Economy

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FILE PHOTO: Japan's Health, Labour and Welfare Minister Katsunobu Kato speaks at a news conference in Tokyo
FILE PHOTO: Japan’s Health, Labour and Welfare Minister Katsunobu Kato speaks at a news conference in Tokyo, Japan August 3, 2017. REUTERS/Kim Kyung-Hoon

May 24, 2019

By Leika Kihara and Yoshifumi Takemoto

TOKYO (Reuters) – The fallout from the U.S.-China trade war on Japan’s economy will be a key factor in deciding whether to proceed with a scheduled sales tax hike this year, a senior Japanese ruling party official said on Friday.

Prime Minister Shinzo Abe has repeatedly said he will go ahead with a twice-delayed increase in the sales tax in October unless the economy is hit by a shock on the scale of the collapse of Lehman Brothers in 2008.

Katsunobu Kato, head of the Liberal Democratic Party’s general council and a close aide of Abe, said such a crisis was hard to predict, and global growth was likely to rebound later this year.

“If the economy remains in a state it is now, the government will proceed with the tax hike as scheduled,” he told Reuters.

But Kato said the government must scrutinize developments in U.S.-China trade talks and their impact on Japan’s economy, warning that it was “unclear” whether the two countries could narrow differences at a summit scheduled to be held on the sidelines of a Group of 20 leaders’ meeting next month.

“The biggest factor to look out for is the U.S.-China trade friction,” Kato said. “Global economic developments change all the time, so we need to watch out for them.”

A recent mixed batch of economic data has kept alive speculation that Abe could put off the increase in the tax rate to 10 percent from 8 percent, despite repeated assurances by senior government officials.

If the higher levy hurts the economy too much, the government can take steps to prop up growth, Kato said, while adding that in terms of policy tools “unfortunately Japan doesn’t have that many options left.”

The Bank of Japan could be called upon to help revive the economy depending on how severe the shock is, though it was up to the central bank to decide what steps it takes, he added.

“Any policy step would come at a cost, so it will be a decision the central bank makes” balancing the merits and demerits, Kato said.

Kato also said there was no change to the government’s endorsement of the BOJ’s efforts to achieve its elusive 2 percent inflation target.

“We’re not in a stage where the government needs to ask the BOJ to drop its 2 percent inflation target,” Kato said.

Years of heavy money printing have failed to drive up inflation to the BOJ’s target. Prolonged easing, instead, has drawn criticism from financial institutions for narrowing margins, raising calls from some lawmakers to drop the target or make it a less rigid one with room for some allowances.

(Reporting by Leika Kihara; Editing by Simon Cameron-Moore)

Source: OANN

Office lights are on at dusk in the Canary Wharf financial district, London
Office lights are on at dusk in the Canary Wharf financial district, London, Britain, January 9, 2017. REUTERS/Dylan Martinez

May 24, 2019

By Susanna Twidale

LONDON (Reuters) – Britons could see a 6 billion pound ($7.6 billion) cut in energy bills over five years from 2021, saving the average household 40 pounds per year, under plans to curb what gas and electricity network firms can pay shareholders.

Regulator Ofgem, which introduced a price cap on standard energy bills in January after lawmakers said customers were being overcharged, is now targeting the operators whose network fees make up around a quarter of British household energy bills.

Energy firms are under intense scrutiny, with Britain’s opposition Labour party last week announcing a plan to nationalize the sector if it comes into power.

Ofgem said it plans to cut the amount network firms pay their shareholders, known as the “cost of equity range” by almost 50% for the next regulatory period starting in 2021.

The regulator said the package of measures it proposed could result in savings averaging 40 pounds per customer from 2021.

“Our proposals are on track to deliver a tough, fair settlement that strikes a better deal for consumers,” Ofgem executive director for systems and networks Jonathan Brearley said as the regulator announced its plan on Friday.

(What costs make up a British duel fuel energy bill? https://tmsnrt.rs/2TDnSKs)

Under Ofgem’s framework, energy network operators set out their plans for investment and how much they expect this to cost over the period. Ofgem sets the return the companies can make.

Fixed returns have prompted investors to scoop up network assets. Abu Dhabi Investment Authority bought a 16.7 percent stake of the Scotia Gas Networks business from SSE for 621 million pounds in 2016.

Other investors in Britain’s energy network include National Grid, Iberdrola’s Scottish Power, Australian investment bank Macquarie and Hong Kong’s Cheung Kong Group.

National Grid and SSE both said they were disappointed by the equity proposals.

“We believe this is not in the long-term interests of consumers,” National Grid said in a statement.

(Reporting by Susanna Twidale; Editing by Alexander Smith)

Source: OANN

Office lights are on at dusk in the Canary Wharf financial district, London
Office lights are on at dusk in the Canary Wharf financial district, London, Britain, January 9, 2017. REUTERS/Dylan Martinez

May 24, 2019

By Susanna Twidale

LONDON (Reuters) – Britons could see a 6 billion pound ($7.6 billion) cut in energy bills over five years from 2021, saving the average household 40 pounds per year, under plans to curb what gas and electricity network firms can pay shareholders.

Regulator Ofgem, which introduced a price cap on standard energy bills in January after lawmakers said customers were being overcharged, is now targeting the operators whose network fees make up around a quarter of British household energy bills.

Energy firms are under intense scrutiny, with Britain’s opposition Labour party last week announcing a plan to nationalize the sector if it comes into power.

Ofgem said it plans to cut the amount network firms pay their shareholders, known as the “cost of equity range” by almost 50% for the next regulatory period starting in 2021.

The regulator said the package of measures it proposed could result in savings averaging 40 pounds per customer from 2021.

“Our proposals are on track to deliver a tough, fair settlement that strikes a better deal for consumers,” Ofgem executive director for systems and networks Jonathan Brearley said as the regulator announced its plan on Friday.

(What costs make up a British duel fuel energy bill? https://tmsnrt.rs/2TDnSKs)

Under Ofgem’s framework, energy network operators set out their plans for investment and how much they expect this to cost over the period. Ofgem sets the return the companies can make.

Fixed returns have prompted investors to scoop up network assets. Abu Dhabi Investment Authority bought a 16.7 percent stake of the Scotia Gas Networks business from SSE for 621 million pounds in 2016.

Other investors in Britain’s energy network include National Grid, Iberdrola’s Scottish Power, Australian investment bank Macquarie and Hong Kong’s Cheung Kong Group.

National Grid and SSE both said they were disappointed by the equity proposals.

“We believe this is not in the long-term interests of consumers,” National Grid said in a statement.

(Reporting by Susanna Twidale; Editing by Alexander Smith)

Source: OANN

Office lights are on at dusk in the Canary Wharf financial district, London
Office lights are on at dusk in the Canary Wharf financial district, London, Britain, January 9, 2017. REUTERS/Dylan Martinez

May 24, 2019

By Susanna Twidale

LONDON (Reuters) – Britons could see a 6 billion pound ($7.6 billion) cut in energy bills over five years from 2021, saving the average household 40 pounds per year, under plans to curb what gas and electricity network firms can pay shareholders.

Regulator Ofgem, which introduced a price cap on standard energy bills in January after lawmakers said customers were being overcharged, is now targeting the operators whose network fees make up around a quarter of British household energy bills.

Energy firms are under intense scrutiny, with Britain’s opposition Labour party last week announcing a plan to nationalize the sector if it comes into power.

Ofgem said it plans to cut the amount network firms pay their shareholders, known as the “cost of equity range” by almost 50% for the next regulatory period starting in 2021.

The regulator said the package of measures it proposed could result in savings averaging 40 pounds per customer from 2021.

“Our proposals are on track to deliver a tough, fair settlement that strikes a better deal for consumers,” Ofgem executive director for systems and networks Jonathan Brearley said as the regulator announced its plan on Friday.

(What costs make up a British duel fuel energy bill? https://tmsnrt.rs/2TDnSKs)

Under Ofgem’s framework, energy network operators set out their plans for investment and how much they expect this to cost over the period. Ofgem sets the return the companies can make.

Fixed returns have prompted investors to scoop up network assets. Abu Dhabi Investment Authority bought a 16.7 percent stake of the Scotia Gas Networks business from SSE for 621 million pounds in 2016.

Other investors in Britain’s energy network include National Grid, Iberdrola’s Scottish Power, Australian investment bank Macquarie and Hong Kong’s Cheung Kong Group.

National Grid and SSE both said they were disappointed by the equity proposals.

“We believe this is not in the long-term interests of consumers,” National Grid said in a statement.

(Reporting by Susanna Twidale; Editing by Alexander Smith)

Source: OANN

A shopper loads a basket in a supermarket in London
A shopper loads a basket in a supermarket in London, Britain April 11, 2017. REUTERS/Neil Hall

May 24, 2019

LONDON (Reuters) – British retailers reported the weakest sales performance for the time of year in over a decade this month, and plan the least investment on record, a survey by the Confederation of British Industry showed on Friday.

The CBI distributive trades survey’s retail sales balance slumped to -27 in May from +13 in April, below all forecasts in a Reuters poll and the lowest since October 2017.

Adjusted for the time of year, sales were the weakest since March 2009, the CBI said.

“This month’s survey paints a dismal picture of business conditions for retailers, who face a grim combination of tough trading conditions, Brexit uncertainty and a burdensome outdated business rates regime,” CBI economist Anna Leach said.

A quarterly measure of retailers’ investment intentions sank to its lowest since the survey began in 1983.

Official data earlier on Friday showed British shoppers paused for breath in April after months of strong buying, according to official data that showed continued underlying strength of consumer spending during the Brexit crisis.

(Reporting by David Milliken, editing by Alistair Smout)

Source: OANN

A shopper loads a basket in a supermarket in London
A shopper loads a basket in a supermarket in London, Britain April 11, 2017. REUTERS/Neil Hall

May 24, 2019

LONDON (Reuters) – British retailers reported the weakest sales performance for the time of year in over a decade this month, and plan the least investment on record, a survey by the Confederation of British Industry showed on Friday.

The CBI distributive trades survey’s retail sales balance slumped to -27 in May from +13 in April, below all forecasts in a Reuters poll and the lowest since October 2017.

Adjusted for the time of year, sales were the weakest since March 2009, the CBI said.

“This month’s survey paints a dismal picture of business conditions for retailers, who face a grim combination of tough trading conditions, Brexit uncertainty and a burdensome outdated business rates regime,” CBI economist Anna Leach said.

A quarterly measure of retailers’ investment intentions sank to its lowest since the survey began in 1983.

Official data earlier on Friday showed British shoppers paused for breath in April after months of strong buying, according to official data that showed continued underlying strength of consumer spending during the Brexit crisis.

(Reporting by David Milliken, editing by Alistair Smout)

Source: OANN

A shopper loads a basket in a supermarket in London
A shopper loads a basket in a supermarket in London, Britain April 11, 2017. REUTERS/Neil Hall

May 24, 2019

LONDON (Reuters) – British retailers reported the weakest sales performance for the time of year in over a decade this month, and plan the least investment on record, a survey by the Confederation of British Industry showed on Friday.

The CBI distributive trades survey’s retail sales balance slumped to -27 in May from +13 in April, below all forecasts in a Reuters poll and the lowest since October 2017.

Adjusted for the time of year, sales were the weakest since March 2009, the CBI said.

“This month’s survey paints a dismal picture of business conditions for retailers, who face a grim combination of tough trading conditions, Brexit uncertainty and a burdensome outdated business rates regime,” CBI economist Anna Leach said.

A quarterly measure of retailers’ investment intentions sank to its lowest since the survey began in 1983.

Official data earlier on Friday showed British shoppers paused for breath in April after months of strong buying, according to official data that showed continued underlying strength of consumer spending during the Brexit crisis.

(Reporting by David Milliken, editing by Alistair Smout)

Source: OANN

FILE PHOTO: A man walks past the Bank of England in the City of London
FILE PHOTO: A man walks past the Bank of England in the City of London, Britain, February 7, 2019. REUTERS/Hannah McKay/File Photo

May 24, 2019

LONDON (Reuters) – Regulators are watching a price war in mortgages like a “hawk” and may need to slap stricter minimum capital requirements on lenders, Bank of England Deputy Governor Sam Woods said on Friday.

The price war may be good news for consumers wanting to buy their first home, but it was less good for a bank concentrated in mortgages, Woods told the Building Societies Association.

High loan-to-value ratios and higher loan-to-income home loans can be well captured by the BoE’s capital requirements.

“But we should be watching them like a hawk,” Woods said.

Falling capital levels have been seen at lenders who use their own computer models to work out the riskiness of loans on their books and therefore how much capital to hold.

“The amount of capital being set aside to cover mortgages has been falling,” Woods said.

The BoE’s supervisors were making strenuous efforts to check on how models are being used.

“Still, I think we should approach this trend with a very skeptical eye and need to consider whether there is a case to impose more floors in firms’ models, particularly given the current stretch in some measures of house price valuation,” Woods said

(Reporting by Huw Jones)

Source: OANN

FILE PHOTO: The logo of French oil giant Total is seen at La Defense business and financial district in Courbevoie
FILE PHOTO: The logo of French oil giant Total is seen at La Defense business and financial district in Courbevoie, near Paris, France. May 16, 2018. REUTERS/Charles Platiau/File Photo

May 24, 2019

By Katya Golubkova, Ron Bousso and Shadia Nasralla

LONDON/MOSCOW (Reuters) – France’s Total is seeking to sell part of its stake in Kazakhstan’s giant Kashagan oilfield to raise up to $4 billion, four banking sources said.

Total holds a 16.8% stake in Kashagan, one of the world’s largest oil fields with production of around 400,000 barrels per day, and is seeking to sell around one third of its stake, according to the sources.

Total’s entire stake is estimated to be worth up to $9 billion, the sources said.

Total declined to comment.

Kashagan, the world’s biggest oil find in decades and the most expensive standalone oil project, took an estimated $50 billion and 13 years to develop before starting in 2016.

The French energy company has held talks with a Chinese national oil company about a stake sale in recent months, but the sides were unable to agree on a price, according to two sources.

Total is not using any external bankers in the sale process, one of the sources said.

The sale would be a welcome cash boost for Total as it prepares to buy $8.8 billion of oil and gas assets in Africa from Occidental Petroleum should its acquisition of U.S. rival Anadarko go through.

Kashagan is operated by the North Caspian Operating Company (NCOC) and the other partners in the field are Eni, Royal Dutch Shell, Exxon Mobil, KazMunayGas, Inpex and China National Petroleum Corp.

Kashagan, located in the Caspian sea where temperatures throughout the year can drop to below 30 Celsius and rise above 40 Celsius, is expected to produce 370,000-400,000 barrels per day early next month after undergoing maintenance.

Under Kazakh law, companies selling stakes in projects like Kashagan have to offer them to the Kazakh government first and can only sell to third parties if the government chooses not to buy.

Kazakhstan’s Energy Ministry could not be immediately reached for comment.

(Additional reporting by Bate Felix in Paris, Mariya Gordeyeva in Almaty; Editing by Elaine Hardcastle)

Source: OANN

FILE PHOTO: Cranes are pictured against sunset at a construction site in Tokyo
FILE PHOTO: Cranes are pictured against the sunset at construction site in the Toyosu district in Tokyo, February 12, 2015. REUTERS/Thomas Peter/File Photo

May 24, 2019

By Leika Kihara

TOKYO (Reuters) – Japan’s government downgraded its assessment of the economy on Friday but maintained the view it was recovering, suggesting that escalating U.S.-China trade tensions have yet to hit growth enough to put off this year’s scheduled sales tax hike.

The fallout from the trade war and slowing global demand have clouded the outlook for the export-reliant economy, keeping alive market expectations that Prime Minister Shinzo Abe may postpone a twice-delayed increase in the sales tax in October.

But Economy Minister Toshimitsu Motegi shrugged off such speculation, saying Japan should proceed with the tax hike.

Japan needs revenues to pay for bulging welfare costs to support a fast-ageing population and curb the industrial world’s heaviest public debt burden.

“There’s no change to our plan to raise the sales tax as scheduled,” he told reporters after the report was issued.

“I don’t think things are that bad. Manufacturing is affected by the U.S.-China trade dispute. But if you look at the supply side of our economy, manufacturing accounts for only 21%,” he said, adding that the service sector that makes up a bulk of the economy is doing well, with consumption “holding up”.

“Japan’s economy is recovering at a moderate pace, while weakness in exports and industrial production continues,” the government said in a monthly economic report for May.

That was a slightly bleaker view than last month, when it said the economy was recovering moderately despite “some” weakness in exports and output.

Some analysts had previously expected the report could drop the view the economy was recovering, to signal that growth was too weak to weather the hit from the higher levy.

The government also cut its view on output and capital expenditure, nodding to the growing pain from U.S.-Sino trade tensions and slowing Chinese demand.

But it stuck to the view that domestic demand remains strong enough to moderate some of the pain from overseas headwinds, helping keep Japan’s recovery intact.

“Export growth is moderating due to China’s slowdown, which is keeping output weak,” a government official told a briefing, adding that some manufacturers were putting off capital spending plans.

“But consumption and capital expenditure continue to grow as a trend. The fundamentals supporting domestic demand remain firm,” he said.

Abe has repeatedly said he would proceed with an increase in the sales tax rate to 10% from 8% in October unless the economy was hit by a severe shock. But some lawmakers have called for a postponement on concerns it could tip Japan into recession.

The government has said Japan needs the tax hike to meet ballooning social welfare costs for a rapidly aging population and to rein in public debt, which is double the size of its economy and the biggest among major countries.

But critics of the plan argue that raising the tax would hit an economy already hurt by slowing exports.

A government index measuring current economic conditions showed Japan may already be in recession, while first-quarter gross domestic product (GDP) data showed weakness in consumption and capital expenditure.

(Additional reporting by Stanley White; Editing by Sam Holmes and Jacqueline Wong)

Source: OANN


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