IMF’s Georgieva warns over risk to global economy from Israel-Hamas war
Kristalina Georgieva, head of the International Monetary Fund, has warned unrest in the Middle East can hit global growth.
She told an audience in Dubai: “I fear most a longevity of the conflict because (if) it goes on and on, the risk of spillovers go up.”
Houthi attacks in the Red Sea in retaliation over Israel’s bombardment of Gaza are a key risk, she said.
Ms Georgieva said: “Right now we see a risk of spillover from the Suez Canal. But if there are other unintended consequences in terms of where the fighting goes, then it can become much more problematic for the world as a whole.”
IMF head “very confident” on soft landing and imminent rate cuts
The International Monetary Fund’s chief, Kristalina Georgieva, has said the world economy will be able to recover from high interest rates without a significant downturn.
Ms Georgieva said: “We are very confident that the world economy is now poised for this soft landing we have been dreaming for.”
Speaking at the World Governments Summit in Dubai, the head of the world’s lender of last resort also said:
“I expect to see by mid-year interest rates going in the direction inflation has been going on for the last year”.
Worst year for private equity since financial crisis
Private equity funds last year generated the lowest amount of cash for investors since the financial crisis, according to Raymond James Financial.
Limited partners received 11.2pc of funds’ net asset value, well below the 25pc median figure across the past 25 years and the lowest since 2009.
High interest rates, jittery markets and economic uncertainty mean private equity firms are struggling to sell their existing investments or do initial public offerings.
It means pension and sovereign wealth funds and other key investors are seeing far lower returns than in previous years.
London rents show signs of slowing in January
Growing numbers of landlords in the capitals have had to reduce their asking prices after record rent increases have enticed many back into the market.
Estate agency Chestertons said there were 41pc more rental properties available in London than in January last year.
It comes as recent figures from Rightmove have found that the average time a property is listed on the market before getting snapped up has risen to 39 days, up from 33.
As a result, there has been a 76pc rise in investors reducing their asking rents from last year, the estate agent said.
Adam Jennings, head of lettings at Chestertons, said:
“We have seen a significant increase in landlords bringing their property to market as they have been attracted by the substantial rent increases over the last 18 months or so. This influx of properties has led to more choice for tenants and as a result, many landlords have decided to lower their rent expectations.”
Labour vows to ‘modernise’ non-dom tax
Labour has vowed to create a “modern” tax system for foreigners living in Britain receiving income from elsewhere to replace the “colonial-era” non-dom regime.
During a visit to India Shadow Business Secretary Jonathan Reynolds said the “the case for modernisation” is clear, in a story first reported by the Financial Times.
Mr Reynolds said Labour would aim to attract global talent who bring “ability” and “innovation”.
He warned however that “I don’t think we need to be supplicants”.
The non-dom scheme allows foreign nationals living in Britain to make money on capital abroad without paying tax on it for up to 15 year years.
Labour has long said it plans to scrap or significantly alter the scheme.
Annual pay rises to slow for the first since the pandemic
Employers’ expectations of how much they will have to increase pay over the next year have fallen for the first time since 2020.
Bosses in the private sector report they expect to increase pay by 4pc in 2024, down from 5pc.
Public sector workers will see a similar decline in wage growth, with bosses predicting wages will only rise 3pc – down from 5pc.
The survey by the Chartered Institute of Personnel and Development (CIPD) also showed that one in ten workplaces expect to reduce their headcount in the next three months, suggesting more workers will be faced with redunancy.
One in three are expecting to hire more people, however.
New FTSE 100 property giant created after Tritax buys rival
Property investment trust Tritax Big Box has put out an all-share bid for its smaller rival UK Commercial Property (UKCM), which will leapfrog it onto the FTSE 100.
The buyout means the firm will have a £6.3bn portfolio that generates more than £290m of rental income a year. Its market value is expected to surpass £4bn.
Tritax counts Amazon, Ocado and B&Q among the biggest tenants renting its distribution warehouses.
UK stocks open higher ahead of crucial week
The benchmark British stock indices started the week higher, as investors brace for a flurry of crucial data that could determine the pace of rate cuts.
The bluechip FTSE 250 rose 0.7pc when markets opened, while the FTSE 100 received a 0.2pc boost.
It comes as figures on Tuesday and Wednesday will reveal whether wages and consumer prices are cooling as policymakers battle to bring inflation back to 2pc.
Traders are expecting pay rises to slow significantly while inflation is tipped to rise slightly to 4.1pc in January.
Should these figures come in higher, it will knock expectations that the Bank of England could soon start lowering interest rates from their 16-year-high of 5.25pc.
This week will also reveal whether the UK economy slipped into recession at the end of the year.
TUI shareholders to decide future of London listing
Europe’s largest travel operator could deliver another embarrasing blow to the struggling London Stock Exchange this week.
Shareholders will vote on Tuesday whether the travel agent, which is listed in London and Frankfurt, should abandon its UK listing.
The firm said in December it was considering the move.
It comes as the boss of IWG has branded Britain as being on “bit of a downer” and said the firm was still considering moving to the US.
Record drop deepens woes for Germany’s office property market
The German market for office buildings has suffered its sharpest decline in two decades, as high interest rates and remote working have soured investor sentiment.
Prices fell by 13pc in the final three months of 2023 from a year earlier, figures from German banking association VDP show.
Across all of last year values dropped by a tenth, marking the most pronounced fall since records began in 2003.
Investors fear the deepening malaise in the sector could plunge banks into crisis, with scrutiny of German lenders intensifying.
Bitcoin on course for best week in more than a year
Bitcoin is flirting with a winning streak last seen more than a year ago after a sharp boost in early Asia trading.
It had risen by 1pc by 9.50am in Singapore on Monday morning, paving the way for a seventh day of gains.
The digital asset has attracted more than $9bn in inflows so far in 2024.
It remains about $20,000 below the record high the token hit in 2021, during a pandemic-era bull run oiled by ultra-low interest rates.
Five things to start your day
Good morning,
The biggest stories to start your day:
1) Vodafone pays out more than $1bn in advisory fees since 2000 | Telecoms giant spends huge sums on bankers and lawyers as part of turnaround efforts
2) Labour donor urges party to borrow billions for green revolution | Entrepreneur Dale Vince argues that sustainable infrastructure will pay its own debt
3) Britain aims to revive plans for nuclear power station in Wales | Taxpayer-backed body looks to acquire Anglesey site in a bid to replace ageing reactors
4) EY borrowed $700m for failed spin-off plan | Debts at accountancy firm’s global operating business triple year-on-year to $983m
5) Buyout barons KKR set to win battle for British Gas smart meter installer | Majority of shareholders in Smart Metering Systems back takeover by US firm
What happened overnight
Markets across Asia – including Japan, China and Hong Kong – were broadly closed on Monday for Lunar New Year holidays.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
