Headlines

The Bank of England this week will consider whether to push through the biggest interest-rate increase in 33 years to respond to surging inflation and weakening confidence in British assets, Bloomberg News reported. With prices rising five times faster than the UK central bank’s 2% target and the pound falling almost daily, policy makers led by Governor Andrew Bailey are under pressure to step up the pace of monetary tightening.

The UK’s Financial Conduct Authority published a warning to consumers about Sam Bankman-Fried’s crypto exchange FTX, saying it isn’t authorized by the regulator to offer financial services or products in the country, Bloomberg News reported. The regulator said on Friday on its website that Bahamas-based FTX “is targeting people in the UK,” adding that investors are “unlikely to get your money back if things go wrong” since they won’t be protected by the country’s ombudsman service and compensation scheme.

Pakistan will "absolutely not" default on debt obligations despite catastrophic floods, the finance minister said on Sunday, signalling there would be no major deviation from reforms designed to stabilise a struggling economy, Reuters reported. Floods have affected 33 million Pakistanis, inflicted billions of dollars in damage, and killed over 1,500 people - creating concern that Pakistan will not meet debts. "The path to stability was narrow, given the challenging environment, and it has become narrower still," Finance Minister Miftah Ismail told Reuters at his office.

The International Monetary Fund (IMF) has reached a staff-level agreement on Argentina's $44 billion extended fund facility arrangement, which should unlock nearly $4 billion in funds for the country, the lender said on Monday, Reuters reported. The approval, which needs to be ratified by the IMF executive board, would unlock $3.9 billion for the embattled South American nation, which is looking to rebuild reserves and tamp down spiraling inflation. Argentina, a major grains producer, struck a new IMF deal earlier this year to replace a huge failed program from 2018.

Tunisia expects to reach a deal with the International Monetary Fund in coming weeks on a loan of between $2 billion and $4 billion over three years, the central bank governor said on Sunday, Reuters reported. Tunisia, which is suffering its worst financial crisis, is seeking to secure an IMF loan to save public finances from collapse. "The size is still under negotiation and I think it will be between $2 billion and $4 billion, we hope to reach a staff level deal in coming weeks," Marouan Abassi told Reuters.

The Hungarian government will submit the first of several anti-corruption bills to parliament on Monday, its spokesman said, as Budapest scrambles to avoid losing billions of euros in European Union funding, Reuters reported. The European Union executive recommended on Sunday suspending funds worth 7.5 billion euros ($7.48 billion) due to what it sees as Hungary's failure to combat corruption and uphold the rule of law. The European Commission also set out requirements for Hungary to keep access to the funding, including new legislation, which Hungary immediately said it would meet.

The number of companies in England and Wales declared insolvent jumped by 43% in August, according to government data, which adds to concerns for the health of the UK economy, The Guardian reported. There were 1,933 insolvencies in August, compared with 1,348 in the same month last year, the Insolvency Service said. It was 42% above the level in August 2019, before the Covid-19 pandemic hit. Economists are concerned that businesses will increasingly struggle as consumers cut back spending amid high inflation.

Germany took control of the German business of Russian oil giant Rosneft Oil Co. as Berlin races to safeguard its energy supplies before its planned ban on Russian oil imports kicks in later this year, the Wall Street Journal reported. The German government said it would place Rosneft’s German subsidiaries under trusteeship. The business’s flagship asset is the PCK refinery in Schwedt, eastern Germany, that provides Berlin and the surrounding region with much of its gasoline and aircraft fuel.

Renewed Covid-19 curbs and a worsening property downturn are dampening the outlook for China’s economy, despite some modest signs of improvement as stimulus measures kicked in, the Wall Street Journal reported. China released a raft of economic data on Friday, including figures showing that housing price declines accelerated and consumer spending remained weak. The data wasn’t all bad, though. Infrastructure investment picked up more quickly than expected, and China’s labor market improved.

Chinese banks are expected to keep benchmark lending rates unchanged this week as the central bank pauses monetary easing and defends the yuan, though a reduction is anticipated in coming months, Bloomberg News reported. Sixteen of the 17 economists surveyed by Bloomberg forecast the one-year loan prime rate will be maintained at 3.65% on Tuesday, with only one estimating a 10 basis-point drop in the rate. Eleven of the 12 economists who gave an estimate for the five-year LPR, a reference for mortgage rates, expect it to be held steady. Only one forecast a 15 basis-point reduction.