Europe

British Prime Minister Rishi Sunak pushed back on Monday against calls from companies to improve trade ties with the European Union and liberalise immigration to help boost growth, saying Brexit had already benefited the country, Reuters reported. Sunak told business leaders at a Confederation of British Industry (CBI) conference he was "unequivocal" that Britain should pursue its own agenda on regulation and migration.
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Greece's economy should grow by 1.8% next year, at a slower pace than initially expected, as soaring energy costs and higher inflation are seen hurting tourism and curbing domestic demand, the government's 2023 final budget projected on Monday, Reuters reported. Next year's growth estimate was downwardly revised from the draft budget submitted to parliament in October. Authorities expect economic output to increase by 5.6% in 2022, better than forecast in the draft budget due to stronger tourism revenues.
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The board of a Swiss-based trust fund managing some $3.5 billion in frozen assets seized after the Taliban took power last year is meeting in Geneva for the first time on Monday, a Swiss government spokesperson confirmed, Reuters reported. The frozen central bank reserves were recently transferred from Washington into the 'Fund for the Afghan People' where U.S. officials say it will be shielded from the Taliban. The latter has condemned the transfer, calling it a violation of international norms. The agenda of the meeting is not yet public.
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Investors are slowly coming to terms with the sheer size of the UK government’s borrowing needs over the next few years and it doesn’t look pretty, Bloomberg News reported. Net gilt supply in the next fiscal year is likely headed for an all-time record, according to bank estimates. For Citigroup Inc. strategists, the increase means the market needs to find twice as much new private cash to absorb it as it has over the last eight years combined.
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Italy's new right-wing government plans to announce some 30 billion euros in new spending on Monday in a budget for next year, mainly focused on curbing the impact of high energy prices while postponing some of its most lavish election promises, Reuters reported. The continued energy crisis, triggered by Russia's invasion of Ukraine, means Prime Minister Giorgia Meloni and her allies will not be able to make good on their more extravagant electoral campaign promises, including swingeing tax cuts. "We won't be able to do everything, all at once.
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Oil tanker tycoons are enjoying a surge in revenue as the sanctions triggered by Russia’s war are redrawing the global trade in crude. And it’s set to last, Bloomberg News reported. The disruption is fairly simple. Europe, for decades the top buyer of Russian oil, is banning purchases from Moscow next month and has already been cutting back. Those cargoes are instead flowing out to Asia. The result is ships sailing thousands of miles further, driving up a vital aspect of demand.
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Germany's foreign ministry plans to tighten the rules for companies deeply exposed to China, making them disclose more information and possibly conduct stress tests for geopolitical risks, a confidential draft document seen by Reuters said. The proposed measures are part of a new business strategy towards China being drawn up by Chancellor Olaf Scholz's government as it seeks to reduce its dependency on Asia's economic superpower.
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The end of the era of cheap money has revived a rare phenomenon in UK real estate: valuations are dropping even as rents rise, Bloomberg News reported. Landlords including Land Securities Group Plc, British Land Co., and Great Portland Estates Plc reported rising rents for their offices, warehouses and even stores this week but it wasn’t enough to prevent them writing down valuations. Its a reflection of the degree to which the sector is being battered by rising interest rates, which have overwhelmed the typical interaction of supply and demand.
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Superdry Plc is seeking to tap investment funds to repay banks on a loan due in January as the cost of living crisis hits consumer spending, Bloomberg News reported. The London-listed clothing company has been sounding out potential new investors to replace an asset-backed facility worth £70 million ($83 million), according to people familiar with the matter, who asked not to be named because the talks are private. The company said that it’s in “positive ongoing discussions with lenders” when contacted by Bloomberg News, reiterating what it said in a quarterly report published last month.

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The U.K. government announced sweeping tax increases and spending cuts on Thursday, becoming the first major Western economy to start sharply limiting its spending growth after years of ramped-up fiscal stimulus during the pandemic and recent energy subsidies, the Wall Street Journal reported. The measures mark a second major shift in U.K. economic policy in just a matter of months, after previous British Prime Minister Liz Truss spooked financial markets by pledging to jump-start growth with tax cuts funded by more borrowing.
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