Headlines

The Bank of Canada is widely expected to deliver yet another oversized interest rate hike next week, lifting its policy rate into restrictive territory for the first time in two decades, but bets are split on whether or not a pause will follow, Reuters reported. BoC Governor Tiff Macklem has made clear the central bank is focused on getting "to the top end or slightly above" the neutral rate, the range from 2% to 3% where monetary policy neither stimulates nor weighs on the economy. The neutral range has declined over the last 20 years. That should happen on Sept.

Power prices surged, European currencies hit multidecade lows and governments scrambled to contain the economic hit after Russia cut its main natural-gas pipeline to Europe, the Wall Street Journal reported. The cutoff, which the Kremlin blamed Monday on Western sanctions and said would be long-lasting, realizes the worst-case scenario Europe had been girding for since Russia invaded Ukraine in February. Europe is at the front lines of the economic war between Russia and the West that runs parallel to the battlefield war in Ukraine.

The European Commission is seeking emergency powers to force companies to make key products and stockpile goods in a crisis or else face fines, according to an EU document seen by Reuters on Friday. The proposed Single Market Emergency Instrument, set to be presented on Sept. 13, comes in response to supply bottlenecks caused by the COVID-19 pandemic and Russia's invasion of Ukraine. Russia calls its actions in Ukraine "a special military operation." It also aims to deter foreign countries with similar powers from taking such action without first informing the 27-country bloc.

Debt owed to South African towns and cities almost doubled over the past five years, weighing on municipal finances and increasing the risk that the supply of basic services such as water and electricity will be disrupted, Bloomberg News reported. Consumers owed municipalities 255.4 billion rand ($14.8 billion) by the end the financial year through June 30, compared with 232.8 billion a year earlier, according to data the National Treasury published on Friday. Households account for 71% of this.

Tens of thousands of applications for a payment-by-instalment plan have flooded into a British budget grocery chain just two weeks after its launch, as a cost of living crisis crushes UK household incomes, Bloomberg News reported. Customers of Iceland Foods have sent in around 60,000 applications so far, more than the total number of loans the credit provider behind the initiative expected to offer in 18 months. Successful applicants can borrow up to £100 ($115) to pay for food at one of its outlets.

China said it will accelerate its stimulus rollout in the third quarter as it tries to recover from a second quarter marred by pandemic-related losses, Bloomberg News reported. It’s “crucially important” for the country to adopt supportive policies this quarter, Yang Yinkai, deputy secretary general at the National Development and Reform Commission, told reporters in Beijing on Monday. He was speaking alongside officials from the central bank and other government ministries.

A unit of Malaysia’s state-owned investment fund 1MDB -- which has spurred investigations around the world into deal-making and political patronage under former Prime Minister Najib Razak -- is seeking bankruptcy protection in the U.S., Bloomberg News reported. Brazen Sky Ltd., which is fully owned by 1Malaysia Development Bhd., filed for chapter 15 in Southern District of Florida court, according to a filing. The document listed voluntary liquidation pending in the British Virgin Islands, where Brazen Sky is incorporated.

LATAM Airlines yesterday turned back two challenges to its bankruptcy reorganization plan, putting the carrier a step closer to emerging from chapter 11 after seeking protection from creditors in the early months of the pandemic, Reuters reported. LATAM said in a statement it was pleased by a U.S. bankruptcy court's decision confirming its reorganization plan in which two groups of creditors lost their appeals. LATAM, which filed for bankruptcy in 2020, won court approval to exit chapter 11 in June.

Delta Air Lines Inc. and Air France-KLM won their joint bid for ITA Airways, entering exclusive talks with the Italian government over plans to privatize the carrier formerly known as Alitalia, the Wall Street Journal reported. Italy’s Finance Ministry said on Wednesday that a bid from the consortium, which also includes investment firm Certares Management LLC, emerged as the most suitable as the government seeks to hand over control of the reincarnated flag carrier. The government said a final deal isn’t certain.

The Italian government said on Thursday it was preparing a new multi-billion euro package to help shield firms and families from surging energy prices, after the country's main business lobby warned of a looming "economic earthquake," Reuters reported. Carlo Bonomi, chief of employers' association Confindustria, said in a radio interview that with energy costs for Italian industry among the highest in Europe, gas prices needed to be capped either at the European or domestic level. Bonomi said that businesses cannot wait for a new government to be installed after elections on Sept.