Headlines

The European Union on Wednesday launched proceedings against Germany over a ruling by the top German court last year on a European Central Bank bond-buying program that broke with a verdict from the EU’s own top court, the Associated Press reported. Brussels says that “constitutes a serious precedent.” Germany’s Federal Constitutional Court in May last year gave the ECB three months to prove that its key bond-buying program was justified and appropriate.

A Chinese businessman with family links to the eldest son of jailed former security czar Zhou Yongkang has been detained by police investigating the collapse of Sichuan Trust, which was taken over by the provincial government and banking regulator last year amid concerns it couldn't repay 25.3 billion yuan ($3.9 billion) of investors' money, Nikkei Asia reported.

China's May factory gate prices rose at their fastest annual pace in over 12 years due to surging commodity prices, highlighting global inflation pressures at a time when policymakers are trying to revitalise COVID-hit growth, Reuters reported. Investors are increasingly worried pandemic-driven stimulus measures could supercharge global inflation and force central banks to tighten policy, potentially curbing the recovery. China's producer price index (PPI) increased 9.0%, the National Bureau of Statistics (NBS) said on Wednesday, as prices bounced back from last year's pandemic lows.

India’s bankruptcy court has allowed billionaire Anil Agarwal’s Twin Star Technologies to takeover Videocon Industries Ltd., Bloomberg News reported. Videocon’s shares will be delisted as part of the plan submitted in December, the company told the stock exchange late Tuesday. Twin Star, a part of Agarwal’s Vedanta Group, will pay about 30 billion rupees ($410 million) to Videocon’s lenders, people familiar with the matter had said earlier. The company will put up 5 billion rupees within 90 days and the rest as non-convertible debentures over a period of time.

Britain's competition authority said on Wednesday that it was launching enforcement action against Ryanair and British Airways over their failure to offer refunds to passengers who were barred from taking flights under lockdown rules, Reuters reported. During COVID-19 lockdowns across Britain, instead of offering refunds to those legally unable to fly, IAG-owned British Airways (ICAG.L) offered vouchers or rebooking and Ryanair providing the option to rebook.

The World Bank said that global inequality is likely to widen this year as a small number of major economies power the fastest recovery in 80 years while many poorer countries struggle to return to pre-pandemic income levels, the Wall Street Journal reported. The global economy is set to grow by 5.6% this year, up from a January forecast of 4.1%, marking the fastest recovery from five post-World War II recessions, the bank said Tuesday in its semiannual Global Economic Prospects report.

A surge in mortgage borrowing is pushing consumer debt loads higher in Canada despite falling credit card use, as households plow more money into their homes while spending less on everything else, Bloomberg News reported. New mortgage borrowing rose 41% in the first quarter compared to the same period in 2020, when the pandemic began, according to a release Tuesday from consumer credit reporting firm Equifax Inc. The average limit on new mortgages -- the amount for which borrowers were approved -- jumped more than 20% to C$326,930 ($270,490).

Debt levels rose in almost every corner of the world last year, but how the burden is shared between governments and the private sector varies widely, the Wall Street Journal reported. Some countries may come to wish the mix of borrowers was a little different. Emerging markets have typically seen more limited increases in government debt than their developed counterparts. Most countries aren’t in the position of the U.S., U.K.

Chinese regulators have instructed major creditors of China Evergrande Group to conduct a fresh round of stress tests on their exposure to the world’s most indebted developer, Bloomberg News reported. Authorities led by the Financial Stability and Development Committee, China’s top financial regulator, recently told lenders including Industrial & Commercial Bank of China Ltd. to assess the potential hit to their capital and liquidity should Evergrande run into trouble. It’s unclear whether the results will lead to any official action.

A lack of semiconductors, timber and other intermediate goods drove an unexpected fall in German industrial output in April, a further sign that massive supply bottlenecks are hampering the recovery in Europe's largest economy, Reuters reported. The Federal Statistics Office said industrial output dropped 1.0% on the month after a downwardly revised increase of 2.2% in March. A Reuters poll had pointed to a 0.5% rise in April. The drop in the headline figure was driven by a decrease in consumer goods production of more than 3% and a plunge in construction activity of more than 4%.