Headlines

Britain’s next government will immediately face a funding crunch in town halls after councils warned of a £6.2 billion ($7.9 billion) hole in their budget plans over the next two years, Bloomberg News reported. The Local Government Association said council budgets will be stretched to the “limit” after many administrations ran into financial trouble in recent years.

Lenders to debt-laden Jaiprakash Associates Ltd, or Jaypee, will pursue the insolvency route against the company, putting plans to sell the company's massive debt to government-backed National Asset Reconstruction Co Ltd (NARCL) on the back burner as they hope to fetch better returns for these assets, the Economic Times of India reported. Jaypee, which owes a group of 32 creditors led by ICICI Bank nearly ₹30,000 crore, was admitted to the National Company Law Tribunal (NCLT) earlier this week after a six-year delay.

As China’s property downturn grinds into a fourth year and house prices continue their downward march, an increasing number of mortgages are slipping underwater, placing fresh financial strain on both households and banks, Bloomberg News reported. Now, with income growth slowing and job losses increasing, people are questioning whether it’s worth the struggle to pay a loan on a property that’s in negative equity. The spectre of negative equity is also concerning banks.

A former Allianz fund manager pleaded guilty on Friday over his role in a meltdown of private investment funds sparked by the pandemic that caused an estimated $7 billion of investor losses, Reuters reported. Gregoire Tournant admitted to two counts of investment adviser fraud at a hearing before Chief Judge Laura Taylor Swain of the federal court in Manhattan. He faces up to 10 years in prison at his Oct. 16 sentencing. Tournant also agreed to give up $17.5 million in ill-gotten gains, including bonuses that were inflated by his fraud.

Global payments processors Visa and Mastercard must face a new set of lawsuits over fees charged to retailers, after a London tribunal ruled on Friday that collective cases brought on behalf of merchants can proceed, Reuters reported. The two firms already face a long list of lawsuits in London over multilateral interchange fees, which retailers pay when consumers use a card to shop. Visa and Mastercard are each being sued by hundreds of claimants at London's Competition Appeal Tribunal, which is managing the various cases together.

India’s central bank held its policy rate steady as Prime Minister Narendra Modi’s election setback raised uncertainty over the country’s future economic and fiscal policies, the Wall Street Journal reported. Reserve Bank of India Gov. Shaktikanta Das said Friday that the monetary-policy committee decided to maintain its policy repo rate at 6.50%. The committee also decided to remain focused on withdrawal of accommodation, he said. Modi’s party failed to secure an outright majority in the lower house of Parliament, results of the general election showed earlier this week.

Russia’s central bank Friday left its key interest rate unchanged for the fourth straight meeting, but signaled it may raise borrowing costs to tame a pickup in inflation driven by the diversion of manpower and other resources to sustain the invasion of Ukraine, the Wall Street Journal reported. In 2023, with inflation surging, the central bank raised its key interest rate five times before pausing as inflation appeared to cool. But prices have begun to rise more rapidly over recent months as the war entered its third year.

Annual inflation slowed to a 10-year low in Venezuela as the central bank intervenes to prop up the currency, Bloomberg News reported. Consumer prices rose 59% in May from a year earlier, the weakest pace since 2014, the bank said Friday. Monthly inflation eased to 1.5%, from 2% in April. President Nicolas Maduro’s government has sought to help ease consumer price pressure by selling more dollars in the official exchange market and cutting expenses in local currency as he campaigns for a third consecutive term in the July 28 election.

In hallways and wooden huts dotted around the SuperReturn International conference in Berlin, dealmakers are meeting to drum up new business, Bloomberg News reported. They’re also rehearsing answers to a question they’re hearing a lot these days: are the boom times for the $1.7 trillion private credit market over? A year since Blackstone Inc. President Jon Gray hailed a “golden moment” for private credit, the shine is coming off Wall Street’s new money spinner. The pace of buyouts is slowing and some private credit funds are struggling to return cash to their investors.

Canada’s unemployment rate rose for the third time in four months, but rising wages and a strong US labor report prompted some economists to express caution on the pace of Bank of Canada rate cuts, Bloomberg News reported. The country added 26,700 positions in May and the jobless rate rose 0.1 percentage points to 6.2%, Statistics Canada reported, roughly in line with expectations in a Bloomberg survey of economists. The unemployment rate has risen 1.1 percentage points since April last year.