China's industrial profits fall 1.8% in first half
The slide followed a decline of 1.1% in the period from January to May, according to National Bureau of Statistics (NBS) data.
Industrial profit numbers cover firms with annual revenue of at least 20 million yuan ($2.79 million) from their main operations.
($1=7.1561 Chinese yuan renminbi)
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Reuters
an hour ago
- Reuters
Irish central bank governor warns government against over-stimulating economy
DUBLIN, Aug 3 (Reuters) - The governor of the Irish central bank has warned the government against over-stimulating the economy in its annual budget in October, saying the country was at risk of being in the "wrong place," in terms of spending. Gabriel Makhlouf was speaking two weeks after the government published its pre-budget plans, in which it said it would allow day-to-day spending to increase by 6.4%, down from the 8-9% range in recent budgets. "For an economy operating at full employment, we're adding more stimulus to the economy than it needs – and I would look again at what we're planning to do," Makhlouf told the Business Post Newspaper in an interview published on Sunday. "I think at the moment there's a risk that we're in the wrong place," Makhlouf said. The government said that it would trim next year's planned 9.4 billion euro package of tax cuts and spending increases, if U.S. tariffs are higher than the 10% in place at the time of the announcement. Days after the government released the budget plans in its Summer Economic Statement, the U.S. struck a framework trade agreement, opens new tab with the European Union, imposing a 15% import tariff on most EU goods. "Hopefully, the Summer Economic Statement is not the budget, and hopefully, by the time he gets there, he will have reflected again on what the trade situation is telling us," Makhlouf said.
The Guardian
an hour ago
- The Guardian
Despite Trump, the US economy remains surprisingly resilient. But for how long?
Chaotic and unpredictable, keeping up with Donald Trump's volatile trade war – never mind his presidency – can be tough. Back in April after his 'Liberation Day' tariff announcement, the talk was of the president crashing the global economy. Then, after a Wall Street backlash, the world learned the acronym 'Taco', which stands for 'Trump Always Chickens Out'. Now, things are heating up again. The president's decision to hit US trading partners with new tariffs – including Canada, Brazil, India and Taiwan – after his self-imposed 1 August deadline certainly reignites a threat to the world economy. Dozens of countries have been left reeling, and US consumers are expected to pay a heavy price. However, there is a sense that things could have been worse. Nowhere more clearly is this reflected than on Wall Street: despite the chaos of the president's trade war, the stock market remains close to record levels. After the latest escalation on Friday, and some worrying US jobs numbers, share prices took a hit, sliding by about 1%. But this is a setback, rather than a rout. A further slide could be ignited by this capricious president. Trump's decision to fire the official in charge of labour market data and his war on the independence of the US Federal Reserve will make matters worse. But despite the warnings of untold economic damage from the US tariff war earlier this year, the American economy has proven surprisingly resilient in recent months. Last week, the president seized on US growth figures showing the economy had expanded at an annualised rate of 3% in the second quarter – far in excess of the 2.4% rate predicted on Wall Street. Could the 'fake news' media have it wrong? Are tariff wars 'good, and easy to win,' as Trump claims? While inflation has ticked up, from 2.4% in May to 2.7% in June, it is well below the peak which followed the height of the pandemic disruption and Russia's invasion of Ukraine, and is far from hitting the levels feared. Back in April, in a country wrought with division, Democrat voters reckoned inflation was on track to hit 7.9% within a year, while Republicans said it would collapse to 0.9%. Butthere is good reason why the US economy has so far defied the prophecies of Armageddon. For starters, the hot-cold nature of Trump's tariff war means investors still anticipate further deals will be done to avoid the worst threats from ever materialising. The toughest tariffs introduced on Friday are only just arriving, too, meaning any impact has yet to emerge. Most countries have not hit back with retaliatory measures, which would have dramatically worsened things by putting international trade into a deeper tailspin. Meanwhile, knowing full well the dangers of this erratic president, businesses have been planning for months to avoid the worst-case scenarios. US companies rushed to stockpile goods before the trade war, helping them to keep prices down for now. Some firms have taken a hit to profits, according to analysts at Deutsche Bank, reckoning this is better than testing struggling American consumers – worn out by years of high inflation – with further price increases. The tariff costs are also being spread by multinationals, by increasing prices across the markets they operate in. In one high-profile example, Sony has put up the price of its PlayStation 5 by as much as 25% in some markets; including the UK, Europe, Australia and New Zealand. But not in the US. Still, there are signs that consequences are coming. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion When US businesses exhaust their pre-tariff stockpiles, it is likely that prices will creep higher. Meanwhile, the uncertainty of an erratic president is hitting jobs and investment. Last week's US jobs market data has reignited fears over the resilience of the American economy. Tariffs are weighing on business confidence and steadily creeping into consumer prices. GDP growth of 3% might appear robust on the face of things, but this figure was heavily influenced by the 0.5% fall in output in the first quarter, when the surge in US firms rushing to beat Trump's tariffs distorted activity. Growth in the first half averaged 1.25%, markedly slower than the 2.8% rate for 2024 as a whole. Part of the reason Wall Street remains sanguine about this is the continued belief that things could have turned out worse. Deals are still expected, with the pause in tariffs for key US trade partners Mexico and China, suggesting this most clearly. The investor view is that, rather than tariffs, the president would prefer a string of box office moments in front of the TV cameras with trade partners paying tribute to the court of Trump. However, it would be wrong to underestimate the self-described 'tariff man's' love of border taxes. And even though his most extreme threats will be negotiated down, the final destination will still be much worse than before. An economic hurricane might be avoided, but a storm is still the last thing businesses and consumers need. Britain's US trade deal is a case in point. A 10% US tariff on British goods has been welcomed as a big victory for Keir Starmer given the alternative, but it is still far worse than before. British cars will face a tariff rate four times higher than previously; costing jobs and growth in Britain while hitting American consumers in the pocket. For the US consumer, the average tariff had been close to 2% before Trump's return to the White House. After his 1 August escalation, that figure leaps to about 15% – the highest level since the 1930s. Almost a century ago a similar wrong-headed protectionist approach in Washington made the Great Depression far worse: the Smoot-Hawley tariffs hit the US and triggered a domino effect among the main industrialised nations; ultimately leading to the second world war. In the unpredictability of Trump's trade war, hope remains that similar mistakes can be avoided. But significant damage is still being done.
Telegraph
3 hours ago
- Telegraph
Sky-high energy prices destroying European industry, warns metal giant
Soaring energy prices will destroy what little heavy industry Britain and the EU have left, the boss of a metals giant has warned ahead of its London listing on Monday. Evangelos Mytilineos, the chief executive of Metlen, a Greek energy and metals company, has marked his company's new FTSE 100 listing with a dire warning about the disastrous impact of high energy costs. 'The UK and Europe have entered a period of high energy prices compared with our competitors,' he said. 'Countries like China, the US and others have maybe half or a third of the cost of power than we have, and this is the biggest problem for UK and European productivity going forward. 'A lot of [UK and European] companies are moving their plants to other parts of the world.' Mr Mytilineos cited German chemical giant BASF's 2024 decision to shut down 11 chemical plants in Germany and spend €10bn (£8.7bn) on a new mega-plant in southern China – partly linked to energy costs and green regulations. The Greek executive, who is also president of the European Metals Association, said the UK and Europe were fighting to retain the factories they had. 'A decade ago Europe had maybe 15 aluminium plants but now there are just four left so we are buying it from countries like China and Indonesia which make it by burning coal,' he said. That decline is partly down to the cost of renewables, the rollout of which is typically funded by subsidies that add levies to energy bills. Surging gas price followed Russia's invasion of Ukraine have also fuelled the problem. 'As long as Russian gas was around, we could be globally competitive,' Mr Mytilineos said. 'Now this is gone. This is geopolitics, and Europe is paying the price.' Addressing Ed Miliband and Sir Keir Starmer's race to decarbonise Britain's economy, Mr Mytilineos warned that green energy policies can come with a heavy price. 'If they want to take these decisions, they must also consider industry. You have to support your industries. Otherwise industries have to find new ways to survive. They have to move.' Metlen's core business is metal refining. It produces bauxite ore from its own mines in Greece where it also has a refinery and smelter. They annually produce 190,000 tonnes of aluminium and 860,000 tonnes of alumina, a vital ingredient in advanced ceramics. From the same ore it is now also extracting gallium, a strategically vital metal where China has long dominated global markets. Metlen is also increasingly involved in metal recycling, melting down scrap and targeting valuable metals like zinc and lead. The company has managed to avoid energy-induced shutdowns because its other key business is energy production: it owns around 14 wind farms, three solar farms and four hydroelectric plants, mostly in Greece, plus several gas fired power stations. It uses those generators to power its metal refining, giving it a near-unique level of immunity from the high energy prices that are wiping out energy-intensive industries across the UK and Europe. The comments come as Mr Mytilineos prepares to ring the London Stock Exchange opening bell at 8am on Monday as Metlen joins the market. The company, valued at close to £6bn, is set for inclusion in the FTSE 100 later this year when the index is re-evaluated. Metlen's move is a vote of confidence in London's beleaguered stock market, which has suffered from a dearth of new listings in the years following Brexit. Mr Mytilineos said: 'My shareholders ask me this – why London? We consider that despite London going through difficult times after Brexit, Amsterdam, Frankfurt or Paris have not managed to overtake the City as a financial hub. 'I think that having gone through this difficult period, the City will make a big comeback, and London Stock Exchange with it. So when choosing a European exchange with the biggest profile for our company, London was the obvious place.'
