Headlines

Firms grappling with high inflation and soaring operating costs are seeking fresh short-term liquidity lines in an echo of the worst days of the 2020 coronavirus pandemic, Bloomberg News reported. European high-grade companies are taking out facilities maturing in two years or less, significantly shorter than the average five-year term of conventional loans. They’ve sealed €76 billion ($75 billion) of short-term financing this year -- the second-highest on record after the €153 billion extended in 2020, according Bloomberg-compiled data.

UK consumers and businesses cut back on borrowing after a jump in interest rates, adding to headwinds for the economy, Bloomberg News reported. New mortgage approvals fell 10%, the sharpest pace since February 2021, and credit card borrowing along with loans taken out by businesses also declined, according to Bank of England figures Monday. The data indicate that the central bank’s interest-rate increases to quell inflation are starting to rein in activity in the economy. Analysts say the UK may already be in a recession that could last until the middle of 2024.

Turkey’s banking watchdog will continue tightening its grip on commercial loan access by further restricting companies holding foreign currency from borrowing liras, stepping up efforts to prop up the local currency and cool lending, Bloomberg News reported. The new rule announced on Oct. 21, and set to come into effect on Tuesday, will bar commercial lira loans to corporate borrowers if they hold more than 10 million liras ($537,000) in foreign currencies and if the amount exceeds 5% of total assets or annual sales.

Court documents released this week outline a long-term borrowing agreement between Laurentian University and the provincial government to replace $35 million in bridge loans taken out by LU during its insolvency, Sudbury.com reported. In early 2021, Laurentian declared insolvency and filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA), making widespread cuts to its programs and employees in April of that year. The university hopes to exit the CCAA in November after creditors voted in favour of a debt plan.

Sri Lanka's key inflation rate eased to 66% in October after hitting 69.8% in September, the crisis-struck country's statistics department said on Monday, Reuters reported. The still extremely elevated Colombo Consumer Price Index (CCPI) reflected a 85.6% jump in food prices in October and a 56.3% climb in the non-food group, the Census and Statistics Department said in a statement. However, the pace of food inflation slowed from a all-time high of 94.9% in September.

The German government has agreed in principle to apply a cap on gas prices for some 25,000 large industrial companies from Jan. 1, 2023, the economy ministry said on Monday, after an expert commission presented its proposals in Berlin, Reuters reported. The ministry said that the government will make some technical adjustments to the commission's original proposal, but a cap of 7 euros cents per kilowatt hours for 70% of companies consumption will apply as per the commission's suggestions. Read more.

Japan said on Friday that it would subsidize around 20 percent of the average family’s electric bill, part of a sweeping economic package that comes as the country struggles with high food and energy prices caused by Russia’s invasion of Ukraine and a yen trading at decades-long lows, the New York Times reported. The total package, which weighs in at over $200 billion, includes a wide variety of economic measures, ranging from individual payments to families with children to fuel subsidies for the transportation industry.

Japan's factory output fell in September for the first time in four months as manufacturers took a hit from rising costs for raw materials and the global economic slowdown. But in a brighter sign for the world's third-largest economy, retail sales grew for a seventh straight month, raising hopes for a sustainable boost in consumption after the easing of COVID-19-related border controls for foreign tourists earlier this month, Reuters reported.

Past financial crises are haunting South Korean policy makers as they rush to support a local credit market that’s quickly gone from one of the world’s safest to teetering on the brink, Bloomberg News reported. As Korea gets swept into a global debt market rout, corporate treasurers and market regulators in Seoul are staring down one of the most rapid deteriorations in the nation’s credit market ever. The rout is one of the worst in Asia’s local-currency markets amid a broader fixed-income slump this year.

The Bank of England looks set to raise borrowing costs by the most since 1989 next week even as it prepares for a recession that could be deepened by spending cuts under new Prime Minister Rishi Sunak, Reuters reported. As well as raising interest rates on Thursday for an eighth meeting in a row to tame inflation above 10% - this time by three-quarters of a percentage point according to most analysts - the BoE is also due to become the world's first big central bank to start selling bonds from its stimulus stockpile on Tuesday.