G7 strikes deal to shield US multinationals from higher global taxes, FT reports
June 28 (Reuters) - The G7 has reached an agreement that would exempt U.S. multinational companies from paying more corporate tax overseas, the Financial Times reported on Saturday, citing people familiar with the discussions.
The deal, backed by Washington and other G7 members, would allow U.S. companies to avoid certain overseas taxes due to levies already paid in the United States, the report said.
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Reuters
44 minutes ago
- Reuters
World economy faces 'pivotal moment', central bank body BIS says
LONDON, June 29 (Reuters) - Trade tensions and fractious geopolitics risk exposing deep fault lines in the global financial system, central bank umbrella body the Bank for International Settlements, said in its latest assessment of the state of the world economy. Outgoing head of the BIS, often dubbed the central bankers' central bank, Agustín Carstens, said the U.S.-driven trade war and other policy shifts were fraying the long-established economic order. He said the global economy was at a "pivotal moment", entering a "new era of heightened uncertainty and unpredictability", which was testing public trust in institutions, including central banks. The bank's report is published just over a week before U.S. President Donald Trump's trade tariff deadline of July 9 and comes after six months of intense geopolitical upheaval. When asked about Trump's criticisms of U.S. Federal Reserve Jerome Powell, which have included Trump labelling the Fed chair as "stupid", he was not overly critical. "It is to be expected at certain points in time that there will be friction," former Mexican central bank governor Carstens told reporters, referring to the relationship between governments and central banks. "It is almost by design". The BIS' annual report, published on Sunday, is viewed as an important gauge of central bankers' thinking given the Switzerland-based forum's regular meetings of top policymakers. Rising protectionism and trade fragmentation were "particular concerning" as they were exacerbating the already decades-long decline in economic and productivity growth, Carstens said. There is also evidence that the world economy is becoming less resilient to shocks, with population ageing, climate change, geopolitics and supply chain issues all contributing to a more volatile environment. The post-COVID spike in inflation seems to have had a lasting impact on the public's perception about price moves too, a study in the report showed. High and rising public debt levels are increasing the financial system's vulnerability to interest rates and reducing governments' ability to spend their way out of crises. "This trend cannot continue," Carstens said referring to the rising debt levels and he said that higher military spending could push the debt up further. Hyun Song Shin, the BIS's main economic adviser, also flagged the sharp fall in the dollar. It is down 10% since the start of the year and on track to be its biggest H1 drop since the free-floating exchange rate era began in the early 1970s. He said there was no evidence that this was the start of a "great rotation" away from U.S. assets as some economists have suggested, but acknowledged that it was still too early to know given sovereign funds and central banks move slowly. Shorter-term analysis, though, showed "hedging" by non-U.S. investors holding Treasuries and other U.S. assets appears to have made an "important contribution" to the dollar's slide over the last few months. "We haven't seen anything (yet) that would give us any cause for alarm," Shin added. The BIS had already published one part of its report last week that gave a stark warning about the rapid rise of so-called stablecoins. In terms of the BIS' own finances, it said it made a net profit of 843.7 million IMF SDR ($1.2 billion), while its total comprehensive income reached a record high of SDR 3.4 billion ($5.3 billion) and currency deposits at the bank also reached a new high. "It is important that the BIS has the highest creditworthiness out there," Carstens said.
Telegraph
an hour ago
- Telegraph
Starmer: Iran ‘distracted' me from dealing with welfare bill rebellion
Sir Keir Starmer has said he did not get to grips with the growing rebellion over welfare reforms earlier as he was focused on international affairs. He also said he took ownership for his decisions and believed as leader he should 'carry the can' when things did not go well. 'I'd have liked to get to a better position with colleagues sooner than we did,' Sir Keir said.'I'm putting this as context rather than an excuse. 'I was heavily focused on what was happening with NATO and the Middle East all weekend. From the moment I got back from the G7, I went straight into a Cobra meeting. My full attention really bore down on this on Thursday. At that point, we were able to move relatively quickly.' The Prime Minister also insisted there had been 'a lot of outreach' over the bill to backbench MPs but acknowledged more should have been done. 'Would I rather have been able to get to a constructive package with colleagues earlier? Yeah, I would. [But] I believe in the world we live in, not the world we want to live in.' Rebellion prompts U-turn The comments came after over 100 Labour MPs rebelled against the government's welfare bill, prompting a last-minute U-turn on the planned reforms. 'Getting it right is more important than ploughing on with a package which doesn't necessarily achieve the desired outcome,' Sir Keir told The Sunday Times. There have been reports that rebel MPs blamed Sir Keir's chief of staff Morgan McSweeney for the Government's approach. Sir Keir said: 'My rule of leadership is, when things go well you get the plaudits; when things don't go well you carry the can. 'I take responsibility for all the decisions made by this government. I do not talk about staff and I'd much prefer it if everybody else didn't.' Tax rises? Ministers had hoped the reforms would get more people back into work and save up to £5 billion a year, but the concessions have left Chancellor Rachel Reeves needing to find money elsewhere potentially in tax rises in the autumn. On Saturday, the Prime Minister told the Welsh Labour conference the 'broken' welfare system must be fixed 'in a Labour way'. He said: 'We cannot take away the safety net that vulnerable people rely on, and we won't, but we also can't let it become a snare for those who can and want to work.' Kemi Badenoch, the Conservative Party leader, will hit out at Sir Keir as 'incapable of sticking to a decision' after he backed down on his plans. The reforms would only have made ' modest reductions to the ballooning welfare bill ', but the Prime Minister was 'too weak to hold the line', the Conservative Party leader is expected to say in a speech next week. Change in welfare reforms The Government's original welfare package had restricted eligibility for Pip, the main disability payment in England, as well as cutting the health-related element of universal credit. Existing recipients were to be given a 13-week phase-out period of financial support in an earlier move that was seen as a bid to head off opposition. Now, the changes to Pip will be implemented in November 2026 and apply to new claimants only, while all existing recipients of the health element of universal credit will have their incomes protected in real terms. The concessions on Pip alone protect some 370,000 people currently receiving the allowance who were set to lose out following reassessment. As a year in office nears, more than half of voters think Labour has underperformed in that time, polling released on Saturday showed. The Opinium survey showed 54 per cent think Labour has done a worse job than expected, while 18 per cent think the party has exceeded expectations.
The Independent
an hour ago
- The Independent
Starmer asked to intervene in Trump-Canada dispute
Donald Trump has abruptly ended trade discussions with Canada and threatened new tariffs, citing Canada's planned digital services tax. The US president stated the tax is a direct and blatant attack on US tech companies, leading him to terminate all trade talks immediately. Prime Minister Sir Keir Starmer is facing calls to intervene in the dispute, particularly ahead of Mr Trump's state visit to the UK in September. Opposition parties, including Liberal Democrats and SNP, have criticised Mr Trump's trade war tactics and questioned the UK government's approach. The escalating tensions have caused market turmoil and highlight concerns about the reliability of the US as a trade partner.
