Australia seemed to have a sort of get-out-of-jail card that allowed it to glide through the dot-com bust and the global financial crisis without a recession, while its citizens mostly enjoyed high wages, affordable housing and golden prospects.When a recession did arrive, in 2020, it was because of the Covid-19 pandemic.But four years later, Australia has been unable to shake off some of the headwinds, including a high cost of living — the price of bread has risen 24 percent since 2021 — a choppy labor market and rising inequality. While these and similar issues are also troubling nations like Britain and the United States, they are particularly stinging to many in Australia, which has long seen itself as the “lucky country.”Australia is among the wealthiest, most resource-rich and stable countries in the world. But millions of residents are experiencing levels of hardship not seen in many decades. They say they are struggling to put food on the table, pay for housing and health care and cover their utility bills. And many young Australians are confronting a reality that their ancestors never had to: that they will be worse off than their parents or grandparents.Robyn Northam, 28, once dreamed of becoming a hairdresser. But rising rent and exorbitant child care costs for her two children have put training out of reach. Just two generations ago, she said, her grandmother raised a family in her own home as a single parent, while working part-time as a nurse.“If you’re an average Australian, that’s virtually impossible,” said Ms. Northam, a content creator in Cairns who, with her partner, pays 600 Australian dollars, or about $400, a week in rent. “It’s a totally different world now.”A residential neighborhood in Melbourne’s inner north suburbs. Rents in some Melbourne neighborhoods are up almost 50 percent year-over-year.Alana Holmberg for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Commercial Bank of Ethiopia recovers $11 million lost in system glitch

    Around 78% of the 801 million birr withdrawn from cash machines or transferred during the night of March 15, or 622.9 million birr ($11 million), has been returned, the president of the bank Abie Sano said on Tuesday.The lender has published the names of the more than 500 people who are yet to return the balance, Abie said. He previously blamed university students for being largely responsible for the “theft”, accusing them of sharing news about the glitch via social media.The problem occurred during an update to the bank’s systems, Ethiopia’s central bank said earlier this month, adding that there was no risk to customers or the overall financial system.($1 = 56.6083 birr) More

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    UK homeowners and businesses resilient to high interest rates, BoE says

    While the overall global environment for financial risk remained challenging – and there were concerns about specific areas such as private equity – Britain’s financial system remained well protected against future shocks, the BoE said. “So far UK borrowers have been resilient to the impact of higher interest rates,” the BoE’s Financial Policy Committee said in a quarterly update.Last week the BoE kept its main interest rate at 5.25%, its highest in nearly 16 years, but said inflation was heading in the right direction for a rate cut. Financial markets on Tuesday saw a nearly two in three chance of a first quarter-point rate cut by June and a move is fully priced in by August.The BoE said just over half of households with mortgages had seen debt payments rise since it started raising rates in December 2021. Mortgage debt service ratios were forecast to rise from 7.0% in the third quarter of 2023 to 8.4% by the end of 2026, slightly below a projection of 8.8% in December.The proportion of households with high debt costs relative to their cost of living was seen rising marginally to 1.6% by the end of this year from 1.4%, well below the peak of 3.4% it reached after the global financial crisis.However, the BoE noted a rising trend of mortgages with 30-year terms – which now accounted for almost half of new mortgages – and that some very low-income households were struggling with basics such as food, even if they were not in debt that posed broader financial stability risks.Britain’s economy entered a shallow recession in the second half of 2023, although more recent business surveys and data suggest it has returned to growth and will eke out a very modest expansion in 2024.Corporate insolvencies in England and Wales in February were 17% higher than a year earlier and 50% above their level four years ago, just before the COVID-19 pandemic struck Britain.The BoE said the weakness was concentrated among very small businesses.”Corporates remained broadly resilient to high interest rates and weak growth,” it said. More

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    German economic institutes slash 2024 GDP forecast to 0.1%

    The institutes now forecast gross domestic product (GDP) to increase by 1.4% in 2025, revised from 1.5% previously.”Although a recovery is likely to set in from the spring, the overall momentum will not be too strong,” said Stefan Kooths, head of economic research at the Kiel Institute for the World Economy (IfW).Economic output was currently barely higher than before the pandemic, as productivity in Germany has been at a standstill since then, the institutes said in a report outlining their six-monthly joint economic forecasts. “There have recently been more headwinds than tailwinds in the domestic and foreign economies,” the report said. German exports declined despite rising global economic activity, primarily because demand for capital and intermediate goods, which are important for Germany, was weak and price competitiveness for energy-intensive goods suffered, they said.Uncertainty about economic policy was weighing on corporate investment, which was likely to remain at the 2017 level despite the expected upturn in the coming year, according to the economic experts.PRIVATE CONSUMPTION THE KEY DRIVERIn the current year, private consumption would become the most important driving force for the economy, followed by stronger exports in the coming year, the institutes said.Private consumption should benefit from lower inflation – German inflation was expected to ease to 2.3% in 2024 and 1.8% in 2025.A robust labour market would also support consumption, the institutes said. Unemployment was likely to rise only slightly and fall again starting from spring onwards. Over the course of the year, the unemployment rate was likely to be 5.8%, falling to 5.5% next year. In this resilient labour market, there was good news for wages – real wages would increase over the entire forecast period and make up for the losses from 2022 and the first half of 2023, the report said.However, the level seen at the end of 2021, before the drastic surge in inflation, was not expected to be reached until the second quarter of 2025.The economy ministry incorporates the joint forecasts from the institutes – Ifo, DIW, IWH, IfW and RWI – into its own predictions.In its latest forecast, the German government expects the economy to grow 0.2% this year, far less than a previously forecast 1.3%. More