Business
The Federal Reserve cut interest rates for the first time since March 2020, reducing its key rate by half a percentage point to a range of between 4.75% and 5%. The central bank suggested it would cut rates again later this year. With inflationary pressures easing, the Fed is pivoting to tackle a cooler labour market.
The Bank of England left its benchmark interest rate unchanged at 5%, having lowered the rate in August for the first time since March 2020. Britain’s headline annual inflation rate has held steady at 2.2%, though price pressures are still evident in the services sector.
As America began to ease monetary policy, Brazil started to tighten it, raising interest rates for the first time in two years to tackle stubbornly high inflation. The central bank lifted its main rate by a quarter point to 10.75%, and indicated that more rises were to come.
Workers in Boeing’s biggest union went on strike, after they resoundingly rejected an offer to raise pay by 25% over four years. The union has been pushing for a 40% increase. It is the first strike to hit Boeing since 2008. It has suspended hiring and furloughed white-collar staff to cut its costs during the industrial action. The strike “jeopardises our recovery in a significant way”, said the company.
Succession obsession
A hearing got under way at a courtroom in Reno, Nevada, to determine who will control Rupert Murdoch’s media empire when he dies. The 93-year-old mogul reportedly wants to change the terms of the family trust so that his eldest son, Lachlan, takes full control of News Corporation and Fox. The trust currently transfers voting shares to four of his children. The court’s judge has refused access to the press, determining that the Murdochs’ confidential personal and financial information needs to be protected.
BP decided to get out of the wind-power business in America and put its operational wind farms, spread across seven states, up for sale. The energy company wants to focus on solar energy in its renewables portfolio instead. Solar capacity is expected to vastly exceed that of wind in America over the next decade.
BlackRock launched a $30bn investment fund aimed at expanding the infrastructure that powers artificial intelligence at data centres and the new energy sources needed to support AI. The fund, one of the biggest of its type ever in America, is backed by Microsoft, Global Infrastructure Partners, an investment fund, and MGX, an investment firm in Abu Dhabi. Nvidia will offer its expertise. The $30bn that the fund raises from private capital swells to a potential $100bn when debt financing is included.
With its share price down by more than half this year, Intel said it would pause the expansion of its chipmaking capacity in Germany and Poland for two years. The company wants to focus on turning its foundry business, which produces processors for other chipmakers, into an independent subsidiary. The German government had promised €10bn ($11bn) in subsidies to Intel to build a new factory.
The European Union’s General Court ruled that Google should not pay a €1.5bn ($1.7bn) fine imposed on it by the European Commission in 2019 for forcing websites to use its AdSense platform to place search ads. The court found that the commission’s antitrust regulator had failed to show how innovation had been hampered. It was a big win for Google, coming a week after the European Court of Justice upheld a €2.4bn penalty against it in a separate case.
Amazon ordered its employees to return to the office five days a week, the toughest such edict yet among America’s big tech firms. Staff had been required to turn up three days a week. An option of working anywhere for four months a year has also been scrapped. Andy Jassy, Amazon’s chief executive, said the change was needed so that workers could “invent, collaborate and be connected”. Employees in America will at least get their own offices back: Mr Jassy also scrapped hot-desking.
TikTok launched its appeal against the Biden administration’s plan to ban it in America unless it separates from ByteDance, its Chinese parent company. Lawyers for the video-sharing app told the appellate judges that the government was imposing an “extraordinary speech prohibition” on a single entity, which was unconstitutional. The government says ByteDance is a national-security threat. Both sides have asked for a decision by December 6th, so that the Supreme Court can hear the case before the ban comes into force on January 19th.
Meta banned RT (formerly Russia Today) from its platforms, after the American government accused the Russian broadcaster of trying to sway foreign politics. Two employees at state-backed RT have been charged with attempting to influence Americans through social media.
Taking a bite in the Big Apple
Pret A Manger reported annual global sales above £1bn ($1.3bn) for the first time. The purveyor of coffee, sandwiches and snacks has 690 shops, 480 of which are in Britain, its home country. But the Pret empire is spreading and international expansion is driving growth. The firm describes New York as the “overseas capital” for customers.