Finance, in brief

The oil price

Brent crude reached $109.39 on Tuesday after a drone attack shut Saudi Arabia's main export pipeline. [17] US drivers have paid about $107 billion extra for fuel since 28 February. [21] India's currency fell to a one-month low on the same bill. [29]

Governments paying more to borrow

The US Treasury sold 20-year bonds at 5.42%, the highest since 1986. [2] Britain's ten-year rate hit 5.41%, a 19-year high. [8] Japan's hit 3.030%, its highest since September 1996. [7]

Central banks turning

Morgan Stanley switched to expecting a US rise this week and another in December. [13] Japan's central bank is expected to raise to 1.25% on Friday. [27] Citi and Deutsche Bank moved their India forecast from December to October. [29]

Companies changing hands

Brookfield agreed to buy Australia's Reliance Worldwide for about $2.9 billion. [32] Grab is paying $1.49 billion in cash for most of Atome Financial. [36] Italy's competition authority opened an investigation into Intesa Sanpaolo's bid for Monte dei Paschi. [34]

One pressure seen across the day runs through Finance too.

• Fuel and shipping routes shut by the warHigh ↑ · seen in 4 beats→

1. 1The US central bank is expected to raise rates today. Lenders already charge it the most since 2007, and its 20-year debt just sold at a 1986 high.
2. 2Oil tops $109 after Saudi cargoes are cancelled
3. 3Houthis take two more islands by the Red Sea exit
4. 4Americans have paid $107bn extra for fuel
5. 5Bank of England set to stop selling long-dated bonds

Watch whether Warsh signals more rises at his 2:30pm press conference, because most of the 29 forecasters in the CNBC survey now expect at least two. [3][11]

Brent crude, the world's main oil price, jumped $3.70 to $109.39 on Tuesday. [17]

The move came after Saudi Arabia told European refineries that their September cargoes were cancelled, because the East-West pipeline that carries its crude across the country to the Red Sea is still shut. [18]

Drones launched from Iraq damaged the line on 11 September and Saudi Aramco has given no restart date. [17]

The pipeline had been carrying more than 70% of Saudi exports since the Strait of Hormuz closed in February. [18] Prices slipped back in early trade on Wednesday. [20]

Saudi Arabia is the world's largest crude exporter, and both of its ways out are now damaged.

Every central bank meeting this week is happening while a barrel costs more than $100. [19]

On Tuesday the Houthis, an armed group in Yemen allied with Iran, captured a pair of islands near the Bab al-Mandab Strait. [22]

That is the narrow exit at the southern end of the Red Sea, and about 6.2 million barrels of oil pass through it each day. [18]

The group had already taken the port of Mokha and Perim island in the days before. [22]

Saudi Arabia ships oil out through the Red Sea when the Gulf route is blocked. [18]

Both of Saudi Arabia's export routes are now under attack, which is why traders have stopped expecting the price to fall back under $100. [19]

US drivers and hauliers have spent about $107 billion more on petrol and diesel since the war with Iran began on 28 February than they would have without it, according to estimates by the Climate Solutions Lab at Brown University. [21]

That is more than $500 million a day. [21] The figure also covers disruption from the Russia-Ukraine war. [21]

Crude passing $100 a barrel again this month means the total keeps growing. [21]

This is what the oil price looks like in household budgets. It is also the number the US central bank is meeting about today. [11]

Fuel is short because a pipeline was hit, and the one thing a central bank can change is what it costs to borrow.

The Bank of England meets on Thursday with hiring weakening and fuel dearer, and forecasters say the fuel price is the reason it may raise anyway

Japanese factory prices rose 7.6% in a year, and the Bank of Japan is expected to raise borrowing costs on Friday for exactly the same reason

India buys its oil abroad, so the barrel reaches Indian prices through the currency, and two banks pulled their forecast for an Indian rate rise forward to October

That is the pump price before it reaches anything else, and it is the number every central bank meeting this week is arguing about

A welder in Saudi Arabia, a bond trader in New York and a British shop that did not hire in August are each answering the thing in front of them.

Also seen in World, Food and Tech.

The Bank of England is expected to announce on Thursday that it will stop selling 20- and 30-year gilts, which are loans to the British government. [23]

It bought them during the financial crisis and the Covid lockdowns, when their prices were high, and has been selling them back at much lower prices. [23]

Economists put the loss to taxpayers at about 22 billion pounds since 2022. [23]

Stopping the long-dated sales could save about 2.5 billion pounds a year by the end of the decade. [23]

Britain's finance minister, John Healey, has his first budget on 28 October and the country pays the highest borrowing costs in the G7. [23]

Anything that lowers them changes what he can spend.

The number of people on British payrolls fell by 26,000 in August, after a 19,000 fall in July. [24] Forecasters at Capital Economics had expected a rise of 5,000. [24]

Unemployment held at 4.9% for a fourth month, below the 5% economists had predicted. [25]

Job vacancies slipped to 702,000 in the three months to August, and pay growth including bonuses eased to 3.9% from 4.2%. [24]

Some of the fall reflects employers waiting to see what the 28 October budget does to taxes. [24]

The Bank of England decides on Thursday with a weakening jobs market on one side and a rising fuel price on the other.

Capital Economics says there is a reasonable chance it does not raise rates at all this year. [24]

The rate on ten-year gilts, which are loans to the British government, reached 5.41% on Tuesday, a 19-year high, up from 5.38% on Monday. [8]

The FTSE 100 index of Britain's biggest listed companies fell 0.59% to 10,634.49, a two-month low. [45]

Banks were the heaviest drag, with Standard Chartered down 1.7% and the fund manager Aberdeen down 2.6%. [45] Grocery prices in Britain rose 2.3% in the four weeks to 6 September. [45]

Britain now pays more to borrow than any other G7 country. [23] That is the rate John Healey has to write his 28 October budget against. [23]

The rate on ten-year Japanese government bonds rose to 3.030% on Tuesday, up 0.045 of a percentage point and the highest since September 1996. [7]

It would be the first time the Bank of Japan's own rate has been this high in about 31 years. [27]

The Bank of Japan, the country's central bank, decides on Friday and is widely expected to raise its own rate by a quarter-point to 1.25%, the highest in about 31 years. [27]

Japanese producer prices, what factories charge each other, rose 7.6% in the year to August. [27]

Japan is the largest foreign holder of US government debt, so what its own bonds pay matters well beyond Japan. [28]

The dollar held near multi-week highs on Wednesday against several major currencies, having risen overnight alongside US borrowing rates. [15]

The New Zealand dollar fell to a two-month low of $0.5749 and the yen to a one-week low of 155.43 per dollar. [15]

The euro was at $1.1535, close to Monday's one-month low, and the pound at $1.3470. [15]

Carol Kong, a currency strategist at the Commonwealth Bank of Australia, said a quarter-point rise is about 90% priced in, and that the dollar would fall more than 1% if the US central bank did nothing. [15]

A firmer dollar makes the same barrel cost more in rupees, so India's falling currency and the oil price push the same way. [29]

Scott Bessent, the US treasury secretary, told a congressional committee on Tuesday that the United States spent only a nominal amount helping Japan support the yen. [28]

The two governments bought yen together on 31 July, after the Japanese currency hit a 40-year low of 163.98 per dollar. [27]

Japan spent a record 15.4 trillion yen, about $98 billion, between 30 July and 26 August. [27]

People who track the US Treasury put its own share at well under $1 billion, and Bessent said the department has made tens of millions of dollars on it. [28]

A stronger yen helps US exporters and means Japan does not have to sell US government bonds to pay for the intervention. [28]

With US borrowing costs at a 19-year high, that matters more than it did in July. [1]

Morgan Stanley, one of the largest US investment banks, changed its forecast on Tuesday and now expects a quarter-point rise this week and another in December. [13]

It had previously expected no rise at all this year. [8] The bank also expects one more increase from the European Central Bank, which raised rates last week. [13]

Its note said the slowdown in price rises has been less convincing than the committee is likely to require. [8]

A month ago most forecasters expected rates to stay where they were. [11] The change is about the fuel price, not about the US economy getting stronger. [11]

In CNBC's survey of 29 economists, fund managers and strategists, 86% now expect at least one rise over the next year, up from 46% last month. [11]

Fifty-five per cent expect more than one. [11] Most respondents think the Strait of Hormuz will stay closed for at least another month. [11]

Their average forecast for US consumer price rises this year climbed to near 3.5%, settling at 2.85% in 2027. [11] Roughly three-quarters now see the problem as broader than energy. [11]

Futures pricing points to three further quarter-point rises over the next year. [5]

That last number is why they expect more than one rise. If the price rise has already reached beyond fuel, it does not end when the pipeline reopens. [11]

Several prominent economists have warned that raising rates this week could be a serious error, MarketWatch reported. [12]

Their argument is that the US economy is more vulnerable to a sharp slowdown than it looks, and that dearer borrowing could push firms into laying people off. [12]

The US central bank is required to keep both employment steady and price rises under control. [12]

Traders put the chance of a rise at about 92%, so this is a minority view. [14]

A rise makes loans dearer for anyone borrowing this year. Leaving rates alone risks prices carrying on rising for everyone.

Neither side disputes the fuel price behind the argument. [11]

The STOXX 600, an index of 600 large European companies, fell 0.4% to 633.3 points on Tuesday morning. [26]

Bank shares were the heaviest drag, down 1.3%, with only healthcare and travel rising. [26]

Reuters reported that rising oil prices and government borrowing costs had made investors less willing to hold shares before the US decision. [26]

The German engine maker Deutz fell 4.5% after offering up to 10% of its shares to raise money. [26]

The European Central Bank raised rates for a second time last week and is now expected to go again. [13]

Europe buys most of its oil abroad, so the same price is pushing on it. [26]

The MSCI Asia Pacific index rose about 0.2% on Wednesday. [6] South Korea's KOSPI gained 0.9% and Japan's Nikkei 225 rose 0.6%, while Hong Kong's Hang Seng slipped 0.2%. [6]

Chip shares were mixed: SK Hynix rose 2.3% and Samsung Electronics 1.5%, while Kioxia fell 4%. [6]

US stock futures were slightly higher, and oil eased in early trade after several days of climbing. [6][20]

A market that is 92% sure of a rise has already moved for it. [6] What is left to find out is what comes after this one. [11]

The Indian rupee fell to 95.9550 per dollar on Tuesday, its weakest in more than a month and its biggest one-day fall since mid-July. [29]

Traders said the Reserve Bank of India, the country's central bank, was probably buying rupees to limit the fall. [29]

India buys most of its oil abroad, so a barrel at $108 widens its trade gap and pushes up prices at home. [29]

Citi and Deutsche Bank both moved their forecast for an Indian rate rise from December to October. [29]

Traders expect India's central bank to hold the rupee between 94.50 and 96.50, using its large foreign currency reserves. [30]

Every step down makes the same barrel dearer for an Indian household.

Median US household income rose 2.6% in 2025 to $87,460 after adjusting for inflation, the Census Bureau said on Tuesday. [31]

That is a record, and the first time it has passed the 2019 figure of $85,320. [31] Median means half of households earned more and half earned less. [31]

Over the six years to 2019, a period of low inflation, household income jumped 19%; over the six years since, it has risen 2.5%. [31]

Women's pay rose 3.2% last year while men's slipped slightly. [31]

It took six years for the typical American household to get back to where it was before the pandemic, which is part of why the cost of living is the main argument in the coming midterm elections. [31]

Reliance Worldwide, an Australian maker of plumbing fittings, agreed on Wednesday to a takeover worth about $2.9 billion by Brookfield, a Canadian investment firm. [32]

Its brands include SharkBite and John Guest, and most of its sales are in the United States. [33]

It had a hard year: revenue of $1.31 billion, down 0.7%, and profit down 15.3%, which it blamed on US tariffs, dearer copper and weak demand. [33]

Brookfield made four approaches this year before the board agreed, and the shares hit a one-year high. [33] Reliance Worldwide has 30 days to look for a better offer. [33]

A company worth less after a year of falling profit is what a buyer with cash goes looking for.

Brookfield is buying in the week borrowing became the dearest since 2007. [1]

Italy's competition authority said on Tuesday it had opened an investigation into Intesa Sanpaolo's bid for Monte dei Paschi di Siena. [34]

Intesa is Italy's largest bank; Monte dei Paschi, founded in 1472, is a smaller rival the Italian state once rescued. [34]

The authority said the 35 billion euro cash-and-shares deal could still harm competition in 20 Italian provinces for deposits and 17 for small-business lending, even after Intesa agreed to sell half of Monte dei Paschi's branches. [34]

The deal would also hand Intesa 13% of Generali, Italy's biggest insurer. [34]

A preliminary check in June had flagged possible problems in 72 provinces for household lending. [34] Every month of investigation is a month the deal is not done.

EQT, a Swedish private-equity firm, and Norges Bank Investment Management, which runs Norway's sovereign wealth fund, are making a joint bid for Acciona Energia, a Spanish renewable-energy company, the newspaper Expansion reported on Tuesday. [35]

Including debt, the company is worth about 11.9 billion euros. [35] EQT would hold about 75% of the pairing and the Norwegian fund 25%. [35]

They face competition from Ardian, a French private-equity firm, and bidders confirm their prices in October. [35]

Acciona, the Spanish group controlled by the Entrecanales family, would then pick a preferred bid and enter exclusive talks, with any deal expected to take the company off the stock market. [35]

Grab, the Southeast Asian ride-hailing and delivery company, agreed to buy 60% of Atome Financial for $1.49 billion in cash, it said on Tuesday. [36]

Atome lends to shoppers across Southeast Asia and is backed by SoftBank, the Japanese investment group. [36] The purchase is expected to be completed by the third quarter of 2027. [36]

The deal is being paid for in cash, which avoids borrowing in a week when lenders are charging the most since 2007. [1]

Solar Industries, an Indian explosives and defence manufacturer, agreed to buy Omnia Holdings of South Africa for about $1.3 billion. [37]

Its shares fell more than 12% during Tuesday as investors questioned how it would pay for a purchase that size. [37]

India's own defence production has more than doubled in five years and its defence exports reached a record last year. [37]

The purchase is much larger than other recent overseas deals by Indian defence companies. [37]

A share price that falls on the day a deal is announced is investors saying the buyer is paying or borrowing too much.

The rupee is at a one-month low, which makes anything priced abroad dearer. [29]

The US Justice Department told a federal court in California on Tuesday that states trying to block Paramount Skydance's $110 billion purchase of Warner Bros Discovery should have to post a bond. [38]

A bond here is money set aside to cover the buyer's losses if the block is later overturned. [38]

Twelve states, led by California, say the deal would let one company raise prices across film and television. [38]

Paramount has asked for $1.88 billion and says it pays Warner shareholders $7 million a day while the deal stays open. [38] The trial is set for March. [38]

Paramount says the delay will have cost it $1.3 billion by April. [38] Requiring a bond makes suing expensive, which decides who can afford to object.

Swiss lawmakers are considering letting UBS, the country's only remaining global bank, meet new capital rules using about $13 billion of a bond called Additional Tier 1, rather than ordinary shareholder capital. [39]

An AT1 bond is debt that can be wiped out or turned into shares if the bank gets into trouble. [39]

The Swiss government had wanted UBS to hold around $20 billion more of the stronger kind. [39]

Investors told Reuters the cheaper route could save UBS hundreds of millions of dollars a year. [39]

The rules are being rewritten because Credit Suisse collapsed in 2023 and UBS bought it. [39]

Switzerland concluded after that collapse that AT1 bonds are not crisis-proof, and the compromise now gives them a bigger role. [39]

Investors say that saves it hundreds of millions of dollars a year. [39]

Hedge funds have taken a record 7% of the US Treasury market, where $1.2 trillion of bonds change hands every day, the Wall Street Journal reported. [40]

They have moved in as pension funds, which hold bonds for decades, have stepped back. [40] The share is now large enough that regulators are looking at it. [40]

A pension fund holding a bond for thirty years does not sell when the price drops.

A fast trader can sell the same bond in minutes, and this is the week the price has been dropping. [1]

Goldman Sachs Alternatives, the arm of the US bank that invests outside listed shares, said it has raised $11.7 billion for private-equity funds. [41]

Private equity means buying whole companies and holding them off the stock market. [41]

It has already invested more than a third, in a cybersecurity auditor, a European medical-devices maker and a sports agency. [41]

Michael Bruun, its global co-head of private equity, said it looks at companies worth between $500 million and about $3 billion and holds them four to five years. [41]

The arm managed $459 billion in June and wants $750 billion by 2030. [41]

Private equity usually buys companies with borrowed money, and borrowing has just become the dearest since 2007. [1]

Cash raised from investors now does not have to be borrowed from a lender at 5%.

One in five American workers is repaying a student loan, and they are more likely to leave a workplace pension or put less into it, according to a study by the Employee Benefit Research Institute for Candidly, a financial-technology firm. [42]

There is $1.66 trillion of US student debt outstanding. [42] Nearly 40% of borrowers put less than 3% of their pay into a retirement plan. [42]

The gap widens with age: workers aged 25 to 29 with loans contributed 7.4% less than those without, and workers aged 50 to 54 contributed 14.7% less. [42]

Some 8% of workers aged 64 to 69 still carry student debt. [42]

The study followed the same people over five years and found the gap did not close after the loan was repaid, because the missing years of saving never earn anything. [42]

One in six workers in Britain pays out of their own pocket for an artificial-intelligence tool to do their job, at a total of nearly 1 billion pounds a year, according to a survey published by Deloitte on Wednesday. [43]

Two-thirds have tried tools such as ChatGPT, Google Gemini or Microsoft Copilot, and nearly a quarter use them daily. [43] Some 31% use them without telling their employer. [43]

The most common uses are searching for information, drafting emails and writing summaries, saving an average of 70 minutes a week. [43]

Workers are adopting the tools faster than employers are supplying them, so a cost that belongs to a company is being carried by its staff. [43]