Headlines

The euro-area’s bailout fund will start using Luxembourg law to govern its debt rather than English law, the latest blow dealt by Brexit to the U.K.’s financial industry, Bloomberg News reported. The European Stability Mechanism will start adopting Luxembourg law for all its euro-denominated bonds and bills starting Oct. 1, according to an investor newsletter Thursday. Dollar-denominated debt will continue to be issued under English law.

Ulster Bank’s chief executive said there will be a fresh round of jobs cuts at the group as it seeks to rein in costs as ultra-low central bank interest rates squeeze lending margins, The Irish Times reported. “I think we all thought that by now we were going to be in a position where interest rates were rising, but, from the latest coming out of the ECB, it looks like it could be four years,” Jane Howard told The Irish Times in her first profile interview since taking over the helm of the bank last September. “It is going to be a challenge to generate new income.

Tensions between the European Central Bank and Germany have again exploded into public view after the resignation of Sabine Lautenschläger, who represented the eurozone’s biggest economy on the central bank’s executive board, the Financial Times reported. Ms Lautenschläger — who is leaving weeks after publicly opposing further easing of super-loose monetary policy by the ECB — is the latest of a string of German representatives to quit the central bank after failing to stop the flow of cheap money.

The French government said it would reduce taxes on individuals and businesses by €10.2 billion as President Emmanuel Macron seeks to breathe new life into his drive to overhaul France’s economy and stave off a revival of the yellow-vest protests that nearly doomed his agenda, The Wall Street Journal reported. In presenting its 2020 budget on Thursday, the government said it planned to lower taxes on households by €9.3 billion and provide companies with tax relief through a lower rate. The measures, worth a total of $11.1 billion, illustrate the delicate balancing act Mr.

Pearson warned that a 20 per cent drop in demand for US college textbooks would hit its profit and jeopardise a return to sales growth next year, triggering an 18 per cent share price fall, The Irish Times reported. In an echo of Pearson’s past profit warnings, the world’s biggest education company said on Thursday that, while 75 per cent of its sales continued to grow, US higher education courseware revenue was set to fall as much as 12 per cent in 2019.

Mexico’s central bank opted to cut its key lending rate by a quarter-point to 7.75 per cent, rather than the half point move that some analysts said it had room for, after the economy contracted in July by more than had been expected, the Financial Times reported. Thursday’s decision was not unanimous however, as two of the five board members pushed for a half-point cut. Banxico’s second cut in a row is a bid to revive the moribund economy as inflation has tamed and the peso is stable against the dollar.

Mario Draghi made a special plea to the other members of the European Central Bank’s governing council, seated around a ring-shaped table on the 41st floor of its Frankfurt headquarters, as he wrapped up his penultimate meeting as its president, the Financial Times reported. The 72-year-old Italian urged them not to give off-the-record briefings to the media criticising the ambitious monetary stimulus package they had just decided upon.

Aer Lingus owner IAG warned that challenges facing the European airline industry are set to continue into 2020 after cutting profit guidance for this year. Earnings will be about 6 per cent lower than forecast in the wake of strikes at British Airways, its biggest unit, and depressed ticket prices at low-cost operations Vueling and Level, The Irish Times reported. IAG lowered capacity growth in the final quarter and will provide details in November of a decrease next year, chief executive Willie Walsh said on a call with analysts on Thursday.

British emerging markets investor Ashmore Group is betting that Argentina’s current crisis, that has seen the country veer toward default, is not as bad as it looks, Reuters reported. The investment manager is buying Argentina’s dollar bonds in the belief the clear favorite to win next month’s general election, Alberto Fernandez, will be less radical in overhauling the government’s debt than markets now expect, one of its executives said on Wednesday.

Santander has taken a €1.5bn writedown on the value of its UK business, blaming new regulations and the expected economic fallout from Brexit, the Financial Times reported. The move highlights the challenges facing the UK’s fifth-largest bank, which is grappling with sluggish growth and rising competition while its Spanish owner looks to cut costs and increase investment in other parts of its empire. Santander, the eurozone’s largest retail bank, announced the news late on Tuesday after markets closed in Mexico, where the group has a secondary listing.