The Bank of England is likely to make a "significant" change to its key interest rate in response to tax cuts recently outlined by the U.K. government when policymakers next meet in early November, its chief economist will say later Thursday.
"It is hard to avoid the conclusion that the fiscal easing announced last week will prompt a significant and necessary monetary policy response in November," Huw Pill will say, according to the text of a speech to be delivered later in Northern Ireland.
Pension Strategy Left Funds Vulnerable to Rate Increases
A pension-fund strategy that aims to reduce volatility without lowering returns created the first crack in the financial system after one of the fastest jumps in interest rates in decades.
The Bank of England stopped the selloff exacerbated by heavy selling from U.K. pension funds forced to raise cash.
U.K. Prime Minister Defends Tax Cuts as Market Turmoil Continues
LONDON-Prime Minister Liz Truss looked to reassure the British public and rattled investors that her plan to cut taxes wouldn't lead to prolonged financial instability, arguing in a series of interviews on Thursday that the country had been buffeted by global shocks rather than her government's reforms and that her policies would result in faster growth.
"We had to take decisive action," Ms. Truss told the British Broadcasting Corp. in her first public comments since the tax plan was presented last Friday. The new prime minister said she wouldn't backtrack on plans to carry out big tax cuts and spending increases, a package funded by borrowing which raised alarm among investors.
LME Considering Consultation on Banning Russian Metal
The London Metal Exchange said late Thursday that it was considering launching a consultation on whether to allow Russian metal to be traded and stored in its system.
The exchange said a discussion paper to be shared with market participants was an option "under active consideration," but stressed that no decision had been made.
Thousands Protest in France Against Inflation, Macron's Pension Plan
PARIS-Thousands of people took to the streets in France on Thursday to demand higher wages to cope with inflation and to protest President Emmanuel Macron's plan to raise the country's retirement age.
Striking teachers, students and railway workers joined peaceful protests in dozens of cities across the country, snarling traffic and forcing many schools to shut down. The Eiffel Tower remained closed. The street demonstrations are a sign of the potential turmoil European leaders face as the war in Ukraine continues with no end in sight. Moscow has choked supplies of Russian gas to the continent, hammering businesses and stoking fuel prices.
Barclays to Pay $200 Million SEC Fine Over Debt-Sale Snafu
Barclays PLC agreed to pay a $200 million fine to settle Securities and Exchange Commission charges stemming from a flubbed debt sale earlier this year.
The British bank had registered with the SEC to sell up to $20.8 billion in securities but sold some $38.5 billion worth instead. The flub involved the sale of structured notes, or debt instruments linked to an underlying reference such as the S&P 500 index, and exchange-traded notes.
Iran Protests Feature Smaller Gatherings, Rooftop Chanting as Crackdown Intensifies
Iranian protesters are moving away from big gatherings and street clashes with authorities in Tehran in favor of pop-up demonstrations and individual displays of resistance against the government, according to residents of the capital.
The decline in large-scale demonstrations against the Islamic establishment is driven in part by the harsh crackdown, the threat of arrests and efforts by police to seal off central areas of the city from protesters, the people said.
Escalation of Ukraine War Effort Raises Risks to Russia's Putin at Home and Abroad
MOSCOW-Russia is planning triumphant ceremonies and public rallies as President Vladimir Putin prepares to formally annex a broad, additional swath of neighboring Ukraine in the coming days.
The celebrations are set to echo the pomp and circumstance that accompanied Russia's seizure of Ukraine's Crimean Peninsula eight years ago, an event that Mr. Putin marked in the imperial grandeur of the Kremlin's gilded St. George's Hall.
GLOBAL NEWS
China's Service Sector Slows in Latest Economic Warning Sign
HONG KONG-Chinese economic activity remained feeble in September, with the services sector slipping into contraction, offering fresh evidence of the damage that Beijing's Covid-prevention measures and a deepening real estate slide are inflicting on the country's economy.
Activity in the service sector, which includes the retail, catering and transport industries, were hammered as authorities across China tightened Covid-19 restrictions ahead of a key political gathering in October.
China's Central Bank Gives Cities Room to Lower Mortgage Rates
China's central bank is giving local governments leeway to lower mortgage rates for first-time home buyers, in a bid to shore up the nation's slumping real-estate market.
The People's Bank of China said late Thursday that cities that have recorded month-on-month and year-over-year drops in home prices between June and August can relax the floor on mortgage rates for first-time buyers.
India's Central Bank Calls Aggressive Monetary Policy a Shock to Global Economy
India's central bank raised its key interest rate by half a percentage point, as efforts to rein in inflation and protect an economic recovery have been complicated by its currency's decline against the U.S. dollar.
On Friday, the Reserve Bank of India raised its overnight lending rate to 5.90% from 5.40%, the fourth increase since it began raising rates following an unscheduled meeting in May, prompted by global inflationary pressures exacerbated by Russia's invasion of Ukraine.
Talking Markets: Taiwan Dollar More Prone to Risks Than Most Other Asian Currencies
The Taiwan dollar, which fell to five-and-a-half-year lows against the U.S. dollar in the third quarter, is likely staring at more potential volatility and weakness till the end of this year.
Vulnerability to geopolitical risks and potential equity outflows are likely to weigh on the currency in the fourth quarter, analysts say.
Fed must try to avoid a 'harsh recession,' Daly says
The Federal Reserve does not need to induce a deep recession in order to bring down high inflation, San Francisco Fed President Mary Daly said Thursday.
"Inducing a deep recession does not seem warranted by conditions, nor is it necessary to achieve our goals," Daly said in a speech at Boise State University.
Senate Approves Stopgap Bill to Fund Government, Provide More Ukraine Aid
WASHINGTON-The Senate approved legislation to keep the federal government operating until mid-December as well as fund new aid for Ukraine.
The legislation, which passed 72-25, would prevent a partial government shutdown after the current fiscal year expires Friday night.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
09-30-22 0559ET
