PRESS DIGEST-British Business

Reuters
Argentina's 300% inflation and propped-up peso spawn Paraguay border ghost town
Paraguayan shoppers used to flock in their droves to the border town of Nanawa to buy cheap imports from Argentina, where the weak peso currency for years kept relative prices low for fuel, medicine and groceries smuggled in across the frontier. Now Nanawa is a ghost town, with prices of the contraband pushed up steeply by Argentina's rare mix of near 300% inflation and a propped-up peso that has even rallied against the dollar in widely-used parallel markets under libertarian President Javier Milei. "Before, things worked very well, we sold everything," said Marta, 57, a pharmacy employee in Nanawa who only wanted to go by her first name.
The Telegraph
Business faces £42bn debt crisis after end of ultra-low rates
High interest rates are set to cost British businesses an extra £41.7bn by the end of the decade as cheap loans expire and are replaced with more expensive debt.
Yahoo Finance
Data reveals rising economic 'distress' across America despite post-pandemic growth
Data from the Economic Innovation Group's (EIG) Distressed Communities Index shows that as of 2023, local economies across America still hadn't fully recovered from the effects of the COVID-19 pandemic.
Reuters
Shares nudge higher as US, EU inflation data loom
World shares firmed on Monday as investors braced for a busy run of inflation data that could set the scene for a European rate cut as soon as next week and a U.S. policy easing within just a few months. Holidays in Britain and the United States made for thin trading ahead of Friday's figures on core personal consumption expenditures (PCE), the Federal Reserve's preferred measure of inflation. "The pathway to the Federal Reserve's 2% target appears longer and more arduous than anticipated last year," Bruno Schneller, managing director at Erlen Capital Management, said.
Reuters
US consumer confidence recovers; inflation worries persist
U.S. consumer confidence unexpectedly improved in May after deteriorating for three straight months amid optimism about the labor market, but worries about inflation persisted and many households expected higher interest rates over the next year. The mixed survey from the Conference Board on Tuesday also showed more consumers believed that the economy could slip into recession in the next 12 months. While the economy is expected to slow this year as a result of the cumulative impact of 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022 to tame inflation, economists and most business executives are not forecasting a downturn.
Reuters
Japan, at G7 meet, renews push to keep yen bears in check
Japan renewed its push to counter excessive yen falls during a weekend gathering of Group of Seven (G7) finance leaders, after a recent rise in bond yields to a 12-year high failed to slow the currency's stubborn decline. The effort by the government and central bank underscores the dilemma policymakers face as they seek to balance the need to arrest sharp yen drops that hurt consumption, while keeping borrowing costs low to underpin a fragile economy. The agreement came after Japan's top currency diplomat Masato Kanda on Friday talked up the chance of renewed currency-market intervention, telling reporters that Tokyo stood ready to act "any time" to counter excessive yen movement.
Reuters
BOJ's underlying inflation measures in April all fall below 2%
The Bank of Japan's key measurements of underlying inflation in April all fell below its 2% target for the first time since August 2022, data showed on Tuesday, heightening uncertainty on the timing of its next interest rate hike. The weighted median inflation rate, among the three indicators closely watched as a gauge on whether price rises are broadening, rose 1.1% in April from a year earlier after a 1.3% gain in March, the data showed. A third index that measures the inflation rate with the highest density in the distribution also rose 1.6% in April, slowing from the previous month's 1.9% gain, it showed.
Yahoo Finance Canada
Seeking affordability, young families flee Canada's big cities for cheaper options
"I think we need to be thinking even further outside the core of these cities."
Reuters
German business sentiment stagnates in May
BERLIN (Reuters) -German business morale stagnated in May, a survey showed on Monday, falling short of a forecast improvement and suggesting the recovery of Germany's economy this year will be slow progress. The Ifo institute said its business climate index remained constant in May at 89.3, compared with a reading of 90.4 forecast by analysts in a Reuters poll. "The Ifo index, Germany’s most prominent leading indicator, just illustrated that the cyclical bottoming out will not automatically be followed by a strong recovery," said Carsten Brzeski, global head of macro at ING.
Reuters
South Korea plans to detail tax incentives, chip industry support
South Korea's finance minister said authorities would put forward detailed tax incentives under corporate reforms aimed at boosting the value of listed companies after seeking more feedback from market participants in coming months. Minister Choi Sang-mok also pledged in a media pool report released on Tuesday that the government would continue efforts to support the country's crucial chip industry. Choi told reporters authorities will seek to balance fairness and effectiveness as they prepare tax benefits for companies participating in the government's "Corporate Value-up Programme" first proposed in February and aimed at boosting the value of listed companies.
MediaOutReach
Octa insights: analysis and outlook for Malaysia's economic growth in the first quarter of 2024
KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 27 May 2024 - The latest economic report for the first quarter of 2024 from Bank Negara Malaysia (BNM), combined with new, revised data from the Department of Statistics Malaysia (DOSM), gives optimism about Malaysia's economy in the coming year. Thus, the economy grew by 4.2% at the end of the first quarter of 2024, beating the 3.9% growth forecast. By comparison, in 2023, the economy grew by 3.7%, with a sharp drop from a 22-year high of 8.7%
Sky News
More than 120 business leaders back Labour 'to achieve UK's full economic potential'
More than 120 business leaders have written an open letter giving their backing to Labour in the general election. Senior figures, including chef Tom Kerridge and former CEOs of Heathrow, JP Morgan and Aston Martin, said the party had "shown it has changed and wants to work with business to achieve the UK's full economic potential". Both Labour leader Sir Keir Starmer and his shadow chancellor Rachel Reeves have long been making efforts to win over the business community since taking over the party from Jeremy Corbyn.
Reuters
Japan upgrades factory output view in monthly report
Japan's government upgraded its assessment of factory output for the first time in a year, saying in its monthly economic report that it showed signs of picking up and signalling production may have bottomed out. The government also upgraded its assessment of imports and public works while leaving its overall economic assessment unchanged for a third straight month. There was no revision to other components such as private consumption and capital expenditure.
Reuters Videos
China's back in Africa, but does the continent benefit?
STORY: China's flagship economic cooperation program is bouncing back after the global health crisis, with Africa as a primary focus.That's what's been shown through analysis of lending, investment and trade data.Chinese leaders are citing the billions of dollars for new construction and record two-trade as evidence of their "win-win" commitment to supporting the continent's modernization through the Belt and Road Initiative.But the data, however, reveals a more complex relationship that is heavily weighted towards the extraction of minerals.:: LendingBefore the health crisis, China's engagement in Africa was heavily driven by sovereign lending - financing ports, hydropower plants and railways across the continent.That peaked at $28.4 billion in 2016, according to the Global China Initiative at Boston University.But Chinese sovereign lending is now at its lowest level in two decades and a rebound is not expected.Instead, Chinese policymakers have been pushing companies to get some "skin in the game" by taking equity stakes and operating infrastructure they build for foreign governments.The $668 million Nairobi Expressway is one example.It was built and is run by the state-owned China Road and Bridge Corporation through a public-private partnership.Since opening in August 2022 it has beaten revenue and usage targets.But few Chinese firms are following CRBC's example in Africa.Globally some 45% of Chinese non-emergency lending was to special purpose vehicles from 2018 to 2021, the most recent years for which figures from U.S. research center AidData are available.But the figure was only 27% for Africa.When asked about a decline in lending for African infrastructure, Chinese officials point to a pivot to trade and investment - arguing Belt and Road Initiative trade boosts the continent's wealth and development.China's foreign ministry said the government encourages Chinese companies to "actively develop new modes of cooperation" such as PPPs to bring more private investment to Africa.:: InvestmentNew Chinese investment in Africa increased 114% last year according to the Griffith Asia Institute at Australia's Griffith University.However, it was heavily focused on minerals essential to the global energy transition and China's plans to revive its flagging economy.Data from Washington-based think tank the American Enterprise Institute showed investments hitting nearly $11 billion in 2023.That's the highest level since it began tracking Chinese economic activity in Africa in 2005.Some £7.8 billion of that went into mining for minerals like copper, cobalt and lithium.The hunt for critical minerals is also driving infrastructure construction as well. In January, for example, Chinese companies pledged up to $7 billion in infrastructure investment under a revision of their copper and cobalt joint venture agreement with Democratic Republic of Congo.:: TradeCritical minerals and oil have also dominated trade.But efforts to boost other imports from Africa, including agricultural products and manufactured goods, have faltered.That's seen the continent's trade deficit with China balloon.Two-way trade reached a record $282 billion last year according to Chinese customs data.But the value of Africa's exports to China actually fell 7% - mainly due to a decline in oil prices.The trade deficit widened 46%.Last August Chinese President Xi Jinping said Beijing would launch initiatives to support Africa's manufacturing and agricultural modernization.China has also pledged to increase agricultural imports from Africa.:: OutcomeBut the result of all this, potentially, is a more one-sided relationship than China says it wants.That is one dominated by imports of Africa's raw materials.Some analysts argue there are echoes of colonial-era Europe's economic relations with the continent.China rejects such assertions. Its foreign ministry said Africa has the "right, capacity and wisdom to develop its own external relations and choose its partners"."China's practical support for Africa's path of modernization in accordance with its own characteristics," it wrote, "has been welcomed by an increasing number of African countries."
Reuters
Dollar rebounds as yields rise, consumer confidence improves
(Reuters) -The dollar gained on Tuesday, giving back earlier losses, as benchmark U.S. Treasury yields hit a four-week high following some weak auctions. The Treasury Department saw soft demand for sales of two-year and five-year notes. “The bond market has turned around today and the dollar with it,” said Adam Button, chief currency analyst at ForexLive in Toronto, citing the weak auctions and noting that the improving consumer confidence report reflects “stronger growth.”
Associated Press Finance
Stock market today: Most of Wall Street slips in quiet trading after returning from a 3-day weekend
Most U.S. stocks fell in a quiet day of trading Tuesday after a tick higher in bond yields tightened the screws a bit on Wall Street. The Nasdaq composite rode the strength of tech stocks to rise 99.09 points, or 0.6%, to 17,019.88 and added to its latest all-time high set on Friday. It’s still riding a wave created by its latest blowout profit report from last week, which calmed some of the worries that Wall Street’s frenzy around artificial-intelligence technology has inflated expectations and prices beyond reasonable levels.
PA Media: UK News
Labour will bring back growth, Reeves to tell businesses
Rachel Reeves will say a Labour government will be both pro-worker and pro-business in her first speech of the election campaign.
The Telegraph
Labour Party manifesto 2024: Keir Starmer’s election promises
Sir Keir Starmer has given his first major speech of the general election, making the case to voters that his “changed” party can be trusted by voters.
Reuters
Japan's business service prices rise at fastest annual pace since March 2015
Japanese corporate services prices in April rose at their fastest pace since early 2015, Bank of Japan data showed on Tuesday, boosted by labour costs in the services sector in a positive signal for policymakers looking for wages-led cycle of demand growth. The Corporate Services Price Index (CSPI) rose 2.8% year-on-year in April, following a 2.4% increase in the previous month. The annual gains reflect rising labour costs in labour-intensive service businesses such as machine repair and industrial facility renovation.
The Independent
Taiwan passes law favouring China and limiting new president’s powers
Thousands of protesters had gathered outside Taiwanese parliament, calling on MPs to ‘refuse Chinese political interference’

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PRESS DIGEST-British Business - May 14

Latest stories

Argentina's 300% inflation and propped-up peso spawn Paraguay border ghost town

Business faces £42bn debt crisis after end of ultra-low rates

Data reveals rising economic 'distress' across America despite post-pandemic growth

Shares nudge higher as US, EU inflation data loom

US consumer confidence recovers; inflation worries persist

Japan, at G7 meet, renews push to keep yen bears in check

BOJ's underlying inflation measures in April all fall below 2%

Seeking affordability, young families flee Canada's big cities for cheaper options

German business sentiment stagnates in May

South Korea plans to detail tax incentives, chip industry support

Octa insights: analysis and outlook for Malaysia's economic growth in the first quarter of 2024

More than 120 business leaders back Labour 'to achieve UK's full economic potential'

Japan upgrades factory output view in monthly report

China's back in Africa, but does the continent benefit?

Dollar rebounds as yields rise, consumer confidence improves

Stock market today: Most of Wall Street slips in quiet trading after returning from a 3-day weekend

Labour will bring back growth, Reeves to tell businesses

Labour Party manifesto 2024: Keir Starmer’s election promises

Japan's business service prices rise at fastest annual pace since March 2015

Taiwan passes law favouring China and limiting new president’s powers