The banking crisis blurs the Central Bank’s focus on inflation

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Today’s top news

  • The International Criminal Court issued arrest warrant for Russian President Vladimir Putin about the deportation of children from Ukraine. Chinese leader Xi Jinping will visit Putin in Russia next week to confirm Beijing’s strong ties with Moscow.

  • OECD raises its forecast for global growth this year from 2.2 percent to 2.6 percentwhile inflation was forecast to hit 4 percent in 2023 and 2.5 percent in 2024. The UK has been named the most fragile advanced economy outside of Russia.

  • A breakthrough in negotiations between the UK government and health workers unions could complete a series of strikes. Hopes are also pinned on an agreement with educators.

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Good evening.

It’s been a rollercoaster week.

Markets have been rattled by banking crises on both sides of the Atlantic, sparking speculation that central banks may have to revise their rate hike plans, only to be urged by the OECD today to hold their nerve.

US banking stocks fell sale resumed today as investors ignored the $30 billion bailout package Bank of the First Republic from major Wall Street institutions. The sector was first worried about the collapse a week ago. Bank of Silicon Valley – the second largest bankrupt in US history – and Signature Bank. SVB’s parent company today applied for bankruptcy protection.

US creditors flocked to the Fed for last week’s support, but Treasury Secretary Janet Yellen claims that the banking system remains “healthy” despite failures.

In Europe, unrest at Credit Suisse, which has been struggling for some time, added to investors’ nervousness. The bank is limping on a $54 billion lifeline from the Swiss central bank, but its shares fell again today, taking the entire sector with it.

While some fear that continued aggressive policy tightening could exacerbate the banking crisis, the OECD today urged central banks to “keep the courseand keep raising rates to fight inflation.

The European Central Bank appears to agree, announcing yesterday up 50 basis points up to 3 percent. However, he abandoned his previous commitment to continue “significantly raising interest rates at a sustainable pace” in a sign of uncertainty about how far he could go.

New data for the euro area today showed that labor costs rose by record speed of 5.7 percent in the last quarter of 2022, highlighting the magnitude of the challenge ahead.

All eyes are now on the Fed.which will announce its decision next Wednesday, followed by the Bank of England a day later.

Activist investor Carl Icahn is one of those urging the Fed to stick to its stance, telling the FT that the alternatives Eradication of the “disease of inflationNew survey data today, largely covering the period before the banking crisis, showed consumer sentiment worsened for the first time in four months, highlighting fears that inflation could take hold.

In the UK, new information showed public inflation expectations fell to a 16-month low, adding to the view that the Bank of England may leave rates unchanged at 4%. Markets are currently evenly split between no change and 25 basis points up.

What you need to know: the British and European economy

Reaction to the environment UK budget continuation. Chancellor Jeremy Hunt was indicted yesterday play his fiscal rules to make public finances look better, while the opposition Labor Party vowed to change that retirement tax breaks for the wealthy. The FT editors said the growth plans were a step in the right direction.

Economics editor Chris Giles evaluates the work of the head of the Bank of England Andrew Bailey after three years of work, emphasizing the praise for crisis management, but critique of inflation and communication.

French President Emmanuel Macron said he would ram his unpopular plan to raise the retirement age without a parliamentary vote. Now he is likely to face a no-confidence vote next week and another nationwide union protest on Thursday.

EU Climate Agenda could be in jeopardy after Germany blocked a ban on new internal combustion engines. Other member states want to loosen emission restrictions on heavy trucks and industrial farms.

What you need to know: World Economy

Ajay Bangathe US nominee for president of the World Bank, said the organization must work with the private sector and adapt to solve problems that its founders could not imagine, such as climate change, pandemics and forced migration.

Growing use of deepfakes and AI to spread government disinformation V Venezuela raises concerns about their potential impact on a population that has little access to reliable news sources.

What you need to know: business

Great Britain banned the use of a Chinese social media app tik tak on government devices. The US has threatened a ban if its owners do not sell your share.

Shares in technology business Baidu fell after disappointing debut of his chatbot Ernie, China ChatGPT response. The launch with pre-recorded video sparked comments online “Is that all?” US West Coast Editor Richard Waters takes a look at how Big Tech works racing to adapt to the AI.

UK retail leader John Lewis refused to reward staff and warned of more job cuts after full-year losses widened. “Inflation hit us like a hurricane,” said Dame chairman Sharon White, adding that the cost-of-living crisis has pushed some customers to discount supermarkets.

british american tobacco this is the latest company to face pressure move your main listing to New York after a major shareholder said it “didn’t make sense” for the cigarette maker to remain on the UK stock market.

The number of visitors to top attractions in uk such as the British Museum and Tate Modern, failed to bounce as the cost-of-living crisis and lack of Chinese travelers limited demand.

Science Review

Computing and life sciences in the UK should benefit from financial and regulatory measures announced in a budget aimed at making the UK “the best place in Europe” for technology companies to invest and grow. Plans were also confirmed £2.5 billion investment after 10 years quantum computing program.

Business groups called on Prime Minister Rishi Sunak to join EU skyline ‘as soon as possible’ research scheme as concerns escalate access of scientists to projects. British scientific sector she still has a certain way to go before she can be called the world’s leading, the commentator writes. Anjana Ahuja.

New study in mice shows high doses sucralose have an unexpected calming effect on the immune system, meaning that the most widely used artificial sweetener can be used to treat certain inflammatory diseases.

Proposed clinic in the USA ketamine along with psychotherapy for people suffering from alcoholism as a rapidly growing psychedelic industry transition to addiction treatment. The drug has been licensed by the British biotechnology company Awakn Life Sciences, which is developing a psychedelic therapy for depression, anxiety and other mental illnesses.

Japan’s decade-long effort to enter the big leagues space competition crashed after the failure of its newest rocket. The H3 was seen by Tokyo as a rival to Elon Musk’s SpaceX Falcon 9 in a potentially lucrative business. commercial satellite launch market.

New research global air quality showed that 90 per cent of the world’s population is still inhalation of air hazardous to health, with a widening gap between richer and poorer countries. Our Big Read solves the question: is 1.5C real as a global climate goal.

Chart showing how half a degree warming could affect crop yields, coral reefs and species extinction

good news

Sustainability experts from the University of Birmingham and local company Suscon have developed a new type of emergency shelter for refugees fleeing disaster areas. Shelter for four people is delivered unassembled, can be quickly erected by unskilled workers and has minimum service life 10 years.

emergency shelter
The disaster shelter has room for four people and can be built quickly © University of Birmingham/Suscon

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