Headlines

The parent company of Thames Water is exploring all options with a group of creditors after a series of board resignations, Bloomberg News reported. Two directors resigned from Thames Water (Kemble) Finance and several quit from Kemble Water Finance Limited, two of the units that make up the firm’s complex holding structure. Paul O’Donnell and Nick Pike, both restructuring experts, have been appointed to help engage with creditors and assess options for the company, according to company statements on Monday.

The International Monetary Fund warned that the UK Treasury needs to find £30 billion ($38.2 billion) of savings to stabilize its debt burden, undercutting Prime Minister Rishi Sunak’s ambition to reduce taxes before the next election, Bloomberg News reported. The estimate released with the institution’s annual health check into the economy also upgraded the outlook for growth and predicted a “soft landing.” Even so, advice on the scale of the UK’s budget gap highlighted the strain on the public finances already struggling to cope with demands on health, defense and social care.

Argentina risks struggling to service some of its debt if it’s forced to pay out $1.5 billion in damages a UK court awarded to investors last year, lawyers for the South American nation have warned, Bloomberg News reported. Hedge funds including Palladian Partners LP last year won a UK High Court ruling that Argentina must compensate investors for losses in the country’s growth-linked securities after it changed the method of calculating gross domestic product.

Investment banks including Goldman Sachs Group Inc. are pitching broadly syndicated refinancings of some of the riskiest types of private credit, in the latest sign that Wall Street is trying to poach back business from direct lenders, Bloomberg News reported. Bankers in Europe are speaking with buyout firms about options for private payment-in-kind debt their companies took on when broadly syndicated markets were much more volatile and expensive. Now that conditions have improved, institutional lenders are becoming increasingly assertive.

Artificial intelligence could be fundamentally disruptive but help boost productivity in Britain's economy, posing a challenge to regulators who should be open to new rule-making approaches, a Bank of England (BoE) policymaker said on Tuesday, Reuters reported. Britain has so far taken a cautious approach to formulating bespoke rules for AI, unlike the European Union, whose members on Tuesday formally backed landmark new rules that will likely set a benchmark for other countries.

Canada’s annual rate of core inflation eased for a fourth straight month, bolstering a case for policymakers to begin an easing cycle in the coming months, but a slight increase in the monthly pace may keep a June rate cut from being a certainty, Bloomberg News reported. The Bank of Canada’s two core inflation measures slowed in April to an average yearly pace of 2.75%, down from 3.05% a month earlier, Statistics Canada reported Tuesday in Ottawa. That’s slightly slower than the 2.8% expected in a Bloomberg survey of economists.

The Reserve Bank of Australia has warned that risks around the inflation outlook have risen, while uncertainty around the economy’s trajectory more broadly remains highly elevated, the Wall Street Journal reported. Minutes of the central bank’s May 6 to May 7 policy meeting showed that while it said there were increased risks that inflation will stay higher for longer than expected, the policy-setting board decided to keep interest rates on hold to avoid “excessive fine-tuning” of policy settings.

Canadian business insolvencies have climbed to levels not seen since the financial crisis of 2008, driven by indebted companies struggling with interest rates and softened consumer demand. But even those official insolvency statistics don’t tell the full picture, according to a commentary in The Globe and Mail. Economists and professionals who work with small and medium-sized businesses warn that the actual number of businesses that fail is much higher, with other data suggesting the problem is growing.

China’s benchmark lending rates were held steady this month, central bank data showed Monday after Beijing announced bold moves to address property-sector malaise, the Wall Street Journal reported. The one-year loan prime rate was steady at 3.45% while the five-year rate was unchanged at 3.95%, according to the official data. Economists had expected the benchmark rates to be left untouched after the People’s Bank of China kept key policy rates, including the interest rate on the medium-term lending facility that is used to price LPRs, unchanged earlier this month.

There are enough unsold homes in China to house every family in California and New York combined. Beijing might finally tackle the problem with a huge outlay of cash, but investors should curb their enthusiasm, according to a Wall Street Journal commentary. It might not be enough, or it could overshoot and reignite the housing bubble. Beijing rolled out measures Friday to support the sluggish housing market. The most eye-catching move is that it would let local governments buy apartments at “reasonable prices” to use as affordable housing in places with excessive inventory.