Headlines

Britain’s inflation rate eased away from a 41-year high on Wednesday, but the slowdown brings only limited relief to a nation gripped by a deep cost-of-living crisis, the New York Times reported. Consumer prices in Britain rose 10.7 percent in November from a year earlier, bringing the rate of inflation down slightly from 11.1 percent in October, which was the highest annual rate since 1981, the Office for National Statistics said.

Ukraine's economy could shrink by 50% this year if Russia keeps attacking the national power grid and other critical infrastructure, Prime Minister Denys Shmyhal was quoted as saying on Tuesday, Reuters reported. Russia has launched a series of missile and drone strikes on Ukrainian energy facilities since October, causing power outages across the country. "The contraction of the Ukrainian economy is projected at the level of 35-40%," Interfax Ukraine news agency quoted Shmyhal as saying.

Germany is highly dependent on imports for many crucial raw materials and often relies entirely on other countries to meet demand, according to a study seen by Reuters, which warned that much of this reliance was on authoritarian regimes. The DIW research institute identified 30 raw materials as particularly critical and placed Germany's dependence on imports at 100% for 14 of them. For another three, dependency was ranked at over 95%, the DIW said. It classed commodities as critical if they were considered essential but also subject to increased supply risk.

Mexico’s central bank will likely decouple from the Federal Reserve early next year by raising interest rates less than the US, after it matches the Fed during its meeting this week, according to Barclays Plc, Bloomberg News reported. Banxico will raise its key rate by 50 basis points to 10.50% on Thursday, mirroring what’s expected by the Federal Open Market Committee, before delivering a last hike of 25 basis points in February, less than the 50 basis-point increase by the Fed in January, Barclays’s analysts wrote in a report.

Brazil's incoming finance minister Fernando Haddad on Wednesday said fiscal expansion would not help the economy at the moment, downplaying market jitters on an expected spending boost starting next year, Reuters reported. "There are situations that demand countercyclical actions ... but we are not at a moment when fiscal expansion will help the economy," he said in an interview with TV channel GloboNews.

Global public and private debt saw its biggest drop in 70 years in 2021 after reaching record highs because of the impacts of COVID-19, but overall remained well above pre-pandemic levels, the International Monetary Fund said on Monday, Reuters reported. In a blog released with its inaugural Global Debt Monitor, the IMF said that total public and private debt decreased by 10 percentage points to 247% of global gross domestic product (GDP)in 2021 from its peak of 257% in 2020. That compares to around 195% of GDP in 2007, before the global financial crisis.

The European Commission plans to seek feedback on whether the 27-country bloc needs to loosen state aid rules to allow governments to support companies affected by the U.S. Inflation Reduction Act, Reuters reported. The $430 billion act, which grants consumers tax credits for U.S.-produced electric vehicles (EV) and other green products, has triggered fears it could disadvantage European Union companies and tempt businesses to relocate to the United States.

The Bank of England warned on Tuesday about "significant pressure" on households and businesses due to higher inflation and borrowing costs, but said they were more resilient than before the global financial crisis, Reuters reported. The BoE has previously flagged that Britain was entering a lengthy recession, and with inflation at a 41-year high and a sharp rise in interest rates over the past year, government forecasters have predicted a record squeeze on living standards.

Investment funds and other non-bank financial institutions face their first 'stress test' next year to apply lessons from the near-meltdown in Britain's pension fund sector, the Bank of England (BoE) said on Tuesday, Reuters reported. The BoE had to step in from September to buy 19.3 billion pounds ($23.75 billion) of government bonds to stabilise markets after turmoil caused by the fiscal plans of Liz Truss's short-lived government. Liability-driven investment (LDI) funds, used by pension funds to ensure their long-term payouts, struggled to meet collateral calls as bond prices tumbled.

Britain’s economy shrank in the three months through October, confirming the toll that rampant inflation and rising interest rates are having on business and industry, the Associated Press reported. Gross domestic product, the broadest measure of economic activity, fell by 0.3% in the period when compared with the three months through July, the Office for National Statistics said Monday.