Headlines

Italian Prime Minister Mario Draghi is expected to offer his resignation after the Five Star Movement, a key member of his coalition, went ahead with its threat to boycott a confidence vote on the government, triggering political turmoil, Bloomberg News reported. The party led by former premier Giuseppe Conte, the second-biggest group in parliament, announced in the Rome Senate that it would stay away later Thursday from the vote on an aid package for businesses and households hit by high energy prices.

British former finance minister Rishi Sunak said his first economic priority if he becomes prime minister will be tackling high inflation, not the tax cuts pledged by some of his rivals in the race to replace Boris Johnson, Reuters reported. British consumer price inflation hit a 40-year high of 9.1% in May, and the Bank of England forecasts it will exceed 11% in October when regulated household energy tariffs increase next. "I think our number one economic priority is to tackle inflation and not make it worse," Sunak told BBC radio on Thursday.

Brazil's economic activity fell for the second month in a row in May, a central bank index showed on Thursday, Reuters reported. The IBC-Br economic activity index, a leading indicator of gross domestic product, fell a seasonally adjusted 0.11% in May from the previous month. The April drop was revised to 0.64% from the previously reported 0.44%. Services activity rose much more than expected in May, while retail sales and industrial output growth came below market estimates.

France needs to mobilise to prepare for the probable scenario of energy shortages this autumn because Russia is using cuts in supplies to Europe as a weapon in its war with Ukraine, French President Emmanuel Macron said on Thursday, Reuters reported. Speaking in a televised interview to mark France's national day, Macron said part of that mobilisation would involve French consumers and businesses scaling back their energy use. "We need to prepare ourselves for a scenario where we have to manage completely without Russian gas," he said.

The International Monetary Fund agreed to a bailout of Pakistan, providing a financial lifeline as emerging markets strain under pressure from a global price shock rippling out from the war in Ukraine, the Wall Street Journal reported. The IMF said in a statement late Wednesday it would provide Pakistan with $4 billion over the next year, starting with an initial $1.2 billion, once its board formally approves the agreement worked out with Pakistani officials over weeks of negotiations.

Train drivers at eight British rail companies will go on strike later this month in the second large-scale industrial action set to affect commuters in July, the Associated Press reported. The Aslef train drivers’ union said Thursday its members will walk out for 24 hours on July 30 over pay disputes. The disruptions, which come during the busy summer holidays, are expected to affect sports fans attending the Commonwealth Games, which kick off in Birmingham on July 28, and the opening weekend of the English Football League.

Chinese exports to the rest of the world grew strongly in June as trade picked up following the easing of pandemic lockdowns and logistics bottlenecks in its ports, the Wall Street Journal reported. Still, economists say the trade bounce is unlikely to last, as rate increases by the U.S. Federal Reserve and other central banks to cool inflation weigh on global growth. Chinese exports rose 17.9% in June compared with a year earlier, China’s General Administration of Customs said Wednesday.

The Bank of Canada hiked interest rates by a full percentage point, a surprise move that supercharges efforts to withdraw stimulus amid fears four-decade-high inflation is becoming entrenched, Bloomberg News reported. Governor Tiff Macklem raised the central bank’s policy rate to 2.5% in a decision announced Wednesday in Ottawa that warned of more hikes to come. The 100-basis-point move is the largest increase since 1998. Markets and economists were anticipating 75 basis points.

Major stablecoins must comply with the same safeguards as traditional forms of payments, global regulators said on Wednesday, tightening controls over a battered crypto sector, Reuters reported. Stablecoins are cryptocurrencies designed to have a stable value relative to traditional currencies, or to a commodity, to avoid the volatility that makes bitcoin and other digital tokens impractical for most commerce.

South Africa’s minister in charge of embattled state-owned companies gave an impassioned defense of the sale of a majority stake in the national carrier for about $3 — a deal that’s subject to a lawsuit from one of the spurned bidders, Bloomberg News reported. The privatisation of South African Airways (SAA) is a vital reform for the country’s battered economy, Public Enterprises Minister Pravin Gordhan, 73, said in an interview at Bloomberg’s Johannesburg office.