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BoE's Vlieghe to vote for rate cut if data shows weak economy- FT – Financial Post

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Bank of England policymaker Gertjan Vlieghe said on Sunday he will vote for a cut in interest rates later this month, barring an “imminent and significant” improvement in the country’s growth data.

“Personally I think it’s been a close call, therefore it doesn’t take much data to swing it one way or the other,” Vlieghe, a member of the bank’s Monetary Policy Committee, told the Financial Times.

“I really need to see an imminent and significant improvement in the UK data to justify waiting a little bit longer.”

Vlieghe’s comments follow other recent suggestions that Britain’s central bank is edging towards a looser monetary policy.

Governor Mark Carney, who steps down in March, surprised markets last Thursday by saying that the BoE could cut interest rates if the economic weakness seen in late 2019 persists into 2020.

Silvana Tenreyro, who is also a policymaker at the central bank, on Friday joined the talk and said she would be inclined to back an interest rate cut in the coming months if growth remained sluggish in the economy.

Britain’s economy lost momentum after the 2016 Brexit referendum and slowed to a crawl in late 2019, although tentative signs of a pick-up in sentiment appeared after Prime Minister Boris Johnson won an unexpectedly big majority in a Dec. 12 election.

“We will get a lot of information as soon as the end of January,” Vlieghe added.

“We’ll get a lot of business and some household surveys that cleanly relate to the period after the election, so that will give us an initial read as to how people are responding.” (Reporting by Shubham Kalia in Bengaluru; Editing by Christian Schmollinger and Richard Pullin)

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World Bank sees ‘significant’ inflation risk from high energy prices

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 Energy Prices are expected to inch up in 2022 after surging more than 80% in 2021, fueling significant near-term risks to global inflation in many developing countries, the World Bank said in its latest Commodity Markets Outlook on Thursday.

The multilateral development bank said energy prices should start to decline in the second half of 2022 as supply constraints ease, with non-energy prices such as agriculture and metals also expected to ease after strong gains in 2021.

“The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries,” said Ayhan Kose, chief economist and director of the World Bank’s Prospects Group, which produces the Outlook report.

“The sharp rebound in commodity prices is turning out to be more pronounced than previously projected. Recent volatility in prices may complicate policy choices as countries recover from last year’s global recession.”

The International Monetary Fund, in a separate blog https://blogs.imf.org/2021/10/21/surging-energy-prices-may-not-ease-until-next-year, said it expected energy prices to revert to “more normal levels” early next year when heating demand ebbs and supplies adjust. But it warned that uncertainty remained high and small demand shocks could trigger fresh price spikes.

The World Bank noted that some commodity prices rose to or exceeded levels in 2021 not seen since a spike a decade earlier.

Natural gas and coal prices, for instance, reached record highs amid supply constraints and rebounding demand for electricity, although they are expected to decline in 2022 as demand eases and supply improves, the bank said.

It warned that further price spikes could occur in the near-term given current low inventories and persistent supply bottlenecks. Other risk factors included extreme weather events, the uneven COVID-19 recovery and the threat of more outbreaks, along with supply-chain disruptions and environmental policies.

Higher food prices were also driving up food-price inflation and raising questions about food security in several developing countries, it said.

The bank projected crude oil prices would reach $74/bbl in 2022, buoyed by strengthening demand from a projected $70/bbl in 2021, before easing to $65/bbl in 2023.

The use of crude oil as a substitute for natural gas presented a major upside risk to the demand outlook, although higher energy prices may start to weigh on global growth.

The bank forecast a 5% drop in metals prices in 2022 after a 48% increase in 2021. It said agricultural prices were expected to decline modestly next year after jumping 22% this year.

It warned that changing weather patterns due to climate change also posed a growing risk to energy markets, potentially affecting both demand and supply.

It said countries could benefit by accelerating installation of renewable energy sources and by cutting their dependency on fossil fuels.

(Reporting by Andrea Shalal; editing by Diane Craft)

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Global Climate Policy Acceleration Means Sink-or-Swim Decade for Canada's Economy: Report – Canada NewsWire

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OTTAWA, ON, Oct. 21, 2021 /CNW Telbec/ – Canada’s economy faces a “sink-or-swim” decade, according to the first study to assess Canada’s economic prospects in the face of accelerating global market shifts responding to climate change.

Sink or Swim: Transforming Canada’s economy for a global low-carbon future is a major new report from the Canadian Institute for Climate Choices, Canada’s independent climate policy research institute. The report assesses Canada’s economic prospects in response to the global low-carbon transition and offers recommendations for successfully navigating that transition.

Countries responsible for over 70 per cent of global GDP and over 70 per cent of global oil demand have committed to reaching net zero emissions by mid-century. Trillions of dollars in global investment will move away from high-carbon sectors. The impact of these global shifts will be profound, shifting trade patterns, reshaping demand, and upending businesses that are too slow to adapt.

To better understand the risks and opportunities of this transition for Canada, Sink or Swim stress tests publicly traded companies under different scenarios. Without major investment, the report finds, many exporters and multinationals will see significant profit loss in the coming decades. The stakes are high for Canada, with almost 70 per cent of goods exports and over 800,000 jobs in transition-vulnerable sectors, including oil and gas, mining, heavy industry, and auto manufacturing.

To succeed in this global transition, the report concludes, Canada must use climate policy, company disclosure, and targeted public investment to mobilize private finance and improve the resilience of Canada’s workforce and impacted communities.

QUOTES

“Our analysis shows that global policy and market changes will have a profound impact on Canada’s economy and workforce. To stay competitive, Canada needs to rapidly scale up new, transition-consistent sources of growth—and successfully transform existing ones. Moving too slowly is now a greater competitive risk than moving too quickly.”

—Rachel Samson, Clean Growth Research Director, Climate Choices

“The global transition means Canada must transform its economy in the face of new market realities. With smart, certain policy and innovation across the private sector, there is a path to strong economic growth, gains in well-being, and lower emissions.”

—Don Drummond, Stauffer-Dunning Fellow and Adjunct Professor at the School of Policy Studies at Queen’s University and fellow-in-residence at the C.D. Howe Institute

“Major Canadian investors understand the pressures our economy will be facing as a result of accelerating global market shifts, and we’re issuing a strong call for increased climate accountability and transparency in the corporate sector.”
—Dustyn Lanz, CEO, Responsible Investment Association

“The Aluminum Association of Canada supports a holistic view of Canada’s trajectory towards net zero emissions. A multifaceted approach with room for everyone will support a transition to a prosperous and sustainable economy.”
—Jean Simard, President and Chief Executive Officer of the Aluminium Association of Canada

“Canadian businesses and investors need clarity on which economic activities are consistent with the transition to a low-carbon future. Without that clarity, there is a risk that finance will flow in the wrong directions and miss areas of great opportunity. The analysis in this report will support the development of practical taxonomies that can be used for transition-consistent investment decisions and financial products.”
—Barbara Zvan, CEO & President, University Pension Plan and member of Canada’s former Expert Panel on Sustainable Finance. UPP is a participating organization of the Sustainable Finance Action Council

RESOURCES

ABOUT CLIMATE CHOICES

The Canadian Institute for Climate Choices is Canada’s independent climate policy research institute, providing evidence-based policy analysis and advice to decision makers across the country.

SOURCE Canadian Institute for Climate Choices

For further information: Catharine Tunnacliffe, Director of Communications, (226) 212-9883

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Economy

Fed survey finds economy facing supply chain, other drags – GuelphMercury.com

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Fed survey finds economy facing supply chain, other drags  GuelphMercury.com



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