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Zelenskyy seeks ‘new energy’ with Ukraine’s biggest wartime cabinet reshuffle

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Zelenskyy seeks ‘new energy’ with Ukraine’s biggest wartime cabinet reshuffle


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Ukraine’s parliament is expected to approve a new wartime cabinet, as President Volodymyr Zelenskyy seeks the biggest overhaul of his government since Russia’s full-scale invasion almost 31 months ago.

The Verkhovna Rada is meeting on Thursday to dismiss several ministers who tendered resignations and approve nine ministerial candidates put forward by Zelenskyy’s ruling Servant of the People party, according to several party members.

But they said few new faces were expected to be appointed, with many of the nine positions to be filled by officials who were already serving in ministerial roles or the presidential administration. Zelenskyy’s critics have warned that the cabinet changes are likely to further concentrate power in the president’s hands and those of Andriy Yermak, his influential and controversial head of office.

Oleksandr Merezhko, an MP in Zelenskyy’s party, told the Financial Times that the president explained to his deputies late on Wednesday that a “new energy” inside the government is needed to take the country forward.

The decision to replace Dmytro Kuleba, one of Ukraine’s longest-serving foreign ministers, has been the most contentious. A career diplomat, Kuleba has been one of the country’s most effective interlocutors with Washington and EU capitals and played a crucial role in securing western military aid for Kyiv’s defence.

Andriy Sybiha, who has served as Kuleba’s first deputy minister since April, was appointed by parliament on Thursday to succeed his boss. Sybiha, an experienced, multilingual diplomat, is seen as one of only a few insiders to have the president’s ear. He has also been deputy head of Zelenskyy’s office in charge of foreign policy, served as ambassador to Turkey and held two posts at Ukraine’s embassy in Poland, roles that will help him navigate two important relationships as the new foreign minister.

Andriy Sybiha delivers a speech in front of a podium.
Ukraine’s new foreign minister, Andriy Sybiha © Altan Gocher/NurPhoto/Getty Images

The shake-up comes as Kyiv has reached a crucial point in the war against Russia, as it fights to halt Moscow’s steady advance towards the key logistics hub of Pokrovsk in eastern Ukraine while trying to solidify its hold on about 1,000 sq km of territory it has seized inside Russia’s Kursk region. On Thursday, Russian President Vladimir Putin claimed that the Russian army had begun pushing Ukrainian forces out of the area.

Meanwhile, Russia’s air strikes on critical infrastructure have increased concerns that Ukraine may be unable to restore enough of its energy production to light and heat homes this winter.

Uncertainty surrounding the upcoming US presidential election and internal pressures in the EU are also of concern to Kyiv, which fears the long-term security and financial commitments it relies on could soon wane.

“We are entering a very difficult period, especially during the coming winter. And to meet these challenges we need changes in the government,” Merezhko said.

Smoke billows from a building on fire. The surrounding area appears to be rural with some vegetation
Smoke rises from a building following a Ukrainian military operation in Kursk last month © Screengrab via Reuters

Zelenskyy has offered little explanation for the reshuffle or its timing. In his meeting with party MPs on Wednesday, the president argued that some of the ministers he had asked to resign had grown too tired to do the job and could “no longer handle the mountain of issues that falls on them”.

Some MPs, including those within Zelenskyy’s party, questioned whether the reshuffle would revitalise the government.

“To be honest, there are no new faces here,” said one MP from Zelenskyy’s party who spoke on the condition of anonymity.

Yarosalav Zheleznyak, a deputy from the opposition party Holos, told the FT that the changes seemed arbitrary and were happening now because the president simply “wants to change something”.

Several outgoing ministers, viewed as loyalists of the president, will return to the government in similar roles, according to David Arakhamia, head of Zelenskyy’s party in parliament. On Telegram, he shared a list of the new appointments that had been agreed by Zelenskyy and his party members.

Olha Stefanishyna, Ukraine’s deputy prime minister for European and Euro-Atlantic integration, was reappointed to the position but also appointed to serve as the country’s justice minister.

Others will move from the cabinet to the president’s office, including Iryna Vereshchuk, who served as deputy prime minister overseeing occupied territories. She will now serve as adviser to the president on social issues.

The parliament on Thursday appointed Oleksiy Kuleba, a close ally of Zelenskyy, to serve as deputy prime minister for reconstruction and minister of the enlarged infrastructure ministry.

Oleksandr Kamyshin, minister of strategic industries and former state railway boss, will also become a presidential adviser on strategic industries inside the administration. He will be replaced by Herman Smetanin, chief executive of Ukraine’s state defence conglomerate Ukroboronprom.

Ukrainian officials with knowledge of the situation said Dmytro Kuleba did not want to step down as foreign minister but was told by the president this week that it was time to resign.

Western diplomats in Kyiv said they were not surprised by the move, as Kuleba’s forced departure had been rumoured for more than a year. But they were struck by the timing.

US secretary of state Antony Blinken wrote on X that he had spoken with Kuleba “to thank him for his principled leadership of Ukraine’s foreign policy”.

Kuleba, in response, thanked Blinken “for his ironclad support for Ukraine”.



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China August factory output, retail sales miss expectations By Reuters

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China August factory output, retail sales miss expectations By Reuters


BEIJING (Reuters) – China’s industrial output growth slowed to a five-month low in August, while retail sales also weakened further, raising the case for bolder stimulus to shore up the world’s second-largest economy.

The sluggish data released on Saturday contrasted with the robust export growth seen in August, underscoring the uneven nature of China’s economic recovery.

Industrial output in August expanded 4.5% year-on-year, slowing from the 5.1% pace in July and marking the slowest growth since March, data from the National Bureau of Statistics (NBS) showed on Saturday.

That missed expectations for 4.8% growth in a Reuters poll of 37 analysts.

Retail sales, a key gauge of consumption, rose only 2.1% in August, decelerating from a 2.7% increase in July amid extreme weather and a summer travel peak. Analysts had expected retail sales, which have been anaemic all year, to grow 2.5%.

President Xi Jinping on Thursday urged authorities to strive to achieve the country’s annual economic and social development goals, state media reported, amid expectations more steps are needed to bolster a flagging economic recovery.

Faltering Chinese economic activity has prompted global brokerages to scale back their 2024 China growth forecasts to below the government’s official target of around 5%.

The protracted property slump has prompted Chinese consumers to cut back spending. Some experts have even proposed distributing shopping vouchers to counter the trend.

Premier Li Qiang said last month the country will focus on stimulating consumption and look at measures to boost household income.

A central bank official said last week China still has room to lower the amount of cash banks must hold as reserves while it faces some constraints in cutting interest rates.

Data from the central bank on Friday showed August new yuan loans remained soft.

Fixed asset investment rose 3.4% in the first eight months of 2024 from the same period a year earlier, compared with an expected 3.5% expansion. It grew 3.6% in the January to July period.

Cash-strapped local governments issued bonds at a quicker pace last month for construction of major projects, a move that economists believe could spur investment and offer some short-term relief for the economy.

Meanwhile, the troubled property sector remains a major drag on growth. Property investment in January-August contracted 10.2% from the previous year, unchanged from a 10.2% slide in January-July.

© Reuters. FILE PHOTO: An employee works at a production line manufacturing optical fiber cables at a factory of the Zhejiang Headway Communication Equipment Co in Huzhou, Zhejiang province, China May 15, 2019. REUTERS/Stringer/File Photo

While Beijing has ramped up efforts to rescue the housing market, many analysts say much more aggressive steps are needed to help debt-laden developers, and encourage would-be home buyers back to the market.

Analysts at Nomura expect bolder measures to be released in the fourth quarter.





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Boeing faces cash crunch as machinists’ strike weighs on production

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Boeing faces cash crunch as machinists’ strike weighs on production


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A strike at Boeing has cast doubt on the company’s production goals for the 737 Max and raised the spectre of a cash crunch, as its chief financial officer on Friday said the company would fight to preserve its investment-grade credit rating.

Boeing’s investment-grade rating is crucial to its operations and losing it would be a serious blow, meaning the company could face a punishing increase in borrowing costs given a debt load that has swelled to $53bn. The options to keep it would likely include some kind of securities offering to shore up cash.

About 33,000 workers with the International Association of Machinists District 751 walked out at 12:01am on Friday after rejecting a tentative agreement with the company. Chief financial officer Brian West said Kelly Ortberg, the new chief executive is “personally engaged” in addressing the situation.

In June and July Boeing had been building roughly 25 Maxes a month, with plans to raise that to 38 by the end of the year. But West told investors on Friday that “now, obviously, that is going to take longer”.

“I can’t comment on 38 per month,” he said. “That rate is so dependent on the duration of the strike.”

Boeing’s share price closed down nearly 4 per cent at $156.77.

The company has slowed production of the Max this year as it tries to improve the quality of its manufacturing process. Boeing has been scrutinised by regulators, prosecutors and the flying public since January when a door panel, which was missing several bolts, blew off a commercial jet midflight. The US Federal Aviation Administration has capped the group’s production at 38 a month.

The slowdown has cost Boeing billions in free cash flow. A lengthy strike would impede the company’s ability to deliver planes to customers, further hurting its cash flow.

The credit rating agencies are closely watching Boeing’s deliveries and ability to generate cash. All three have the group rated one notch above junk, on a negative outlook. Moody’s on Friday said it had placed the company on review for a downgrade.

“Boeing’s investment-grade credit rating has limited headroom for a strike,” said Fitch Ratings analyst Dino Kritikos. “If the current strike lasts a week or two, it is unlikely to pressure the rating. However, an extended strike could have a meaningful operational and financial impact, increasing the risk of a downgrade.”

When asked if Boeing may raise debt or equity before early 2025, West said the company had two priorities: keeping its investment-grade rating and stabilising its supply chain and factory floor.

“That last objective just got harder based on last night,” he said. “So we are perfectly comfortable to supplement our liquidity position to support these two objectives.”

West said it has told suppliers which are not behind on their deliveries to stop shipping to Boeing’s factories in Renton, Washington. Supply schedules remain untouched for the group’s South Carolina plant, which builds the 787 and is not unionised.

The work stoppage is “disappointing”, West said, “because things were starting to move in the right direction”.

“We’re working every responsible lever to do what’s right to conserve cash,” he said. “Our expectation — and I don’t have any timetable — is to want to get back to the table and hammer out a deal.”



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Dangers of being a FOMO customer as rates fall

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Dangers of being a FOMO customer as rates fall


Getty Images Woman lies in bed at night looking at her smartphoneGetty Images

Falling mortgage rates may, at last, be bringing some relief to embattled homeowners and first-time buyers.

In a market described as “frenetic”, lenders are locked in intense competition for new customers while simultaneously trying to hold on to borrowers already on their books.

On supposedly unlucky Friday the 13th alone, big-name providers such as the Nationwide, HSBC and NatWest reduced their fixed rates. In an unusual move, TSB did so for the second time in a week.

Analysts expect further cuts to come, but brokers say the fear of missing out (FOMO) on better deals is paralysing some borrowers.

Failing to act before their current deal expires leaves them exposed to a much more expensive variable rate.

National obsession

During the last couple of years, mortgage rates have featured in discussions from chats around the dinner table to election debates.

About 1.6 million existing borrowers had relatively cheap fixed-rate deals expiring this year. Hundreds of thousands of potential first-time buyers have been hoping to get a place of their own.

Yet, rates have been volatile and much higher than what was the norm for more than a decade.

Line chart showing the average interest rate charged on two-year and five-year fixed deals, according to Moneyfacts. The two-year rate was 5.49% on 13 Sep 2024, and it peaked at 6.86% in July 2023. The five-year rate was 5.15%, and it peaked at 6.51% in October 2022.

The interest rate on a fixed mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it.

Average rates on new deals are now 5.49% for a two-year deal, the lowest for more than a year. Five-year deals have an average rate of 5.15%, according to the financial information service Moneyfacts.

However, the best, so-called headline, rates are reserved for those borrowing a small proportion of the value of the home (known as loan-to-value). A few are at levels not seen since rates shot up following the mini-Budget in the short-lived premiership of Liz Truss.

“Momentum is really starting to build now and the cuts are coming thick and fast.,” said Emma Jones, managing director at broker When The Bank Says No.

“Borrowers are the winners as lenders seek to compete for all-important market share as we head into the final months of the year.”

‘We took the plunge’

The Bank of England’s interest rate cut in August, with the potential for more to come, is part of the reason for falling mortgage rates.

That came slightly too late for Johnny and Sophie Abbott, whose last mortgage deal expired at the end of July.

Johnny Abbott Portrait of Johnny and Sophie Abbott, both of whom are smilingJohnny Abbott

Johnny and Sophie Abbott decided to move house

When they spoke to the BBC in March, the couple from Loughborough, who have three children, admitted every option seemed like a gamble.

In the end, they chose to buy a home that needed renovation.

“We took the plunge and can just about deal with the mortgage,” said Mr Abbott. “It will be great when it’s done.”

In June, the Bank of England said three million households would see their mortgage payments rise in the next two years, and about 400,000 mortgage holders were facing some “very large” payment increases.

A few months ago, Gary Rees expected to have to make serious lifestyle changes when his current deal expires in October. Now, things are looking better.

Yet, typical of many, the benefit is a smaller rise in his monthly mortgage repayments, not a fall. To be blunt, the financial punch won’t hurt as much.

“It’s improved, but my mortgage rate is still likely to double, rather than triple,” he said.

He is expecting to settle on a two-year deal, in the hope of further rate falls. The Bank of England’s next interest rate decision is on Thursday, although analysts are predicting a hold at 5%.

Getty Images A young man stands outside a house looking at his phone with a reflection of a tree in the window behind himGetty Images

These two cases show that, although things are looking more positive for borrowers, not all are getting an equal benefit. Savers, meanwhile, are seeing the interest they receive worsen.

Brokers say that lenders have been offering the best deals to new, house-purchasing customers, rather than those who are remortgaging.

With relatively few buyers, providers are trying to get a piece of a small pie, according to David Hollingworth, of broker L&C. That includes offering loans at higher multiples of income, up to 5.5 times.

He said that while the lowest rates were “not divebombing”, the market was frenetic.

The market could also improve for remortgagers, he said, as lenders try to hit year-end targets.

Time to act?

Mr Hollingworth said the danger for any borrowers endlessly waiting for even lower rates to come is that they do nothing.

If a fixed deal expires, then borrowers automatically move on to their lender’s standard variable rate – which currently carries an average interest demand of 7.99%, which is two-and-a-half percentage points higher than a new two-year deal.

Adviser Jo Jingree, director of Mortgage Confidence, said people in the process of buying or remortgaging could still switch to a better deal if rates continued to fall before their personal deadline.

“I’ve seen first-hand that customers have been able to achieve revised mortgage offers on the lower rates which will save them money on their monthly payments,” she said.

Borrowers should monitor their rates, particularly a few weeks before their mortgage completes, to ensure they are getting the best possible rate, said Aaron Strutt, of broker Trinity Financial.

He expected rates to keep falling, especially if the Bank of England cuts the base rate on Thursday, or later this year.

With the cost of funding mortgages coming down, some in the industry suggest lenders could have cut rates more quickly.

They say lenders are making smaller price cuts week after week when they could be making larger reductions in one go.

Tackling it Together strap

Ways to make your mortgage more affordable

  • Make overpayments. If you still have some time on a low fixed-rate deal, you might be able to pay more now to save later.
  • Move to an interest-only mortgage. It can keep your monthly payments affordable although you won’t be paying off the debt accrued when purchasing your house.
  • Extend the life of your mortgage. The typical mortgage term is 25 years, but 30 and even 40-year terms are now available.

Read more here.



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