China forced to cut rates as zero-Covid policy hits growth - live updates




  • In Business
  • 2022-08-15 08:50:23Z
  • By The Telegraph
China economy slowdown lending rate zero-Covid policy property - Andrea Verdelli
China economy slowdown lending rate zero-Covid policy property - Andrea Verdelli  
  • UK's first four-day week trial battles staff confusion and rota chaos

  • Saudi Aramco rakes in record £40bn profit

  • FTSE 100 edges higher

  • Roger Bootle:  Our ailing economy needs another dose of Thatcher's shock treatment

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China has cut a key lending rate in a bid to shore up its economy after new data showed its slowdown deepened in July due to a worsening property slump and continued Covid lockdowns.

The People's Bank of China cut its policy rates, bringing its seven-day reverse repurchase rate - a key rate at which the central bank provides short-term liquidity to banks - to a new low.

It also cut its one-year medium-term lending facility, surprising analysts.

It came after retail sales, industrial output and investment all slowed in July, while the unemployment rate for those aged 16-24 hit a record high.

The figures highlight a crisis of confidence among Chinese businesses and households, adding another threat to the world economy as global demand falters.

09:50 AM

Joules hires former Compare The Market chief as new boss

Joules has hired the former chief executive of Compare The Market as its new boss.

Jonathon Brown will take over the top job from Nick Jones, who announced plans to leave the business in May.

The reshuffle comes after a torrid start to the year for the upmarket retailer, which has issued several profit warnings in the face of surging inflation and waning consumer confidence. Shares have dropped more than 80pc over the last 12 months.

Joules also confirmed last week it's in talks to sell a minority stake to Next for as much as £15m.

Mr Brown will join the company on September 7 for a handover period, before taking the reins fully at the end of the month.

He was most recently chief executive of Compare The Market, before which he led MandM Direct. He also previously held director roles at B&Q owner Kingfisher and John Lewis.

09:30 AM

Saudi Aramco rakes in record £40bn profit

Saudi Aramco profits - Saudi Aramco
Saudi Aramco profits - Saudi Aramco  

ICYMI - Saudi Aramco has announced the biggest quarterly profit of any public company in history thanks to surging oil prices and demand.

Laura Onita reports:

Read Laura's full story here

09:15 AM

Oil extends losses as China outlook darkens

Oil prices have fallen further at the start of the week as traders weighed up concerns about falling demand from China.

Benchmark Brent crude dropped 1.7pc to below $96.50 a barrel, while West Texas Intermediate was trading under $91.

Markets were rattled by China's unexpected decision to cut lending rates as it boosts support for an economy hit by lockdowns and property woes. The country's apparent oil demand was about 10pc lower in July than last year.

But traders also have an eye on the prospect of more supply from Iran amid signs of progress in efforts to revive a nuclear deal.

08:52 AM

FTSE risers and fallers

The FTSE 100 has gained ground in early trading as investors look ahead to inflation data due later this week.

The blue-chip index rose as much as 0.4pc, before paring gains to just 0.1pc.

AstraZeneca was the biggest boost to the index, rising 2pc after it reported positive results from its phase 3 trial of breast cancer drug Enhertu.

Electronics group RS Group was the biggest riser, up as much as 5.5pc amid reports its preparing to bolster its defences against a possible takeover bid.

Housebuilders including BerkeleyBarratt and Taylor Wimpey and miners Anglo American and Rio Tino slipped into the red.

The domestically-focused FTSE 250 lost 0.1pc, with Trainline down as much as 3.5pc.

08:32 AM

Property asking prices fall by most in two years

Property asking prices have tumbled at the sharpest pace in almost two-and-a-half years as a traditional summer lull was compounded by a slowdown in the market.

The cost of new homes listed for sale fell 1.3pc in August, reducing the annual rate of growth to 8.2pc from 9.3pc, according to data from Rightmove.

The biggest drop was felt in the country's most expensive homes, while London was the region with the largest decline.

Rightmove said prices typically fall in August as buyers go on holiday and gear up for the return to school. But separate figures suggest higher interest rates and a deepening cost-of-living crisis are starting to weigh on the property market.

Tim Bannister at Rightmove said:

08:13 AM

Insurer Phoenix Group posts record first half

Phoenix Group has hailed a strong start to the year despite a "challenging" economic backdrop.

The FTSE 100 life insurance group struck an upbeat tone on the outlook after cash generation jumped 8.9pc to a record £950m in the six months to the end of June.

It added that cash generation was expected to be at the top end of its target range of between £1.3bn and £1.4bn for the full year.

Phoenix said trading was boosted by new business, with cash generated by new clients more than doubling to £430m over the half year.

It comes a week after the company continued its recent acquisition spree with a £248m takeover of Sun Life UK.

Shares ticked up 0.8pc in early trading.

08:03 AM

FTSE 100 opens higher

The FTSE 100 has started the week in positive territory, with traders looking ahead to inflation figures due on Wednesday.

The blue-chip index rose 0.4pc to 7,531 points.

07:51 AM

China shocks with rate cut amid economic slowdown

China economy rates - Noel Celis / AFP
China economy rates - Noel Celis / AFP  

China has cut a key lending rate in a bid to shore up its economy after new data showed its slowdown deepened in July due to a worsening property slump and continued Covid lockdowns.

The People's Bank of China cut its policy rates, bringing its seven-day reverse repurchase rate - a key rate at which the central bank provides short-term liquidity to banks - to a new low.

It also cut its one-year medium-term lending facility, surprising analysts.

It came after retail sales, industrial output and investment all slowed in July, while the unemployment rate for those aged 16-24 hit a record high.

The figures highlight a crisis of confidence among Chinese businesses and households, adding another threat to the world economy as global demand falters.

07:39 AM

Russia resumes bond trading for 'friendly' nations

Good morning.

Russia has taken a step towards reopening its markets - but only for countries it deems "friendly".

Bond trading will resume on the Moscow Exchange today for investors from "countries that are not hostile" - meaning those that haven't targeted Russia with sanctions.

China and Turkey are likely to be included in that group. But the move excludes countries such as EU states, Canada and Japan, which together made up 90pc of investments in Russia last year.

It marks the end of a near six-month shutdown, with Putin halting bond and stock markets in the wake of his invasion of Ukraine in late February.

5 things to start your day

1)  Saudi Aramco books record profit as oil demand soars: State-owned giant makes record $48.4bn in second quarter.

2) Nine in 10 Bank of England staff handed bonuses as inflation soars: More than 300 employees received a bonus of between £10,000 and £15,000.

3)  Pubs and restaurants warn of winter closures as energy bills soar 300pc: Industry pushes for consumer-style price cap and says crisis 'no less of a threat' than drought hitting Britain

4) UK's first four-day week trial battles staff confusion and rota chaos: Companies involved say the policy may not survive beyond the 'bumpy' experiment

5) The Peckham Thatcherite who 'straightened out' Stormzy: Carpet tycoon Lord Harris has won praise from the rapper for his commitment to education

What happened overnight

Tokyo shares opened higher this morning following gains on Wall Street. The benchmark Nikkei 225 index rose 0.6pc, while the broader Topix index climbed 0.2pc.

Meanwhile, Hong Kong stocks dropped at the open, with the Hang Seng Index plummeting 0.7pc. The Shanghai Composite Index dipped 0.3pc and the Shenzhen Composite Index on China's second exchange slipped 0.2pc.

Coming up today

Corporate: Phoenix Group (Interim results)

Economics: GDP (Japan); industrial production, retail sales (China); public holiday (Germany/France/Spain)

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