2025-05-29 18:57

LONDON, May 29 (Reuters) - Britain said on Thursday the northwest of England was now officially in drought status after the driest start to spring in decades caused water levels in rivers and reservoirs to decline. Through March, April and May, Britain has basked in its sunniest spring on record, according to the Met Office weather forecaster, though the lack of rainfall has raised some concerns about conserving water supply. Sign up here. The Environment Agency (EA) said reservoir storage levels in northwest England - home to the picturesque Lake District as well as the cities of Manchester and Liverpool - were lower than during the same time in the 1984, 1995 and 2022 drought years. Scientists say climate change is making droughts and drier summers more frequent. The EA said it would ensure that water companies, including major northwest supplier United Utilities (UU.L) , opens new tab, are ready to support customers to reduce demand if needed. "I'm doing everything in my power to hold United Utilities to account to ensure we have the regular supply of water that is needed across the region," Water Minister Emma Hardy said in a statement. The agency said ministers would convene a meeting of the National Drought Group next Thursday to assess the situation across the country. https://www.reuters.com/sustainability/climate-energy/drought-declared-northwest-england-amid-sunniest-spring-record-2025-05-29/

2025-05-29 18:20

SAO PAULO, May 29 (Reuters) - Brazil's central government recorded a primary budget surplus of 17.8 billion reais ($3.1 billion) in April, Treasury data showed on Thursday, above the 15.9-billion-real surplus projected by economists polled by Reuters. The figure represents an increase from the 11.6-billion-real surplus in the same period of last year, driven by higher tax collection, as well as a jump in revenues coming from dividends and the exploration of natural resources, specially oil. Sign up here. Year-to-date, the central government primary surplus reached 72.4 billion reais, more than double the 31.8-billion-real surplus posted a year earlier. The improvement has been helped by a favorable base effect, as the government chose to push a hefty bill for court-ordered payments to the second half of the year, whereas those payments were made in the first half in 2024. In the 12-month period, the primary deficit stood at 5.3 billion reais, or 0.02% of gross domestic product (GDP). Speaking at a press conference, Treasury Secretary Rogerio Ceron said the central government will probably post a 12-month primary surplus in May. The government targets a zero primary deficit this year, with a tolerance margin of 0.25% of GDP, meaning it can record a deficit of up to 31 billion reais and still comply with fiscal rules. ($1 = 5.6574 reais) https://www.reuters.com/world/americas/brazils-central-government-posts-higher-than-expected-primary-surplus-april-2025-05-29/

2025-05-29 16:57

BRASILIA, May 29 (Reuters) - Brazil's Credit Guarantee Fund (FGC) should hold accounting reserves equivalent to 1% of eligible deposits but is currently at 0.35%, the fund's head Daniel Lima said on Thursday. Discussions on necessary adjustments will take place in the coming months, Lima stressed. Sign up here. Speaking at an event hosted by payment industry group Abipag, Lima also noted that the FGC's liquidity indicator stands at around 2.3% of eligible deposits, compared to a target range of 2.3% to 2.7%. The FGC is a private nonprofit entity created to manage protection mechanisms for clients of financial institutions in the event of bank resolution. The fund has drawn renewed attention following the high-profile acquisition of lender Banco Master by BRB (BSLI3.SA) , opens new tab, a deal currently being analyzed by the central bank. The transaction has sparked scrutiny as it involves two similarly sized banks, with Master having grown rapidly in recent years through an aggressive funding model based on high-yield debt distributed via investment platforms. Lima noted that addressing potential contagion risks from mid-sized banks requires more timely access to information from each institution. The central bank said earlier this year that it would carry out a scheduled review of the FGC next year as part of its regular four-year cycle on the matter. Debt securities issued by banks are insured by the FGC up to a limit of 250,000 reais ($44,028) per financial institution. https://www.reuters.com/world/americas/brazil-discuss-adjustments-credit-guarantee-fund-reserves-fall-short-target-2025-05-29/

2025-05-29 16:51

MEXICO CITY, May 29 (Reuters) - All of the Bank of Mexico's five governing board members agreed in the monetary authority's most recent rate decision that the period had been marked by high uncertainty due to trade policy announcements worldwide, minutes published on Thursday showed. "Some activity indicators surprised to the downside partly due to the effects of trade uncertainty at the global level," said the Mexican central bank. Sign up here. Most board members also noted that changes in trade policy have added significant uncertainty to the global economic outlook. Adding to global concerns, a U.S. trade court on Wednesday blocked most of U.S. President Donald Trump's tariffs, arguing he had overstepped his authority in imposing across-the-board duties on imports from U.S. trading partners. Banxico, as the central bank is known, slashed its growth forecast for Mexico's economy this year to 0.1%, from its previous estimate of 0.6%, citing sluggish domestic activity and uncertainty related to U.S. trade policy, according to its quarterly report published on Wednesday. Trump's tariff announcements since he took office in January have shaken markets and added to global uncertainty. This month, the U.S. and China agreed to a temporary truce to scale back tariffs, while Trump also postponed 50% duties on the EU until July 9. Inflation in Mexico rose more than expected in the first half of May, reaching 4.22%, above the central bank's target range of 2% to 4%. Still, most board members expect headline inflation to return to the target range by the third quarter of 2026. The majority also said risks to economic activity remain tilted to the downside, while one member warned that this could push inflation higher than anticipated, which could lead to an upward revision to the forecast. https://www.reuters.com/world/americas/bank-mexicos-rate-decision-marked-by-trade-policy-pressures-minutes-show-2025-05-29/

2025-05-29 16:09

May 29 (Reuters) - Chicago Federal Reserve Bank President Austan Goolsbee on Thursday said he believes that if big tariffs could be avoided, either through trade deals or otherwise, the U.S. central bank could likely cut interest rates given the underlying strength of the economy and the direction of inflation. Comparing the economic effect of tariffs to a layer of fat atop an otherwise healthy set of abdominal muscles, "you've got to get all of what's on top of there off before you can see it," Goolsbee said at the 2025 Mackinac Policy Conference. "And I feel a little bit like that on the economy. You know, if we could just get this off of there, there's a sixpack underneath." Sign up here. Goolsbee did not comment directly on a ruling Wednesday by a U.S. trade court that blocked many of the tariffs put on by the Trump administration that have threatened to push up inflation and slow economic growth, including the "Liberation Day" levies from April 2. Before that date, Goolsbee said, the labor market was stable and inflation was heading towards the Fed's 2% goal, conditions that would allow the Fed to bring the policy rate down from its current 4.25%-4.5% range and toward its long-term settling point. Based on the most recent Fed policymaker projection, that long-term neutral rate is around 3%. For now, though, uncertainty over tariffs is causing businesses to have a "pencils down" moment as they wait for clarity on trade policy, Goolsbee said. The Fed finds itself in a similar situation, with policymakers particularly worried about the possibility of tariffs disrupting downward progress on inflation and pushing up the unemployment rate. https://www.reuters.com/business/feds-goolsbee-if-tariffs-are-avoided-policy-rate-can-come-down-2025-05-29/

2025-05-29 14:43

WASHINGTON, May 29 (Reuters) - U.S. corporate profits fell sharply in the first quarter and could continue to be squeezed this year by higher costs from tariffs that are threatening to undercut the economic expansion. Profits from current production with inventory valuation and capital consumption adjustments dropped $118.1 billion last quarter, the Commerce Department's Bureau of Economic Analysis (BEA) said on Thursday. Profits surged $204.7 billion in the October-December quarter. Sign up here. President Donald Trump's sweeping import duties have cast a shadow over the economy, knocking business and consumer sentiment as well as unleashing unprecedented volatility on financial markets. A U.S. trade court on Wednesday blocked most of Trump's tariffs from going into effect in a sweeping ruling that the president overstepped his authority. Economists said the ruling, while it offered some relief, had added another layer of uncertainty over the economy. The increasingly uncertain environment was echoed in minutes of the Federal Reserve's May 6-7 meeting published on Wednesday, which noted "participants judged that downside risks to employment and economic activity and upside risks to inflation had risen, primarily reflecting the potential effects of tariff increases." Companies ranging from airlines, retailers to motor vehicle manufacturers have either withdrawn or refrained from giving financial guidance for 2025, citing the uncertainty caused by the on-again and off-again nature of some duties. Businesses front-loaded imports and households engaged in pre-emptive buying of goods last quarter to avoid higher costs, making it difficult to get a clear picture of the economy. The deluge of imports sent gross domestic product declining at an upwardly revised 0.2% annualized rate in the January-March quarter, the BEA said in its second estimate of GDP. The economy was initially estimated to have contracted at a 0.3% pace. It grew at a 2.4% rate in the fourth quarter. When measured from the income side, the economy also contracted at a 0.2% rate in the first quarter. Gross domestic income (GDI) expanded at a 5.2% pace in the October-December quarter. The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, declined at a 0.2% rate. Gross domestic output grew at a 3.8% pace in the fourth quarter. https://www.reuters.com/world/us/us-corporate-profits-decrease-sharply-first-quarter-2025-05-29/