PERU: BCRP Remains On Hold As Expected, Maintains Data Dependent Stance
Aug-15 08:57
- The BCRP kept its reference rate unchanged at 4.50% for a third consecutive meeting last night, in line with expectations. The accompanying policy statement was similar to before, with the central bank maintaining a data dependent stance and keeping the door open to further easing. Analysts still see scope for a further cut in H2, potentially in September, dependent on external developments.
- The Board continued to sound comfortable about the domestic inflation outlook, with headline inflation still expected to remain in the lower half of the target range in the coming months, before settling around the 2% target, while core inflation is seen holding around 2%. Meanwhile, almost all domestic economic activity indicators remained in “optimistic territory” in a context where activity is still “around its potential level”.
- On the external front, the Board continued to sound cautious, with risks to global growth still skewed to the downside, due to trade uncertainties. However, it removed any reference to the global inflation outlook. Overall, the committee reiterates that future rate adjustments will depend on new information about inflation, particularly core inflation, inflation expectations and economic activity. The next MPC meeting is scheduled for September 11.
- Link to BCRP policy statement here.
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FRANCE: Opposition Criticise Budget After PM Outlines 2026 Proposals
Jul-16 08:33
Opposition politicians have been lining up to criticise the budget proposals announced by PM Francois Bayrou on 15 July. There is a strong likelihood that, given the gov'ts minority status, Bayrou will have to push the budget through using Article 49.3 of the French constitution in order to avoid a vote.
- Budget rapporteur for the National Assembly, Charles de Courson, said that he would not vote in favour of the proposals, arguing the measures fall too harshly on workers without businesses being asked to contribute. De Courson said the Liberties, Independents, Overseas and Territories (LIOT) group would meet later this morning to discuss the budget, but "I would be surprised if many of our colleagues voted for this type of proposal," and that "We will discuss whether to vote for the motion of censure."
- Sebastien Chenu, vice-president of the right-wing Rassemblement National (National Rally, RN), told FranceInfo that "Francois Bayrou, with this kind of proposal, will face a full-blown censure," calling the budget a "stab in the social contract."
- Speaking to BFM-TV on the evening of 15 July, First Secretary of the Socialist Party (PS) Olivier Faure said that "on the current basis, the only possible perspective is censorship". Support from the PS would likely prove one of the only paths for the budget passing in the National Assembly. Former President, now PS Deputy Francois Hollande, is believed to oppose Bayrou's censure, arguing that the PS should focus on the 2027 elections instead.
