Headlines

Wage rises in the U.K. cooled in the three months to May, after months of stubbornly high growth, keeping an August interest-rate cut in play at the Bank of England, the Wall Street Journal reported. Average earnings, excluding bonuses, between March and May were 5.7% higher than a year earlier, down from 6.0% in the three months to April, according to data from the Office for National Statistics published Thursday.

Chancellor of the Exchequer Rachel Reeves warned “difficult decisions” lie ahead as she tries to fix Britain’s public finances, raising the prospect of tax hikes or spending cuts in her first Budget in the autumn, Bloomberg News reported. Reeves, who is the UK’s first female finance minister, said she will update Parliament this month on her fiscal inheritance from the Conservatives and will also set a date for a Budget that will define Labour’s opening period in office.

The Bank of Canada needs to wrap up its quantitative tightening program or fix distortions in short-term funding markets that are keeping effective interest rates higher, according to Canadian Imperial Bank of Commerce strategists, Bloomberg News reported. Canada’s central bank has been shrinking its balance sheet for more than two years, withdrawing the extraordinary stimulus it provided during the Covid-19 crisis.

Ukraine and its international bondholders started a new round of official talks on restructuring more than $20 billion of debt as Kyiv is running out of time to reach an agreement or face the risk of a potential default, Bloomberg News reported. The east European nation, fighting against Russian aggression, is under pressure to agree a debt overhaul with its creditors as a freeze on payments — agreed two years ago after Moscow’s full-scale invasion — is set to expire on Aug. 1.

South Africa’s central bank kept interest rates on hold in a split decision, with two of the six policymakers favoring a cut which could signal a shift toward easing as soon as September, Bloomberg News reported. The monetary policy committee left its benchmark interest rate unchanged at a 15-year high of 8.25% for a seventh consecutive meeting, Governor Lesetja Kganyago said in a virtual press conference Thursday. He said the two MPC officials who favored a cut wanted to lower rates by 25 basis points while the other four wanted to keep rates on hold.

The African Development Bank said Thursday it had approved a $1 billion loan to South Africa's state-owned rail and ports company, Transnet, the Associated Press reported. The 25-year loan was wholly guaranteed by the South African government and will help finance the first phase of a $8.1 billion investment plan for Transnet to improve the country's ailing rail and port infrastructure, the bank said.

The Suez Canal's annual revenue dropped by almost a quarter in its latest financial year as some shippers switched to alternative routes to avoid attacks by Iran-aligned Houthis in the Red Sea, Reuters reported. Osama Rabie, the head of the Egyptian canal's authority said on Thursday revenues fell to $7.2 billion in its 2023-24 financial year from $9.4 billion the year before. Since November, the Houthis have been attacking commercial vessels in the Red Sea and Indian Ocean to show support for Palestinian militant group Hamas in its fight against Israel.

The Hyderabad bench of the National Company Law Tribunal (NCLT) has initiated corporate insolvency proceedings against GVK Power & Infrastructure (GPIL) in response to a petition by ICICI Bank and joined by five other banks seeking recovery of about Rs 18,000 crore of dues from the company, the Economic Times of India reported. ICICI Bank had petitioned the court in November 2020 to pursue the recovery of its $1.35 billion lent through its Dubai, Bahrain and Singapore branches along with 3 other lenders.

Indian education technology company Byju's will challenge insolvency proceedings initiated against it in an attempt to block the process this week, as the startup once valued at $22 billion tries to tide over the crisis, two sources said on Wednesday, Reuters reported. The National Company Law Tribunal in the southern state of Karnataka on Tuesday ordered insolvency proceedings against the company after a complaint by the cricket board for not paying $19 million in dues. A court-appointed professional is currently running the company.

British inflation defied forecasts for a slight fall and held at 2% in June while strong underlying price pressures prompted investors to reduce bets that the Bank of England will cut interest rates in two weeks' time for the first time since 2020, Reuters reported. Increases in hotel prices - in a month when U.S. pop star Taylor Swift and other performers toured the UK - were partly to blame for the higher-than-expected inflation number, underscoring the BoE's concern about services prices.