2025-06-19 14:59

LONDON, June 19 (Reuters) - Bank of England Deputy Governor Clare Lombardelli said on Thursday that British services price inflation - a key measure of domestic price pressures - remained "sticky" despite data showing a slight fall in May. Lombardelli, who was speaking after the central bank kept interest rates at 4.25% in a 6-3 vote split earlier on Thursday, also said the slowdown in Britain's labour market was as expected. Sign up here. "We've seen a rise in a number of elements of inflation. Services inflation is proving to be quite sticky, but we've also seen recent rises in energy prices, other regulated prices," Lombardelli told reporters. "We are seeing some broad weakening in the labour market. I mean, this is in line with what we expected, and actually quite similar to what we set out in our latest Monetary Policy Report in May, but it's important that we consider those changes," she added. Figures published on Wednesday showed British inflation fell to 3.4% in annual terms in May, and service price inflation cooled more than expected to 4.7% from 5.4% in April. https://www.reuters.com/sustainability/sustainable-finance-reporting/uk-services-inflation-is-proving-sticky-boes-lombardelli-says-2025-06-19/

2025-06-19 12:33

Norway surprises with rate cut Switzerland on verge of negative rate territory The Fed holds out on rate cuts for now LONDON, June 19 (Reuters) - Central banks are grappling with elevated uncertainty about economic growth and inflation, complicating decision-making, especially for those trying to calibrate policy as they near the end of their rate-cutting cycles. That's making life hard for investors too. Norway's central bank on Thursday gave markets a shock by cutting interest rates, and even the U.S. Federal Reserve is warning not to put much weight on its policy projections. Sign up here. 1/ SWITZERLAND The Swiss National Bank cut its benchmark rate to 0% on Thursday, in response, it said, to falling inflation, a stronger Swiss franc and economic uncertainty caused by unpredictable U.S. trade policy. The big question is whether it will cut rates into negative territory next time. The SNB is keeping all options on the table, but chairman Martin Schlegel says the hurdle to further cuts is higher now rates are at zero. 2/ CANADA The Bank of Canada held rates at 2.75% in early June and said another cut might be necessary if the economy weakened in the face of tariffs. That pause was the second in succession for the BoC, after an aggressive cutting cycle which shrank rates by 225 basis points over nine months. Markets anticipate one further 25 bps cut by year-end. 3/ SWEDEN Sweden's central bank cut its key rate to 2% from 2.25% on Wednesday and said that, with price pressures weak, it may ease further before year-end to boost sluggish growth. The Riksbank has been one of the more aggressive central banks, with 200 bps of cuts since May 2024. 4/ NEW ZEALAND Markets expect the Reserve Bank of New Zealand to hold steady on July 9 after a 25 bps rate cut to 3.25% in May to protect the China-focused economy. The RBNZ also warned that global trade uncertainties made future moves unclear. Markets see one more 25 bps cut this year, on top of the 225 bps of cuts already this cycle. 5/ EURO ZONE The ECB cut rates earlier this month, its eighth cut since mid-2024, and kept all options on the table , opens new tab for its next meetings. ECB President Christine Lagarde says the euro zone central bank's 2% inflation target is in reach. The question for investors is whether inflation will undershoot that target, and necessitate further easing. Markets price in one more rate cut by year-end. 6/ UNITED STATES The Federal Reserve held rates steady on Wednesday and signalled borrowing costs are still likely to fall in 2025, although Chair Jerome Powell warned against putting too much weight on that projection. "No one holds these ... rate paths with a great deal of conviction, and everyone would agree that they're all going to be data-dependent," Powell said. He added that if not for tariffs, rate cuts might be in order given recent inflation readings have been low. Markets still see roughly two 25 bps cuts by year-end. 7/ BRITAIN The sometimes surprising Bank of England met market expectations on Thursday, keeping interest rates at 4.25%. The BoE has been cutting roughly once a quarter for the past year, and markets expect it to continue at that pace, with two more cuts priced in by year end. Three of the nine rate-setters voted on Thursday for a cut however. Some investors speculate softening labour data could cause the BoE to up the pace of cuts, though others reckon it will be held back by high UK inflation. 8/ AUSTRALIA Weak growth data and fears commodities producers and miners will take a blow from a U.S.-China trade war means the Reserve Bank of Australia stands ready to deliver rapid rate cuts. The RBA cut rates by 25 bps to 3.85% in May and traders see borrowing costs dropping to near 3% by year-end. 9/ NORWAY Norway's central bank cut its policy interest rate by 25 bps to 4.25% on Thursday, its first reduction since 2020, a decision that took most analysts by surprise and weakened the currency. The Norges Bank has been the most cautious among developed market central banks on rate cuts, and governor Ida Bache said only one or two more reductions were planned this year. 10/ JAPAN The Bank of Japan, the sole central bank in hiking mode, kept rates steady on Tuesday, as expected by investors. Escalating Middle East tensions and U.S. tariffs complicate the BOJ's task of raising still-low interest rates and reducing a balance sheet that has ballooned to roughly the size of Japan's economy. On Tuesday it decided to decelerate the pace of its balance sheet drawdown next year, signalling its preference to move cautiously in removing remnants of its decade-long stimulus. https://www.reuters.com/business/finance/global-markets-cenbank-2025-06-19/

2025-06-19 12:28

ST PETERSBURG, Russia, June 19 (Reuters) - Indonesian President Prabowo Subianto held talks with President Vladimir Putin in the northern Russian city of St Petersburg on Thursday as they explore ways to deepen what some officials have called a burgeoning strategic partnership. The deepening of ties between Russia and Indonesia, part of Moscow's bid to forge new relations with the Global South amid Western attempts to isolate it over the Ukraine war, has perturbed some powers such as Australia. Sign up here. Meeting in the Constantine Palace, Putin noted Indonesia's entry into BRICS as a full member and said he was sure it would make a significant contribution to the grouping, which he said was gaining clout in the world. Prabowo thanked Putin for his support over Indonesia's entry to BRICS and said that ties between the two countries were improving. Russia and Indonesia's foreign ministers, Sergei Lavrov and Sugiono, speaking in Moscow earlier this week, mentioned a possible strategic partnership between the two countries. Russia has proposed deepening military, security, trade and nuclear ties with Indonesia, which has the world's fourth largest population. Prabowo previously visited Russia in August 2024, when he was defence minister and president-elect, and described Moscow as a "great friend", saying he hoped for stronger cooperation on defence, energy and education. Indonesia has said that it wants to build its first nuclear power plant by 2032, with 500 MW capacity, aiming for it to come online in the next decade. Authorities said interested developers included Russia's Rosatom, China CNNC, and U.S. small modular reactor producer NuScale. Indonesia, Southeast Asia's biggest economy, currently relies mostly on coal as a source of power despite boasting massive potential for renewable energy sources such as hydro, solar and geothermal. With expectations of high energy demand in the future, Indonesia is seeking to boost power generation capacity while capping its carbon emissions, eyeing nuclear power as the solution. Prabowo has maintained Indonesia's non-aligned foreign policy, vowing to befriend any country, including Russia and the United States. He has said Indonesia will not be joining any military bloc. China is Indonesia's largest trading partner, but recently Prabowo's government announced a raft of concessions for trade with the U.S. as it looks to neutralise the effect of tariffs. Russia has praised what it says is Indonesia's balanced position on the Ukraine war. Russia and Indonesia conducted their first joint naval exercises in the Java Sea last November. https://www.reuters.com/world/china/putin-meets-indonesias-prabowo-russia-bid-deepen-ties-2025-06-19/

2025-06-19 12:25

LONDON, June 19 (Reuters) - Britain on Thursday published long-awaited environmental guidance which is expected to impact the future development of two vast North Sea oil and gas fields by companies including Shell (SHEL.L) , opens new tab and Equinor (EQNR.OL) , opens new tab. The guidance sets out how greenhouse gas emissions that would come from the oil and gas being used, known as downstream emissions, should be treated in any future government decisions to approve extraction. Sign up here. "This new guidance offers clarity on the way forward for the North Sea oil and gas industry, following last year’s Supreme Court ruling," energy department minister Michael Shanks said in a statement. "It marks a step forward in ensuring the full implications of oil and gas extraction are considered for potential projects and that we ensure a managed, prosperous, and orderly transition to the North Sea’s clean energy future, in line with the science." The document was ordered by the government following a landmark Supreme Court ruling last year which said planning authorities should have considered the impact of climate-warming emissions in approving an oil well near Gatwick Airport. In January a Scottish court said Britain's decisions to approve Shell's Jackdaw and Equinor's Rosebank projects in the North Sea were unlawful and must be retaken. https://www.reuters.com/sustainability/climate-energy/uk-publishes-environmental-guidance-expected-impact-north-sea-drilling-2025-06-19/

2025-06-19 12:22

DUBAI, June 19 (Reuters) - Iran could shut the Strait of Hormuz as a way of hitting back against its enemies, a senior lawmaker said on Thursday, though a second member of parliament said this would only happen if Tehran's vital interests were endangered. Iran has in the past threatened to close the Strait of Hormuz to traffic in retaliation for Western pressure, and shipping sources said on Wednesday that commercial ships were avoiding Iran's waters around the strait. Sign up here. "Iran has numerous options to respond to its enemies and uses such options based on what the situation is," the semi-official Mehr news agency quoted Behnam Saeedi, a member of the parliament's National Security Committee presidium as saying. "Closing the Strait of Hormuz is one of the potential options for Iran," he said. Mehr later quoted another lawmaker, Ali Yazdikhah, as saying Iran would continue to allow free shipping in the Strait and in the Gulf so long as its vital national interests were not at risk. "If the United States officially and operationally enters the war in support of the Zionists (Israel), it is the legitimate right of Iran in view of pressuring the U.S. and Western countries to disrupt their oil trade's ease of transit," Yazdikhah said. President Donald Trump is keeping the world guessing about whether the United States will join Israel's bombardment of Iranian nuclear sites. Tehran has so far refrained from closing the Strait because all regional states and many other countries benefit from it, Yazdikhah added. "It is better than no country supports Israel to confront Iran. Iran's enemies know well that we have tens of ways to make the Strait of Hormuz unsafe and this option is feasible for us," the parliamentarian said. The Strait of Hormuz lies between Oman and Iran and is the primary export route for Gulf producers such as Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait. About 20% of the world’s daily oil consumption — around 18 million barrels — passes through the Strait of Hormuz, which is only about 33 km (21 miles) wide at its narrowest point. https://www.reuters.com/world/middle-east/irans-options-against-foreign-aggression-include-closing-strait-hormuz-lawmaker-2025-06-19/

2025-06-19 12:14

Windmills, corn and soybeans spring up in former wheat fields Historically, wheat was the best crop from Texas through Montana Drought-hit yields or low prices make bumper crops unprofitable COLBY, Kansas, June 19 (Reuters) - On a foggy morning in May, Dennis Schoenhals drove a carload of crop scouts around the wheat fields of northern Oklahoma, part of an annual tour to evaluate the health of the crop. But on some fields, Schoenhals and other farmers had already abandoned plans to harvest the grain for sale because prices had sunk to five-year lows. Farmers cut their losses early this year across the U.S. wheat belt, stretching from Texas to Montana. They were choosing to bale the wheat into hay, plow their fields under or turn them over to animals to graze. In Nebraska, wheat acreage is less than half of what it was in 2005. Sign up here. For farmers with crop insurance, damaged or unprofitable wheat fields can still earn revenue. But many agree that chasing insurance payouts is not the best business model. The Great Plains have long been celebrated for the "amber waves of grain" in the popular hymn "America the Beautiful." The region's states produce most of the U.S.-grown crop of hard red winter wheat, favored by bakers for bread. But with prices hovering around $5 per bushel, U.S. wheat farmers have reached an inflection point, with many forced to either lose money, feed wheat to cattle or kill off the crop. Interviews with more than a dozen farmers and analysts across Kansas, Nebraska and Oklahoma, along with a review of U.S. Department of Agriculture data, revealed a vast disparity in profit for wheat compared to other crops. This has led farmers to abandon more fields before harvest. In parts of the region, prolonged drought has lowered yields in recent years. Farm revenue has also suffered in years with healthy rainfall, as abundant global supplies have weighed on prices. Many have pivoted to corn, soy or livestock, often after generations of their family growing wheat exclusively. "They can’t sustain that," said Schoenhals, 68, who raises crops and cattle near Kremlin, Oklahoma, and is president of the state's wheat growers association. "Eventually you either change to other crops if you’re able to, or you go out of business," he said. Two years ago, severe drought drove farmers to abandon about a third of the U.S. crop. This year, healthy green stalks shot through the cracked soil, and farmers had expected to harvest the most bushels per acre since 2016. But wheat prices hit a five-year low in May. Every year since 2020, farmers have abandoned between a fifth and a third of the winter wheat crop, U.S. Department of Agriculture data show. Nationwide, corn and soybeans dominate crop fields, with wheat a distant third , opens new tab in planted acreage. Hard red winter wheat exports hit historic lows , opens new tab in 2024 after drought and lower prices in other wheat-producing areas of the world squeezed the U.S. commodity's competitiveness. In Kansas, the leading U.S. producer of hard winter wheat, the disparity between acreage and value is particularly stark. About 1.3 million more farm acres in Kansas were planted with wheat than with corn in 2024, USDA data show, but corn's value of production , opens new tab was more than twice as high. Plentiful global supplies have kept benchmark U.S. prices stuck at lows that discourage farmers from growing wheat, producers and analysts told Reuters. Supplies are so ample that droughts in important grain-growing regions of China and Russia this year have barely budged prices. “We’re below profitable levels for these guys,” said Darin Fessler, an analyst with Lakefront Futures in Lincoln, Nebraska, who grew up on a row crop farm in nearby Sutton. The way things stand, he said, many farmers have "eaten a lot of their own money and burned up working capital. These bankers are going to say: 'show me some profits or we’re going to have some farm sales.'" HERITAGE BUT NO PROFIT Ties to wheat farming run deep in the Plains. Historically, European settlers in Kansas struggled to find a foothold until Mennonites from Ukraine arrived with seeds of Turkey Red wheat, a variety that proved able to withstand the area’s dry soil, harsh winters and extreme temperature swings. The seeds spread to neighboring Oklahoma and Nebraska, where pioneers established homesteads in the sandy, light earth in which wheat thrived but other crops struggled. Hard red winter wheat has remained the main variety of wheat sown , opens new tab in the U.S. Images of golden stalks adorn hotel lobbies and road signs, and towns include the word in their names. Pulitzer Prize-winning author Willa Cather, a daughter of Red Cloud, Nebraska, wrote a celebrated poem describing "the miles of fresh-plowed soil, heavy and black, full of strength and harshness." Now, U.S. wheat growing is on a steady decline , opens new tab, with farmers finding surer profits from corn, soybeans or cattle. On the wheat quality tour in May, weeks before Nebraska wheat is usually harvested, no wheat could be seen for miles around Red Cloud. When Royce Schaneman joined Nebraska's wheat board 19 years ago, wheat fields stretched for 2.2 million acres across the state. Since then, acreage has shrunk to less than a million acres, he said. In Cheyenne County in southern Nebraska, the state's most productive wheat-growing land, about one in five fields was abandoned this year. "The feeling out in the country is not good," he said. Generations of farmers grew wheat because the crop thrived on rainfall alone. In recent decades, farmers have invested in pricey irrigation systems, experimented with hardier varieties and used fertilizer to improve yields. Agronomists have helped farmers grow more bushels per acre even as climate change has brought more drought and pests. Producers in the southern Plains have experimented with other types of wheat such as durum, the kind used for pasta, and a gluten-free variety, pursuing customers willing to pay more. Profits remain elusive. “It’s heritage, but there’s no profit," said Lon Frahm, the CEO of Frahm Farmland, a 40,000-acre operation in Colby, Kansas. Surrounding Thomas County is now dotted with wind farms. Farmers there once grew wheat exclusively, he said, but they have started to diversify due to more frequent drought and global competition depressing prices. Frahm himself now mainly plants corn. He irrigates, fertilizes and harvests the grain using multimillion-dollar machines, then stores it in gleaming, 80-foot steel grain bins. His 7,000 acres of wheat sometimes produce just 5 percent of his farm's total output. "There's certainly profit in corn," he said. https://www.reuters.com/world/us/amber-waves-grain-recede-americas-heartland-wheat-farmers-struggle-2025-06-19/