Latest news with #economicRecovery
Reuters
10-07-2025
- Business
- Reuters
South Korea holds rates steady amid tariff, household debt concerns
SEOUL, July 10 (Reuters) - South Korea's central bank held interest rates steady on Thursday, as policymakers steered a cautious path amid concerns about financial stability risks stemming from rising household debt and economic pressure from U.S. tariffs. The Bank of Korea's seven-member monetary policy board voted to keep its benchmark interest rate (KROCRT=ECI), opens new tab unchanged at 2.50%, an outcome expected by all 33 economists in a Reuters poll. Concerns of financial stability risks in Asia's fourth-largest economy have grown in recent months, driven by home prices and household debt rising sharply on lower interest rates, prompting policymakers to introduce stricter mortgage rules. Economists expect the central bank, which has lowered interest rates by a cumulative 100 basis points in the current easing cycle that started in October, to deliver at least one more rate cut of 25 basis points this year to underpin the economic recovery. The government last week adopted a second supplementary budget for the year with a cash handout scheme to boost domestic demand, as President Lee Jae Myung, who took office on June 4, prioritises shoring up an economy grappling with trade risks and tepid consumption. Earlier this week, U.S. President Donald Trump ramped up the trade war he launched this year, telling partners, from powerhouse exporters such as Japan and South Korea to minor players, that they will face high tariffs from August 1. Governor Rhee Chang-yong will hold a press conference at 0210 GMT, which will be livestreamed via YouTube.
News.com.au
10-07-2025
- Business
- News.com.au
Commonwealth Bank warns of RBA rate hold impact on cautious consumers
This week's shock decision from the Reserve Bank of Australia to keep interest rates on hold could dampen the country's recovery in spending, the Commonwealth Bank has warned. The $300bn bank said the hold, which has kept the cash rate at 3.85 per cent, could soften an already limp recovery in household spending throughout 2025. 'The RBA's decision to hold rates at 3.85 per cent in July was unexpected but we anticipate the RBA to cut the cash rate in August by 25 basis points, with November the most likely option for a follow-up rate cut,' CBA senior economist Belinda Allen said. 'While we still anticipate a pick-up in household spending in 2025, a slower rate-cutting cycle could soften this recovery over the remainder of the year.' Consumer spending lifted 0.3 per cent in June, the bank's closely watched household spending index revealed, for a third month of gains following rises of 0.4 per cent in both April and May. But Ms Allen said a full recovery 'was not yet assured'. 'Household spending is starting to show signs of consistency month-on-month and should continue to pick up this year as consumers begin to loosen their purse strings,' she said. 'This recovery is taking longer than expected to occur, but there are green shoots emerging. 'The annual growth rate has picked up, but the recovery is not yet assured. 'Spending around sales events and new items show consumers are still deliberate on their spending decisions.' She also said households continued to preference saving and paying down debt over spending. 'Recent data from CBA showed that just 10 per cent of eligible home loan customers chose to reduce their mortgage direct debit payments following the May interest rate cut,' she said. Growth in spending on utilities, education and communications propelled June's uplift, the index shows, while spending fell across hospitality, motor vehicle and recreation. Consumer spending makes up about 50 per cent of the Australian economy and CBA's index is a closely watched economic indicator. The data is drawn from de-identified payments from the bank's seven-million customer base, accounting for about 30 per cent of Australian consumer transactions. On Tuesday, the RBA voted 6-3 for the hold, which shocked expert commentators and predictions from the money markets. RBA governor Michele Bullock wanted to wait for the June quarter inflation numbers – scheduled for release on July 20 – before moving on rates. 'We just want to confirm with a full quarterly CPI that we're still on track to deliver inflation continuing down to the middle of the band over time,' she said in response to a question from NewsWire. 'That's the reason we're waiting. We decided to hold and we'll reconsider again in August with this extra information and new forecasts.' bRight Agent co-founder Aaron Scott called the hold a 'cruel blow' for millions of Australian homeowners. 'Despite the fact that a July cut would not have been enough to give most mortgage holders a meaningful reprieve, it would have been welcome by the millions of Aussies who are holding out for more cost-of-living relief,' he said on Tuesday. 'Nobody will be breaking out the Wagyu beef or shiraz.'
Reuters
07-07-2025
- Business
- Reuters
Euro zone investor morale hits three-year record as recovery broadens
BERLIN, July 7 (Reuters) - Investor sentiment in the euro zone improved more than expected in July to hit its highest level in more than three years, a survey showed on Monday, as the bloc's economic recovery broadened. The Sentix index for the euro zone rose to 4.5 from 0.2 in June, beating the 1.1 forecast from analysts polled by Reuters and marking its third consecutive monthly increase. The current situation sub-index improved notably but remained in negative territory, rising by 5.8 points to -7.3, while expectations climbed 2.8 points to 17.0, also marking a third straight rise. The survey of investors, conducted between July 4-6, showed the recovery was broad-based across regions, with the United States economy making particularly strong gains after lagging in previous months. Germany, Europe's largest economy, also showed continued improvement with its overall index reaching -0.4, its highest since February 2022, as the current situation rose for a fifth straight month. The survey indicated the European Central Bank's room for further interest rate cuts may narrow as the economic upturn strengthens, though inflation pressures remain contained for now.
Bloomberg
07-07-2025
- Business
- Bloomberg
Kiwi Rally May Lose Steam as Rate Cuts Loom for Sluggish Economy
The New Zealand dollar's rally may fade in the second half of the year, as the central bank continues to cut interest rates and the local economy remains sluggish. With the economic recovery still uneven, strategists see the kiwi's gain likely topping out at 62 US cents by year-end, according to a median forecast compiled by Bloomberg. Kiwibank anticipates a decline to 60 US cents if the Reserve Bank of New Zealand reduces borrowing costs.
Bloomberg
03-07-2025
- Business
- Bloomberg
How Greece Turned a Debt Crisis Into a European Success Story
Ten years ago, Greece's economy stood on the brink. Now it's the envy of Europe - but some scars remain. (Source: Bloomberg)
