• British inflation defied forecasts for a slight fall and held at 2% in June while strong underlying price pressures prompted investors to reduce bets that the Bank of England (BoE) will cut interest rates in two weeks' time for the first time since 2020.
• Increases in hotel prices - in a month when U.S. pop star Taylor Swift and other performers toured the UK - were partly to blame for the higher-than-expected inflation number, underscoring the BoE's concern about service prices.
• Economists polled by Reuters had mostly expected headline consumer price inflation would ease to 1.9% in the 12 months to June, extending its drop from a peak of 11.1% in October 2022.
• Inflation for services was 5.7%, the Office for National Statistics (ONS) said, unchanged from May. The Reuters poll had pointed to a slightly weaker 5.6% increase.
• The BoE took comfort from May's fall in consumer price inflation to its 2% target for the first time in nearly three years. But it has expressed concern about the strength of services inflation, which largely reflects pressure from wage growth in a labour market short of candidates to fill jobs.
• Core inflation - excluding volatile food and energy prices - held at 3.5% in the 12 months to June, the ONS said, matching the median forecast in the Reuters poll. The BoE had expected headline inflation of 2.0% in June and services inflation of 5.1%, according to forecasts it published two months ago. The BoE also expected headline inflation to rise back above its target later this year and through 2025.

(Source: Reuters)

• Production at U.S. factories increased more than expected in June, contributing to a solid rebound in output in the second quarter, though higher borrowing costs remain a constraint for the manufacturing industry.
• Factory output rose 0.4% last month following an upwardly revised 1.0% increase in May, the Federal Reserve said on Wednesday. Economists polled by Reuters forecast factory output would advance 0.2% after a previously reported 0.9% jump in May. Factory Production shot up 1.1% on a year-on-year (YoY) basis in June.
• It increased at a 3.4% annualised rate in the second quarter, rebounding from the 1.3% pace of decline in the January-March quarter.
• Manufacturing, which accounts for 10.4% of the economy, has at best been treading water as higher interest rates curb demand for goods and make capital investment challenging.
• Motor vehicle and parts output rose 1.6% last month after being unchanged in May while durable goods manufacturing production was unchanged. Increases in the output of motor vehicles and parts as well as electrical equipment, appliances and components were offset by declines in fabricated metal products and miscellaneous goods.
• Mining output rose 0.3% after falling 0.7% in May. Utilities production increased 2.8% following a 1.9% rise in the prior month. Overall industrial production advanced 0.6% in June after gaining 0.9% in May.
• Capacity utilisation for the industrial sector, a measure of how fully firms are using their resources, rose to 78.8% from 78.3% in May. It is nine-tenths of a percentage point below its 1972–2023 average. The operating rate for the manufacturing sector climbed to 77.9 from 77.6% in the prior month. It is four-tenths of a percentage point below its long-run average.

(Source: Reuters)

• Access Financial Services Limited (AFS) has advised that Executive Chairman, Mr. Marcus James requested a one-year leave of absence from his role effective June 27, 2024. During this period, Mr. James will continue to serve on the Board.
• Mr. Michael Shaw was subsequently appointed as the new Chairman of the Board. Mr. Shaw brings extensive leadership experience in the financial sector. He served in senior positions where he consistently exceeded targets, improved efficiency, and delivered strong financial results.
• Additionally, the AFS Board appointed Mrs. Charmaine Boyd-Walker as the Chairman of the Audit & Risk Management Committee. Mrs. Boyd-Walker has over 25 years of experience in accounting and finance, with significant expertise in audit and accounting standards, internal controls, compliance, and risk management.
• AFS’ stock has declined 13.1% since the start of the calendar year and closed at $21.73 on Tuesday, July 16^th. At this price, the stock currently trades at a P/B of 2.0x earnings, which is below the Junior Market Financial Sector average of 2.7x.

(Sources: JSE & NCBCM Research)

• Prime Minister, the Most Hon. Andrew Holness, has highlighted the need for Negril to have its own local authority, which will enable the town to manage its affairs better.
• The Prime Minister, who was speaking to members of the Negril business community and other stakeholders on July 12, said the resort town outgrew its current governance structure, posing challenges both to infrastructure and administration.
• He stated that due to the growth and expansion of Negril, the town has crossed over from Westmoreland into Hanover, leaving the question as to who is in charge.
• Mr. Holness said that while there have been discussions on the matter in the past, it was time to give Negril its own Municipality.
• “Where the problem lies is where the solution should be. If the proper structure is put in place, I am convinced you could see an improvement in how the town is managed… Negril has also outgrown not only its physical infrastructure but its management structure,” Mr. Holness further noted.

(Source: JIS)

• Bermuda has successfully continued to attract global re/insurers as the Bermuda Monetary Authority (BMA) continues to introduce significant new requirements to regulate the market in its jurisdiction. This move has had a significant financial impact on the island’s life and long-term insurance sector, according to the Bermuda International Long Term Insurers and Reinsurers (BILTIR’s) CEO Suzanne Williams-Charles.
• In a recent interview with Reinsurance News, BILTIR’s CEO spoke about Bermuda’s strong regulatory regime. Williams-Charles says the BMA isn’t merely keeping up with global requirements. the BMA is at the forefront of solidifying the life re-insurance sector with robust and progressive regulations. “Bermuda has a very well-established marketplace, we are seen internationally as a jurisdiction that has a world-class regulator, and I would consider us and our regulatory environment to be well respected by peers. The regime that the BMA has put in place continues to evolve in order to address their ability to stay in line with international standards,” Williams-Charles explained.
• The constant enhancement of regulations by the BMA, including insurance amendment rules and business investment amendments, is also an attraction, despite causing some financial impacts. Re/insurance businesses also make moves to adapt to these enhanced regulations, looking for an environment that fits with their business plan, the CEO noted.
• Bermuda’s alignment with other key jurisdictions such as the US, Europe and the UK is also highly important, Williams-Charles stated. She believes that these relationships and the recognition of a high standard of the regulatory environment in Bermuda are critical for continued success.

(Source: Reinsurance News)

• Fitch Solutions forecast that the Chilean economy will grow by 2.7% in 2024 (previously 1.8%), after an estimated 0.2% expansion in 2023. Lower interest rates and inflation and a recovery in copper output will drive the expansion. Still, the pace of rate cuts by the Banco Central de Chile (Central Bank of Chile- BCCh) and import demand from Mainland China are key risks.
• The updated forecast aligns with the government’s projection of 2.7% and slightly above the Bloomberg consensus of 2.3%. Data for Q1 2024 came in well above expectations, with the economy expanding by 1.9% quarter-over-quarter (QoQ) on the back of strength in the mining and commercial sectors.
• That said, risks are skewed mostly to the downside. If the pace of the BCCh’s cutting cycle is more conservative than pencilled in, higher rates will continue to pose a headwind to economic activity in 2024.
• However, if copper prices surge further, and Chile overcomes the operational mining challenges seen all through 2023, there could be an increase in output and even stronger growth than currently predicted though this scenario is less likely.

(Source: Fitch Solutions)

• Canada's slower-than-expected rise in consumer prices in June has firmed up expectations that yet another rate cut by the Bank of Canada (BoC) is coming next week, extending some more relief to homeowners and indebted businesses.
• The annual inflation rate cooled a tick more than expected to 2.7% in June and the BoC's closely tracked core inflation measures were also marginally down, data showed on Tuesday.
• The inflation reading is the last critical data point before the central bank's interest rate announcement and Tuesday's print prompted analysts and economists to factor in with almost complete certainty another 25-basis point rate cut on July 24.
• Month-over-month, the consumer price index was down 0.1%, compared with a forecast for no change. This was the first deceleration in the monthly inflation rate since December, Statistics Canada data showed.
• CPI has stayed below 3% since the start of the year and has been in the target range of the central bank, which aims to keep inflation at the mid-point of its range. The average of two of the BoC's preferred measures of core inflation - CPI-median and CPI-trim - eased slightly to 2.75% in June from 2.80% in May.
• Canada's main stock index (the S&P/TSX Composite) opened higher by 0.26% to 22,810.07 points, boosted by rate cut hopes. Meanwhile, yields on the government's two-year bonds were down 0.9 basis points to 3.792%.

(Source: Bloomberg News)

• The International Monetary Fund (IMF) has upgraded its forecast for UK economic growth this year in an early boost for the new Labour government.
• In an update to its global growth outlook, the IMF raised the UK to 0.7% from the 0.5% forecast in April, taking it from the second bottom ahead of Germany in 2023 to a pace equal to Italy and Japan. The US, Canada and France will see more rapid expansions.
• The 0.2 percentage point upgrade was the equal largest alongside France. The forecast was unchanged for 2025, when the UK will be the third-fastest growing G-7 economy at 1.5%, behind Canada and the US, according to the IMF
• Despite the better outlook, the forecasts imply the newly appointed  Chancellor of the Exchequer Rachel Reeves still faces trouble in her first budget – expected in September or October. The Chancellor of the Exchequer is the UK government's chief financial minister responsible for raising revenue through taxation or borrowing and for controlling public spending.
• The Office for Budget Responsibility, the fiscal watchdog, was forecasting growth this year of 0.8% and 1.9% in 2025 and most economists think its long-term outlook is overly ambitious.
• “Further challenges to disinflation in advanced economies could force central banks, including the Federal Reserve, to keep borrowing costs higher for even longer. That would put overall growth at risk,” Pierre-Olivier Gourinchas, the IMF’s economic counsellor, wrote in a blog accompanying the forecasts.
• Last week, 3 of the 9 members of the BOE’s Monetary Policy Committee expressed similar concerns about services prices and wages. However, they were countered by another external member already voting for a rate cut, who said this week that the BOE’s policy was too tight.

(Source: Reuters)

• Jamaica welcomed 55,000 visitors from July 4 to 10, indicating a recovery of the tourism industry post Hurricane Beryl. Tourism Minister, Hon. Edmund Bartlett, made the disclosure at the opening ceremony of the Christmas in July trade show, on July 11.
• Minister Bartlett informed that for July 2 and 3, there were no arrivals to the island. He said the island started receiving visitors again on July 4 and arrival numbers increased over a six-day period.
• “That is what resilience is about where you can say… 80% of our resources is intact, so you can come, and they came because they have confidence in the promise that we make, because of the integrity of that promise,” he said.
• The Minister noted that the sustainability plan for the industry is predicated on several key strategies of training and development, upskilling, and broadening the scope of the production of authentic Jamaican goods and services. He also mentioned other strategies like expanded credit and debt arrangements, and marketing and networking entrepreneurs operating within the sector.
• Mr. Bartlett added that Jamaica’s long history of attracting record numbers of visitors to the island goes beyond its natural resources and noted that the artisanal community is a valuable part of the island’s tourism product.
• He emphasised that small and medium-sized enterprises in the tourism ecosystem are critical drivers of the future of the industry.

(Source: JIS)

• The Jamaica Special Economic Zone Authority (JSEZA) is looking to expand Jamaica’s footprint in global markets, targeting strategic opportunities in Colombia, Mexico and El Salvador.
• The Authority’s Chief Executive Officer, Kelli-Dawn Hamilton, who will participate in a business mission to these Latin American countries from July 17 to 26, said that the aim is to foster international partnerships and attract investments that will propel Jamaica’s economic growth.
• In an interview with JIS News, Mrs. Hamilton pointed out that JSEZA’s role in this mission is crucial, as they coordinate from the Government side to penetrate new markets and pursue strategic opportunities.
• The Authority will also work with Jamaica Promotions Corporation (JAMPRO) to provide timely and relevant information, facilitating the setup process for potential investors in Jamaica and maintaining collaborations to benefit existing SEZ companies.
• The mission aims to highlight Jamaica’s potential to become a logistics hub, especially given current global supply chain challenges, logistical considerations are paramount.
• In this, Mrs. Hamilton explained: “We would have chosen these markets because of the potential opportunities, based on our own needs as a country, and our own vision of becoming a logistics-centred economy.”
• To capitalise on the benefits, “We have to go out there and sell that opportunity and show that Jamaica has the potential to be an even larger nearshore destination for a number of companies, especially amidst issues related to the Panama and Suez Canals,” she said.

(Source: JIS)