Headlines

Eurozone industrial production contracted more than expected in July, dragged down by a sharp fall in Germany and marking the latest batch of bleak economic data ahead of Thursday’s meeting of the European Central Bank, the Financial Times reported. The single currency area’s industrial output contracted 0.4 per cent in July over the previous month, according to official data from Eurostat. Compared to the same month last year, factory output in the 19 eurozone countries was down 2 per cent, worse than the 1.3 per cent fall expected by economists polled by Reuters.

Treasury plans to prioritise debt repayments to the government in company insolvencies represents a “cash grab” that will have “serious consequences” for the economy, industry bodies have warned, The Times reported. In a joint letter to Sajid Javid, the chancellor, accountancy, investment and legal trade groups said that the proposed legislation would make it harder to rescue businesses, limit access to finance across the economy, increase the impact of insolvencies on other businesses and undermine government tax receipts.

Southern Italy has the worst graduate employment rates in the EU, according to new data published on Thursday which highlighted the impoverished region’s economic dysfunction, the Financial Times reported. Only one in three recent graduates is in employment in the area, less than half the EU average and the worst of any region in the bloc, including the poorest parts of Greece and Spain.

A Latvian court declared the country’s sixth-biggest lender insolvent, sealing the demise of the last bank to level accusations in a high-level corruption scandal, Bloomberg News reported. The decision, which Latvia’s Financial and Capital Market Commission said was taken on Thursday, comes almost a month after AS PNB Banka became one of only a handful of lenders declared by the European Central Bank to be “failing or likely to fail” because of insufficient capital. It joins Banco Popular Espanol SA, Banca Popolare di Vicenza SpA, Veneto Banca SpA and ABLV Bank AS.

Nearly 10m households in the UK are paying their energy bills via standard variable tariffs. These are the rates customers default to when any special energy deal runs out and are usually the most expensive around, the Financial Times reported. A customer could be put on a standard variable tariff if their fixed-term tariff contract ends and they have not chosen a new one; this usually occurs after around a year. The average price of a standard variable tariff from the largest six suppliers for a typical dual fuel customer is £104.50 a month, or £1,254 a year.

Losses at Topshop, once considered the jewel in the crown of Philip Green’s Arcadia group, widened to £498m for the year to September 2018 after taking significant exceptional charges relating to property leases and brand value, the Financial Times reported. The company accounts for around half of Arcadia’s overall sales and along with six other group entities has used insolvency procedures to secure lower rents at many of its UK stores. Topshop’s loss in the previous year was £15.6m.

Algeria, which hasn’t sold debt abroad in over two decades, signaled it may reverse its aversion to outside borrowing and lift some restrictions on foreign investment, Bloomberg News reported. The protest-torn OPEC member, still led by veterans of the war for independence from France waged over half a century ago, was forced to restructure billions of dollars worth of loans from foreign banks in the 1990s. While struggling to revive the economy, the government has been wary of turning to outside financing for fear it could again leave the nation beholden to others.

Telecom Italia SpA Chairman Fulvio Conti is planning to resign in a move that signals the battle for influence between two of the phone carrier’s largest investors may be nearing an end, according to people familiar with the matter, Bloomberg News reported. Fulvio Conti, 71, was appointed as chairman last year in a list proposed by Elliott Management Corp. as part of a board reshuffle won by the U.S. activist investor against the French media-conglomerate Vivendi SA. Conti’s resignation hasn’t been finalized and is expected to be discussed at a Sept. 26 board meeting, the people said.

Italy’s prime minister has called on Brussels to allow Rome “a little bit of time” to cut its debt by investing in economic growth, in his first meeting with the incoming president of the European Commission, the Financial Times reported. Giuseppe Conte, who was this week sworn in by lawmakers as the leader of Italy’s new coalition government, said that he would not pursue policies that would risk financial stability after a meeting in Brussels on Wednesday with Ursula von der Leyen, the commission’s incoming head.

Investors may be forgiven for wondering what’s taking Moody’s Investors Service so long to downgrade South Africa to junk, Bloomberg News reported. Financial markets have been pricing in a downgrade for months, and the two other major rating companies have had South Africa on junk for two years. Yet Moody’s said this week South Africa’s investment rating is probably safe for another 12 to 18 months and President Cyril Ramaphosa’s government needs time to implement economic reforms, including fixing the loss-making power utility Eskom Holdings SOC Ltd.