US Senate Republicans for a second day in a row blocked a bid by President Joe Biden's Democrats to head off a potentially crippling U.S. credit default, as partisan tensions rattled an economy recovering from the COVID-19 pandemic. With federal government funding due to expire on Thursday and borrowing authority set to run out around Oct. 18, Democrats who narrowly control the Senate and House of Representatives are working to head off twin fiscal disasters while also trying to advance Biden's ambitious legislative agenda. Senate Republican leader Mitch McConnell has insisted that Democrats use a parliamentary manoeuvre to temporarily lift the government's $28.4 trillion debt limit without Republican votes, although Democrats note that about $5 trillion of the nation's debt is the result of tax cuts and spending passed during Republican Donald Trump's presidency.

The two critical deadlines have added disarray to a complicated autumn for Democrats, who are deeply divided over a pair of bills worth some $4.5 trillion that form the core of Biden's agenda. Biden cancelled a planned Wednesday trip to Chicago to promote the COVID-19 vaccine so he can continue negotiations with the Democrats' moderate and progressive wings, which need to act in unison to pass anything due to their razor-thin majorities. "There is a strong sense that progress is being made, and the president is staying to continue his engagement," said an administration source familiar with the talks.

(Reuters - Continue Reading)

Former foreign minister Fumio Kishida won a ruling Liberal Democratic Party (LDP) leadership race on Wednesday, a victory that virtually ensures he will succeed Yoshihide Suga as prime minister within days. Kishida enjoys only moderate public support and has a bland image and his victory could spell problems for the LDP in a general election due within weeks. Kishida defeated former defence and foreign minister Taro Kono, seen as an outspoken maverick, in a second round run-off vote. Two female contenders, Sanae Takaichi, 60, and Seiko Noda, 61, dropped out after the first round.

The winner of the party poll to succeed unpopular Prime Minister Suga, who is not seeking re-election after just one year in office, is almost certain to become premier because of its majority in parliament's lower house. Kishida must call an election by Nov. 28 and faces the task of rebuilding an economy staggering from the COVID-19 pandemic, but his consensus style will help him consolidate power within the factious ruling party. Kishida's victory is unlikely to trigger a huge shift in policies as Japan seeks to cope with an assertive China and revive an economy hit by the pandemic, with the soft-spoken MP highlighting the need to focus on reducing income disparity.

(Reuters – Continue Reading)

Confidence in the euro-area economy unexpectedly rose in September as consumers turned more optimistic about the outlook and construction companies saw employment prospects improve. The European Commission’s monthly sentiment gauge rose to 117.8 from 177.6, a small gain that masks trouble in services, retailing and industry, with manufacturers lowering production expectations amid persistent supply bottlenecks. The European economy is entering a phase of uncertainty after a strong performance this summer when governments lifted most Covid restrictions. Growth in services is slowing as the sector nears normal, while material shortages and transport delays are hitting factories and a jump in energy prices threatens to strip away more momentum.

Selling-price expectations rose across industry, services and retail, leaving consumers to anticipate an increase in inflation pressures. Consumer-price growth is currently running at 3% and expected to pick up further. Half of total inflation today is due to energy, according to European Central Bank President Christine Lagarde. While governments have already reacted by earmarking billions of euros of public money for mechanisms to mitigate higher heating costs for consumers, the Frenchwoman has played down concerns, arguing there are no signs the increase in inflation is broad-based.

(Bloomberg – Continue Reading)