2025-10-28 09:58

OBR expected to cut productivity forecast Downgrade will affect budget shortfall LONDON, Oct 28 (Reuters) - Britain's budget watchdog is expected to cut a key productivity forecast by a larger-than-expected 0.3 percentage points, people familiar with the situation said, potentially leading to a 20 billion-pound ($26.8 billion) hit to the public finances. Finance minister Rachel Reeves has said the Office for Budget Responsibility is likely to cut its productivity forecast after acknowledging it had been too optimistic in the past. Sign up here. But a 0.3% downgrade - first reported by the Financial Times and larger than the 0.1 or 0.2 percentage-point cut that had been expected - will place more pressure on Reeves as she prepares her budget for November 26. The Institute for Fiscal Studies, a think tank, estimates that each 0.1 percentage point downgrade to annual productivity growth would raise public borrowing by 7 billion pounds by the 2029/30 financial year. MASSIVE SPENDING SHORTFALL NEEDS ADDRESSING Analysts had already expected Reeves to need to fill a spending shortfall of up to 30 billion pounds based on the lower productivity downgrade as well as a reversal of planned welfare savings by Prime Minister Keir Starmer and other factors. Speculation has mounted as to which tax rises and spending cuts will be needed to keep the government on track for its fiscal targets and avoid upsetting bond investors. The finance ministry said it would not comment on the media reports. Reeves, speaking at a conference in Saudi Arabia on Monday, reiterated that the expected downgrade was due to weak productivity numbers since the 2008 financial crisis and Britain's departure from the European Union in 2020. The OBR's outlook for trend productivity - measured as output per hour worked - is central to its economic projections which, in turn, underpin its fiscal estimates. Those estimates have yet to be finalised. 'SEVERAL MOVING PARTS' TO ESTIMATING IMPACT TO BUDGET JP Morgan economist Allan Monks said there were several moving parts involved in estimating the size of the hit to the budget from the reported productivity downgrade which, he said, could reach almost 27 billion pounds. But other factors such as a recent fall in borrowing costs in financial markets or more people coming into the jobs market could help limit the damage. "For now, we are still assuming a 20-30 billion-pound range, but with the risk that this could be exceeded to some degree," Monks said. As well as offsetting the productivity and welfare hit, Reeves has said she would like to raise her headroom for meeting her budget targets - including a goal to balance day-to-day borrowing with tax revenues by 2030 - from the relatively small 9.9 billion-pound buffer she previously given herself. ($1 = 0.7451 pounds) https://www.reuters.com/world/uk/uk-budget-watchdog-expected-cut-trend-productivity-growth-forecast-by-about-03-2025-10-27/

2025-10-28 07:43

Oct 28 (Reuters) - British cryptocurrency company KR1 (KR1.ASE) , opens new tab said on Tuesday it plans to uplist its stock to the main market of the London Stock Exchange, to enhance its visibility and broaden investor base. KR1's move comes at a time when decentralised blockchain companies have gained a strong foothold in the global financial system and are of great interest to institutional investors. Sign up here. The UK, which has one of the fastest-growing crypto markets globally, has been revising regulations and positioning itself as a hub for the maturing sector. KR1, currently listed on the Aquis Stock Exchange, said it would also establish a placing programme to issue new shares to expand its staking operations, which involve validating transactions on blockchain networks in exchange for rewards. The company's stock migration is subject to approval of a prospectus by the Financial Conduct Authority and shareholder approval. https://www.reuters.com/business/british-crypto-firm-kr1-targets-london-main-market-listing-2025-10-28/

2025-10-28 07:34

LONDON, Oct 28 (Reuters) - Global miner Anglo American (AAL.L) , opens new tab on Tuesday posted a 9% drop in copper production in the first nine months of the year but maintained its 2025 guidance for the transition metal, and raised its outlook for iron ore output. Anglo said its copper output stood at 183,500 metric tons in the July to September quarter, compared to 181,000 tons in the same period of 2024, but fell to 526,000 tons in the first nine months from 575,000 in 2024. Sign up here. The London-listed miner in September announced a plan to merge with Canada's Teck Resources (TECKb.TO) , opens new tab, hoping to forge a new global copper-focused heavyweight. The deal came as Anglo was in the middle of restructuring its business after fending off a $49 billion takeover offer from bigger rival BHP Group (BHP.AX) , opens new tab in 2024. Anglo still expects to produce 690,000-750,000 tons of copper and raised its iron numbers to 58-62 million tons from 57-61 million previously, after a pipeline inspection at its Minas-Rio operation in Brazil completed ahead of schedule. https://www.reuters.com/business/anglo-american-reports-flat-copper-production-third-quarter-2025-10-28/

2025-10-28 07:32

Win raises prospect of structural change for Argentina Investors eye long-term commitments in mining, energy, infrastructure Currency instability remains a risk NEW YORK/LONDON, Oct 28 (Reuters) - After riding a wave of market gains for most of the first two years of Argentine President Javier Milei's government, investors expect him to turn his party's redrawing of the electoral map into sweeping labor and tax reforms that could unlock billions of dollars in foreign investment. The decisive midterm victory for Milei's party on Sunday has raised the prospect of structural change on a scale Argentina has not seen in decades. After acknowledging the need to build bridges within the legislature, Milei said in his victory speech that the newly elected group of legislators would be "the most reformist Congress in Argentine history." Sign up here. The combination of Milei's strengthened mandate and explicit U.S. support - to the tune of up to $40 billion - will lure investors to consider longer-term exposure to Argentine assets despite the country's track record of policy whiplash, analysts said. "The momentum is 100% with him, and he is in a stronger position than he's ever been to push reforms in Congress," said Gustavo Medeiros, head of research at Ashmore Group. "The big problem is, every two years you have this gun on your head that people are worried about - the major change in the political dynamics (and) a major change in economic policies," Medeiros said. Milei's decisive victory - if followed by an aggressive push to complete the economic overhaul he has started - could permanently break the cycle, he said. For years, foreign direct investment in Argentina has been held back by an unpredictable policy landscape and quick boom-and-bust cycles, usually linked to elections or the agricultural commodities cycle. But the midterm win has given Milei's government the kind of political leverage Argentina has rarely seen, with investors not asking whether reforms will happen, but how far and how fast they will go. A simpler tax system, more flexible labor laws and lower pension costs could lower longstanding barriers to Argentina's competitiveness. For companies weighing capital commitments in mining, energy or technology, the ability to plan years ahead would mark a decisive break from the past. Recently, artificial intelligence company OpenAI vowed an investment of up to $25 billion for a data center project and Chevron Corp (CVX.N) , opens new tab recommitted to its investment in the Vaca Muerta shale formation. The U.S. International Development Finance Corporation said last week it was discussing with the government strategic investment across a range of industries, including critical minerals and infrastructure. "Mining projects for copper and lithium and rare earths, those take a decade to come to fruition," said Graham Stock, senior sovereign strategist at RBC Global Asset Management in an interview. "You need more than a two-year horizon to make that commitment. And now there's a reasonable chance that we have that." Shamaila Khan, head of fixed income for emerging markets and Asia Pacific at UBS, also said Argentina could emerge as more of a "destination for long-term investments" if Milei can build the needed legislative coalitions to pass reforms. THE PESO QUESTION One of the biggest risk factors hanging over Argentine financial markets remains the currency, which many economists view as overvalued. With the backdrop of a $20 billion U.S. swap line and years-long similar support from China, the currency has nonetheless remained under pressure. An initial post-election rally strengthened the interbank exchange past 14% to 1,300 per dollar, but it ended the Monday session at 1,430, 4% stronger on the day, after having closed last week at 1,491.5. Many investors see room for a more flexible exchange rate, or even for the current band to stay in place supported by fresh inflows. Others would prefer a weaker currency, especially to support exporters. "The key risk is that the Milei administration sticks to the current exchange rate regime," said emerging markets economist Kimberley Sperrfechter at Capital Economics in a note. "That would leave the peso severely misaligned, lead to a further deterioration in the current account position and complicate the central bank’s efforts to accumulate FX reserves." Gross FX reserves stand around $40 billion while net reserves, accounting for certain foreign currency liabilities, are in the red. Milei's victory, while impressive, won't be a gamechanger unless he can generate the kind of lasting stability needed to allow for Argentina's vast resources - agricultural, energy and mineral - to entice a constant flow of foreign investment, analysts said. "Argentina has massive potential, but to attract foreign direct investment, the type of investment that's making decisions on a very long-term horizon, that level of confidence can only be built with time," said Gorky Urquieta, senior portfolio manager and global co-head of emerging markets debt at Neuberger Berman in an email to Reuters. "It's a very optimistic starting point, but there’s still a lot of ground to cover." https://www.reuters.com/world/americas/investors-anticipate-new-wave-argentine-reforms-after-mileis-midterm-victory-2025-10-28/

2025-10-28 07:04

UN sees global emissions falling 10% by 2035 Reflects new climate pledges, including from China First time UN climate body forecasts emissions decline U.S. emissions trajectory uncertain under Trump BRUSSELS, Oct 28 (Reuters) - The latest climate pledges by governments will cause global greenhouse gas emissions to start to fall in the next 10 years, but not nearly fast enough to prevent worsening climate change and extreme weather, the U.N. said on Tuesday. The analysis by the United Nations' climate change secretariat (UNFCCC) suggested that, if countries' plans for tackling climate change are carried out, the yearly amount of planet-warming gases added to the atmosphere would decrease 10% by 2035, from 2019 levels. Sign up here. The calculation marked the first time the UNFCCC has forecast a steady decline in global emissions, which have consistently increased since 1990. The projected 10% cut is far short of the 60% emissions drop needed by 2035 to limit global warming at 1.5 degrees Celsius above pre-industrial temperatures - the threshold beyond which scientists say it would unleash far more severe impacts. That shortfall adds pressure ahead of next month's COP30 climate summit in Brazil for countries to step up their efforts – even as the United States rolls back climate policies under President Donald Trump. "Humanity is now clearly bending the emissions curve downwards for the first time, although still not nearly fast enough," UNFCCC head Simon Stiell said. "It's now for COP30 and for the world to respond and show how we are going to speed up," Stiell said in a statement. Many countries have been slow to submit more ambitious climate targets, amid economic and geopolitical challenges. The UNFCCC also published a detailed report of the 64 countries who met a September deadline to submit final climate plans, but those accounted for just 30% of global emissions. To offer a more complete assessment, the UNFCCC said it had produced the global analysis, including targets countries have announced but not yet formally submitted, such as from China and the EU. That assessment still includes uncertainties. For example, it included the 2024 U.S. emissions-cutting pledge that Trump is expected to scrap, leaving the future U.S. emissions trajectory unclear. China, which now produces about 29% of annual global emissions, pledged last month to cut emissions by 7% to 10% from their peak by 2035, but did not say when that peak would happen. Some analysts suggested Beijing could deliver far more. "China tends to under-commit," said Norah Zhang, climate policy analyst at the research group NewClimate Institute, noting that the country met its 2030 target to expand wind and solar energy six years early. https://www.reuters.com/sustainability/cop/countries-new-climate-plans-start-cutting-global-emissions-un-says-2025-10-28/

2025-10-28 06:58

US President Trump set to meet Xi Jinping on Thursday Trump announces deals with Southeast Asian nations FOMC policy meeting on Wednesday Oct 28 (Reuters) - Gold fell more than 2% to a three-week low on Tuesday, as optimism over easing trade tensions lifted risk appetite and squeezed demand for safe-haven bullion, while investors turned their attention to the Federal Reserve policy meeting this week. Spot gold was down 1.4% at $3,924.99 per ounce, as of 1140 GMT, hitting its lowest level since October 6. Sign up here. U.S. gold futures for December delivery lost 2% to $3,940.20 per ounce. "Hopes of avoiding a full-out trade war between the U.S. and China ... (are) driving a rally for risk-related assets like shares. On the other side, it's negatively impacting the demand for safe-haven assets like gold," said ActivTrades analyst Ricardo Evangelista. U.S. President Donald Trump on Monday said he thought a trade agreement would be reached with China, and announced a flurry of deals on trade and critical minerals in Malaysia with four Southeast Asian nations. Top Chinese and U.S. economic officials hashed out the framework of a trade deal on Sunday for Trump and his Chinese counterpart Xi Jinping to decide on when they meet on Thursday. Asian shares consolidated recent hefty gains on Tuesday as hopes for thawing global trade tensions kept risk appetite keen. Meanwhile, the Fed is widely expected to cut interest rates at the end of its policy meeting on Wednesday, with investors awaiting any forward-looking commentary from Chair Jerome Powell. Gold, a traditional safe-haven, benefits from low-interest environments as it is a non-yielding asset. Spot prices have gained about 53% this year, reaching an all-time peak of $4,381.21 on October 20, before falling 3.2% this week. Citi analysts on Monday lowered their zero-to-three month forecast for gold prices to $3,800/oz from $4,000/oz, while Capital Economics reduced their forecast to $3,500/oz for the end of 2026. Elsewhere, spot silver fell 0.9% to $46.47 per ounce, its lowest in over a month, while platinum slipped 1.6% to $1,565.20 and palladium lost 2.4% to $1,368.48, a more than three-week low. https://www.reuters.com/world/india/gold-reclaims-4000-level-softer-us-dollar-rate-cut-prospects-2025-10-28/