Page 2 - Europe Economy

UK PM Liz Truss hints at benefits cuts, courts fresh Tory rebellion

When people are on a fixed income, when they are pensioners, it is quite hard to adjust. It's a different situation for people who are in the position to be able to work, said Liz Truss

British PM Liz Truss sticks by economic plan as her party worries

British Prime Minister Liz Truss said Sunday that she could have done a better job laying the ground for her package of unfunded tax cuts, but insisted she would push on with an economic plan that has caused turmoil on financial markets and weakened the country's public finances. Truss acknowledged that the UK faces a very turbulent and stormy time, but said her policies would lead to a high-growth, low-tax economy in the longer term. The comments are unlikely to calm Truss' Conservative Party, which opens its four-day annual conference on Sunday in the central England city of Birmingham amid plunging poll ratings and growing public discontent. Truss took office less than a month ago, promising to radically reshape Britain's economy to end years of sluggish growth. But the government's September 23 announcement of a stimulus package that includes 45 billion pounds (USD 50 billion) in tax cuts, to be paid for by government borrowing, sent the pound tumbling to a record low against th

Bank of England to buy UK bonds worth 65 bn pounds to stem market rout

The Bank of England stepped in on Wednesday by offering to buy some of the country's long-term debt as an emergency measure to prevent "material risk" to the country's financial stability, amid an unprecedented warning by the IMF that the UK's recent mini-budget risked making the cost-of-living crisis worse. The central bank said it would buy as many long-dated government bonds as needed between now and October 14 in a bid to calm some of the mayhem that followed the Liz Truss-led government's massive tax-cutting and government borrowing mini-budget last Friday. It has seen the pound tumble against the dollar as investors demand a greater rate of return for UK bonds because the level of government borrowing required to fund the financial measures have spooked the markets. The Bank is monitoring developments in financial markets very closely in light of the significant repricing of UK and global financial assets, the Bank of England said in a statement. This repricing has become mor

Energy crisis: Recession clouds gather in Germany, Europe's largest economy

Europe's largest economy is sending recession signals. Germany's key future indicator, the IFO survey of business confidence, pointed down for the fourth month in a row as high inflation fed by astronomical natural gas prices undermines consumer pricing power and imposes heavy costs on businesses. The index compiled by the Munich-based IFO institute dropped to 84.3 in September from 88.5 in August, to its lowest level since the global financial crisis more than a decade ago. High energy and commodity prices are weighing on demand and putting pressure on profit margins, said Carsten Brzeski, chief eurozone economist at ING bank. Companies can no longer pass through higher costs to consumers as easily as in the first months of the year. Company order books are shrinking, while businesses that use a lot of energy, such as bakeries, are facing costs that make them question whether they can stay in business. The news comes as more economists predict a recession for Europe as a ...

World shares mixed; British pound falls to all-time low on tax cut concerns

Global shares were mixed Monday while the British pound declined to an all-time low against the US dollar on concerns over planned tax cuts. France's CAC 40 rose 0.2% in early trading to 5,795.88, while Germany's DAX added 0.2% to 12,311.57. Britain's FTSE 100 edged 0.1% higher to 7,025.51. The futures for the Dow industrials and the S&P 500 were 0.1% lower. In Asian trading, Japan's benchmark Nikkei 225 shed 2.7% to finish at 26,431.55. Australia's S&P/ASX 200 dipped 1.6% to 6,469.40. South Korea's Kospi dropped 3.0% to 2,220.94. Hong Kong's Hang Seng gave up 0.4% to 17,855.14, while the Shanghai Composite lost 1.2% to 3,051.23. The British pound's slide against the dollar picked up pace last week after the UK's new government outlined plans to cut taxes and boost spending. The weakening currency piles pressure on the UK's new Conservative government, which has gambled that slashing taxes and increasing borrowing to compensate will spur economic growth. Many economists say .

British PM Liz Truss may lift immigration cap to fight labour shortage

Plans to introduce more tax cuts next year as part of first full Budget

Euro zone likely entering recession as price rises hit demand: Survey

Overall demand in the euro zone fell to its lowest since November 2020, when the continent was suffering a second wave of Covid-19 infections

Britain sends investors fleeing with historic tax cuts and borrowing

Pound slides below $1.11 for first time in 37 years

Putin says Russia to stop supplying energy if Western price caps imposed

Speaking at an economic forum in Vladivostok, Putin said European calls for a price cap on Russian gas were 'stupid', and would lead to higher global prices and economic problems in Europe

Pound falls to weakest level since 1985 against dollar amid dire UK economy

The last time the sterling-dollar exchange rate was this low the world's richest nations signed the Plaza Accord, an agreement to weaken the US currency

No Stream: EU gas markets brace for price surge after latest Russia gas cut

Europe has accused Russia of weaponising energy supplies in what Moscow has called an 'economic war' with the West over the fallout from the Ukraine conflict

What is Nord Stream 1 pipeline, and why is it critical for Europe?

Nord Stream 1 is the biggest pipeline transporting cheap natural gas between Russia and Europe via Germany

Inflation hits 9.1% in countries using euro currency as fuel prices soar

Inflation in the European countries using the euro currency hit another record in August, fuelled by soaring energy prices mainly driven by Russia's war in Ukraine. Annual inflation in the eurozone's 19 countries rose to 9.1% in August, up from 8.9% in July, according to the latest figures released Wednesday by the European Union statistics agency. Inflation is at the highest levels since record-keeping for the euro began in 1997. Energy prices surged 38.3%, while food prices rose 10.6%. Prices for goods were up 5% and the cost of services rose 3.8%.

Europe's energy concerns drag euro to 20-year low, stokes recession fears

"No surprise then to see the USD at near multi-decade highs against a falling EUR and GBP."

With inflation at 8.9%, Europe bond rally at risk of complacent market

With the worst yet to come in Europe, strategists say policy makers may hike more aggressively than many expect, upending a bond rally that some say has gone too far

European Central Bank set to hike rates for the first time in 11 years

That outlook is getting murkier by the day because inflation is still accelerating and growth slowing sharply

Russia's war expected to hit European Union economy, push up inflation

The EU acknowledged that Russian President Vladimir Putin can keep the European economy off balance for months to come and make any forecast highly uncertain

With Europe slowing, TCS says North America to drive its growth in FY23

The IT major indicated that clients in Europe are more cautious on tech spends given the possibility of deeper recession and ongoing conflict in Eastern Europe, leading to delays in decision making

Euro under pressure as inflation fears send investors to dollar haven

The euro was at $1.044, after losing 0.75% on the dollar the day before, and heading for a monthly decline of 2.7%

Russia-Ukraine war worsens financial stability risks: European Central Bank

Financial stability risks have increased as the conflict has impacted all aspects of economic activity and financing conditions, ECB Vice President Luis de Guindos