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Reuters
22-07-2025
- Business
- Reuters
Bank of England's Bailey says rise in borrowing costs is not just a UK issue
LONDON, July 22 (Reuters) - Bank of England Governor Andrew Bailey said on Tuesday that a rise in British government borrowing costs was not out of line with increases in other countries. "We have seen steepening of yield curves going on now," Bailey told lawmakers on parliament's Treasury Committee. "I think the important thing to say is that is a global phenomenon. It's not in any sense unique to this country. In fact, the pattern in this country is not in any sense out of line with what we've seen in other markets, and we've seen steeper increases in some other markets." Rising borrowing costs were being driven by concerns about the impact on global trade from trade policy decisions and uncertainty about fiscal policy, he said. U.S. President Donald Trump has imposed tariffs on imports of many goods and has also won approval in Congress for tax cuts that are forecast to push up U.S. public debt. Bailey was speaking to the Treasury Committee alongside other members of the BoE's Financial Policy Committee. Randall Kroszner, a former U.S. Federal Reserve official who is a member of the FPC, said he saw no clash between financial stability and a relaxation of regulations announced by finance minister Rachel Reeves. "But always the devil is in the detail," Kroszner said.
Yahoo
22-07-2025
- Business
- Yahoo
Bank of England's Bailey says rise in borrowing costs is not just a UK issue
LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Tuesday that a rise in British government borrowing costs was not out of line with increases in other countries. "We have seen steepening of yield curves going on now," Bailey told lawmakers on parliament's Treasury Committee. "I think the important thing to say is that is a global phenomenon. It's not in any sense unique to this country. In fact, the pattern in this country is not in any sense out of line with what we've seen in other markets, and we've seen steeper increases in some other markets." Rising borrowing costs were being driven by concerns about the impact on global trade from trade policy decisions and uncertainty about fiscal policy, he said. U.S. President Donald Trump has imposed tariffs on imports of many goods and has also won approval in Congress for tax cuts that are forecast to push up U.S. public debt. Bailey was speaking to the Treasury Committee alongside other members of the BoE's Financial Policy Committee. Randall Kroszner, a former U.S. Federal Reserve official who is a member of the FPC, said he saw no clash between financial stability and a relaxation of regulations announced by finance minister Rachel Reeves. "But always the devil is in the detail," Kroszner said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
09-07-2025
- Business
- Reuters
Malaysia central bank lowers key rate to 2.75% on weaker growth outlook
KUALA LUMPUR, July 9 (Reuters) - Malaysia's central bank cut its benchmark interest rate MYINTR=ECI, opens new tab for the first time in five years on Wednesday, as it looks to support the economy amid a weaker growth outlook and rising uncertainty in global trade. Bank Negara Malaysia lowered its overnight policy rate (OPR) by 25 basis points to 2.75% from 3.00%, where it had been since May 2023, as had been expected by 17 of 31 economists surveyed in a Reuters . The ceiling and floor rates of the OPR corridor are correspondingly reduced to 3% and 2.5% respectively, the central bank said in a statement. The rate decision came a day after U.S. President Donald Trump announced a 25% tariff on Malaysian exports to the United States. BNM said the global growth outlook was weighed down by uncertainties surrounding tariffs, as well as geopolitical tensions, which could lead to greater volatility in global financial markets and commodity prices. While the Malaysian economy was on a strong footing, the central bank said external uncertainties could affect Malaysia's growth prospects. "The reduction in the OPR is... a pre-emptive measure aimed at preserving Malaysia's steady growth path amid moderate inflation prospects," the central bank said. Economists had expected at least one 25-basis-point cut this year, which would hold until the end of 2026, though there was no consensus on where the rate would be then. Estimates for the end of next year ranged from 2.25% to 3.00%. Malaysia has reported a string of soft economic data in recent months with growth slowing to 4.4% in the first quarter, while exports unexpectedly fell in May. Inflation has also remained relatively subdued, with consumer prices rising 1.2% in June, a four-year low. Prime Minister Anwar Ibrahim said in May that Malaysia was unlikely to meet its growth outlook of between 4.5% and 5.5% this year, while BNM has said it would have to lower its growth forecast range due to uncertainties arising from U.S. tariff policies. The central bank also lowered banks' statutory reserve requirement (SRR) ratio by 100 basis points to 1.00% in May - the first SRR reduction since March 2020 at the start of the COVID-19 pandemic - reinforcing a dovish policy outlook. Malaysia's trade ministry said this week it will continue talking to its U.S. counterparts "in good faith" to address outstanding issues, and clarify the scope and impact of the revised U.S. tariffs. Headline and core inflation averaged 1.4% and 1.9% in the first five months of the year respectively, BNM said, adding that consumer prices are expected to remain moderate in 2025. The central bank projects headline inflation to range between 2% to 3.5% in 2025, and core inflation at 1.5% to 2.5%. Both headline and core inflation came in at 1.8% in 2024.
CNA
09-07-2025
- Business
- CNA
Malaysia central bank lowers key rate to 2.75% on weaker growth outlook
KUALA LUMPUR : Malaysia's central bank cut its benchmark interest rate MYINTR=ECI for the first time in five years on Wednesday, as it looks to support the economy amid a weaker growth outlook and rising uncertainty in global trade. Bank Negara Malaysia lowered its overnight policy rate (OPR) by 25 basis points to 2.75 per cent from 3.00 per cent, where it had been since May 2023, as had been expected by 17 of 31 economists surveyed in a Reuters poll. The ceiling and floor rates of the OPR corridor are correspondingly reduced to 3 per cent and 2.5 per cent respectively, the central bank said in a statement. The rate decision came a day after U.S. President Donald Trump announced a 25 per cent tariff on Malaysian exports to the United States. BNM said the global growth outlook was weighed down by uncertainties surrounding tariffs, as well as geopolitical tensions, which could lead to greater volatility in global financial markets and commodity prices. While the Malaysian economy was on a strong footing, the central bank said external uncertainties could affect Malaysia's growth prospects. "The reduction in the OPR is... a pre-emptive measure aimed at preserving Malaysia's steady growth path amid moderate inflation prospects," the central bank said. Economists had expected at least one 25-basis-point cut this year, which would hold until the end of 2026, though there was no consensus on where the rate would be then. Estimates for the end of next year ranged from 2.25 per cent to 3.00 per cent. Malaysia has reported a string of soft economic data in recent months with growth slowing to 4.4 per cent in the first quarter, while exports unexpectedly fell in May. Inflation has also remained relatively subdued, with consumer prices rising 1.2 per cent in June, a four-year low. Prime Minister Anwar Ibrahim said in May that Malaysia was unlikely to meet its growth outlook of between 4.5 per cent and 5.5 per cent this year, while BNM has said it would have to lower its growth forecast range due to uncertainties arising from U.S. tariff policies. The central bank also lowered banks' statutory reserve requirement (SRR) ratio by 100 basis points to 1.00 per cent in May - the first SRR reduction since March 2020 at the start of the COVID-19 pandemic - reinforcing a dovish policy outlook. Malaysia's trade ministry said this week it will continue talking to its U.S. counterparts "in good faith" to address outstanding issues, and clarify the scope and impact of the revised U.S. tariffs. Headline and core inflation averaged 1.4 per cent and 1.9 per cent in the first five months of the year respectively, BNM said, adding that consumer prices are expected to remain moderate in 2025. The central bank projects headline inflation to range between 2 per cent to 3.5 per cent in 2025, and core inflation at 1.5 per cent to 2.5 per cent. Both headline and core inflation came in at 1.8 per cent in 2024.
CNA
08-07-2025
- Business
- CNA
UN warns Trump tariff delays deepen trade uncertainty
GENEVA: United States President Donald Trump's decision to delay implementing major tariff hikes on most trading partners may have offered some relief, but the extension is also prolonging global trade uncertainty, the UN warned on Tuesday (Jul 8). Days before the three-month pause on his "Liberation Day" tariffs was set to expire, the US president said on Monday he would give trading partners an extra three weeks to hammer out deals to avoid paying sky-high levies for their exports to the world's biggest economy. Trump had unveiled sweeping tariffs on imports on Apr 2, including a baseline 10 per cent tariff on all countries, but following market turmoil he quickly suspended tariffs above 10 per cent until Jul 9. But prior to that deadline, he sent out letters to more than a dozen countries - including top trading partners Japan and South Korea - setting out what he had decided to charge if they did not reach agreements by a new Aug 1 target date. Pamela Coke-Hamilton, director of the United Nations-backed International Trade Centre, told reporters in Geneva that the extension was not necessarily good news. "While the reciprocal tariffs will no longer go into effect tomorrow as originally announced, but be (postponed) for another few weeks until first of August, this move actually extends the period of uncertainty," she said. That in turn risks "undermining long-term investment and business contracts and creating further uncertainty and instability". Predictability, she said, is the "one thing businesses need more than anything else". "PERFECT STORM" Coke-Hamilton stressed that the US was not the only country piling on new trade restrictions. "These changes in the trade landscape are part of a bigger trend," she said, pointing out that since the start of the year, her agency has "tracked more than 150 restricted trade measures that have been introduced globally". "These measures layered on top of a general decline in world trade since the onset of the war in the Ukraine, with its related supply-chain disruptions, insecurity and rising commodity prices have put strains on all economies." At the same time, spending on development assistance and aid has fallen off a cliff. "In today's context, a perfect storm is brewing," Coke-Hamilton said. While the global trade uncertainty and the US tariffs were clearly taking their toll on developing countries, she said there were actions they could take "to restore a sense of stability and predictability, and even find new opportunities to grow". Those included focusing more on strengthening regional value chains and striving to process goods in-country before export to retain more value, as well as boosting their small businesses. She also highlighted that markets besides the US could become more attractive, pointing to China's recent announcement that it would give African countries tariff-free access to its market. "That is a major, major, major development, and it can swing things in a way that was not anticipated three months ago," she said. Coke-Hamilton cautioned though that the US itself might suffer from the tariff turmoil. "I think in the long run, it will have a negative impact on the US economy," she said.
