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The World
Economists and investors are braced for aggressive Federal Reserve interest rate increases to continue beyond September after an unexpected jump in monthly inflation reignited fears over the US central bank’s grip on persistent price pressures. US consumer price growth accelerated once again in August, defying expectations for a 0.1 per cent monthly decline, as a steep slide in energy prices failed to offset rising costs elsewhere. Meanwhile, “core” inflation, which strips out volatile items such as energy and food, registered an alarming 0.6 per cent increase for the month. “To call this a disappointment would be an understatement,” said David Rosenberg, chief economist and president of Rosenberg Research. “All we’re left with is the view that the [Federal Open Market Committee] hawks so far continue to have the story right and they are in charge.” (Financial Times)
Money markets have increased their expectations that the Bank of England is poised to announce its largest ever rise in interest rates after inflation data showed price pressures growing throughout the British economy last month. Bets were placed on a 75-basis-point rise in the Bank rate next week after official figures revealed rises in core inflation, food prices and services costs. (The Times)
Possible U.S. Railroad Strike Could Fuel More Inflation: Concerns are mounting over the potential upward pressure on prices if a strike snarls supply chains and hurts economic activity, according to economists and business groups. Meanwhile, Amtrak to Suspend Long-Distance Services as Strike Looms: The national passenger railroad said it would suspend all long-distance train services on Thursday to avoid disruptions from a potential strike by freight rail workers as negotiations approach a Friday deadline. (Wall Street Journal)
Delta Air Lines tips robust US holiday demand but warns of ‘cracks’ in the segment: Delta predicted strong demand for travel during the holiday season but warned there were sign consumers’ travel patterns were returning to pre-pandemic levels following a very busy summer. (Financial Times)
United Airlines partners with one-time foe Emirates, will launch Dubai flights. (CNBC)
British Prime Minister Liz Truss is expected to hold one-to-one talks with U.S. President Joe Biden and other world leaders gathered in London before Queen Elizabeth's funeral on Monday. Truss may also meet President Emmanuel Macron of France, as well as other key UK allies such as Australian Prime Minister Anthony Albanese and Canada's Justin Trudeau. (Reuters)
U.S. Considers Sanctions on Iran-Linked Entities After Rushdie Attack: The designations would target those who have advocated for and have offered rewards for the killing of the author, who was stabbed last month. (Wall Street Journal)
France will cap electricity and gas price rises for consumers at 15 per cent in 2023, as it seeks to extend protections for households as Europe also targets measures to cushion the blow from spiralling energy market prices. (Financial Times)
Mosquito fire nears 60,000 acres, poised to become largest blaze in California this year. The fire in Placer and El Dorado counties is close to surpassing the 60,138-acre McKinney fire. (Los Angeles Times)
Economy
The US shale industry has warned it cannot rescue Europe with increased oil and gas supplies this winter amid fears that a plunge in Russian exports will send crude prices soaring back above $100 a barrel. Even though oil markets have softened in recent weeks, the respite could end when an EU embargo on Russian sales comes into full effect later this year. “It’s not like the US can pump a bunch more. Our production is what it is,” said Wil VanLoh, head of private equity group Quantum Energy Partners, one of the shale patch’s biggest investors. (Financial Times)
EU plans energy windfall tax and electricity cap: Commission president says hardships are a ‘price worth paying for democracy’. (The Times)
EY’s break-up plan raises fears over audit business: EY’s radical plan to break itself up risks stripping its audit business of the expertise needed to vet the complex accounts of the world’s largest multinationals, industry executives have warned. Partners at the Big Four firm will start voting in November on EY’s proposal to spin off and publicly list its advisory business, a move its leaders say will drive growth by eliminating conflicts of interest. But EY and its Big Four rivals — Deloitte, KPMG and PwC — rely on their advisory arms to provide the expertise in tax and asset valuation often needed to sign off on companies’ accounts. (Financial Times)
Citigroup has opened its new hub for junior investment bankers in the beachside Spanish city of Málaga, insisting the move is more than a gimmick as Wall Street lenders battle for young talent amid criticism of burnout in banking. The US bank selected 27 analysts from more than 3,000 applicants for the two-year programme, which started on Wednesday. Promising eight-hour days and work-free weekends, it aims to distinguish itself from the punishing seven-day working weeks common for young staff in London and New York. (Financial Times)
Patagonia founder Yvon Chouinard announced that he and his family are transferring 100% of the company’s stock to a specially designed trust and a nonprofit organization. Changing ownership ensures the company will keep its independence and make sure all of its profits are used to combat climate change. The Chouinard family said it has transferred 100% of its ownership to two new entities: Patagonia Purpose Trust and the Holdfast Collective. (Axios)
Technology
California has sued Amazon over claims it punishes third-party sellers who offer their products more cheaply on other websites, in the latest legal action against the $1.3tn tech giant by prosecutors and regulators in the US and Europe. Rob Bonta, the state’s attorney-general, accused the ecommerce group of violating the state’s competition law by “severely penalising” sellers by reducing their prominence on product listing pages and search results if they offered lower prices on other platforms. (Financial Times)
Google lost an appeal in one of Europe’s leading courts yesterday against a record multibillion-euro fine for abusing its dominance of the Android mobile phone ecosystem, paving the way for further claims. Although the penalty was cut to €4.1 billion from €4.3 billion, after the court ruled against one of the original infringements, it remains the largest ever handed down by a competition authority in Europe and it still ruled that Google had acted intentionally. (The Times)
Netflix Estimates Ad-Supported Tier Will Reach 40 Million Viewers by Late 2023: The streaming service is betting a lower-cost, ad-supported plan could bring in new users and boost revenue, as the company confronts stepped-up competition and a maturing U.S. market. (Wall Street Journal)
iPhone 14 and 14 Pro Review: Go Pro or Go Home. Between the new “dynamic island” multitasking bar and more camera flexibility, Apple’s higher-end iPhones make more sense than ever before. (Wall Street Journal)
Smart Links
McDonald’s plans to expand West Loop HQ, but CEO says city needs to ‘face facts’ about downtown business climate. (Chicago Tribune)
U.S. Senate panel advances bill to boost U.S. ties with Taiwan. (Reuters)
Tesla struggles with Elon Musk’s strict return-to-office policy. (CNBC)
Daily multi-vitamins may improve brain function in older people – US study. (The Guardian)