Headlines

The European Central Bank raised interest rates for the second time this year in a widely flagged move on Thursday, hoping to tame an inflation rise driven entirely by higher energy costs from the Iran war, Reuters reported. The euro weakened 0.3% to around $1.159, and euro zone government bond yields edged ‌up to fresh multi-year highs after the decision. In addition, the oil price surged by more than 4% to $105.3 a barrel, adding to investor concern about a ‌more sustained pickup in inflation.

A disconnect between deteriorating macroeconomic conditions and upbeat valuations risks triggering ‌a market drop, the European Union's financial watchdog said on Thursday, ‌citing conflict in the Middle East and rising energy prices, Reuters reported. "Investor optimism continues to support ​elevated valuations despite rising geopolitical tensions and a weakening economic outlook. The wider this gap becomes, the greater the risk of an abrupt market correction," ESMA Chair Verena Ross said.

The Bank of Japan may eventually be forced to raise interest rates rapidly if inflation accelerates given the country's loose financial conditions, board member Kazuyuki Masu said, warning of price risks that solidify the chance of a September hike, Reuters reported. In a closely watched speech ahead ‌of next week's policy meeting, Masu warned of broadening price pressures that have pushed underlying inflation "very close" to its 2% target.

A German branch of the Iranian state-owned lender Bank Sepah has been declared insolvent in the wake of sanctions, Germany’s financial regulator BaFin said on Thursday, Alarabiya.net reported. The bank is one of Iran’s largest public banks, with historical links to the military. “The institution is no longer able to repay its customers’ deposits,” said the regulator. “As a result of European Union sanctions against Bank Sepah, the German branch no longer has access to the European payments system,” BaFin said. BaFin said a Frankfurt court on Thursday appointed an insolvency manager.

Hamburg-based solar PV construction firm Pvwerk has filed for reconstruction just days after its sister company, Enerparc, announced it had entered insolvency proceedings, PV-Tech.org reported. According to Pluta, the law firm representing Pvwerk, the company’s move is directly tied to Enerparc’s filing with the Hamburg District Court earlier this week. The same court ordered Pvwerk’s self-administered reconstruction yesterday, with instructions for lawyers to oversee the company’s restructuring in the interests of shareholders.

Turkey’s central bank left its key interest rate unchanged as high energy prices, driven by the war in Iran, continue to pose upside risks to inflation, the Wall Street Journal reported. The bank held its benchmark one-week repo rate at 37.0%, it said Thursday. The bank last cut its key rate in January. The Central Bank of Turkey said that while the underlying trend of inflation was decelerating, higher energy prices driven by the war in Iran continue to threaten the outlook for consumer price growth.

Germany would tax profits on crypto sales at a flat 25% regardless of how long the asset was held, under a draft bill from Vice Chancellor and Finance Minister Lars Klingbeil seen by Handelsblatt. Welt reported it first on Tuesday, from a departmental draft dated mid-August, Decrypt.com reported. The law would take effect on January 1, 2027, and apply only to crypto bought from that date. Anything acquired earlier stays under today's rules, so anyone already holding Bitcoin keeps the exemption.

A slowdown in Britain's housing market appears to be levelling off as measures of buyer ‌demand and agreed sales moved away from recent lows, ‌the Royal Institution of Chartered Surveyors said on Thursday, Reuters reported. RICS said that its house price ​balance rose to a five-month high of -28 in August from an upwardly revised -29 in July, while the net balance for new buyer enquiries rose to its highest since January at -19. "August's results show a ‌market that is gradually ⁠finding its footing, with key activity indicators having become progressively less negative over recent months.

U.S.-Mexico trade reached a record $94.8 billion in July, the highest monthly total on record, according to U.S. Census Bureau data analyzed by WorldCity, Freight Waves reported. Two-way trade between the U.S. and Mexico increased 27.5% from $74.36 billion in the same month last year. Mexico accounted for nearly 18% of the United States' $530.37 billion in total international trade during the month. U.S. exports to Mexico totaled $34.24 billion, up 18.1% year over year, while imports from Mexico jumped 33.5% to $60.55 billion.

Across the pavements, residential areas and public spaces of African cities, the informal economy is booming under the noses of authorities, who are often powerless to stop it, Agence France-Presse reported. Poverty, unemployment and bureaucratic red tape force tens of millions of Africans into work that is not regulated, taxed or protected by the government. From Abidjan to Dakar and Abuja, mechanics, scrap dealers, motorcycle taxi drivers and street vendors make the most of the tiniest corner to set up their business activity.