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Bank of England chief Andrew Bailey said Tuesday bond investors have “three days left” until the British central bank phases out emergency bond-buying efforts.

“We think the rebalancing must be done and my message to the funds involved and all the firms involved managing those funds: you’ve got three days left now,” Bailey said.

“You’ve got to get this done,” he said at an appearance at the Institute of International Finance, a Washington trade group. 

The comments, which rebuffed calls from some investor groups for a longer program to allow markets to stabilize, sent the pound sharply lower.

The statement was a reiteration of the timetable on the emergency program, which was expanded earlier Tuesday by the central bank in the latest in a series of responses to upheaval in financial markers.

“We’ve been up all nights in recent days working how to solve the problem,” Bailey said. “That’s a financial stability intervention.”

This week’s actions are a fresh bid to soothe the bond markets in particular, as state borrowing — and its costs — soar following finance minister Kwasi Kwarteng’s debt-fueled mini-budget last month.

The poor market response to it saw UK bond yields spike and the pound tumble to a record low against the dollar, prompting the BoE to step in over recent weeks vowing to protect the nation’s financial stability.

The Bank of England on Monday revealed it was launching a temporary facility aimed at easing liquidity pressures, and followed that up Tuesday by announcing plans to expand the program to include index-linked securities.

The Pensions and Lifetime Savings Association praised the BoE’s latest manuevers but said in a statement Tuesday that the “purchasing should not be ended too soon,” adding that “many” have called for the program to be prolonged to “31 October and possibly beyond.”

Near 2000 GMT, the pound was at $1.0987, down 0.6 percent from the prior day.

The French government warned Tuesday striking workers could soon be forced to return to their jobs to break blockades of paralysed oil refineries and fuel depots.

Motorists again besieged petrol stations that are either low on fuel or completely dry as the labour protest at energy giant TotalEnergies and Esso-ExxonMobil entered its third week.

Government ministers have urged a negotiated resolution to the crisis, but have been threatening direct intervention to get supplies flowing again if agreements are not reached soon.

On Tuesday evening TotalEnergies offered to consult unions whose workers were not on strike.

And France’s oil giant renewed an offer to the hard-left CGT union leading the strike to negotiate if its members returned to work.

“If the CGT removes the blockades of the sites before midday (1000 GMT) tomorrow, it will be welcome at this dialogue meeting,” a Total statement said.

Earlier in the day, Prime Minister Elisabeth Borne told parliament workers would be requisitioned in particular at two depots owned by Esso-ExxonMobil, and face fines or jail time if they refuse.

Unions representing overall staff at the company accepted a pay deal Monday, but the CGT and FO unions at the depots rejected it and voted to extend their stoppage.

“Social dialogue means moving forward as soon as a majority agrees,” Borne told lawmakers. “I have asked officials to begin, as allowed by law, requisitions of essential staff for operating this company’s depots.”

Government spokesman Olivier Veran had already warned Tuesday that strikers at TotalEnergies could also be forced back, calling the strike “excessive and out of line”.

The company has said it is willing to advance annual pay negotiations to this month.

But Eric Sellini, CGT coordinator at the oil major, said: “We are still waiting for details from management on what they want to negotiate on.”

His union wants a 10-percent pay hike for all of 2022, pointing to the company’s profit of $5.7 billion in the second quarter of the year, more than double the year-earlier figure.

– ‘They don’t respect us’ –

The stoppages have hit several key refineries, including France’s biggest near Le Havre in the north.

The company runs a network of around 3,500 filling stations in France, nearly a third of the total.

At Fos-sur-Mer, in southern France, home to refineries run by TotalEnergies and Esso, strikers said their working conditions had been getting worse for years.

“For the past 10 years we have not been getting the slightest recognition for our work,” said one man who joined Esso 24 years ago.

“Not only don’t they pay us enough, they also don’t respect us,” agreed CGT spokesman Fabien Cros at the neighbouring Total installation.

Franck Tinel, FO secretary for Esso at the site, said the threat of forcing workers back to work would have only a limited impact.

“They’re going to unblock internal depots for these refineries, but we’re not storage sites, so in fact these volumes will be used up quickly,” he said after Borne’s intervention.

Other workers acknowledged that tensions could rise further if the government began ordering refinery workers back.

– ‘We can’t work’ –

Long queues formed outside petrol stations from dawn Tuesday, with many people using social media to exchange tips on the best places to go.

One post in a Facebook group Monday said a local BP service station would be resupplied “at 2:30 pm”. Another replied: “It’s now 2:37 pm and they’re out of diesel.”

Jefferson Saint-Louis, a taxi driver, said “without fuel we can’t work. I’m just going to go home”.

The crisis comes at a time of high energy prices and inflation that are sapping French households’ purchasing power.

The frustrations could add impetus to a “march against the high cost of living” in Paris and elsewhere on Sunday, called by the left-wing opposition coalition Nupes.

At the weekend, several prominent French people came out in support of the initiative, including this year’s winner of the Nobel Prize for Literature, Annie Ernaux.

“With this government, when dialogue stalls, it’s threats for the wage earners and caresses for the bosses,” tweeted Manuel Bompard, a deputy for the left-wing LFI party.

burs-jh/js/bp/imm

The Bank of England struggled Tuesday to reassure investors after unveiling yet more measures to calm markets rocked by the British government’s tax-cutting mini-budget, as the International Monetary Fund renewed warnings about their divergent policies.

The day after it launched a temporary facility aimed at easing liquidity pressures, the central bank said it was now widening the scope of its daily purchases of UK government bonds, or gilts, until Friday to include index-linked securities.

Comprising around a third of such bonds, they see their value and interest rates fluctuate with UK inflation and can have an outsized impact on pension funds which invest heavily in government bonds. 

This week’s actions are a fresh bid to soothe the bond markets in particular, as state borrowing — and its costs — soar following finance minister Kwasi Kwarteng’s debt-fuelled mini-budget last month.

The poor market response to it saw UK bond yields spike and the pound tumble to a record low against the dollar, prompting the BoE to step in over recent weeks vowing to protect the nation’s financial stability.

In a surprise September 28 move, it announced it was temporarily buying up tens of billions of pounds of long-dated UK government bonds “to restore orderly market conditions”.

Its latest action Tuesday would “act as a further backstop to restore orderly market conditions”, the central bank said.

– ‘Dysfunction’ –

It noted that “the beginning of this week has seen a further significant repricing of UK government debt, particularly index-linked gilts”, which it will now buy under its wider operation of bond purchases.

“Dysfunction in this market, and the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to UK financial stability,” it added.

But in a sign that investors remained wary of the UK’s ability to repay long-term debts, the 30-year government borrowing rates have risen again in recent weeks and reached 4.73 percent early Tuesday afternoon.

AJ Bell investment director Russ Mould noted a key problem was that “the support measures are only scheduled to last until Friday”. 

“Extending it could go one of two ways — the market either applauds the move and breathes a sigh of relief or it gets even more worried, thinking the extra time suggests the crisis is more severe than originally thought.”

In some positive news, official data Tuesday revealed British unemployment fell to a near 50-year low at 3.5 percent.

Wages, however, continue to be eroded by decades-high inflation that threatens to send Britain into recession.

The British government on Monday brought forward key growth and inflation forecasts to Halloween, hoping not to spook markets further.

Finance minister Kwarteng will unveil debt-reduction plans and UK economic predictions on October 31 rather than in late November.

It comes after he was already forced to axe a tax cut for the richest earners, in the face of outrage as millions of Britons face a cost-of-living crisis with UK inflation around 10 percent.

– ‘Different direction’ –

However, in Washington, IMF economic counsellor Pierre-Olivier Gourinchas said the divergence between BoE monetary policy and the UK government’s tax-slashing fiscal plans was “a little bit difficult”.

“It’s like having a car with two people in the front, and each of them is steering the wheel, and trying to steer the car in a different direction,” he told reporters. “That’s not going to work very well.”

The IMF, among others, has previously criticised the mini-budget over fears that government debt would balloon to pay for the tax cuts.

It added to the gloom Tuesday with a new forecast that UK economic growth would slow sharply to just 0.3 percent in 2023 — and warned the budget would “complicate” efforts to fight inflation.

Fitch last week lowered the outlook on its credit rating for British government debt to negative from stable.

The BoE has piled on further pressure by ramping up its main interest rate to a 14-year high of 2.25 percent in a bid to cool inflation — and is expected to hike even further next month.

This in turn has seen retail banks ramp up interest rates on mortgages, with analysts predicting heavy price falls for property.

Britain meanwhile faces “painful” cuts in public spending to fix state finances should it decide against more U-turns over tax cuts, a leading think tank warned.

“With a weaker economy, getting government finances on a sustainable path without cancelling tax cuts could force… big and painful spending cuts,” the Institute for Fiscal Studies said in a study.

The French government warned Tuesday that it could move to break blockades of refineries and fuel depots paralysed by strikes, saying it would soon force some of the workers to return to their jobs.

Motorists again besieged petrol stations that are either low on fuel or completely dry as the labour protest at energy giant TotalEnergies and Esso-ExxonMobil entered its third week.

Government ministers have urged a negotiated resolution to the crisis, but have been threatening direct intervention to get supplies flowing again if agreements are not reached soon.

On Tuesday, Prime Minister Elisabeth Borne told parliament that workers would be requisitioned in particular at two depots owned by Esso-ExxonMobil, and face fines or jail time if they refuse.

Unions representing overall staff at the company accepted a pay deal Monday, but the hard-left CGT and FO unions at the depots rejected it and voted to extend their strike.

“Social dialogue means moving forward as soon as a majority agrees,” Borne told lawmakers. “I have asked officials to begin, as allowed by law, requisitions of essential staff for operating this company’s depots.”

Earlier, government spokesman Olivier Veran said striking workers at TotalEnergies could also be forced back, calling the strike “excessive and out of line”.

The company has said it is willing to advance annual pay negotiations to this month.

But Eric Sellini, coordinator for the CGT union at the oil major, said: “We are still waiting for details from management on what they want to negotiate on.”

His union demands a 10 percent pay hike for all of 2022, pointing to the company’s profit of $5.7 billion in the second quarter of the year, more than double the year-earlier figure.

– ‘They don’t respect us’ –

The stoppages have hit several key refineries, including France’s biggest near Le Havre in the north of the country, after strikers at TotalEnergies voted to extend their action.

The company runs a network of around 3,500 filling stations in France, nearly a third of the total.

At Fos-sur-Mer, in southern France, home to refineries run by TotalEnergies and Esso, strikers said their working conditions had been getting worse for years.

“For the past 10 years we have not been getting the slightest recognition for our work,” said one worker who joined Esso 24 years ago.

“Not only don’t they pay us enough, they also don’t respect us,” agreed CGT spokesman Fabien Cros at the neighbouring TotalEnergies installation.

Franck Tinel, the FO secretary for Esso at the site, said the threat of forcing workers back to work would have only a limited impact.

“They’re going to unblock internal depots for these refineries, but we’re not storage sites, so in fact these volumes will be used up quickly,” he said after Borne’s announcement.

But other workers acknowledged that tensions could rise further if the government began ordering refinery workers back.

– ‘We can’t work’ –

Motorists formed long queues outside petrol stations from dawn Tuesday, hoping to be served before the pumps closed.

Many used social media to exchange tips. One post in a Facebook group Monday said a local BP service station would be resupplied “at 2:30 pm”. Another replied: “It’s now 2:37 pm and they’re out of diesel.”

Jefferson Saint-Louis, a taxi driver, said “without fuel we can’t work. I’m just going to go home”.

The petrol crisis comes at a time of high energy prices and inflation that are sapping French households’ purchasing power.

The frustrations could add impetus to a “march against the high cost of living” in Paris and elsewhere on Sunday, called by the leftwing opposition coalition Nupes.

At the weekend, several prominent French people came out in support of the initiative, including this year’s winner of the Nobel Prize for Literature, Annie Ernaux.

“With this government, when dialogue stalls, it’s threats for the wage earners and caresses for the bosses,” tweeted Manuel Bompard, a deputy for the leftwing LFI party.

burs-jh/js/raz

Global growth is expected to slow further next year, the IMF said Tuesday, downgrading its forecasts as countries grapple with the fallout from Russia’s invasion of Ukraine, spiraling cost-of-living and economic downturns.

The world economy has been dealt multiple blows, with the war in Ukraine driving up food and energy prices following the coronavirus outbreak, while soaring costs and rising interest rates threaten to reverberate around the globe.

“This year’s shocks will re-open economic wounds that were only partially healed post-pandemic,” said International Monetary Fund economic counsellor Pierre-Olivier Gourinchas in a blog post accompanying the fund’s latest World Economic Outlook.

More than a third of the global economy is headed for contraction this year or next, and the three biggest economies –- the United States, European Union and China –- will continue to stall, he warned.

“The worst is yet to come and, for many people 2023 will feel like a recession,” said Gourinchas.

In its report, the IMF trimmed its 2023 global GDP growth forecast to 2.7 percent, 0.2 point down from July expectations.

Its world growth forecast for this year remains unchanged at 3.2 percent.

The global growth profile is its weakest since 2001, apart from during the global financial crisis and the worst of the pandemic, the IMF said.

This reflects slowdowns for the biggest economies, including a US GDP contraction in the first half of 2022 and continued lockdowns in China as it faces a property market crisis.

– Laser focus –

A key factor behind the slowdown is a shift in policy as central banks try to bring down soaring inflation, with higher interest rates starting to take the heat out of domestic demand.

Growing price pressures are the most immediate threat to prosperity, said Gourinchas in the report, adding that central banks are now “laser-focused on restoring price stability”.

Global inflation is expected to peak at 9.5 percent this year before dropping to 4.1 percent by 2024.

Misjudging the persistence of inflation could prove detrimental to future macroeconomic stability, he warned, “by gravely undermining the hard-won credibility of central banks.”

Asked about the Federal Reserve’s rate hikes, Gourinchas told a press briefing on Tuesday that the IMF is not calling for an acceleration, but this “doesn’t mean that they should pause on the path… that we’ve seen” either. 

This is because banks were starting from a point where rates were historically low as countries emerged from the pandemic, he said.

Current challenges do not mean a large downturn is inevitable, but the fund also warned many low-income countries are either in, or close to debt distress.

While the G20 has agreed on a “common framework” for debt restructuring for the poorest countries, only three have qualified and “more progress is needed,” Gourinchas told reporters.

“Time may soon be running out,” he said.

– Slowdown in major economies –

The IMF has also cut forecasts for the world’s two biggest economies, the United States and China.

US economic growth for this year is now pegged at 1.6 percent, 0.7 point below the fund’s July forecast, due to an “unexpected real GDP contraction in the second quarter,” the IMF said.

“Declining real disposable income continues to eat into consumer demand, and higher interest rates are taking an important toll on spending,” the report added.

The Federal Reserve has been raising interest rates aggressively to tamp down surging inflation, which is slowing economic activity. And the central bank has said more increases are likely to come.

China’s economy is expected to grow at 3.2 percent this year — its lowest rate in decades, apart from the initial coronavirus outbreak.

The fund cautioned that a worsening of China’s property sector slump could spill over to the domestic banking sector and weigh heavily on growth.

A slowdown in the Euro area is also expected to deepen next year, the IMF projected, with the German and Italian economies tumbling into recession due to their exposure to Russian gas cuts.

The energy crisis provoked by Russia’s invasion of Ukraine “is not a transitory shock,” the IMF said, describing the global shift in energy trade as “broad and permanent.”

It warned that winter this year will be “challenging for Europe,” while “winter 2023 will likely be worse.”