Headlines

China's financial regulators are investigating a month-end liquidity crunch that saw short-term money rates surge to as much as 50%, asking some institutions to explain why they borrowed at extremely high rates, Reuters reported. The overnight rate for pledged repo - a short-term financing business - hit a record high of 50% on Oct 31, as a month-end scramble for cash and a flood of government bond sales caused stress in money markets.

Residential building across Europe has tumbled as costs soar, while sluggish bureaucracies and increasingly stringent energy-efficiency regulations add to the headwinds. With housing already tight, the situation threatens to weigh on growth and further stoke political tensions as shortages squeeze more and more voters, Bloomberg News reported. The hardest-hit countries are among the wealthiest. New building permits in Germany have fallen more than 27% in the first half. Permits in France are down 28% through July, and UK home building is expected to drop more than 25% this year.

Bank of Japan Governor Kazuo Ueda will continue to dismantle the central bank's ultra-easy monetary policy settings and look to exit the decade-long accommodative regime sometime next year, an inherently risky plan that would require skilful execution, Reuters reported. Ultimately, however, the BOJ chief's exit strategy will require a bit of good fortune too, especially given global uncertainties including the Middle East conflict and worries about whether the U.S. economy could achieve a soft landing as well as China's growth trajectory.

The Bank of England held interest rates at the highest levels in 15 years on Thursday, though policymakers were again divided on the best course of action to stamp out high inflation, the New York Times reported. Six members of the central bank’s nine-member rate-setting committee voted to keep rates at 5.25 percent amid signs that inflation would continue to ease and the economy was weakening. But they said restrictive monetary policy would be needed for an “extended” period, a stronger stance than before, according to the minutes of this week’s policy meeting.

The Bank of England's decision to hold its policy interest rate steady on Thursday puts the world's three major central banks in a "higher-for-longer" holding pattern the length of which will hinge on how inflation behaves, the strength of U.S. growth and the depth of developing slowdowns in Europe and the UK, and whether bond markets sustain the higher borrowing costs that have attracted notice on both sides of the Atlantic, Reuters reported.

The Czech central bank signaled that concern over inflation risks overshadows a weakening economy for now as policymakers left the door open to an interest-rate cut next month, Bloomberg News reported. The monetary panel voted to keep the benchmark rate at 7%, even as two out of seven members sought a quarter-point reduction. Governor Ales Michl said most central bankers decided to keep the policy “at a very restrictive level” to prevent excessive wage demands from triggering an inflation spiral.

Chilean economic activity registered the biggest monthly gain since January as the mining sector recovered and policymakers continued to lower borrowing costs, Bloomberg News reported. Activity rose 0.6% in September from the previous month, according to the central bank’s Imacec index, a proxy for gross domestic product. That compares with the 0.2% median estimate from analysts in a Bloomberg survey. The index was unchanged from the prior year, the bank reported Thursday.

After being roughed up by judges, lawmakers, regulators and its own employees, Australia's Qantas Airways faces its toughest grilling at its annual meeting on Friday as investors take the airline to task over a series of crises, Reuters reported. The weight of public fury will most likely overshadow a record annual profit for the carrier in 2023 as shareholders respond to reputational blunders by voting against executive pay and other motions. If 25% of shareholders vote against an Australian company's remuneration report, it is rejected.

Leading AI developers agreed to work with governments to test new frontier models before they are released, to help manage the risks of the rapidly developing technology, in a potentially landmark achievement at the UK's artificial intelligence summit, Reuters reported. Some tech and political leaders have warned that AI poses huge risks if not controlled, ranging from eroding consumer privacy to danger to humans and causing a global catastrophe, and these concerns have sparked a race by governments and institutions to design safeguards and regulation.

England’s largest councils are “running out of road” with almost half saying they are unsure if they can balance their budgets next year, the Independent reported. The County Councils Network (CCN) warned on Wednesday that England’s 41 county and unitary councils face an estimated budget gap of £4 billion over the next three years which they will be unable to plug with more cuts. CCN vice-chairman Barry Lewis said the scale of cuts needed to fill the budget gap is “simply unsustainable” after “a decade of continuous cutbacks”.