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Economy

Updates on the state of the economy, growth, inflation, and employment.

  • Credit: Photo by Andrew Taylor / Pexels

    Fitch cuts France’s credit rating, hints at more to come

    Credit: Photo by Andrew Taylor / Pexels

    After credit rating agency Fitch downgraded France's sovereign credit score to the country's lowest level on record, stripping the euro zone's second-largest economy of its AA- status, there’s mounting speculation that if other agencies follow, it could trigger forced selling on French bonds bound by ratings thresholds. With bond markets watching closely, there’s growing pressure on recently appointed Prime Minister Sebastien Lecornu to find ways to shrink the ballooning debt budget deficit next year from an estimated 5.4% of GDP, when he hands down his draft 2026 budget on 7 October. Fitch attributes its A+ downgrade, the lowest on record for a major credit rating agency, to France’s “high and rising debt ratio” and lack of "a clear horizon for debt stabilisation in subsequent years". In addition, Fitch forecasts that French debt would increase to 121% of GDP in 2027 from 113.2% in 2024. Fitch also warned that “political fragmentation” was hindering fiscal consolidation. "This instability weakens the political system's capacity to deliver substantial fiscal consolidation," Fitch said in a statement. On Monday morning, the yield on France’s benchmark 10-year government bond initially moved 7 basis points higher t

  • Credit: Nelso Silva / flickr

    Australia commits $500m to boost green iron industry

    Credit: Nelso Silva / flickr

    Australia took a major step closer to becoming a green iron manufacturing powerhouse following revelations last week that iron ore companies can, from next month, apply for a share of major funding the federal government is stumping up to help kickstart commercial green steel projects. The federal government is throwing A$500 million to help turbocharge Australia’s green iron sector through the launch of the National Development Stream of the Green Iron Investment Fund (NDSGIIF). Iron ore companies have been invited to start throwing their hats in the ring for a slice of the funding on offer ahead of the NDSGIIF’s official launch on 28 October.Sprint for global dominance in green ironAccording to Federal Industry and Innovation Minister Tim Ayres, funding under NDSGIIF – together with Australia’s natural resources and know-how - will underpin Australia’s sprint for pole position as the world pivots towards developing a global green steel sector. Based on the Department of Industry, Science and Resources numbers, global demand for green iron could reach more than 850 million tonnes by 2050 in a net-zero scenario. While green iron proposals are currently under consideration around the country to capture the growing globa

  • Credit: US Department of Treasury / WikimediaCommons

    US and China to continue talks in Spain

    Credit: US Department of Treasury / WikimediaCommons

    United States and Chinese officials will hold a second day of talks on Monday as the U.S. TikTok deadline looms. Current negotiations are being led by U.S. Secretary of State Scott Bessent and Chinese Vice Premier He Lifeng as they attempt to end the trade war between the economic powerhouses. In July, top officials from Beijing and Washington struck a deal to extend their tariff truce by 90 days until 10 November. Despite being in favour of TikTok being banned in his first term as president, Trump has since changed his mind and delayed the ban three times. The current deal is set to expire on 17 September, meaning if TikTok isn’t sold from its Chinese owner, ByteDance, it could face being pulled from the American app store if Trump doesn’t once again extend the deadline. Trump has suggested that he would continue to extend the deadline until a buyer for TikTok could be found after calling the security and privacy concerns the app and its Chinese parent company pose “highly overrated”. The White House also launched its official TikTok account in August this year. The current talks in Spain are supposed to lay the groundwork for a potential meeting between Trump and Chinese President Xi Jinping as soon as Octob

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    China's retail sales, industrial output misses estimates

    Credit: zydeaosika / Pexels

    China’s economic slowdown deepened in August as key indicators missed market expectations amid a worsening property slump and sluggish consumer demand. Industrial output rose 5.2% year-on-year, down from July’s 5.7% growth and marking the weakest performance since August 2024. Markets had expected a 5.8% increase. Sector breakdown showed mining output climbing 5.1%, manufacturing up 5.7%, and utilities - including electricity, heat, gas and water - rising 2.4%. Equipment manufacturing and high-tech manufacturing stood out, posting stronger gains of 8.1% and 9.3%, respectively. Retail sales grew 3.4% from a year earlier, according to the data release, missing forecasts for 3.9% growth and easing from July’s 3.7% increase. Fixed-asset investment expanded just 0.5% in the first eight months of the year, down sharply from a 1.6% rise in the January to July period and far below the 1.4% expected by markets. Real estate investment contracted by 12.9% during the period, extending the sector’s downturn. By contrast, investment in manufacturing rose 5.1%, while utilities surged 18.8%. China’s survey-based urban unemployment rate edged up to 5.3% in August from 5.2% the previous month.

  • Credit: pdimaria / Pixabay

    UK economy stalls in July; tax hike speculation grows

    Credit: pdimaria / Pixabay

    The United Kingdom government is under mounting pressure to deliver economic growth after its economy whimpered to a 0.4% expansion in June and zero growth in July, following the biggest contraction in manufacturing output for a year. While Labour pledged in its manifesto last year not to raise taxes on "working people" - namely income tax, National Insurance and VAT, plans to boost economic growth are expected to underpin Chancellor Rachel Reeves’ Budget on 26 November, which will outline the government's tax and spending plans. These include:Day-to-day government costs will be paid for by tax income, rather than borrowing, by 2029-30. To get debt falling as a share of national income by the end of this parliament in 2029-30.Following the financial hit they took from a rise in employers' National Insurance Contributions (NICs) and the minimum wage that came into force in April, companies are now speculating on what changes the Chancellor might make. With Reeves widely expected to raise taxes in the Budget if she wants to meet her self-imposed rules on the economy, some businesses are already delaying hiring or investing until the details of the Budget become clear. Estimates for the size of the "black hole" in the p

  • Credit: EMBAJADA DE MÉXICO EN ESTADOS UNIDOS / flickr

    Mexico to lift tariffs on Chinese cars to 50%

    Credit: EMBAJADA DE MÉXICO EN ESTADOS UNIDOS / flickr

    Mexico will raise tariffs on cars imported from China to 50% as part of a sweeping overhaul of trade duties that the government said will protect jobs, while analysts suggested the move also seeks to ease pressure from Washington. The Economy Ministry said on Wednesday that the tariff hikes, which also target textiles, steel, toys, motorcycles and other goods, will affect around US$52 billion (A$78.75 billion) of imports. The new measures will see tariffs rise to varying levels across sectors, with some duties climbing as high as 50%. "They already have tariffs," Economy Minister Marcelo Ebrard told reporters when asked about existing levies on Chinese cars, currently set at 20%. "What we will do is raise them to the maximum level allowed. Without a certain level of protection, you almost can't compete," he added. Ebrard said the plan, which complies with World Trade Organization limits, is designed to protect Mexican jobs as Chinese vehicles were being sold locally "below what we call reference prices". According to the Economy Ministry, the measures are intended to safeguard 325,000 industrial and manufacturing jobs at risk. China criticised the move, saying it opposed being coerced under "various pretexts".

  • Credit: PTNorbert / Pixabay

    US offshore wind on verge of collapse under Trump

    Credit: PTNorbert / Pixabay

    Offshore wind energy development in America is teetering on the verge of collapse after the Trump administration's Interior Secretary Doug Burgum told an energy conference in Italy this week that it has no future as a source of electricity generation in the United States. This latest missive by Burgum follows speculation by renewable energy executives last month that the Trump administration’s attacks on solar and wind will lead to a power crunch that increases electricity prices. Burgum’s declaration that offshore wind energy has no future in America follows an order from the U.S. authorities on 22 August for Danish renewable energy company Orsted to halt construction of the 704MW offshore wind project, after citing national security concerns. Dubbed Revolution Wind, the Orsted project – which is 80% complete and has had all necessary approvals since 2023 – is capable of powering more than 350,000 homes. Orsted, which, together with partner Skyborn Renewables, has already invested $5 billion in Revolution Wind, may end up facing a double-digit billion-dollar write-down and $1 billion in breakaway costs from existing contracts if the project never supplies electricity to the U.S. Orsted has since appealed to the U.S

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    US CPI accelerates to 2.9%; jobless claims hit 4yr high

    Credit: Maydonshoots / Pexels

    United States consumer prices rose slightly faster than expected in August while unemployment claims surged to their highest level in nearly four years, delivering the final set of data the Federal Reserve will weigh as it prepares to decide on interest rates next week. The consumer price index advanced 0.4% on a seasonally adjusted basis, slightly above the 0.3% expected and marking the largest monthly gain since January, while the annual inflation rate to 2.9%, the highest since the start of the year and in line with estimates. Core CPI, which excludes volatile food and energy categories and is viewed by the Fed as a clearer measure of underlying price pressures, climbed 0.3% in August and 3.1% from a year earlier, both in line with forecasts. The central bank targets 2% inflation over the long run. The biggest driver of August’s inflation uptick came from shelter costs, which make up about one-third of the index and rose 0.4% on the month. Food prices climbed 0.5%, while energy costs increased 0.7%, including a 1.9% jump in gasoline. The Bureau of Labor Statistics noted that tariffs appeared to contribute to the rise, with new vehicle prices gaining 0.3% and used cars and trucks rising 1%. Services prices e

  • Credit: Anduril

    Plans unveiled for $1.7bn underwater drone fleet

    Credit: Anduril

    The Australian government has earmarked $1.7 billion to locally build a fleet of long-range lethal underwater drones that will be in the service of the Australian Navy by January 2026. Dubbed "Ghost Sharks", an undisclosed number of uncrewed underwater drones – aka extra-large autonomous undersea vehicles (XL - AUL) - will be deployed to conduct intelligence, surveillance, reconnaissance, and strike measures. These Australian-designed and built Ghost Sharks can be deployed from warships or launched off the coast. “This is a world-class capability that has the capability to conduct intelligence, surveillance, reconnaissance and strike at extremely long distances from the Australian continent,” said the defence industry minister, Pat Conroy, emphasising the final point. “Let me repeat that: we will have the ability to strike at extremely long distances from the continent of Australia.” It’s understood that defence forces around the world are opting for cheaper to build and run autonomous technologies with crewless platforms that can be deployed at scale. Countries are also investing heavily in improving submarine detection technologies, undermining the stealth capability that has been crewed submarines’ decisive a

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