By Clare Jim

HONG KONG (Reuters) -Shanghai-based property developer CIFI Holdings said on Tuesday it has suspended payments on all of its offshore debt after it failed to reach an agreement with creditors to which it owes $414 million in total.

CIFI said in a filing it has engaged Haitong International Securities Company Limited as financial advisor and Linklaters as legal adviser to facilitate a restructuring of its $6.85 billion offshore debt, as it is likely to come under continued pressure to generate sufficient cash for repayments.

The company’s shares plunged 26% following the lifting of a trade suspension that had been in place since Thursday.

CIFI’s default is another blow to a deepening debt crisis in the sector, following the resignation of Longfor Group’s chairwoman and state-backed Greenland Holdings’ request to extend some offshore bond repayments on Monday.

CIFI and Longfor had borrowings totalling 114 billion yuan ($15.61 billion) and 212 billion yuan, respectively, as of June, and Greenland had 122 billion yuan.

While Beijing-based Longfor has not run into liquidity problems, the three companies were considered safer bets previously due to the state support on their financing.

These events are likely to worsen investor concerns about China’s property sector at a time when already weak sales are likely to be weighed by fresh COVID lockdowns across the country.

Longfor recovered 7.8% by early afternoon after plummeting 24% on Monday, while Shanghai-listed Greenland dropped 1.1%. Hong Kong’s broader Hang Seng Mainland Properties Index rose 2.9% while China’s CSI300 real-estate sub-index fell 1.1%.

WORSENING CONDITIONS

In the Tuesday filing, CIFI said the failure to meet offshore debt obligations was because of a further deterioration in sales and credit availability and heightened payment pressure triggered by a ratings downgrade.

Greenland also blamed declining property sales and the overall economy, as well as rising U.S. interest rates for its inability to repay on time, according to a transcript of the firm’s Monday meeting with creditors seen by Reuters.

“Until now we don’t’ see any turning point for sales of the whole industry,” said a senior executive of Greenland. “Although every city is relaxing rules and has encouraging policies, from the front line we feel it’s not optimistic.”

The executive also said while state shareholders including the Shanghai government and State-owned Assets Supervision and Administration Commission Of Shanghai Municipal Government have supported offshore repayments in the past, the firm’s “extreme situation” now required a market resolution.

Greenland declined to comment.

S&P Global Rating director Edward Chan said the market is disappointed after CIFI and Greenland’s event as there were hopes that they could make repayments. The rating agency withdrew its rating on CIFI last month.

“According to (CIFI’s) disclosures in the past it seemed they still had cash in hand…so is this a problem of willingness or a problem of capacity (to repay)?” Chan said.

“I think it’s a question mark: a lot of the investors are doubting that. This would weaken investor confidence further.”

Regarding developers generally, he said the market is monitoring closely if there would be further weakening in buyer confidence and whether existing financing channels could be maintained.

CIFI said in its filing its offshore debt problems do not materially affect onshore financing arrangements as a whole and that commercial operations remain normal.

($1 = 7.3040 Chinese yuan)

(Reporting by Clare Jim; Editing by Kim Coghill and Sam Holmes)

By Daina Beth Solomon

MEXICO CITY (Reuters) – Independent Mexican union La Liga has won the right to represent workers at a 3M Co plant, authorities said on Monday, marking a second victory for the fledgling group at a pivotal moment for workers to take on entrenched interests.

Workers at 3M’s plant in the central city of San Luis Potosi, which makes everything from Post-It notes to N95 masks, voted in January to reject the collective contract negotiated by their long-established union, the Confederation of Mexican Workers (CTM), opening the door to new representation.

One of Mexico’s dominant unions, CTM has lost a handful of significant factories, such as General Motors, Stellantis and Panasonic, following a labor reform and revised trade deal with the United States that aim to improve worker rights.

La Liga union leader Marco Saucedo, who has worked at 3M for 22 years and makes materials that go into masking and electrical tapes, said La Liga drew support because it emphasized that workers, rather than outsiders unfamiliar with day-to-day issues on the production floor, would decide their demands.

“We’re people from the base, common workers,” he said. “Whatever I do for you is going to be good for me, too.”

La Liga representatives spoke to workers one-by-one during lunchtime and after work, in cafeterias and at bus stops, over several months to collect the several hundred signatures needed to prove 30% of support among nearly 2,000 workers.

The union now has six months to negotiate a new contract, and aims to ensure salaries that keep up with Mexico’s climbing inflation, Saucedo said.

3M did not immediately reply to a request for comment. It has previously said it aims to offer competitive salaries and ensure job stability and will negotiate with the union chosen by workers.

La Liga will also soon begin negotiating its first contract at VU Manufacturing, a car upholstery factory on the U.S. border in Piedras Negras, after winning a vote against CTM in August.

(Reporting by Daina Beth Solomon; Editing by Leslie Adler)

By David Shepardson and Rajesh Kumar Singh

(Reuters) -Pilots at Delta Air Lines have voted to authorize a strike if negotiators cannot reach agreement on a new employment contract, their union said on Monday.

The Air Line Pilots Association (ALPA), which represents nearly 15,000 pilots at the Atlanta-based carrier, said 99% of those who cast their ballots backed strike-authorization.

Under U.S. law, Delta pilots cannot walk off the job until the National Mediation Board grants them permission.

The board must first decide that additional mediation efforts would not be productive and offer the parties an opportunity to arbitrate. If either side declines, both parties enter a 30-day “cooling off” period, after which pilots and management can engage in self-help – a strike by the union or a lockout by management.

This lengthy and complex process makes it difficult for airline workers to strike. The last pilot strike at a U.S. passenger carrier was at Spirit Airlines in 2010.

Delta said its pilots are not on strike and the vote will not affect its operation. The carrier said a “significant progress” has been made in the contract negotiations and only a few issues have been left to resolve.

“ALPA’s stated purpose for the vote is simply to gain leverage in our pilot contract negotiations,” a company spokesperson said. “We are confident that the parties will reach an agreement that is fair and equitable, as we always have in past negotiations.”

Delta’s pilot union said the contract negotiations have dragged on for too long. “It’s time for the company to get serious at the bargaining table and invest in the Delta pilots,” said Jason Ambrosi, chairman of the Delta Master Executive Council.

Delta pilots have been working without a new contract for nearly three years after their old contract became amendable in December 2019.

(Reporting by David Shepardson in Washington and Rajesh Kumar Singh in Chicago; Editing by Leslie Adler and David Gregorio)

By Stella Qiu and Wayne Cole

SYDNEY (Reuters) – Australia’s central bank on Tuesday stuck with a slower pace of interest rate rises for a second month while revising up its inflation outlook, saying more rate hikes would be needed as it struggles to keep the economy afloat while battling inflation.

Wrapping up its November policy meeting, the Reserve Bank of Australia (RBA) lifted its cash rate by 25 basis points to a nine-year peak of 2.85%, the seventh hike in as many months.

It had surprised many in the markets last month by downshifting to a quarter-point rate hike following four consecutive moves of 50 basis points, citing an already substantial rise in rates.

Inflation is now expected to peak around 8% later this year, up from a previous forecast of 7.75%, and slow to a little above 3% in 2024, the RBA said. That would still leave it above the central bank’s 2% to 3% target range.

RBA Governor Philip Lowe said in a statement that the central bank’s board was seeking to return inflation to the target range while keeping the economy on an even keel.

“The path to achieving this balance remains a narrow one and it is clouded in uncertainty,” Lowe said, adding that the board recognises monetary policy operates with a lag.

The local dollar trimmed some of its previous gains after the rate decision, while short-term bonds rallied and markets lengthened the odds for an outsized 50 bp hike in December.

(Another rate hike https://graphics.reuters.com/AUSTRALIA-ECONOMY/RATES/egpbynqeavq/chart.png)

“The Reserve Bank has indicated a preference for ‘normal’ 25 basis point rate hikes,” said Craig James, chief economist at CommSec.

“Larger 50 bp hikes from here are riskier – a sledge hammer rather than a hammer – and likely to mean that the interest rate objective is achieved too quickly, resulting in a move to the sidelines for a number of months.”

Rates have already risen by 275 basis points since May and the RBA had wanted to slow down and see how the drastic tightening was affecting consumer spending, against a backdrop of heightened global uncertainty.

However, consumer spending has remained strong, the job market stayed tight and Australian inflation raced to a 32-year high last quarter, a shock result that stoked pressure for a return to more aggressive rate hikes by the RBA.

A closely watched measure of core inflation released last week, the trimmed mean, rose 6.1% from a year ago, already topping a forecast by the RBA that it would peak at 6.0% in the fourth quarter.

An ANZ survey of consumers on Tuesday showed confidence declined for a fifth straight week last week, while inflation expectations surged to the highest in more than a decade.

CLOUDY OUTLOOK

The RBA was the first central bank among developed nations to break with outsized interest rate hikes, warning that households were already under pressure with rate rises so far.

(The race to raise rates https://graphics.reuters.com/GLOBAL-MARKETS/gkplwmakkvb/chart.png)

The rate hikes already delivered will add around A$950 a month in repayments to the average A$600,000 mortgage, a deadweight for a population that holds A$2 trillion ($1.3 trillion) in home loans.

Australian home prices fell for a sixth straight month in October with declines spreading to every major city and region, a drag on household wealth that could curb confidence and consumption over time.

“It is crystal clear that the RBA is now focused on developments in the housing market. And their tightening cycle from here will determine how much further home prices will fall,” said Gareth Aird, head of Australian economics at CBA.

The RBA on Tuesday revised down its forecast for economic growth to average around 3.0% this year and 1.5% for 2023 and 2024.

Signs of a pivot in the global tightening cycle are emerging elsewhere. The Bank of Canada slowed its pace of rate hikes, saying it was getting closer to the end of its historic tightening campaign. The European Central Bank, while hiking rates as expected, sounded a cautious note on the outlook.

(Reporting by Stella Qiu and Wayne Cole; Editing by Edmund Klamann)

By Stefanno Sulaiman and Fransiska Nangoy

JAKARTA (Reuters) – Indonesia’s October inflation rate came in below the expectations of officials and the market, statistics bureau data showed on Tuesday, but still remained above the central bank’s target range for a fifth straight month.

The headline annual inflation rate fell to 5.71% in October, compared with 5.95% in September and a 5.99% forecast in a Reuters poll.

The September rate was the highest in seven years for Southeast Asia’s largest economy, as prices of goods climbed after the government raised subsidised fuel prices on Sept. 3.

Officials at Bank Indonesia (BI), which has a target for inflation within a range of 2% to 4%, had predicted an easing in the headline inflation rate. A deputy governor on Monday expected a 5.8% rate for October.

Tuesday’s data also showed the annual core inflation rate, which excludes government-controlled prices and volatile food prices, picked up to 3.31% last month, from 3.21% in September, below the poll’s 3.40% prediction.

Softening food prices had helped to restrain the acceleration in the headline inflation, DBS Bank economist Radhika Rao said, describing the gradual rise in core inflation as “a surprise”.

“It would, nonetheless, be early to conclude that the peak in the second round inflationary impact from the fuel price increase is already behind us,” she said, adding that with the rupiah under pressure, BI would likely tighten policy further this and next month.

BI has raised interest rates by 125 basis points since August to rein in inflation expectations and support the rupiah.

(Reporting by Stefanno Sulaiman and Fransiska Nangoy; Writing by Gayatri Suroyo; Editing by Kanupriya Kapoor and Ed Davies)

By Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) -Japan’s currency interventions have been stealth operations in order to maximise the effects of its forays into the market, Finance Minister Shunichi Suzuki said on Tuesday, after the government spent a record $43 billion supporting the yen last month.

Bank of Japan Governor Haruhiko Kuroda, however, reiterated the central bank’s resolve to keep interest rates ultra-low, indicating that the yen’s broad downtrend could continue.

Japanese officials remain tight-lipped on exactly when they intervened in the market in October. Full details of their actions will not be available until quarterly intervention data is published. The July-September data is expected to be released early this month.

“There are times when we announce intervention right after we do it and there are times when we don’t,” Suzuki told a news conference on Tuesday. “We are doing this to maximise effects to smoothe sharp currency fluctuations.”

The finance minister repeated his warning that authorities are closely watching market moves and will not tolerate “excessive currency moves driven by speculative trading”.

Japan spent 6.35 trillion yen ($42.7 billion) on currency intervention in October to prop up the yen, data showed on Monday, leaving investors keen for clues about how much further the authorities might step in to soften the yen’s sharp fall.

A steep drop in the yen to a 32-year low of 151.94 to the dollar on Oct. 21 likely triggered the intervention, which was followed by another round on Oct. 24. In September, when Japan conducted its first yen-buying intervention since 1998, authorities immediately confirmed they had stepped in.

Since the Oct. 21 intervention, the yen has been moving in a range below the psychologically important threshold of 150 yen versus the dollar. On Tuesday, the Japanese currency was changing hands at 148.70 per dollar, little changed from the previous session.

While the possibility of another round of currency intervention is keeping yen bears at bay for now, investors are bracing for more volatility ahead of a closely watched U.S. Federal Reserve policy meeting that ends on Wednesday.

The Fed is widely expected to raise rates by 75 basis points for a fourth straight time, while debating when to downshift to smaller rate hikes to avoid sending the economy into a tailspin.

In a sign that the onus of addressing sharp yen declines will remain with the government rather than with the central bank, the BOJ’s Kuroda ruled out the chance of raising Japan’s ultra-low rates anytime soon.

“Japan’s economy is still in the midst of recovering from the coronavirus pandemic’s impact. As such, it’s necessary to support the economy with acccomodative monetary policy,” Kuroda told parliament on Tuesday.

Kuroda brushed aside criticism, raised by some politicians, that the BOJ’s resolve to maintain an ultra-loose policy was inconsistent with the government’s efforts to curb the yen’s fall.

“Our policy and that of the government complement each other,” Kuroda said. “There’s no doubt the BOJ needs to cooperate closely with the government.”

($1 = 148.6100 yen)

(Reporting by Tetsushi Kajimoto; Editing by Kim Coghill, Kenneth Maxwell and Edmund Klamann)

By Anthony Boadle and Ana Mano

BRASILIA/SAO PAULO (Reuters) -President Jair Bolsonaro will not publicly address his defeat in Brazil’s presidential election until Tuesday, a minister said, amid doubts over whether the far-right nationalist will accept the victory of his leftist rival Luiz Inacio Lula da Silva.

Bolsonaro was holding off on making remarks so he could prepare a speech, Communications Minister Fabio Faria told Reuters. But it was not clear if Bolsonaro would concede defeat, as his allies were encouraging him to do.

Brazil is on edge, with pro-Bolsonaro truckers setting up roadblocks throughout the country to protest Lula’s return to power. Some truckers posted videos calling for a military coup.

The protests that spread from the first roadblocks in farm states did not immediately disrupt grain shipments by the top food producing country, but agricultural lobbies warned they may eventually affect exports.

Brazil’s federal highway police said 321 protests had partially or fully blocked roads in 26 states. Truckers – who have benefited from Bolsonaro lowering diesel costs – are one of the president’s key constituencies, and they have been known to disrupt Brazil’s economy when they shut down highways.

Faria, the communications minister, said Bolsonaro was working with his solicitor general to determine measures to clear the highways.

The truckers were hoping Bolsonaro would endorse their roadblocks, but the president’s political aides were urging him to accept his electoral defeat to quell the spreading protests, a senior staffer at his campaign headquarters said.

While the president had not conceded, his associates held the first contacts with the Lula camp on a future transition.

Vice President Hamilton Mourao spoke by telephone with Lula’s vice president-elect Geraldo Alckmin and recognized Lula’s victory, a spokesman for Alckmin said.

Later, Workers Party president Gleisi Hoffmann called Bolsonaro’s chief of staff, Ciro Nogueira for what her spokeswoman called a “cordial” and “respectful” conversation.

The outgoing president has yet to call his rival to congratulate him on becoming Brazil’s next president.

Lula’s win represents a stunning comeback for the 77-year-old former metalworker, who governed Brazil from 2003 to 2010 but then spent time in prison for corruption convictions that were later annulled.

Lula has vowed to overturn many of Bolsonaro’s policies, including pro-gun measures and weak protection of the Amazon rainforest.

Environmentalists and sustainable investors cheered Lula’s victory and his commitment to protect the rainforest and restore Brazil’s leadership on climate change.

Even before he is due to take office on Jan. 1, President-elect Lula will send representatives to next month’s COP27 United Nations climate summit in Sharm El Sheikh, Egypt, allied environmentalist Marina Silva said on Monday.

In his victory speech on Sunday evening, Lula pledged to strongly police illegal logging, mining and land grabbing that have driven the surging destruction of the Amazon rainforest in the past four years under Bolsonaro.

Pitching the contest as a battle for democracy, Lula promised to unite his deeply divided country and celebrated what he called his “resurrection.”

“I will govern for 215 million Brazilians, and not just for those who voted for me,” Lula said at his campaign headquarters. “We are one country, one people, one great nation.”

The Supreme Electoral Court (TSE) declared Lula won 50.9% of votes, against 49.1% for Bolsonaro, who becomes the first Brazilian incumbent to lose a presidential election.

INTERNATIONAL RECOGNITION

Lula’s win consolidates a new “pink tide” in Latin America, and means the left will govern all the region’s major economies after a string of electoral successes from Mexico to Argentina in recent years.

Argentine President Alberto Fernandez flew to Sao Paulo to meet Lula on Monday and hailed “a new era for the history of Latin America. A time of hope and future that begins today.”

U.S. President Joe Biden moved quickly to congratulate Lula, calling the election “free, fair and credible.”

Congratulations also poured in from other foreign leaders, including China’s Xi Jinping, Russia’s Vladimir Putin, German Chancellor Olaf Scholz and French President Emmanuel Macron.

But Bolsonaro’s prolonged silence sparked fears over the handover of power.

Markets braced for a volatile week. Brazil’s real currency gained more than 2% against the dollar, while the Bovespa was up 0.6% in choppy trading.

Lula’s win was a rebuke for the fiery far-right populism of Bolsonaro, who lost support as Brazil ran up one of the worst death tolls of the coronavirus pandemic.

Lula has vowed a return to state-driven economic growth and social policies that helped lift millions out of poverty during his two terms as president.

A former union leader born into poverty, Lula’s presidency was marked by a commodity-driven economic boom and he left office with record popularity.

However, his Workers Party was later tarred by a deep recession and a record-breaking corruption scandal that jailed him for 19 months on bribery convictions, which were overturned by the Supreme Court last year.

(Reporting by Anthony Boadle and Ricardo Brito in Brasilia, Brian Ellsworth, Ana Mano, Gabriel Araujo and Lisandra Paraguassu in Sao Paulo; Writing by Frank Jack Daniel and Anthony Boadle, Editing by Brad Haynes, Angus MacSwan, Rosalba O’Brien and Lincoln Feast.)

By Soo-hyang Choi and Ju-min Park

SEOUL (Reuters) – South Korean investigators combed footage on Monday from more than 50 state and private closed-circuit TV cameras as well as from social media looking for answers to how a surge in Halloween party-goers trapped in narrow alleys killed so many.

As the country began a week of mourning, the death toll climbed to 154. Another 149 people were injured, 33 of them in serious condition. At least 26 citizens from 14 countries were among the dead.

South Korean President Yoon Suk-yeol called for a thorough investigation, and authorities said they were focused on reconstructing the lead-up to the surge and looking at whether anyone may have been responsible for triggering the crush.

“We are analysing CCTVs to find out the exact cause of the accident,” Police chief investigator Nam Gu-jun told reporters.

“We will continue questioning more witnesses, including nearby shop employees,” he said.

Tens of thousands of revellers – many in their teens and twenties and dressed in costume – had crowded into narrow streets and alleyways of the popular Itaewon district on Saturday for the first virtually unrestricted Halloween festivities in three years.

Chaos erupted when people poured into one particularly narrow and sloping alley, even after it was already packed, witnesses said.

Prime Minister Han Duck-soo, who steers a task force team handling the accident, said the identification of the victims was nearly complete and funeral preparations could move ahead, promising support for the bereaved families.

MAKESHIFT ALTAR

On Monday, people laid white chrysanthemums, drinks and candles at a small makeshift altar off an exit of the Itaewon subway station.

Jung Si-hoon, a retiree, placed an old wooden cross at the altar, saying nothing could be done to bring back all the young people who had died.

“Those poor people, all at similar ages to my grandchildren… What more should we say? We should pray for them and wish they rest in peace,” he said.

On Monday afternoon, dozens of crime scene investigators and forensics officers descended onto the trash-strewn alleys which were eerily quiet with many shops and cafes closed.

One agent with the National Forensic Service team, in white overalls and a black ribbon of mourning pinned to his chest, operated a Leica 3D scanner, he said, “to capture the scene.”

Yoon paid his respects to victims at a memorial altar near the Seoul city hall on Monday, a day after visiting the crush scene and designating Itaewon a disaster zone.

He also met Han and other officials handling the accident, calling for a thorough investigation, support for victims and their families and safety measures over unorganised large gatherings.

Yoon said he felt “indescribable sadness and responsibility as the president in charge of the life and safety of the people,” and it was so tragic that many young people, in particular, lost their lives, his deputy spokesman said.

“Above all, it is important to thoroughly investigate the cause of the accident and transparently disclose its results,” Yoon was quoted as telling the meeting.

“It is necessary to come up with a safety management system for preventing crowd accidents that can be applied to voluntary group events without an organizer like this one.”

Schools, kindergartens and companies around the country scrapped planned Halloween events. K-pop concerts and government briefings were also cancelled.

The crush came as Itaewon was just starting to thrive again after more than two years of COVID-19 restrictions. The disaster is the country’s deadliest since a 2014 ferry sinking that killed 304 people, mainly high school students.

Han said there had been incidents of people propagating hate speech by blaming victims, as well as incidents involving the spreading of false information and the posting of disturbing scenes of the crush online. A National Police Agency official said they were investigating six related cases.

(Reporting by Soo-hyang Choi and Ju-Min Park; Additional reporting by Choonsik Yoo, Joyce Lee and Hyonhee Shin; Writing by Lincoln Feast and Jack Kim; Editing by Gerry Doyle, Edmund Klamann, Edwina Gibbs and Philippa Fletcher)

By Joyce Lee

SEOUL (Reuters) – Proper crowd and traffic control by South Korean authorities could have prevented or at least reduced the surge of Halloween party-goers in alleys that led to a crush and the deaths of 154 people, safety experts said on Monday.

The annual festivities in the popular nightlife area of Itaewon in Seoul also did not have a central organising entity, which meant government authorities were not required to establish or enforce safety protocols.

District authorities for Yongsan, where Itaewon is located, discussed measures to prevent illegal drug use and the spread of COVID-19 during the Halloween weekend, according to a district press release. There was, however, no mention of crowd control.

On Saturday when the tragedy occurred, roughly 100,000 people were estimated to be in Itaewon, an area known for its hills and narrow alleys. According to Seoul Metro, some 81,573 people disembarked at Itaewon subway station on the day, up from around 23,800 a week earlier and about 35,950 on Friday.

But there were only 137 police officers in Itaewon at the time, the city of Seoul said.

In contrast, at rallies by labour unions and by supporters of President Yoon Suk-yeol that drew tens of thousands in Gwanghwamun, central Seoul, on the same Saturday, up to 4,000 police were deployed, a police official said.

“Police are now working on a thorough analysis of the incident’s cause,” Minister of the Interior and Safety Lee Sang-min said on Monday.

“It’s not appropriate to make hasty conclusions before the exact cause is determined – whether it was caused by a lack of police or whether there is something that we should fundamentally change for rallies and gatherings.”

President Yoon has called for a thorough investigation into the cause of the crush as well as improvements in safety measures that can be used for large gatherings where there is no set organiser.

While South Korea has a safety manual for festivals expected to attract more than 1,000 people, the manual presupposes an organising body in charge of safety planning and requesting government resources.

Just two weeks earlier, the Itaewon Global Village Festival organised by a tourism association and sponsored by the city of Seoul and Yongsan district, had people wearing yellow vests directing the flow of movement and the main road was closed to car traffic.

But on Saturday, there were just thousands of shops open for business, normal car traffic rules and tens of thousands of young people eager to celebrate Halloween without major COVID restrictions for the first time since the pandemic.

“Just because it’s not named a ‘festival’ doesn’t mean there should be any difference in terms of disaster management,” said Paek Seung-joo, a professor of fire & disaster protection at Open Cyber University of Korea.

“As there was no central authority, each government arm just did what they usually do – the fire department prepared for fires and the police prepared for crime. There needs to be a system where a local government takes the reins and cooperates with other authorities to prepare for the worst,” he said.

Moon Hyeon-cheol, a professor at the Graduate School of Disaster Safety Management at Soongsil University, said this type of crush had the potential to happen in any populous city.

“We need to take this tragedy and learn to prepare for the risk of disaster,” he said.

(Reporting by Joyce Lee; Additional reporting by Hyonhee Shin and Soo-hyang Choi; Editing by Edwina Gibbs)

By David Milliken

LONDON (Reuters) – Britain still faces a 40 billion pound ($46 billion) budget hole that will need to be filled by tax rises as well as spending cuts, despite recent U-turns on measures proposed during Liz Truss’s short-lived premiership, a think tank said on Tuesday.

The Resolution Foundation, which focuses on issues facing low- and middle-income households, said new Prime Minister Rishi Sunak and his finance minister Jeremy Hunt faced unappealing choices ahead of a budget statement due on Nov. 17.

“While the recent focus has been on conditions improving post-Trussonomics, the central picture remains one of a weaker growth, higher borrowing costs and expensive tax cuts that have left a fiscal hole of at least 40 billion pounds to fill,” the Resolution Foundation’s research director, James Smith, said.

Britain’s Office for Budget Responsibility last published borrowing forecasts in March, since when the growth outlook has weakened due to surging energy prices, while interest rates have risen in Britain and globally, pushing up borrowing costs.

The Resolution Foundation estimated that tax rises and spending cuts of at least 30 billion pounds would be needed to ensure debt was falling as a share of gross domestic product by the 2026-27 financial year.

Previous finance ministers had also left a minimum of 12 billion pounds of leeway to achieve their budget goals, the think tank added.

Previously the Institute for Fiscal Studies had estimated Britain faced a budget hole of 62 billion pounds in the wake of the tax-cut plan announced by Truss’s finance minister, Kwasi Kwarteng, on Sept. 23.

This ‘mini-budget’ pushed sterling to a record low against the U.S. dollar and forced the Bank of England to intervene in the bond market, prompting Truss to reverse some of the plans and sack Kwarteng – but too late to save her premiership.

The Resolution Foundation said cuts to investment spending often appealed to British governments seeking to save money – but would come at the cost of longer term growth and would raise 10 billion pounds at most.

High inflation meant government departments – which mostly have fixed cash budgets – are already facing 22 billion pounds of real-terms cuts by 2024-25, limiting the scope for further savings and creating pressure for extra spending, it added.

The government is reviewing a previous promise to raise pensions and welfare benefits in line with inflation, which will cost around 9 billion pounds.

Around 17 billion pounds of Truss’s tax cuts remain in place, largely the reversal of a 15 billion pound rise in payroll taxes introduced by Sunak when he was finance minister.

“Further austerity for public services is also likely, but there are limits to how big these can credibly be,” Smith said. “This reality means that the Autumn Statement is likely to involve tax rises, not just spending cuts.”

($1 = 0.8692 pounds)

(Reporting by David Milliken, editing by Andy Bruce)

By Shaloo Shrivastava

BENGALURU (Reuters) – Malaysia’s central bank will tighten its policy rate by a quarter point for the fourth time in a row on Nov. 3 as upside risks to inflation persist and to support the weakening currency, a Reuters poll showed.

Bank Negara Malaysia (BNM) started raising rates in May even though inflation was within its target range of 2%-3%. It has since hiked rates by 75 basis points to keep inflation in check.

In September, inflation fell marginally to 4.5% from 4.7% in August but robust domestic demand and an accommodative budget pose a risk and economists said all-time high core inflation in September indicated it was sticky.

All but two of 27 economists in the Oct. 25-31 poll predicted BNM would hike its overnight policy rate by 25 basis points to 2.75% from 2.50% at its Nov. 3 meeting.

“The direction of fiscal policy measures in 2023 is still unclear,” noted Sanjay Mathur, chief economist, Southeast Asia and India at ANZ.

“Besides, the odds of the U.S. Fed delivering another 75bp hike in November have also risen. This does not bode well for the Malaysian ringgit, especially when the international reserves are also on a steady path of decline.”

The Malaysian ringgit has fallen around 12% this year.

Two economists – at Barclays and UOB – expected BNM to pause at the meeting given a weakening global outlook and to assess the effect of cumulative hikes.

Nearly 90% of economists forecast BNM will raise rates in Q1 of next year, including the two economists calling for a pause in November, giving a median forecast of 3.00%.

While 13 of 18 penciled in a 25 basis point hike in Q1, three said 50 basis points. Two economists predicted no move.

The median forecast showed the overnight policy rate would remain at 3.00% until at least the end of next year. However, beyond Q1, seven economists expected rates to go up at some point in 2023.

“As core inflation gains momentum, we continue to expect BNM to hike policy rates at consecutive meetings (25bp/meeting pace) through H1 next year, bringing the policy rate up to 3.5%, from 2.5% currently,” analysts at Goldman Sachs said.

“The evolution of subsidy policy after the elections remains a key risk – a faster shift to targeted fuel subsidies may imply higher inflation pressures, and more hawkish BNM policy outcomes than in our baseline forecasts.”

The Malaysian economy grew by 8.9% in the second quarter, its fastest expansion in a year, mostly driven by domestic demand and resilient exports although the momentum is unlikely to be sustained.

“Economic growth is likely to weaken considerably over the coming quarters as the boost from reopening fades and weaker external demand drags on exports,” Gareth Leather, senior Asia economist from Capital Economics, said.

(Reporting by Shaloo Shrivastava; polling by Veronica Khongwir; editing by Barbara Lewis)

(Reuters) – Electronic Arts Inc will launch an Iron Man game and at least two other action-adventure titles revolving around characters from the Marvel universe, under a deal announced by the videogame publisher on Monday.

The Iron Man game will feature an original narrative based on the history of fictional billionaire Tony Stark, portrayed by Hollywood actor Robert Downey Jr. in the popular superhero movie franchise.

The new games will be available on both consoles and PC, EA said, in a deal that gives it access to one of the most valuable companies in entertainment, mainly due to the success of films based on characters from Marvel comics.

EA has previously partnered with Marvel owner Walt Disney Co to develop games based on the Star Wars movie franchise for mobile devices, PCs and consoles.

Redwood City, California-based EA joins a host of other gaming heavyweights that have tapped popular superheroes for their titles. Activision Blizzard has launched games on Spider-Man, while Warner Bros Interactive Entertainment developed games based on DC’s Batman.

EA’s bet on its new games comes as the videogame publisher struggles with a slowdown in demand from peaks touched during the pandemic. Earlier in August, the company forecast quarterly adjusted sales below estimates.

It is expected to report quarterly results on Nov. 1.

(Reporting by Tiyashi Datta and Aditya Soni in Bengaluru; Editing by Devika Syamnath)