The world this week--Business
The Federal Reserve resumed its policy of monetary tightening following a pause at its last meeting in June, raising its key interest rate by a quarter of a percentage point to a range of between 5.25% and 5.5%.
Inflation has slowed in America.
However, other indicators point to a labour market and overall economy that, while no longer “hot”, have not cooled sufficiently for the rate setters.
The Fed offered few clues about its next move.
Turkey’s central bank took more measures to try to control inflation, increasing the maximum interest rates charged on overdrafts and credit-card cash advances.
On July 20th the bank lifted its main interest rate from 15% to 17.5%.
The world economy is now expected to grow by 3% this year, according to the IMF, a slightly faster pace than its previous estimate in April.
Britain is no longer expected to fall into recession, in part because of strong consumption and less post-Brexit uncertainty.
However, Germany’s economy is forecast to shrink by 0.3% because of weak manufacturing output.
The Federal Reserve and the Bank of England fined UBS a total of $387m for misconduct at Credit Suisse, which UBS recently acquired.
The fines relate to Credit Suisse’s “unsafe and unsound” practices in managing the risk from its dealings with Archegos Capital Management.
Archegos collapsed in 2021, saddling Credit Suisse with a $5.5bn loss.
Dame Alison Rose resigned as chief executive of NatWest, a British bank, after admitting that she was the source of an incorrect BBC story about the closure of a bank account held by Nigel Farage.
Mr Farage helped to lead the campaign in 2016 to pull Britain out of the EU.
Dame Alison told the BBC that his account had been shut at Coutts, a subsidiary of NatWest, solely for commercial reasons.
But Mr Farage obtained a dossier that showed the account was closed in part because his political views on a range of issues were “at odds” with the bank’s “position as an inclusive organisation”.
The affair has raised concerns about how far banks can go to withhold their services from someone with whose views they disagree.
Two of America’s tech giants, Alphabet and Microsoft, reported solid increases in revenue and profit as their core businesses outperformed expectations: digital-ad sales for Alphabet and cloud-computing for Microsoft.
Both companies said their spending on AI would increase over the coming quarters, which could hit profit margins.