UNITED KINGDOM
Jobless rate remains low
The unemployment rate remains close to a 50-year low, but decades-high inflation is causing the value of wages to fall at a record pace, official data showed yesterday. Unemployment stood at 3.8 percent in the three months to the end of May, unchanged from the previous quarter, the Office for National Statistics (ONS) said in a statement. Job vacancies remain close to record-high levels. ONS head of labor market statistics David Freeman said that demand for workers was “clearly still very high” after the lifting of COVID-19 restrictions. However, “following recent increases in inflation, pay is now clearly falling in real terms, both including and excluding bonuses,” he said.
CURRENCIES
Rupee hits record low
The Indian rupee yesterday fell to more than 80 per US dollar for the first time on record, as the greenback extended its rally and foreign capital outflows intensified. The rupee hit 80.0600 against the greenback soon after trading started, compared with the previous close of 79.9775, Bloomberg data showed. In a written statement to parliament on Monday, Indian Minister of Finance Nirmala Sitharaman attributed the rupee’s sharp fall to external reasons. “Global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian rupee against the US dollar,” she said.
AIRLINES
SAS pilots end strike
Scandinavian Airlines (SAS) pilots in Sweden, Norway and Denmark early yesterday called off a strike that has been causing major disruption for 15 days after reaching a deal with management. SAS chief executive officer Anko van der Werff said the parties had agreed on an agreement for the next five-and-a-half years that guarantees both cost savings and job security for the pilots. SAS said the strike led to the cancelation of more than 3,700 flights, affecting more than 380,000 passengers, adding that the walkout cost 100 million to 130 million Swedish kronor (US$9.76 million to US$12.68 million) per day in lost revenue and costs.
CHINA
Banks to forfeit US$4.6bn
Chinese banks would forfeit 31 billion yuan (US$4.6 billion) of interest income from mortgages under a proposal to give home buyers in stalled projects a temporary payment holiday, according to estimates from Citigroup Inc. The figure amounts to about 1.2 percent of estimated net profit in the banking system for next year, assuming 561 billion yuan of home loans would be at risk if Beijing signs off on the plan, Citigroup analysts wrote in a research report yesterday. Credit risk from the latest round of stress in the property sector is manageable for most banks, the analysts estimated.
CONGLOMERATES
Softbank pauses Arm IPO
Softbank Group Corp has put on hold plans for a London initial public offering of the British chip technology firm Arm Ltd because of the political turmoil in the UK government, the Financial Times reported on Monday. The departures of investment minister Gerry Grimstone and digital minister Chris Philp, following the collapse of British Prime Minister Boris Johnson’s government earlier this month, have led Softbank to pause discussions about Arm’s UK listing next year, the report said, citing people briefed on the talks. They had both played leading roles in talks with the Japanese tech investor, the report said.
DOLLAR CHALLENGE: BRICS countries’ growing share of global GDP threatens the US dollar’s dominance, which some member states seek to displace for world trade US president-elect Donald Trump on Saturday threatened 100 percent tariffs against a bloc of nine nations if they act to undermine the US dollar. His threat was directed at countries in the so-called BRICS alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Turkey, Azerbaijan and Malaysia have applied to become members and several other countries have expressed interest in joining. While the US dollar is by far the most-used currency in global business and has survived past challenges to its preeminence, members of the alliance and other developing nations say they are fed
LIMITED MEASURES: The proposed restrictions on Chinese chip exports are weaker than previously considered, following lobbying by major US firms, sources said US President Joe Biden’s administration is weighing additional curbs on sales of semiconductor equipment and artificial intelligence (AI) memory chips to China that would escalate the US crackdown on Beijing’s tech ambitions, but stop short of some stricter measures previously considered, said sources familiar with the matter. The restrictions could be unveiled as soon as next week, said the sources, who emphasized that the timing and contours of the rules have changed several times, and that nothing is final until they are published. The measures follow months of deliberations by US officials, negotiations with allies in Japan and the Netherlands, and
Qualcomm Inc’s interest in pursuing an acquisition of Intel Corp has cooled, people familiar with the matter said, upending what would have likely been one of the largest technology deals of all time. The complexities associated with acquiring all of Intel has made a deal less attractive to Qualcomm, said some of the people, asking not to be identified discussing confidential matters. It is always possible Qualcomm looks at pieces of Intel instead or rekindles its interest later, they added. Representatives for Qualcomm and Intel declined to comment. Qualcomm made a preliminary approach to Intel on a possible takeover, Bloomberg News and other media
Foxconn Technology Group (富士康科技集團) yesterday said it expects any impact of new tariffs from US president-elect Donald Trump to hit the company less than its rivals, citing its global manufacturing footprint. Young Liu (劉揚偉), chairman of the contract manufacturer and key Apple Inc supplier, told reporters after a forum in Taipei that it saw the primary impact of any fresh tariffs falling on its clients because its business model is based on contract manufacturing. “Clients may decide to shift production locations, but looking at Foxconn’s global footprint, we are ahead. As a result, the impact on us is likely smaller compared to
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