Trade figures raise hopes for eurozone recovery

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This morning's encouraging trade figures for the eurozone raised hopes that the big shock caused by Russia's full-scale invasion of Ukraine is finally starting to wear off, as energy prices rebound and exports pick up. .

The trade balance in goods reached 28 billion euros in January, the highest level since authorities began keeping track of the statistics in 2002. Last year, the eurozone recorded a trade surplus of 64 billion euros, compared to a record deficit of 335 billion euros in 2022.

Today's data provided a welcome antidote to continued bad news on the strength of the single currency area, particularly in Germany, its largest economy. The country had the highest overall trade surplus in more than six years, accounting for much of the euro zone's improvement.

Germany was the world's worst-performing large economy last year due to a combination of high interest rates and inflation, rising energy prices and falling demand for exports, according to the IMF. After contracting by 0.3% in 2023, growth will remain at just 0.2% this year, the city of Berlin expects there will be no major impact on the unemployment rate.

France, the region's second-largest economy, has a budget shortfall this year that is “significantly” higher than its target and plans further spending cuts.

The war in Ukraine has placed further financial stress on European NATO members, who are under pressure to increase defense spending to meet the alliance's goal of 2% of gross domestic product (GDP). Many of the EU countries with the highest budget deficits, including Italy, Spain and Belgium, have some of the highest levels of debt and budget deficits in Europe, according to Germany's Ifo Institute.

Businesses will also face a tough year ahead. European banks need to brace themselves for a year of rising bankruptcies, geopolitical risks and upheaval in energy-intensive industries, the eurozone's new banking regulator says.

The European Central Bank's Claudia Buch told the FT in an interview today that the sector is “not out of the woods yet” and the effects of record high interest rates will still permeate the financial system, including loan defaults and bankruptcies. said it was necessary. It may last a while.

Higher-than-expected inflation in the euro area (2.6% in February confirmed today) suggests that the last mile of the fight to rein in price growth may be more difficult than expected.

ECB President Christine Lagarde said she still wanted “more evidence” that inflation was under control and suggested June was the likely earliest date for a rate cut. But the ECB cut its forecast, saying inflation is now expected to fall to 2.3% this year before reaching its 2% target next year.

Track global inflation and interest rates: Compare with your country

What you need to know: The UK and European economies

british prime minister Rishi Sunak He sought to quell party dissatisfaction with his leadership, saying the economy had “turned a corner”. He also announced reforms to support small and medium-sized businesses, including reducing red tape and creating a new task force for women entrepreneurs. Chief economic commentator Martin Wolff says the country needs broader changes.

A good example is war. poverty. The FT's Big Read details how nearly a third of children in the UK live in relative poverty, and relative poverty is increasing more than any other developed country.

climate change activist People charged with criminal damage in England and Wales have lost the right to a key defense following a landmark Court of Appeal ruling that has led to a series of acquittals. The judges said evidence presented by the defendants about the effects of climate change would be “inadmissible” in future litigation.

What you need to know: The global economy

of federal reserve Economists in the FT/Chicago Booth poll say interest rates will need to remain high for longer than markets and central bankers expect. Traders are expecting three rate cuts starting in June or July this year. Columnist Rana Foruher says despite moves on subsidies and tariffs, the United States still lacks industrial policy.

ChinaIndustrial activity rose 7% at the start of the year, raising hopes for an economic recovery after a period of deflation, declining consumer confidence and tight real estate financing.

International Development Association, World Bank Fund poorest countryis seeking record amounts of funding to tackle rising debt and the climate crisis, its chief fundraiser has told the FT.

of dominican republic Over the past half century, it has achieved Asian-style growth averaging 4.9 percent per year, countering the downward trend in Latin American economies. President Luis Abinader told the FT that this is because the government is pro-investment, pro-business, balanced by increased social spending.

What you need to know: Business

mike lynchThe founder of British software company Autonomy goes on trial in San Francisco today, 13 years after what US prosecutors called Silicon Valley's “biggest fraud in history.” Lynch, who sold the company to Hewlett-Packard for $11.7 billion in 2011, is accused of falsifying Autonomy's accounts in the two years before the deal.

Telecommunications and tech giants are being forced to change course. internet traffic Attacks in the Red Sea have compromised undersea cables, impacting connectivity and services around the world.

The world's largest oil and gas company group is expanding its satellite surveillance campaign for detection purposes. Methane emissions Twenty-six large-scale leaks of greenhouse gases were discovered in the skies over Kazakhstan, Egypt, and Algeria, and the damage was also widespread in emerging countries. Saudi Aramco's CEO said the world should “abandon the illusion of phasing out oil and gas.”

commodity trader It has up to $120 billion in cash on hand after five years of record growth, largely as a result of the Ukraine war.

Retail correspondent Laura Onita evaluates it as follows: john lewis and marks and spencer It is struggling in the battle for Britain's wealthy shoppers. John Lewis reported last week that he was back in the black after three years in the red.

world of work

british statistician They are threatening to go on strike over orders to return to the office. The PCS union said workers at the Office for National Statistics:
We were given the flexibility to work wherever we wanted, and many of our members accepted jobs at the agency based on that understanding.

Worldwide, woman They still earn 77 cents for every dollar paid to men and spend an average of 2.4 hours a day doing unpaid care work. Columnist Pirita Clark argues that Ireland's failed referendum on women's roles is just the latest example of how long efforts to reverse inequality still have a long way to go.

workaholicis an addiction that can cause serious and long-term damage to an individual and needs to be recognized and treated like any other drug or behavioral problem, says host of the Working It Newsletter and Podcast said Isabel Barwick.

Innovation Editor John Thornhill says that future AI-driven changes should be treated as follows: employment As an opportunity rather than a threat.

chat apps etc. slack Elaine Moore in the Lex column writes that the culture that helped create a new workplace culture of constant informal chatter remains.

good news

New drug could be a promising weapon in the fight against infectious diseases lyme disease, a problem that affects both humans and pets. Approximately 476,000 people are diagnosed with and treated for the disease each year in the United States.