Headlines

The number of UK businesses in “critical financial distress” has risen by more than a third over the past year, as companies contend with a “slew of increased taxes” and the impact of the Middle East conflict, The Guardian reported. Hospitality and leisure firms have been faring particularly badly because of shaky consumer confidence, and rising taxes and staff costs, according to research by the restructuring company BTG. It said that the number of firms in financial distress had risen by 36.9% in the first three months of this year, compared with the same period in 2025.

China’s top market regulator is intensifying its crackdown on debt-laden “zombie companies” – rolling out a pilot programme in seven economic hubs to facilitate the forced exit of unprofitable firms often propped up by government subsidies or bank loans, the South China Morning Post reported. The move signals a broadening of Beijing’s campaign against local protectionism and the low-quality vicious competition that officials say results in neijuan, or “involution”.

Brazilian retailer ​CVLB Brasil has ‌filed for bankruptcy protection, saying ​on Wednesday ​that it needed ⁠to broaden ​and provide greater ​legal stability to an ongoing debt ​restructuring process, Reuters reported. "The ​company clarifies that its ‌sales ⁠ecosystem, which includes physical stores and digital ​channels, ​remains ⁠fully operational," said the ​retailer, which ​runs ⁠the CASA&VIDEO and Le Biscuit ⁠store ​chains. Read more.

The World Bank said this week that it expected the war in Iran would cause energy prices to surge 24 percent this year, to their highest level since 2022, fanning inflation around the world and slowing the global economy, the New York Times reported. The analysis came as Federal Reserve leaders concluded two days of discussions on the economy and whether to adjust interest rates. The war has disrupted the flow of oil through the Strait of Hormuz, causing crude prices to soar this year.

German and Spanish inflation climbed again in April to multiyear highs as tensions in the Middle East continued to drive up energy prices, the Wall Street Journal reported. Consumer prices were 2.9% higher than a year earlier in Germany, an increase in the annual rate of inflation from 2.8% in March, according to EU-harmonized figures published by Destatis on Wednesday, its highest since January 2024. Spain’s statistics agency INE said inflation rose to 3.5% in April from 3.4% in March, reaching its strongest level since June 2024.

The European Central Bank and the Bank of England are set to leave their key interest rates unchanged Thursday as they await clarity on the duration and scale of the energy shock that has accompanied the conflict in the Middle East, the Wall Street Journal reported. At their last meetings in March, Europe’s leading central banks made it clear that they were prepared to increase borrowing costs in response to the surge in energy prices. That communication led investors to expect a number of rate rises soon.

Smaller Italian banks have increased reliance on funding they raise abroad through online deposit platforms, ‌the Bank of Italy said on Wednesday, as regulators step ‌up monitoring of the practice, Reuters reported. Online deposits allow banks to raise retail deposits digitally, often ​on a cross‑border basis, by giving savers access to deposit accounts offered by multiple banks through a single interface.

Canada’s Department of Finance has proposed a total ban on Bitcoin and crypto ATMs, describing the measure as a way to protect seniors and vulnerable people, Decrypt.com reported. In an economic update released on Wednesday, the country’s government described machines that let customers exchange cash for digital assets as “a primary method” for scammers set on bilking a growing number of Canadians out of their hard-earned cash.

The Bank of Canada likely will keep its main interest rate unchanged Wednesday, but there is growing doubt that officials can hold rates steady the longer energy prices remain elevated, economists surveyed by the Wall Street Journal say. The conflict in the Middle East has effectively closed oil-tanker traffic in the Strait of Hormuz, leading to a sizable jump in crude oil prices and what drivers pay to fill up their tanks. The energy-price shock has sharply lifted near-term inflation expectations, according to a recent Bank of Canada survey.

Two German carmakers are suing a U.K. watchdog over its £9bn car finance redress scheme, The Telegraph reported. Mercedes-Benz and Volkswagen have both launched legal challenges against the Financial Conduct Authority (FCA) over the scheme, which will compensate customers for mis-sold car loans. A Volkswagen spokesman said it had “identified issues that require independent clarification” and so had decided to take the FCA to court. “Our referral is focused on ensuring the redress scheme is applied accurately and fairly,” they added.