2024-10-18 15:34

LONDON, Oct 18 (Reuters) - British finance minister Rachel Reeves is expected to prolong a freeze on income tax thresholds beyond 2028 in the government's upcoming budget, in a move that could raise 7 billion pounds ($9.1 billion) a year, the Financial Times reported on Friday. Prime Minister Keir Starmer promised voters before last July's election that he would not put up income tax rates or other key rates of taxation, adding to the new government's challenge of improving public services and raising investment. The FT quoted a person briefed on Reeves' thinking as saying the move to extend the freeze on income tax thresholds would not break Labour's manifesto tax pledges because they had only ruled out an increase in income tax rates. "We do not comment on speculation around tax changes outside of fiscal events," a Treasury spokesperson said when asked about the FT report. Government sources said earlier this week Reeves was looking for around 40 billion pounds in tax increases and spending cuts to put more money into public services and stabilise the fiscal situation. Most of the increase is likely to come from higher taxation rather than cuts to other areas of public spending. By default, Britain's official budget forecasts assume that the thresholds at which Britons begin to pay income tax or pay it at higher rates will rise in line with inflation each year to preserve the real-terms value of the tax-free allowances. However, in March 2021 the then Conservative government said the thresholds would be frozen until 2026, and in November 2022 it extended the freeze again until April 2028. British government fiscal rules focus on the situation for debt and borrowing in five years' time, so extending the freeze in advance helps balance the future budget while creating no immediate burden for taxpayers. Income tax was the single biggest source of revenue for Britain's government last year, raising 276 billion pounds. Tax is generally payable at a 20% rate on annual income above 12,570 pounds, at 40% on income above 50,270 pounds and 45% on income over 125,140 pounds. ($1 = 0.7672 pounds) Sign up here. https://www.reuters.com/world/uk/uks-reeves-set-prolong-freeze-income-tax-thresholds-ft-reports-2024-10-18/

2024-10-18 14:56

AmEx raises 2024 profit forecast Credit remains 'very strong', CFO says Stock drops about 5% Oct 18 (Reuters) - American Express (AXP.N) , opens new tab reported third-quarter profit above Wall Street estimates on Friday, benefiting from disciplined expense management that helped cushion a blow from softer spending. Affluent customers have allowed the company to maintain relatively smaller provisions for credit losses compared with peers that serve a broader spectrum of customers, including those with lower income. The credit card giant has also kept a lid on incentives, rewards and other expenses, allowing it to outdo profit expectations even when revenue growth decelerates. "(This quarter is) another proof point of management's ability to flex expenses to hit earnings per share (EPS) targets when top line is softer," said Citi analyst Keith Horowitz. Still, AmEx shares fell nearly 5% even as it raised its profit forecast for 2024. "Over time, cost-cutting can only take you so far," said Brian Mulberry, client portfolio manager at Zacks Investment Management, an investor in AmEx. Total expenses were $12.08 billion in the quarter, lower than expectations of $12.74 billion, according to estimates compiled by LSEG. Revenue rose 8% to $16.64 billion but fell short of the $16.67 billion estimate. Profit of $2.51 billion was 2% higher than last year. On a per-share basis, AmEx earned $3.49 versus the $3.28 that analysts had forecast. "We do not need double-digit revenue growth to hit mid-teens EPS because we are disciplined with our operating expenses. Our credit is also very, very strong," Chief Financial Officer Christophe Le Caillec told Reuters in an interview. The company now sees 2024 EPS between $13.75 and $14.05, higher than the earlier range of $13.30 to $13.80. "Expectations were elevated, but we believe the growth opportunities remain large and the valuation remains attractive," William Blair analysts said in a note. Sign up here. https://www.reuters.com/business/finance/amex-profit-beats-estimate-robust-customer-spending-2024-10-18/

2024-10-18 14:37

JOHANNESBURG, Oct 18 (Reuters) - South Africa's rand firmed against a weaker dollar on Friday, ahead of a domestic inflation reading next week which could provide clues on the central bank's rate-cutting path. At 1400 GMT, the rand traded at 17.57 against the dollar , about 0.6% stronger than its previous close. The currency is still down about 1% against the greenback this week. The dollar last traded about 0.2% softer against a basket of currencies. The rand's recovery on Friday can be attributed to a broader dollar retreat, said Danny Greeff, co-head of Africa at ETM Analytics. "The market is stabilising after a period of dollar strength as bets on aggressive rate cuts in the U.S. were pared and a higher probability of a Trump presidential election victory was being priced in," Greeff added. Next week, domestic investors will look to September's consumer inflation figures which could provide clues on the South African Reserve Bank's interest rate path. The central bank cut its main lending rate for the first time in more than four years in September, after data showed headline inflation fell just below 4.5%, the middle of the central bank's target range. On Thursday, South Africa's central bank governor Lesetja Kganyago said the country could move to a lower inflation target at little cost. "One of the requirements for a stable currency is low inflation; therefore, any talk of lowering the inflation target should be mildly supportive of the ZAR," ETM Analytics said in a research note. On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) , opens new tab last traded about 0.5% higher. South Africa's benchmark 2030 government bond gained, the yield down 2.5 basis points to 9.28%. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-firms-focus-shifts-inflation-print-next-week-2024-10-18/

2024-10-18 12:47

MUMBAI, Oct 18 (Reuters) - The head of India's central bank said on Friday that it would be "very premature" and risky to lower interest rates at this stage. While inflation is expected to moderate going forward, the central bank would only think of rate cuts when it has confidence that inflation is durably aligned to its medium-term target, Governor Shaktikanta Das said at an event in Mumbai. The central bank is not "behind the curve" in terms of monetary policy and would base its decisions on incoming data and the outlook on inflation, Das said. The Reserve Bank of India has kept its rate unchanged for nearly two years even as global central banks, including the U.S. Federal Reserve and the European Central Bank, kicked off rate cuts earlier this year. Speaking about the rupee, Das said that the RBI is "not managing the exchange rate" but buys dollars when there is an opportunity and supplies them when the currency faces pressure. The rupee touched a record low of 84.0775 on earlier in the day, pressured by sustained outflows from local equities, although the RBI's likely intervention prevented sharper losses. Sign up here. https://www.reuters.com/markets/rates-bonds/interest-rate-cut-this-stage-would-be-premature-india-cenbank-chief-says-2024-10-18/

2024-10-18 12:42

ZURICH, Oct 18 (Reuters) - Switzerland is "unequivocally committed" to sanctions against Moscow, the government said on Friday, after it decided not to adopt in full a package of European Union measures, a move the U.S. ambassador called disappointing. As Western governments try to cut off Russia's means to finance its war on Ukraine, U.S. officials have pressed Switzerland to do more to close loopholes given the country's role as a global financial centre and commodity trading hub. The State Secretariat for Economic Affairs (SECO), the department that oversees Switzerland's sanctions regime, said in a statement emailed to Reuters that the decision not to implement the full EU sanctions package this week was "not politically motivated." "Switzerland is unwaveringly and unequivocally committed to sanctions against Russia," it said. The government took issue with wording that requires companies to prevent circumvention via their subsidiaries "to the best of their ability." "It will be quite unclear to companies what measures they are required to take," SECO said, adding that the government would consider adopting a version of the clause were it more precise. Switzerland has mostly adopted in full sanctions the EU has imposed against Russia since Moscow's war in Ukraine began in February 2022. But Switzerland also seeks to maintain a policy of neutrality dating back more than 200 years. SECO said it already prosecutes violations of sanctions via third countries, as long as the violation was orchestrated from Switzerland. It would investigate commodity traders based in Switzerland suspected of violating the law, the department added. One "particularly flagrant" case had already been transferred to prosecutors, it said, without giving details. "The Federal Council's decision to not fully adopt all components of the 14th package of EU sanctions [this week] is disappointing, and we hope it will work to close the loophole that enables overseas subsidiaries to evade sanctions," U.S. Ambassador Scott Miller said in a statement on Friday. The Swiss government has taken note of the ambassador's criticism, SECO said. Sign up here. https://www.reuters.com/world/swiss-defend-decision-not-adopt-latest-russia-sanctions-full-2024-10-18/

2024-10-18 12:34

Around 600 olive trees burnt, sawn or vandalised, UN says Violence in West Bank surged since Oct. 7 Hamas-led attack Israel says it is investigating Jenin, making harvest secure GENEVA, Oct 18 (Reuters) - The United Nations humanitarian office accused Israel on Friday of using "war-like" tactics against Palestinians in the occupied West Bank, citing killings by soldiers and attacks on Palestinian olive groves by Israeli settlers. This month so far, OCHA said it had received reports that settlers have carried out 32 attacks against Palestinians and their property, including on farmers. It added there were initial reports Israeli forces killed a woman who was harvesting olives near the West Bank city of Jenin on Thursday. "It is, frankly, very concerning that it's not only attacks on people, but it's attacks on their olive groves as well," OCHA spokesperson Jens Laerke said at a Geneva press briefing. "The olive harvest is an economic lifeline for tens of thousands of Palestinian families in the West Bank." Israel's military said it had launched an investigation into the reported attack in Jenin and the commanding officer there at the time has been suspended pending the checks. It said, as with every year, it was working to secure the area to let people get on with the harvest. "The harvest season was planned and coordinated with all relevant parties, and IDF forces are providing security in the designated areas," it added. Violence has surged across the West Bank since the start of the Hamas-Israel war in Gaza. Hundreds of Palestinians - including armed fighters, stone-throwing youths and civilian bystanders - have been killed in clashes with Israeli security forces. Dozens of Israelis have been killed in Palestinian street attacks over the past year. The OCHA report said around 600 mainly olive trees have been burnt, vandalised or stolen by settlers since the start of the harvest. It included a picture of a Palestinian man standing next to an olive tree stump with its branches sawn off. "Israeli forces have been using lethal, war-like tactics in the West Bank, raising serious concerns over excessive use of force and deepening people's humanitarian needs," Laerke said. Earlier this month, the U.N. World Food Programme said that violence and the spillover effect of the Gaza war had nearly doubled the number of people facing food insecurity in the West Bank to 600,000 people since early 2023. A group of Western states including France, Britain and Germany issued a joint statement on Oct. 14 saying olive-picking had become "dangerous" due to settler violence and calling on Israel to allow Palestinians to join the harvest. Settler violence is a source of growing concern among Israel's Western allies. A number of countries, including the United States, have imposed sanctions on violent settlers and urged Israel to do more to stop the violence. Sign up here. https://www.reuters.com/world/middle-east/un-denounces-israels-use-war-like-tactics-west-bank-2024-10-18/