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UK firm Kwarteng moves to placate investors with early budget date and Treasury pick By Reuters

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© Reuters. British Chancellor of the Exchequer Kwasi Quarting speaks during the annual conference of the British Conservative Party in Birmingham, Britain, on October 3, 2022. REUTERS/Hana McKay

By Andy Bruce, William Schomberg, and David Milliken

LONDON (Reuters) – British Chancellor of the Exchequer Kwasi Quarting, who last month caused a bond market crash and international panic over unfunded tax cuts, made his next budget announcement for nearly a month and appointed a Treasury official to run the department.

Under pressure to rebuild investor confidence in the new government’s economic agenda, Kwarteng said he will unveil long-term tax and spending plans and an independent economic forecast on October 31, not November 23 as previously scheduled.

He also announced on Monday that James Bowler, an expert Treasury official, will be the Treasury’s top new civilian employee, after he upset investors by abruptly ousting his predecessor.

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Newspapers reported last week that Prime Minister Liz Truss wanted to give the job to an outsider, after accusing the Treasury of pursuing a low-growth economic policy “doctrine”.

Mel Stride, the lawmaker who chairs the House Treasury Committee, who has been critical of Scholar’s departure, said the appointment would help reassure investors.

“What we need at the moment are safe pairs. We need to rely on our strong institutions. We don’t want to undermine those institutions in any way,” Stride told BBC radio.

The moves come as Courting prepares to head to Washington this week with criticism from the International Monetary Fund of Britain’s new policy direction ringing in his ears.

Investors remained wary, sending yields on long-term British government debt soaring even as the Bank of England extended its emergency support to the shaky bond market, which is set to expire on Friday.

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The regulator, the Financial Supervisory Authority, told trading platforms that it should tell them immediately of any significant deterioration in market conditions while the European Union’s securities watchdog asked Britain about the extreme moves.

The early date for announcing Kwarteng’s budget will allow the BoE to include government tax and spending plans in its thinking before it announces its next rate decision on November 3.

Many investors believe that the Bank of England may raise interest rates by a full percentage point to counteract the inflationary impact of Kwarteng’s tax cuts.

Quantitative tightening (QT) sales of UK government bonds are also due to start on October 31, after being delayed due to its move to buy emergency bonds.

“You have a lot of risk events coming up,” said Pooja Kumra, chief European interest rate analyst at TD Securities. “End of provisional purchases, then financial outlook on October 31 and beginning of QT, and the BoE meeting itself on November 3.”

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New budget, same growth problems?

Kwarteng said the new date for his medium-term financial statement would give the Independent Office of Budget Responsibility (OBR) enough time to implement a full forecast.

He had previously said that the Office of Budget Affairs did not have time to provide a satisfactory forecast for his September 23 announcement, although the Balance Sheet Office disputed this.

Kwarteng and Truss hope the Office of Budget Responsibility will support their claims that a combination of tax cuts and reforms in areas such as planning rules and immigration will boost Britain’s economic growth prospects.

But the International Monetary Fund said last month that the government’s push for economic growth and the Bank of England’s attempts to control inflation were working against each other.

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The new fiscal plan deadline leaves Quarting and Truss a little more than two weeks to iron out divisions in her government over cuts in government spending.

Having already bowed to pressure to drop the most divisive policy — the abolition of the highest income tax rate of 45% for high-income earners — they face ministerial opposition to the idea of ​​cutting welfare benefits on inflation-adjusted terms.

Last week, two senior ministers expressed their displeasure with the shift in income tax for Truss, which indicates that unity among its top team is crumbling.

(dollar = 0.9038 pounds)

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Economic

US Federal Reserve proposes plan for banks to manage climate-related financial risks By Reuters

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© Reuters. FILE PHOTO: An eagle graces the facade of the US Federal Reserve Building in Washington, July 31, 2013. REUTERS/Jonathan Ernst

Written by Chris Prentice

WASHINGTON (Reuters) – The U.S. Federal Reserve on Friday joined other major bank regulators in proposing a plan for how big banks can manage climate-related financial risks, drawing immediate opposition from one member and reservations from another.

The proposed principles detail the expectations for banks with more than $100 billion in assets to incorporate climate-related financial risks into their strategic planning. The proposal was approved for public comment in a 6-1 vote of the Fed’s Board of Governors.

The proposal marks the latest effort by US policymakers to prepare for potential financial risks from climate change, bringing the Fed into line with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), which have separately proposed their own plans.

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The potential impacts of climate change — rising sea levels, worsening floods and fires, and government policies moving away from carbon-heavy industries — could destroy trillions of dollars in assets worldwide.

The Fed said these financial implications “constitute an emerging risk to the integrity and integrity of financial institutions and to the financial stability of the United States.”

The Fed’s plan requires banks to consider climate-related financial risks in their audits, manage other risks, and add climate-related scenario analysis to the traditional stress test. The report suggested that banks should also assess and consider whether they should include climate-related risks in their liquidity reserves.

The debate over the extent of financial system risks posed by climate change has been politically charged. Federal Reserve Governor Christopher Waller opposed Friday’s proposal, raising the question of whether it represented a serious risk to the safety of large banks or financial stability in the United States.

“Climate change is real, but I do not agree with the premise that it poses a serious risk to the safety and integrity of major banks and the financial stability of the United States,” Waller said in a statement released alongside the proposal. “The Fed conducts regular stress tests on large banks that deliver very severe macroeconomic shocks and show that banks are resilient.”

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Gov. Michele Bowman endorsed the plan for public input with reservations, noting that the board should consider the “costs and benefits of any new projections.”

The proposal will be open to public comment for 60 days.

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More than 1,000 New York Times union employees plan to quit over payroll, reports Reuters

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© Reuters. FILE PHOTO: The New York Times Building in Manhattan, New York, US, August 3, 2020. REUTERS/Shannon Stapleton/File Photo

(Reuters) – More than 1,000 unionized employees of The New York Times Company have pledged to quit if the news publisher does not agree to a “full and fair contract” by Dec. 8, according to a union tweet on Friday.

The New York Times NewsGuild sought “inflationary” wages as well as preserving and enhancing health insurance and retirement benefits promised during employment, according to a letter signed by 1,036 members.

“We will be out and about for 24 hours, Thursday, December 8th, if we do not have a full and fair contract agreement in place by then,” the letter said.

Union members are also asking for flexibility to work remotely, among other demands.

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A spokesperson for The New York Times said “While we are disappointed that NewsGuild is threatening to strike, we stand ready to ensure The Times continues to serve our readers without interruption,” adding that the company’s current pay offer offered “significant increases.”

Earlier in March, a group of nearly 600 tech employees at The New York Times voted to unionize as the company faced allegations that it illegally interfered with organizing work.

In August, approximately 300 Thomson Reuters (NYSE: Corp) journalists in the US, represented by the same NewsGuild, also staged a 24-hour strike while the union negotiated a new three-year contract with the company.

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Mexico and the United States plan to promote by early 2023 to attract companies from abroad (Reuters).

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© Reuters. Mexico’s Economy Minister Raquel Buenrostro smiles during an event with business union representatives to discuss goals for the “Black Friday” shopping season in Mexico City, Mexico, October 19, 2022. REUTERS/Edgard Garrido

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MEXICO CITY (Reuters) – Mexican Economy Minister Raquel Buenrostro and U.S. Commerce Secretary Gina Raimondo agreed on Friday to put together a plan by early 2023 to move companies from Asia to North America, the government said.

In her first visit to Washington since taking office in October, Buenrostro met this week with senior US officials to discuss shared trade concerns, as well as efforts to attract companies from Asia.

Buenrostro’s ministry said she and Raimundo spoke on Friday about strengthening supply chains, particularly printed circuit boards and semiconductors, and they agreed on how important energy, food and national security are to economic development.

The ministry said in a statement that the two countries will work to submit a joint offer during the first two months of 2023 to the private sector on the economic and financial benefits that their countries offer companies to transfer.

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This summer, the US government approved legislation known as the Chip Act that will provide more than $52 billion to boost semiconductor manufacturing capacity in the US.

Buenrostro on Thursday discussed efforts to resolve a bilateral dispute over Mexico’s energy policies with US Trade Representative Catherine Taye. Tai also stressed the importance of avoiding disruptions to US corn exports to Mexico.

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