The world this week--Business
Markets reacted positively to the British government’s decision to scrap most of its unfunded tax cuts.
The yield on 30-year gilts fell back to around 4.2%, still higher than it was just before the mini-budget spooked investors in late September.
The pound traded around $1.12, not far off its lows in recent days.
Jeremy Hunt, the new chancellor, is reportedly mulling windfall taxes on banks and energy companies to help plug a fiscal gap still worth tens of billions of pounds.
Big cuts to public spending are also in the offing.
The Bank of England said it would start selling the bonds it has accumulated through its quantitative-easing programmes on November 1st, but only short- and medium-dated gilts and not bonds with a maturity of more than 20 years, which saw the sharpest sell-off in the recent turmoil.
The central bank started buying longer-maturity bonds in late September to calm markets, but after two weeks that programme has now ended.
Britain’s annual inflation rate rose in September, hitting 10.1% (the level it was at in July).
Food prices made the largest contribution to inflation between August and September.
They have risen by 14.6% over the past year.
Although that was the biggest jump since 1980, staples like milk and butter were up by even more, some 30%.
Energy costs were up by 70%, as gas prices nearly doubled over the year.
There is no sign of the cost-of-living crisis receding for British households.
A raft of earnings from America’s big banks showed a decline in profits as rocky markets took a toll on their lucrative investment-banking business.
But at Goldman Sachs, where net income was down by 43%, year on year, another problem is its expansion into retail banking.
Its boss, David Solomon, announced another reorganisation of the bank, splitting up its consumer business by rolling its savings and wealth products into asset-management and putting lending into a new division called Platform.
Swiss Re estimated that its claims from Hurricane Ian would come in at $1.3bn, causing a quarterly loss of $500m.
The reinsurance company reckons the total insured market loss from the storm, which hit west Florida in September, would be between $50bn and $65bn.
That could make it the second-most costly hurricane for insurers, behind Katrina in 2005.
The International Energy Agency said that, “defying expectations”, global carbon-dioxide emissions are expected to grow by only 1% this year.
The increase would have been much larger, it said, if it were not for the take-up of renewable energy and electric cars.