Europe

Russian President Vladimir Putin blamed international sanctions and falling energy prices for declining incomes that have led to a drop in living standards for average Russians and caused mounting social discontent. The demise in quality of life has contributed to a battering in Mr. Putin’s domestic approval ratings and the negative sentiment threatens to overshadow his almost two decades in power. In his annual “Direct Line,” a carefully choreographed event where citizens submit questions via phone, video calls and the internet, Mr.

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Morningstar has suspended its rating on a fund run by H2O Asset Management because of its holdings of illiquid bonds, after a Financial Times investigation into the substantial holdings related to a controversial German financier, the Financial Times reported. The agency, whose assessments are used as a key guide for investors, suspended its bronze rating on H2O’s Allegro Fund, citing concerns over “the liquidity of certain bonds”.

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Iceland is preparing for a deeper recession this year amid dropping tourism arrivals and a failed capelin season, central bank Governor Mar Gudmundsson said, Bloomberg News reported. “We are prepared for the possibility of a deeper recession, and the numbers we are getting on tourist arrivals seem to indicate that that may happen,” Gudmundsson said in an interview on the sidelines of a conference in Dubrovnik, Croatia.

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U.K. hotel operator Whitbread Plc and leather-goods maker Mulberry Group Plc reported lower sales in their home market as the uncertainty around Brexit erodes business prospects, Bloomberg News reported. Whitbread said Wednesday that first-quarter comparable sales dropped 3.7%. Mulberry reported U.K. revenue fell 6% in the year through March, driving it to a 5 million-pound ($6.3 million) pretax loss. The reports add to a litany of U.K.

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Dubai developer Damac is in pole position to buy troubled Italian fashion group Roberto Cavalli, a source close to the matter said on Wednesday, Reuters reported. Two other binding offers for the whole group have been submitted by Italy’s Diesel-owner OTB and U.S. brand management company Bluestar Alliance, the source said. Last Friday Cavalli said it had received five offers for the brand. The company and its private equity owner Clessidra both declined to comment.

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Iceberg Research, the short seller that targeted commodities trader Noble Group Ltd., has another trading house in its sights: Trafigura Group Ltd. Trafigura is overstating the value of debt securities related to its 49.5% stake in Porto Sudeste, an iron ore export terminal in Brazil, Iceberg, headed by Arnaud Vagner, said Wednesday in a report on its website, Bloomberg News reported. Iceberg estimates those securities may be worth only a 10th of the $490 million carrying value that Trafigura attributes to them.

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The percentage of families living in poverty in Italy rose to a record high last year as a prolonged economic stagnation and persistent high unemployment continued to take their toll on the country, the Financial Times reported. About 7 per cent of Italy’s families lived in “absolute poverty” last year, according to data from the national statistics office ISTAT released on Tuesday. This is the highest level since comparable data were made available in 2005 and is double the rate from the pre-crisis period.

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European Central Bank policymakers were divided on Tuesday, with some feeling powerless, after President Mario Draghi hinted at new stimulus measures that had yet to be discussed by the ECB's Governing Council, the International New York Times reported on a Reuters story. Draghi told an ECB conference the central bank would ease policy again if inflation fails to accelerate, saying that fresh bond purchases, rate cuts or changes to the ECB’s policy guidance had all been “raised and discussed” at a meeting of the Council less than two weeks ago.

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A key gauge of expectations for the German economy plummeted in June, as trade fears, geopolitical tensions and Brexit all weighed on financial executives, the Financial Times reported. The Zew indicator of economic sentiment fell to minus 21.1 this month, dropping 19 points from May and well below expectations of minus 5.9 in a Reuters poll.

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In the years after the financial crisis, many of the world’s biggest lenders set up vast “bad banks” to cleanse trillions of dollars in toxic assets from their balance sheets, the Financial Times reported. Until now, very few of them have needed a second bite at the cherry. However, six years after creating its first non-core unit, Deutsche Bank is repeating the trick. The Financial Times reported on Monday that Deutsche is seeking to divest a further €50bn of assets adjusted for riskiness on its balance sheet.

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