costs

Turkey central bank stuns market with 500-point rate hike to 50%

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Turkey central bank stuns market with 500-point rate hike to 50%

Turkey’s central bank raised interest rates by 500 basis points to 50% due to a deteriorating inflation outlook and may tighten further if inflation worsens significantly and persistently. This decision, seen as a demonstration of the central bank’s independence, occurred 10 days before nationwide local elections. Following the rate hike, the lira appreciated by up to 1.5% against the dollar, and Turkey’s dollar bonds rallied. Since last June, the central bank has increased the key one-week repo rate by 4,150 basis points from 8.5%, following a shift towards more orthodox economic policies after President Tayyip Erdogan’s election victory in May. The central bank also adjusted its policy operational framework, setting the overnight borrowing and lending rates 300 basis points below and above the repo rate. Inflation in Turkey rose to 67% last month, higher than expected, despite a series of rate hikes since June. A Reuters poll showed that while most respondents expected the rate to remain steady in March, a majority anticipated further hikes later in the year. The central bank has also taken steps to tighten credit, including adjusting reserve requirements and raising the maximum rate on credit card cash withdrawals. Tighter fiscal policy is expected after the upcoming elections, which could increase credit costs and exacerbate the cost-of-living crisis in Turkey.

Cyprus banks to maintain stability, but lower profits, says Moody, ’s

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Cyprus banks to maintain stability, but lower profits, says Moody, ’s

– Risks associated with loans for Cypriot banks are expected to decrease due to economic growth, declining inflation, and unemployment rates.
– Moody’s predicts a decline in bank profits from recent highs.
– A gradual decrease in net interest margins is anticipated due to rising deposit costs and falling interest rates, influenced by competition and high levels of private sector debt.
– Stricter loan criteria and loan restructuring efforts are improving loan quality and reducing problematic loans.
– Asset quality risks from foreclosed properties are diminishing, supported by a strong real estate market.
– The banking sector in Cyprus is characterized by a low loan-to-deposit ratio and ample liquidity reserves.
– Cyprus’ GDP is forecasted to grow by 2.8% in 2024 and 3.2% in 2025-27, outpacing the euro area by 0.8% in 2024.
– Economic growth is supported by diversification in the services sector and significant foreign direct investment projects.
– Moderate growth in the loan portfolio is expected due to the banking system’s saturation, high private sector debt, and elevated interest rates.
– Monetary policy is expected to remain restrictive, even with interest rate reductions by the European Central Bank.
– The NPE ratio is expected to decrease below 3% this year.
– The proportion of foreclosed assets relative to bank equity is decreasing, supported by the real estate market.
– Capital risks are declining, with banks completing risk release and balance sheet restructuring.
– The Common Equity Tier 1 ratio for assessed banks increased to 18.8% at the end of 2023.
– Moody’s assessment focuses on Cyprus’ two largest domestic banks, Bank of Cyprus and Hellenic Bank, which represent a significant portion of the banking system’s assets.
– The weighted average Baseline Credit Assessment of the two major banks is ba2, with a weighted average asset-based deposit rating of Baa3.

UK house prices fall by 0.6 per cent in annual terms in January

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UK house prices fall by 0.6 per cent in annual terms in January

British house prices fell by 0.6 percent on an annual basis in January, after a revised 2.2 percent decrease in December, according to the Office for National Statistics (ONS). Other data showed house prices rose in January as demand increased following a decrease in mortgage costs and weaker inflation. A slowdown in British consumer price inflation led to increased expectations of an interest rate cut by the Bank of England in August. The ONS reported that private rents rose by 9.0 percent in the year to February, the largest increase since records began in 2015, up from 8.5 percent in the 12 months to January.

Hot or cold? How air to air heat pumps can help you withstand any weather

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Hot or cold? How air to air heat pumps can help you withstand any weather

An air to air heat pump is a heating and cooling system that transfers heat from the outside air into a home and can also cool indoor spaces by converting air into energy. It is considered a renewable energy system because it uses air instead of fossil fuels. These pumps are efficient, space-saving as they are installed outside, and can reduce electricity usage by up to 50% compared to traditional boilers and air conditioning units. They have a lifespan of 10-15 years, are easy to install, typically within a day, and require low maintenance. However, their efficiency can be significantly affected by outdoor temperatures, and they can be expensive with potential additional costs for extra parts. Proper insulation, adequate outdoor space, and professional installation are essential for optimal operation.

Somali pirates’ return adds to crisis for global shipping companies

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Somali pirates’ return adds to crisis for global shipping companies

A speed boat carrying more than a dozen Somali pirates attacked a Bangladeshi-owned bulk carrier in the western Indian Ocean, taking the captain and second officer hostage. The ship, named the Abdullah, later anchored off the coast of Somalia. This incident is part of a resurgence of piracy in the region, with more than 20 attempted hijackings since November. The increase in piracy has led to higher costs for shipping companies due to the need for armed security guards, insurance coverage, and the potential for ransom payments. The Indian Navy recently intercepted and freed another hijacked ship, the Ruen, capturing 35 pirates and rescuing 17 hostages without injuries. The resurgence of piracy is attributed to a reduction in international naval operations off the coast of Somalia and the distraction provided by Houthi militia strikes in nearby waters. Somali President Hassan Sheikh Mohamud emphasized the importance of stopping piracy early to prevent it from escalating. The global economy suffered approximately billion in costs due to Somali pirate activities at their peak in 2011. The current rate of attacks is significantly less, but the threat persists, especially with the end of the monsoon season. Insurers have extended the area in which additional war risk premiums are imposed, and the demand for private armed guards has increased, driving up prices. No ransom payments have been reported for the recent hijackings, but negotiations have taken place. International efforts to combat piracy have been hampered by reduced naval patrols and the lapse of a U.N. resolution authorizing foreign vessels to patrol in Somali waters. Somali President Mohamud highlighted the need to bolster Somalia’s law enforcement capacity at sea and on land to contain the piracy threat.

Easing UK inflation keeps BoE on track for rate cuts later in 2024

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Easing UK inflation keeps BoE on track for rate cuts later in 2024

British inflation slowed in February, with consumer prices rising by 3.4% in annual terms after a 4.0% increase in January. This was the weakest rate of inflation since September 2021. Core inflation, which excludes energy, food, and tobacco prices, also slowed to 4.5% from 5.1% in January. Despite the moderation, Britain still has the highest rate of headline inflation among the Group of Seven advanced economies, with consumer prices having increased by more than 21% since the end of 2020. The Bank of England (BoE) has indicated that underlying inflation pressures remain too persistent for it to cut interest rates now, although it has signaled that lower borrowing costs are likely later this year. Finance Minister Jeremy Hunt mentioned that the fall in inflation could help the government with its goal of abolishing social security taxes, provided it does not lead to increased borrowing or cuts in funding for public services.

Service dogs may be exempt from dog licence fee

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Service dogs may be exempt from dog licence fee

Service dogs and dogs owned by low-income pensioners and welfare recipients may soon be exempt from the dog licence fee, following the progression of a bill through the House environment committee. The bill amends Article 4 of the law on dogs, which currently requires an annual fee of up to €20 for dog licensing. Akel MP Nikos Kettiros stated that the exemption aims to support those in need without causing significant financial issues for public finances or local authorities. The exemption is intended for one animal per residence and could encourage adoptions from animal shelters. Despite some opposition from the Municipalities’ union, government agencies, and the Legal Service, proponents of the bill argue it will have numerous non-financial benefits. Diko MP Chrysanthos Savvides highlighted concerns regarding the number of animals per household and called for a unified nationwide policy on the matter.

Shifting focus in higher education

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Shifting focus in higher education

The number of EU students enrolling in British universities has significantly decreased by more than half since the UK’s withdrawal from the European Union in 2016, with notable declines from Italy, Germany, and France. This trend is also observed in Cyprus, where students are now considering universities in other countries. British passport holders and children of British passport holders residing in the EU can still apply for UK universities and receive home fees until January 1, 2028. Before Brexit, EU students paid just over £9,000 in home fees and had access to student finance, but now, with no loans available, tuition fees can rise to £38,000. Despite the increase in tuition fees, some UK universities still offer home fees or scholarships to reduce costs. Students from Cyprus are exploring universities in various countries, including the Netherlands, France, Ireland, Greece, Germany, Austria, the Czech Republic, Canada, the USA, and Australia. There is also a noticeable increase in students applying to local private universities in Cyprus due to the variety of courses, scholarship opportunities, flexible entry requirements, and easy application processes. Students are increasingly pursuing courses that offer immediate employment opportunities, with a growing interest in fields such as artificial intelligence, cybersecurity, risk management, data analysis, art and design, real estate, business, economics/finance/accounting, law, medicine, engineering, psychology, and physiotherapy.

Greece must bolster flood defences and reduce water-guzzling crops, experts say

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Greece must bolster flood defences and reduce water-guzzling crops, experts say

Greece is advised to enhance river flow space and defenses in the Thessaly plain to prevent future floods. Thessaly, contributing 25% to Greece’s agricultural output and 5% to its GDP, was severely affected by Storm Daniel’s record rains last year. A plan by HVA suggests moving dykes, deepening riverbeds, and restricting construction on floodplains. Despite potential water shortages due to groundwater extraction for irrigation, HVA recommends planting less water-intensive crops. Thessaly faces a 500 million cubic meter annual water deficit, expected to rise with climate change. The proposed plan, costing about 4.5 billion euros, aims to address flood risks and water scarcity, potentially enhancing Thessaly’s agricultural competitiveness. The government is reviewing the plan for implementation. HVA also proposes tripling Lake Karla’s size to support agriculture. Public consultation on these proposals ends on March 29.

Unilever to spin off ice cream unit, cut 7,500 jobs for cost savings

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Unilever to spin off ice cream unit, cut 7,500 jobs for cost savings

Unilever announced it would spin off its ice cream unit, which includes brands like Magnum and Ben & Jerry’s, into a separate entity and cut 7,500 jobs as part of a new cost-saving initiative. The spinoff is set to be completed by the end of 2025. Unilever aims for mid-single-digit underlying sales growth and modest margin improvement post-split. The company also plans to save around 800 million euros over the next three years. The job cuts, mostly office-based, represent about 5.9% of Unilever’s workforce of approximately 128,000 people. Shares in the company rose 5.4% in early trading following the announcement.