Latest news with #economic growth
The Guardian
8 hours ago
- Business
- The Guardian
BoE governor warns Reeves over weakening banking rules too much
The governor of the Bank of England has warned the chancellor, Rachel Reeves, against a radical watering-down of City banking rules because it would risk repeating the mistakes that led to the 2008 financial crisis. Andrew Bailey said that while some changes to the rules could be helpful, wholesale changes to unleash risk-taking in the City of London in the name of economic growth would be counterproductive. 'There isn't a trade-off between financial stability and growth. We've had that experience,' he told MPs on the Treasury select committee. Reeves last week used her annual Mansion House dinner to announce sweeping changes to banking industry rules, telling City bosses she believed that in too many cases regulation was a 'boot on the neck' of business. Bailey refused to back the chancellor's analogy when pressed by the Treasury committee chair, Meg Hillier, saying: 'I do not use those terms, let me say that … It is not a term I use.' The governor said veterans of the 2008 financial crisis recognised there were clear dangers linked to slashing City red tape. 'Sadly I can understand when I hear people say the financial crisis is now way in the past, we've got past that, that's all solved, that's out of the way, move on … Yes of course the world moves on,' Bailey said. 'But that was the experience of losing financial stability and we had a very serious recession in this country after that.' However, he said regulations should not be set in stone, highlighting how the government could tweak City rules after Brexit to make Britain's banking industry regulations more reflective of the UK than the EU. 'There are areas where we should clearly look at it. And we'll look at it, we're very open to that. We've announced a whole range of things we're doing. That's a good thing. But we can't compromise on basic financial stability, that would be my overall message.' Bailey's comments come after several leading figures involved in Britain's post-2008 drive to prevent a repeat of the financial crisis warned Labour against unpicking bank ringfencing – a key measure to separate high street banking from riskier investment banking that was introduced after the collapse. Sir John Vickers, the architect of the UK's ringfencing rules, told the Guardian a wholesale retreat would be a 'very bad idea'. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Against a backdrop of intensive lobbying from leading banks to water down the regulation, Bailey said such a change would have little benefit for lenders and put UK households at heightened risk. 'It [ringfencing] has benefits in terms of UK customers and UK consumers; businesses and households. I think that is a helpful feature of it. I don't think it hinders banks fundamentally in terms of their business models,' Bailey added. 'Again, at the margins, I am sure there are things that can be improved and we will work constructively to go through that process. It has established itself as part of the system and to me it would not be sensible to take it away at this point.'
ABC News
15 hours ago
- Business
- ABC News
RBA meeting minutes reveal plan for 'cautious and gradual' rate cuts clashed with unemployment 'surge'
They say hindsight is 20-20, but three members of the Reserve Bank board are likely to turn up at the next meeting with the strong temptation to say, "we told you so". The RBA has released the minutes from its meeting two weeks ago, when interest rates were left on hold, catching the market and most private-sector economists off guard. That decision to keep rates steady was made by a six to three majority, with the minority arguing there was no need to wait. "The case to lower the cash rate target at this meeting rested on a view that there was already sufficient evidence to be confident that inflation was on track to be sustainably back at the midpoint of the target range, if not lower," the minutes revealed. The minority in favour of a cut argued that US tariff policy would be a drag on future global economic growth, that Australia's economic expansion remained "subdued", households were saving more, wages growth and services inflation were weakening, and that "recent data suggested a loss of momentum in activity". "Moreover, there was uncertainty around whether market sector employment growth would increase by enough to offset an expected slowing in non-market sector employment growth to maintain momentum in overall employment growth," the minutes showed. That last concern appears to have since been vindicated by another weak set of jobs numbers, released last week, showing unemployment had jumped from 4.1 per cent in May to 4.3 per cent in June, seasonally adjusted, although some analysts have attributed the scale of that increase to statistical variation. At her post-meeting press conference, RBA governor Michele Bullock said the disagreement among the board was not one of where rates should head, but merely the timing of further rate cuts. This is reflected in the formal minutes from the meeting. "All members agreed that, based on the information currently available, the outlook was for underlying inflation to decline further in year-ended terms, warranting some additional reduction in interest rates over time," the minutes noted. The majority who decided to keep interest rates on hold based their decision on a few key elements. Unlike the minority, most board members interpreted recent economic data as surprisingly upbeat, including the very monthly inflation figures that had prompted some market economists to bring forward their rate cut forecasts from August to July. "Monthly indicators of inflation had been marginally higher than were consistent with the staff's forecast for underlying inflation in the June quarter, growth in private demand in the March quarter had been a little stronger than expected and conditions in the labour market had so far not eased as anticipated," the majority argued. They also said that global economic outcomes had so far been more benign than feared at the previous May meeting, when rates had been cut, reducing the urgency for another rate cut. "Members noted that the baseline forecasts already incorporated some deterioration in global economic conditions because of higher tariffs and policy uncertainty, which was consistent with the evidence currently available on how the trade tensions and other factors might be resolved," the minutes revealed. "Moreover, the forecasts had been conditioned on a relatively modest and gradual path of further easing of monetary policy over the period ahead." After two rate cuts, the majority of the board was also concerned that it would be difficult for the RBA to know exactly when monetary policy had changed from being restrictive — that is, holding back economic growth — to neutral or boosting activity. Given the degree of uncertainty around what the current "neutral" level of the cash rate is, the majority argued that "lowering the cash rate a third time within the space of four meetings would be unlikely to be consistent with the strategy of easing monetary policy in a cautious and gradual manner". Despite the expressed caution of the majority on the RBA board, Abhijit Surya from Capital Economics expects rates to fall at next month's meeting on August 11-12, with further cuts to follow. "With the unemployment rate having surged in June and timely indicators suggesting that activity and inflation both remain subdued, the bank will almost certainly resume its easing cycle in August," he noted. "Looking further ahead, we expect the board to cut rates to 2.85 per cent by mid-2026, in line with the bank's stated goal of ensuring that monetary policy is no longer restrictive. "Our terminal rate forecast is below the 3.1 per cent currently predicted by the analyst consensus." Either way, that implies between three and four more rate cuts from the current cash rate of 3.85 per cent, unless the market has again misread the degree of caution among the majority of RBA board members.
Zawya
17 hours ago
- Business
- Zawya
37,356 issued, renewed licenses in Sharjah during H1 2025
SHARJAH: The total number of issued and renewed business licenses in Sharjah during the first half of this year reached 37,356, with a growth rate of 8% compared to the same period last year, according to data released from Sharjah Economic Development Department (SEDD). The data revealed the most significant developments and events witnessed by the economic sectors in Sharjah, as well as the measures and efforts undertaken by the Department across all sectors and activities. This release aimed at providing a comprehensive tool for stakeholders in the emirate's economic sectors and inform them of the most significant results achieved. Such thing confirms SEDD's efforts to achieve balanced and sustainable economic performance and enhance business continuity across various sectors. Thereof, the number of issued licenses during the first half of 2025 reached 4,359, with a 16% increase. On the other hand, the number of renewed licenses hit 32,997, a 7% increase over the same period last year. When analyzing the issued and renewed licenses in Sharjah during the first half of 2025 by type, it was clearly displayed that the commercial licenses took the first rank in the number of licenses issued and renewed in the emirate with a total of 23,945 licenses and a growth rate of 7% compared to the first half of last year. Then, it was followed by professional licenses with a total of 10,693 licenses with an increase of about 7%. On the other hand, the industrial licenses hit 1,924 ones, with a growth rate of 14%, while Eitimad licenses came in fourth with 522 licenses, and with a growth of 41%. Later on, the e-commerce licenses reached 272 ones, with a growth rate of 23% compared to the first half of last year. Furthermore, SEDD conducted 78,887 inspection campaigns on various economic establishments in the emirate during the first half of 2025. Also, the Department has dealt with many different cases of commercial protection complaints during the past period, each of which was fully resolved in cooperation with all concerned parties. Thus, the total number of commercial protection complaints reached 7,685, including 6,677 consumer protection complaints, 652 commercial fraud complaints, and 356 service agent complaints. The satisfaction rate with the department's consumer protection services for the first half of this year reached 78%. Regarding the data on the scales calibrated by type during the first half this year, the total number of "commercial and gold" scales reached 1,950, representing a growth rate of 56% compared to the same period last year. Commenting on that, Hamad Ali Abdalla Al Mahmoud, SEDD Chairman, stated that the economic sectors in Sharjah are built on solid foundations of diversifying sources of income, focusing on developing key sectors, supporting and stimulating future economic activities, and developing and modernizing flexible legal frameworks that support businesses. This is done in cooperation with concerned partners from all sectors, to make the emirate a leading investment destination in the region. On the other hand, Fahad Ahmed Al Khamiri, SEDD Director, pointed out that the data of 2025 first half confirm the strength of the emirate's economy, the attractiveness of its investment environment, and the confidence of business sectors in the investment opportunities.
Bloomberg
2 days ago
- Business
- Bloomberg
The Global War On Public Holidays Is Far Too Lazy
Worries about fiscal sustainability and tepid economic growth are enticing governments to embrace a simple but controversial step: reduce the number of public holidays so employees produce more. Yet the economic benefit of doing this is marginal. There are better ways to boost productivity and the number of hours worked that would neutralize bitter conflicts about how the economic cake is divided.
Malay Mail
3 days ago
- Business
- Malay Mail
China says exports reflect demand, not bid for world market dominance
BEIJING, July 20 — China is not seeking to dominate global markets, Vice Finance Minister Liao Min said on Friday while defending the country's trade practices during a G-20 gathering near Durban, South Africa. He said most of China's production serves domestic demand, with exports only responding to overseas needs and not part of a wider strategy to flood foreign markets, Bloomberg reported. Liao said China's recent economic performance, including 5.3 per cent growth in the first half of the year, contributes stability at a time when global markets face uncertainty. 'China's certainty and stability are the greatest contributions it makes to the world today,' Liao said, stressing the country's shift toward a consumption-led economy. He noted that 86.4 per cent of China's growth came from domestic demand and that consumption alone drove an average of 56.2 per cent of GDP gains over the past four years. The government is continuing to promote consumption through measures such as 300 billion yuan in special sovereign bonds aimed at boosting sales of electronics, home appliances and cars. China recorded a goods-trade surplus of about US$586 billion (RM2.5 trillion) in the first half of 2025, partly due to exporters accelerating shipments amid fears of new US tariffs. While this export momentum may slow later in the year, economists believe China could still post a record annual surplus exceeding US$1 trillion. Liao argued that China's current-account surplus stood at 2.2 per cent last year, a figure he called globally reasonable and not indicative of excessive trade dominance. US Treasury Secretary Scott Bessent has accused China of extreme trade imbalances and suggested the country is trying to export its way out of a property crisis. Liao rejected overcapacity claims as oversimplified, saying large market share in some sectors does not prove China is distorting global trade. He also voiced strong support for multilateralism and praised the G-20 finance ministers' joint communique, calling it a sign of continued global cooperation despite trade tensions.
