UK becomes frugal with foreign aid

Today's news headlines:

‘UK Treasury blocks ‘non-essential’ overseas aid payments’. Last week, Treasury Chief Secretary Simon Clarke informed government departments, including the Foreign Office, to suspend all non-essential aid spending until the new Prime Minister has been sworn in. This follows concerns that the cost of relief work in Ukraine will break the overseas aid budget cap, which was cut from 0.7% of GDP to 0.5% last summer by Boris Johnson after the pandemic. Former conservative International Development Secretary Andrew Mitchell has said that this suspension will ‘undoubtedly cost lives’ in some of the world’s most vulnerable countries. (Financial Times)

‘Inverted yield curve in China savings rates signals sustained economic slowdown’. China’s top four state lenders have started to set the interest rates for five-year deposits up to 0.4% lower than for three-year deposits. In Treasury markets, an inverted yield curve is a closely monitored indicator of recession risk. Officials have said that the inversion of savings rates signals that investors have a weak long-term outlook on the growth of the Chinese economy. (Financial Times)


Today

Overnight, cable has fallen 20 basis points while the S&P 500 dropped by nearly a percentage point and UK stocks by 0.3%. Oil prices continue their downfall, with Brent trading at a little over $97 a barrel this morning.

Events

German IFO Business Climate: 88.6 vs 92.3 last month
UK Confederation of British Industry Industrial Order Expectations: 11:00AM
US Chicago Fed National Activity Index: 1:30PM
National Bank of Belgium Business Climate: 2:00PM


Interbank rates:

GBP/USD – 1.1982
GBP/EUR – 1.1750
EUR/USD – 1.0197
USD/CAD – 1.2924

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