Europe

Hungary's central bank raised its base rate by 30 basis points to 2.4% on Tuesday, its highest level since May 2014, and pledged further rate hikes next year in order to anchor rising inflation expectations, Reuters reported. The National Bank of Hungary (NBH) also raised the rate on its overnight deposit facility by a larger-than-expected 80 basis points to 2.4%, aligning it with the base rate in a surprise move which the bank said was aimed at supporting the stability of swap market rates. The base rate decision was in line with a Reuters poll forecast last week.

The International Monetary Fund urged the Bank of England on Tuesday to avoid an "inaction bias" when it comes to raising interest rates as it forecast British inflation would hit a 30-year high of around 5.5% next year, Reuters reported. The BoE has said rates will need to rise to ensure that consumer price inflation - currently 4.2% - returns to its 2% target in the next couple of years.

Britain will remove all 11 countries from its COVID-19 travel red list on Wednesday, Health Secretary Sajid Javid told parliament, Reuters reported. "Now that there is community transmission of Omicron in the UK and Omicron has spread so widely across the world, the travel red list is now less effective in slowing the incursion of Omicron from abroad," he said.

France plans to require banks to build up their capital reserves again after easing requirements during the coronavirus crisis to keep credit flowing, the finance stability council said on Monday, Reuters reported. The council said it expects to raise the countercyclical capital buffer from 0% to the pre-crisis level of 0.5% at its next meeting in March. The council, which is chaired by Finance Minister Bruno Le Maire and includes the central bank governor, said that economic and financial conditions justified increasing the amount of extra capital banks have to keep on hand for a rainy day.

The European Central Bank’s top task is to keep inflation at bay. But as the cost of everything from gas to food has soared to record highs, the bank’s employees are joining workers across Europe in demanding something rarely seen in recent years: a hefty wage increase, the New York Times reported. “It seems like a paradox, but the E.C.B. isn’t protecting its own staff against inflation,” said Carlos Bowles, an economist at the central bank and vice president of IPSO, an employee trade union.

French judges are set to rule on Monday on whether to overturn a record 4.5 billion euro ($5.1 billion) fine against Swiss bank UBS (UBSG.S) for allegedly helping wealthy clients stash undeclared assets offshore, Reuters reported. The case is being watched by banks to see if it signals a toughening European stance. Fines in Europe for tax-related and other offences have in the past been smaller than in the United States, but the size of the UBS penalty has proved an exception.

Virgin Atlantic has received 400 million pounds ($530 million) of new funding from its shareholders to help the airline ride out the coronavirus pandemic, the Associated Press reported. In a statement Monday, the company said its shareholders, Richard Branson’s Virgin Group and Atlanta-based Delta Air Lines, will provide the money in line with their stakes. Virgin Group owns 51% of the airline, while Delta owns the rest. “Our story has been well documented during the pandemic,” Virgin Atlantic CEO Shai Weiss said.

Andalusian bankruptcy has grown by 37% in the first eleven months of 2021 although this is still slightly behind the national average of 40% that the data has shown so far, EuroWeeklyNews.com reported. There have been 456 business tenders leading up to November and in the same period an increase of 19% on dissolutions bringing that number to 3,288. The numbers come from a study by Informa D&B SAU (MSE), which is a Cesce subsidiary company. Regarding the month of November, the concursos in Andalusia have risen by 32%, to 50, and the dissolutions have done so by 8%, to reach 309.

State-owned water and sewerage utilities in Bulgaria are facing bankruptcy due to high electricity prices caused by the energy crisis. The government and regulatory authorities are trying to find the solution, but for now they have different views on the issue, BalkanGreenEnergyNews.com reported. Electricity prices on power exchange IBEX in Bulgaria have risen fivefold since January, from EUR 45 per MWh to about EUR 220.

Nordic Aviation Capital AS is planning to file for chapter 11 bankruptcy this month to carry out its restructuring plan, Bloomberg News reported. The aircraft lessor has shored up support from its largest creditors to implement the plan, said one of the people, who asked not to be identified because the discussions are private. Major creditors have also agreed to provide financing to help fund Nordic Aviation’s operations through bankruptcy.