Overseas Headlines – December 21, 2017

Europe:

U.K. Posts Lowest November Budget Deficit Since 2007 on Tax

Britain recorded its lowest November budget deficit for a decade as tax receipts posted another month of healthy growth. Net borrowing narrowed to 8.7 billion pounds ($11.6 billion) last month, below the median forecast of economists, figures from the Office for National Statistics showed Thursday. It left the shortfall in the first eight months of 2017-18 at 48.1 billion pounds, down 6 percent from the same period a year earlier. Tax receipts rose 5 percent in November, boosted by income tax, value-added tax and stamp duty on property purchases. Tobacco duty receipts also rose to a November record after a budget duty increase. Government spending increased by 3.6 percent. Chancellor of the Exchequer Philip Hammond has benefited from buoyant revenue this year, prompting his budget watchdog to lower its full-year deficit forecast to 50 billion pounds — around 2.4 percent of gross domestic product. Much will depend on January, the deadline for settling self-assessed tax liabilities. Business owners paid themselves early dividends in 2016 to avoid a tax increase and the extra revenue generated poured into the Treasury at the start of this year. The unwinding of this is expected to depress receipts in early 2018.

https://www.bloomberg.com/news/articles/2017-12-21/u-k-posts-lowest-november-budget-deficit-since-2007-on-tax

 

South America:

Brazil c.bank cuts 2017 inflation forecast further below target

The Brazilian central bank on Thursday cut its forecast for inflation further below the official target range, suggesting it may end the year below the goal for the first time ever. In its quarterly inflation report, the central bank forecast inflation of 2.8 percent this year, down from a prior 2.9 percent estimate. Brazil targets 4.5 percent annual inflation, plus or minus 1.5 percentage points. The revision could add to calls for additional interest rate cuts early next year, even as austerity measures seen as crucial to curbing public debt hang in the balance. Price pressures in Brazil have been muted this year as the economy emerged from its deepest recession in decades, with double-digit unemployment rates helping to drag inflation down from over 10 percent early in 2016. Still, the central bank forecast gross domestic product growth of 1 percent in 2017 and 2.6 percent in 2018, up from previous estimates of 0.7 percent and 2.2 percent, painting a rosier picture for Latin America’s largest economy. Inflation remained below the bottom end of the official target range for the whole second half of the year, weighed down by falling food prices amid a strong harvest.The central bank acknowledged that the months-long period of food deflation, as well as slower industrial price hikes, could drive slower-than-expected inflation.

https://www.reuters.com/article/brazil-economy-cenbank/update-1-brazil-c-bank-cuts-2017-inflation-forecast-further-below-target-idUSL1N1OL0HC

 

U.S.:

Fed still sees cyber risks nearly two years after Bangladesh heist

The Federal Reserve, which was at the center of an unsolved $81-million cyber heist nearly two years ago, is ready for further talks with foreign counterparts to address the lingering risks of cyber fraud in global messaging systems, a top Fed official said on Wednesday. Simon Potter, head of market operations at the New York Fed, said the SWIFT bank messaging system is only as strong as the weakest of the central banks and financial institutions that use it to communicate and transfer trillions of dollars each day. In February 2016, hackers broke into Bangladesh Bank’s systems and tricked the New York Fed – which maintained its account – into sending $81 million to entities mostly in the Philippines. Bangladesh’s central bank has only recovered some $15 million of the stolen funds despite an international probe involving the U.S. Federal Bureau of Investigation. Fixing the “deficiencies in prevention and detection may require a substantial re-orientation of priorities and resources for some institutions,” said Potter, whose unit within the U.S. central bank maintains the international accounts and oversees some $3.6 trillion in foreign dollar-denominated assets.

https://www.reuters.com/article/cyber-heist-bangladesh-fed/fed-still-sees-cyber-risks-nearly-two-years-after-bangladesh-heist-idUSL1N1OK2AG

2017-12-21T16:39:54+00:00