Economy

LONDON (Reuters) – Some of Britain’s car, home and other insurers are still unable to show they provide good outcomes for consumers, the country’s financial watchdog said on Wednesday, a year after the introduction of tougher protections for policyholders.The Financial Conduct Authority (FCA) published a ‘thematic review’ of the general insurance sector that found poor customer value and potential harm due to shortcomings in product governance, oversight and controls.Many insurers have not implemented effective frameworks that provide evidence of why good value is being provided to customers, the FCA said.Firms were also not adequately considering the total price paid for a policy, including the impact of remuneration on the overall value of a product.”Progress is being made, but we are still seeing too many examples of insurers and brokers lacking the right information, governance, or oversight to ensure their customers get consistently good outcomes,” Matt Brewis, the FCA’s director of insurance, said in a statement.The FCA introduced its Consumer Duty, comprising broad and comprehensive consumer protections across the financial sector, in July 2023 in a bid to draw a line under years of mis-selling scandals in the industry.On Wednesday it published its latest indicators for value in insurance products, using the proportion of premiums paid in claims as a measure.”Where our data suggests that value appears low, we will be in touch with firms later in the year to understand their products and the actions they have taken to improve value,” the FCA said.Claims costs as a proportion of premiums range from 72% for healthcare cash plans to 56% for motor insurance, and 45% for home insurance, falling sharply across a range of ‘add on’ insurance.”Where we believe a firm has failed to act and is still providing poor value products, we will intervene where necessary to protect consumers,” the FCA said. More

KARACHI (Reuters) -Pakistan is making good progress with the International Monetary Fund and hopes to get board approval in September for a new $7 billion loan programme, Pakistan’s Finance Minister Muhammad Aurangzeb said on Wednesday. Pakistan and the IMF reached an agreement on the 37-month loan programme in July. The IMF said the programme was subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”.”We are making good progress with IMF for Board approval in September,” said Aurangzeb in text message to Reuters. Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to meet gross financing needs under the IMF programme, Aurangzeb said in July following a trip to China to seek energy sector debt reprofiling. Rollovers or disbursements on loans from Pakistan’s long-time allies, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.The IMF did not immediately respond to a Reuters request for comment on Pakistan’s external financing needs and the executive board’s meeting on Pakistan’s loan programme. During an analyst briefing following the central bank’s decision in July to cut rates by 100 bps, the central bank chief said he expected rollovers of $16.3 billion in the fiscal year to June 2025 – more than half of Pakistan’s $26.2 billion external financing requirement. More

Below are some of the airlines that have adjusted services to and from the region:AEGEAN AIRLINESThe Greek airline cancelled flights to and from Amman until Sep. 30, Beirut until Oct. 1 and Tel Aviv until Oct. 26.AIR ALGERIEThe Algerian airline temporarily suspended flights to and from Lebanon until further notice.AIRBALTICLatvia’s airBaltic cancelled flights to and from Tel Aviv until Aug. 25.AIR FRANCE-KLM KLM cancelled all flights to and from Tel Aviv until Oct. 26. Air France resumed service between Paris and Beirut on Aug. 15 after a two-week suspension.The Franco-Dutch group’s low-cost unit Transavia cancelled flights to and from Tel Aviv until March 31, 2025, and flights to Amman until Nov. 3.AIR INDIAThe Indian flag carrier suspended scheduled flights to and from Tel Aviv until further notice.CATHAY PACIFICHong Kong-based Cathay Pacific cancelled all flights to Tel Aviv until March 27, 2025.DELTA AIR LINES The U.S. carrier extended cancellations of flights to Israel until Sept. 30.EASYJETThe UK budget airline stopped flying to and from Tel Aviv in April and will resume flights on March 30, 2025, a spokesperson said.FINNAIRThe Finnish airline continues to not use Iranian airspace, which may extend flight times to and from Doha.ITA AIRWAYSItaly’s ITA Airways extended the suspension of flights to and from Tel Aviv until Aug. 21.LOTThe Polish flag carrier suspended flights to Tel Aviv and Beirut until Aug. 26, it said in an emailed comment to Reuters.LUFTHANSA GROUPThe German airline group, which includes carriers Swiss International Air Lines, Austrian Airlines, Brussels Airlines, Condor and Eurowings, extended its suspension flights to and from Tel Aviv, Tehran, Beirut, Amman and Erbil through Aug. 26. RYANAIR Europe’s biggest budget airline cancelled flights to and from Tel Aviv until Sept. 30 citing “operational restrictions”.SINGAPORE AIRLINES The Singaporean airline stopped flying over Iranian airspace and is using alternative routes.SUNEXPRESSSunExpress, a joint venture between Turkish Airlines and Lufthansa, said in an emailed comment to Reuters that it had suspended flights to Beirut through Dec. 17.TAROMRomania’s flag carrier on Aug. 20 extended the suspension of flights to Beirut until Sept. 2, while temporarily resuming flights to Tel Aviv and Amman until Aug. 23.UNITED AIRLINESThe Chicago-based airline suspended flights to Tel Aviv for the foreseeable future. It had suspended daily service between Newark, New Jersey and Tel Aviv on July 31 citing security reasons.VUELINGSpanish low-cost airline Vueling, owned by IAG, cancelled all flights to Tel Aviv and Amman until Oct. 26.LEBANESE AIRSPACE ALERTSBritain advised UK airlines not to enter Lebanese airspace from Aug. 8 until Nov. 4 citing “potential risk to aviation from military activity”. More

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BANGKOK (Reuters) -Thailand’s central bank left its key interest rate unchanged for a fifth straight meeting on Wednesday, saying the current level was neutral as it waits to see whether the country’s new prime minister will make changes to economic stimulus policies.The Bank of Thailand’s (BOT) monetary policy committee voted 6-1 to hold the one-day repurchase rate at 2.50%, the highest in more than a decade, as predicted by 24 of 27 economists in a Reuters poll. Three economists had forecast a cut.”The majority of the committee deems that the current policy interest rate is consistent with the economy converging to its potential, as well as conducive to safeguarding macro-financial stability,” the BOT said in a statement. The dissenting member voted for a 25-basis-point (bps) cut.The key rate is neutral and not high compared with global rates, said Assistant Governor Piti Disyatat, adding that the BOT would ensure it does not hinder economic activity.”If the conditions change, adjustments may be needed to maintain the neutral rate,” he told a press conference. “We have to wait and see how stimulus measures will change,” he added.Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said he expected two rate cuts, one 25-bps cut each in October and December as private domestic demand weakened.”The recent change in administration will also be a factor, as the future of the previous government’s Q4 digital cash handout is now more in question,” he said in a note, referring to the government’s flagship household stimulus programme.”If this will no longer see the light of day, then the onus to support the economy will fall harder on monetary policy,” he said.Last week, a court removed Prime Minister Srettha Thavisin over a cabinet appointment.Political newcomer Paetongtarn Shinawatra, daughter of former Prime Minister Thaksin Shinawatra, has become prime minister but has yet to form a new cabinet and announce policies.Paetongtarn said she would maintain all of Srettha’s policies, but she would seek to further study her Pheu Thai party’s flagship “digital wallet” handout scheme worth 500 billion baht ($14.6 billion) for 50 million Thais, planned to be rolled out in the fourth quarter.Some former central bank governors and economists have called the scheme fiscally risky, citing concerns over the impact on public debt. The previous government rejected such criticism.The BOT raised its key rate by 200 basis points to 2.50% over eight meetings between August 2022 and September 2023, and has held it steady since then.Several central banks have started easing policy, including in the Philippines and New Zealand last week. Sweden delivered its second cut on Tuesday, while the Bank of England and Switzerland also lowered rates recently. The next BOT policy review is due on Oct. 16. Inflation, which was 0.83% in July, would return to its target range of 1% to 3% by the end of the year, the BOT said, adding inflation might be less than forecast this year. Southeast Asia’s second-largest economy grew at a faster pace of 2.3% in the April-June quarter on the year, but analysts said fiscal policy uncertainty clouded the outlook.The BOT said the economy should grow as anticipated, with annual growth seen close to 3% in the third quarter and close to 4% in the last quarter of 2024. In June, it predicted growth of 2.6% for 2024. ($1 = 34.3200 baht) More

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“If the Fed isn’t too careful an accident is waiting to happen,” stated the firm in a note on Wednesday.Mizuho points to various economic indicators that they note signal a shift in the labor market, which could prompt the Fed to pivot towards an easing cycle sooner rather than later.As the U.S. labor market shows signs of slowing—evidenced by declining hiring rates, weakening payroll numbers, and rising unemployment—Mizuho believes the Fed will soon have to adjust its stance.”It’s pretty likely the Fed is going to make a labor market ‘pivot’ as the precursor to starting the easing cycle,” the analysts wrote.They argue that both the labor market and inflation could weaken significantly, with inflation potentially dropping below 1% next year due to the embedded weakness in U.S. money supply.The note also points out that the current interest rates may be too high for an economy that isn’t strong enough, except for a few high-performing sectors.Additionally, according to Mizuho’s analysis, the free cash flow to interest expense ratio for the S&P 500, excluding the technology and communications sectors, is now at its lowest point since the Global Financial Crisis.Mizuho’s analysis suggests that investors should be prepared for a significant shift in the Fed’s approach as the economic landscape becomes increasingly fragile. More