2025-10-24 12:26

Cuts interest rate by 50 basis points to 16.5% Governor says the central bank still in easing cycle Raises average rate forecast for 2026 to 13%-15% Raises inflation forecast for 2026 to 4%-5% MOSCOW, Oct 24 (Reuters) - The Russian central bank cut its interest rate by 50 basis points to 16.5% at a board meeting on Friday, its first since the government proposed raising VAT in 2026 and U.S. President Donald Trump imposed sanctions on Russian oil companies. The decision was in line with economists' median forecast in a Reuters poll. Sign up here. However, the central bank also raised its 2026 inflation forecast to between 4% and 5% from 4% previously, partly due to the tax hike, and increased its average interest rate estimate for 2026 to between 13% and 15% from between 12% and 13% before. "This is a much more negative development than the symbolic 0.5 percentage point rate cut is positive," said economist Evgeny Kogan. The rouble rose by 0.7% against the U.S. dollar after the board meeting. ONE-OFF FACTORS BLAMED FOR RECENT INFLATION RISE "The current inflationary pressures will temporarily increase in late 2025 and early 2026 because of a number of factors, including price adjustments and the reaction of inflation expectations to the upcoming VAT rise," the central bank said in a statement. Governor Elvira Nabiullina said that the central bank was still in the monetary policy softening cycle but will proceed in a more cautious way, pointing to easing tightness in the labour market and slowing demand as factors behind the cut. "We see that demand growth is slowing down, demand overheating is subsiding, and we expect the demand gap to close in the first half of next year," Nabiullina told a news conference. Russian businesses, which piled pressure on the central bank to cut its key rate faster, say they need interest rates at around 12% to 14% for investment and economic growth to resume. The bank also adjusted its 2025 inflation forecast to between 6.5% and 7% from between 6% and 7% before. Russia's weekly inflation, an important gauge for the bank, has been above 0.2% for the past three weeks. Cumulative inflation since the start of the year had reached almost 5% by October 20. On an annual basis, it rose to 8.14% in the latest week. Prices for gasoline, which the central bank called a "marker" commodity important for people's inflationary expectations, have risen by 11.6% since the start of the year due to recent Ukrainian attacks on Russian refineries. "The current price growth acceleration was substantially affected by one-off factors. They include increased motor fuel prices and a faster-than-usual rise in fruit and vegetable prices in the autumn months," the central bank said. The latest data on households' inflation expectations showed that people see inflation at 12.6% in one year's time. SIGNIFICANT UNCERTAINTY FACTOR Trump on Wednesday imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting oil companies Lukoil and Rosneft, which account for half of Russia's oil production. The measure comes as Russian economic growth is set to slow sharply to about 1% in 2025 from 4.3% last year, high interest rates are hindering investment, and the government has had to hike taxes to balance next year's budget. "Geopolitical tensions remain a significant uncertainty factor," the central bank said. It cut its forecast for Russia's exports to a fall of up to 3% in 2025 from a fall of up to 1% before. President Vladimir Putin conceded on Thursday that the new U.S. sanctions were of a "serious nature" and would lead to "certain losses", but that they would not have a significant impact on Russia's economic wellbeing. The central bank cut its key interest rate by 100 basis points to 17% at its last board meeting on September 12 - less than analysts had expected - citing stubbornly high inflation. Since then, the finance ministry has proposed raising the value-added tax rate to 22% from 20% in 2026 to help curb the budget deficit, a move seen as adding up to one percentage point to inflation in 2026. https://www.reuters.com/business/finance/russian-central-bank-cuts-key-rate-by-50-bps-after-new-us-oil-sanctions-2025-10-24/

2025-10-24 12:25

BRASILIA, Oct 24 (Reuters) - Brazil's current account deficit reached $9.77 billion in September, wider than the $7.75 billion shortfall forecast by economists in a Reuters poll, central bank figures released on Friday showed. Foreign direct investment (FDI) for the month came in at $10.67 billion, beating the $6.5 billion expected in the poll and marking the highest level for the month in the historical series. Sign up here. Over the past 12 months, FDI amounted to 3.47% of gross domestic product (GDP), not enough to cover the current account deficit, which stood at 3.61% of GDP. Brazil's widening external gap has been driven mainly by a shrinking trade surplus: imports have been growing faster than exports as Latin America's largest economy continues to show resilience despite high borrowing costs. In September, the trade surplus narrowed by $2.2 billion from the same month a year earlier, said the central bank. Also contributing to the larger current account deficit, the deficit in factor payments rose by $946 million, only partially offset by a $640 million decline in the services deficit. According to the central bank, portfolio investments in the domestic market posted net inflows of $4.43 billion in September, a 49.6% increase from a year earlier, driven by $5 billion in net debt inflows and $572 million in net equity outflows. https://www.reuters.com/world/americas/brazil-posts-wider-than-expected-current-account-deficit-september-2025-10-24/

2025-10-24 12:15

SOFIA, Oct 24 (Reuters) - Bulgaria is preparing measures to secure uninterrupted supplies of oil and oil derivatives after the U.S. imposed sanctions on Russia's Lukoil (LKOH.MM) , opens new tab, which runs the country's biggest oil refinery, Energy Minister Zhecho Stankov said on Friday. U.S. President Donald Trump imposed sanctions on Russia's two biggest oil companies, Lukoil and Rosneft (ROSN.MM) , opens new tab, over Moscow's war in Ukraine, sending shockwaves across Europe, where Lukoil has a network of filling stations, and transports, stores and refines crude. Sign up here. Lukoil is Bulgaria's biggest crude importer. It runs the 190,000 barrel-per-day Burgas oil refinery, operates more than 200 petrol stations and has a fuel transport and depot network. "This is an extremely important situation in which we, with the interested parties, including our European partners ... will have the opportunity ... to build a common European action plan for the situation that has arisen," Stankov said after a ministerial meeting including other state agencies. He said that Bulgaria's plan will involve monitoring fuel stocks in the country. "Bulgarian citizens should be calm, fuel is provided. Until the end of the year, the quantities are guaranteed," Stankov said at a news conference. Justice Minister Georgi Georgiev said the Burgas oil refinery and several other subsidiaries representing the Lukoil group meet the criteria of the U.S. sanctions and that the government was in contact with U.S. institutions to ensure the refinery can continue operating. The Bulgarian parliament on Friday adopted an amendment requiring the cabinet and the country's intelligence service to provide their approval prior to any sale of Lukoil's assets in Bulgaria. Lukoil was already under pressure to due to existing sanctions against Russia over the Ukraine conflict. Georgiev said the security services and the interior ministry have taken additional measures to ensure capacity, manpower and any other security measures at the refinery. https://www.reuters.com/business/energy/bulgaria-prepares-measures-its-lukoil-owned-refinery-after-us-sanctions-2025-10-24/

2025-10-24 12:15

BEIJING, Oct 24 (Reuters) - China on Friday unveiled a proposal for a more stringent steel capacity swap plan, 14 months after it paused the old programme that failed to rein in rampant expansion, leaving the industry with overcapacity that hit profitability and sparked protectionist backlash. China halted its existing steel capacity replacement programme from August 23, 2024. Sign up here. The addition of new steel capacity in the key areas, the transfer of steel capacity from non-key areas to key areas and the capacity transfer among key areas are strictly forbidden, China's Ministry of Industry and Information Technology said in a statement. Key areas refer to the Beijing-Tianjin-Hebei and surrounding areas, the Yangtze River Delta region, and the Fenwei Plain, according to the statement. Provinces and cities that the country has clear targets for total steel capacity are not allowed to accept the transfer of capacity from other regions, it said. At least 1.5 metric tons of old steel capacity is needed to exit for building every-tonnage new capacity. More efficient utilization of scrap steel to develop the cleaner electric-arc-furnace-based steelmaking in an organized way and the development of hydrogen metallurgy in appropriate regions are encouraged, it added. https://www.reuters.com/world/asia-pacific/china-proposes-more-stringent-steel-capacity-swap-plan-curb-overcapacity-2025-10-24/

2025-10-24 12:06

LONDON, Oct 24 (Reuters) - British finance minister Rachel Reeves is expected to raise tens of billions of pounds in taxes in her budget on November 26 to stay on track to meet her fiscal targets and avoid a loss of confidence in the bond market. Reeves has said she is looking at spending reductions too but any cuts are expected to be small. Sign up here. Following is a summary of measures that Reeves is reportedly considering or has been urged to introduce as she seeks as much as 30 billion pounds a year ($40.3 billion) in extra revenue. INCOME TAX Reeves and Prime Minister Keir Starmer promised voters last year they would not raise the rates of income tax, value-added tax or social security contributions paid by "working people." The Guardian said on October 23 that Reeves might increase the main income tax rate by one percentage point to raise an extra 8 billion pounds. Such an increase in just the higher and top rates of income tax would raise around 2 billion pounds and 230 million pounds a year respectively. A minister said on October 24 the pre-election tax commitment stood. Reeves could raise about 8 billion pounds of extra income tax by extending a freeze on the thresholds at which people pay basic and higher income tax rates by two years until 2030. VAT Value-added tax could be simplified by ending lower or zero rates for products such as food and children's clothes. But that could add to British inflation which is the highest among the Group of Seven economies. Tax experts also say a lower starting threshold for businesses paying VAT would bring in more revenue and remove a disincentive for growth among small firms. A NEW TAX Reeves might introduce a new tax, on incomes for example, dedicated to a specific area of spending such as public health. Such a move would probably be seen as breaking the spirit of the 2024 commitment. THE WEALTHY Reeves has ruled out a new wealth tax but said on October 15 that higher taxes on the wealthy "will be part of the story," leading to speculation that she might increase taxes on capital gains and other income sources. Reeves often says "those with the broadest shoulders should pay their fair share of tax". PROPERTY Many economists say a stamp duty tax paid by homebuyers discourages mobility and holds back economic growth. A separate local tax paid by homeowners is based on out-of-date valuations. Reeves might seek to increase taxes paid by owners of expensive homes and reduce stamp duty. PENSIONS Options include charging social security levies on pension contributions made by employers to staff or lowering the 25% tax-free lump sum that individuals can take from a pension. Legal & General CEO Antonio Simoes told Reuters the budget must not deter pension savers. SAVINGS ACCOUNTS The Financial Times said on October 14 that Reeves was looking at lowering the tax-free limit for cash Individual Savings Accounts in the hope of driving more money into the UK stock market. LAWYERS AND ACCOUNTANTS The Times reported on October 21 that Reeves was considering an increase in tax on people in limited liability partnerships, which are typically used by partners at large accountancy and law firms, triggering protests from professional bodies. BANKS Some think tanks have called for higher taxes on banks to claim back some of the billions of pounds of interest that lenders have received on reserves held at the Bank of England, a feature of the BoE's quantitative easing programme. Such a move could hurt lending and slow growth, bankers say. Reeves said on October 16 she wanted to ensure there is a "competitive environment" for financial services firms. 'SIN TAXES' Taxes on alcohol, tobacco, gambling and vaping could go up. Other options are air travel, plastics and sugary drinks. But higher "sin" taxes could prompt consumers to change their spending behaviour and limit the extra government revenues. They could also be inflationary. FUEL DUTY Successive governments have kept fuel duty frozen since 2011, fearful of protests by drivers over petrol and diesel costs. The duty is a big revenue-raiser bringing in around 25 billion pounds a year, so ending the freeze could boost tax revenues significantly. ($1 = 0.7451 pounds) https://www.reuters.com/business/finance/uk-tax-options-finance-minister-reeves-november-budget-2025-10-24/

2025-10-24 11:57

KYIV, Oct 24 (Reuters) - A man detonated an explosive device as border guards checked documents at a railway station in northern Ukraine on Friday, killing himself and three women, the State Border Guard Service said. It said in a statement that 12 other people were hurt in the blast at the station in Ovruch, close to the border with Belarus, and that a border guard was among the dead, who were aged 29, 58 and 82. Sign up here. The man who detonated the explosive device was a 23-year-old resident of Kharkiv in northeastern Ukraine who had recently been detained for trying to cross the border, it said. It made no mention of any link with Russia's war in Ukraine. https://www.reuters.com/world/man-kills-himself-three-women-ukrainian-railway-station-2025-10-24/