NEW YORK (AP) — Markets sold off around the world on mounting signs the global economy is weakening just as central banks raise the pressure even more with additional hikes to interest rates. The Dow Jones Industrial Average closed at its lowest point of the year Friday. The S&P 500 fell 1.7%, close to its 2022 low. Energy prices also closed sharply lower as traders worried about a possible recession. Treasury yields, which affect rates on mortgages and other kinds of loans, held at multiyear highs. U.K. government bond yields snapped higher after that country’s new government announced a sweeping plan of tax cuts.
UK cuts taxes, boosts spending, accelerating pound’s slide
LONDON (AP) — The British pound has went on its biggest one-day drop in 2 1/2 years after the U.K.’s new government outlined plans to cut taxes and boost spending. It’s sparked concerns that increased public borrowing will worsen the nation’s cost-of-living crisis. The British currency plunged over 3% on Friday. Treasury chief Kwasi Kwarteng announced sweeping tax cuts that he said would boost economic growth and generate increased revenue, without introducing corresponding spending reductions. He also said previously announced plans to cap soaring energy bills for homes and businesses would be financed through borrowing. Critics attacked the plan for favoring business interests over working people and failing to provide any figures on its impact on government fiscal targets.
Revamped Detroit auto show now also features new flying tech
DETROIT (AP) — The Detroit auto show has returned with a roar. And a soar. The prestigious North American International Auto Show last was held in 2019. It returned last week. Visitors once again can lay eyes on the latest offerings from some of the world’s biggest automakers. But now they also can check out what organizers call “the show above the show.” The Air Mobility Experience features displays and demonstrations from six air mobility innovators that include an electric vertical takeoff and landing aircraft, a hoverbike, a hoverboard and a jet suit. The show runs through Sunday at a downtown convention center.
US to seek stronger labor, environmental standards in Asia
WASHINGTON (AP) — The U.S. is outlining its goals for a new trade deal with Australia, Japan, South Korea and nine other nations meant to signal the country’s commitment to working with the Indo-Pacific region at a time of growing Chinese clout. The Office of the U.S. Trade Representative on Friday released its negotiating aims for the Indo-Pacific Economic Framework, a deal with the 12 nations launched in May. Among them, the U.S. wants the Indo-Pacific countries to improve their labor and environmental standards and ensure their markets remain open to competition, while also taking steps to ease supply-chain backlogs at border crossings.
GM spending $760M to convert Toledo factory to make EV parts
TOLEDO, Ohio (AP) — General Motors says it will spend $760 million to renovate its transmission factory in Toledo, Ohio, so it can build drive lines for electric vehicles. It’s the first GM engine or transmission plant to begin the long transition from internal combustion engines to EVs. GM has a goal of making only electric passenger vehicles by 2035. The investment will keep the jobs of about 1,500 hourly and salaried workers at the Toledo plant, which now makes four transmissions used in pickup trucks and many other GM internal combustion vehicles. It’s good news for workers in Toledo, who have been worried about the future of their plant.
Bank directors urge firing of Trump official in ethics probe
MIAMI (AP) — Executive directors of the Inter-American Development Bank have voted unanimously to recommend firing a former Trump official as president of the Washington-based institution. The action follows an investigation that found Mauricio Claver-Carone violated ethics rules by favoring a top aide with whom he had a romantic relationship. A person familiar with the vote said the decision to recommend ousting Claver-Carone came in a closed-door meeting Thursday. The Associated Press obtained a confidential report by a law firm hired by the bank’s board triggered by an anonymous complaint of misconduct against Claver-Carone. Investigators say it is reasonable to conclude the relationship existed since at least 2019, when both held senior positions on the National Security Council.
After 90 years, German bakery to close as energy costs soar
COLOGNE, Germany (AP) — A family-run bakery in the German city of Cologne is turning off its ovens for good after 90 years because it can no longer afford rising energy prices resulting from Russia’s war in Ukraine. Engelbert Schlechtrimen’s grandparents founded the bakery before World War II and the 58-year-old took it over 28 years ago from his father. His business is one victim of a European energy crisis driven by Russia’s cutbacks of natural gas. The resulting hikes in energy and power prices have squeezed businesses already struggling with a rise in other costs as inflation rises.
Spain plans tax hike for millionaires to help those in need
MADRID (AP) — Spain’s Socialist-led coalition government is planning a temporary higher tax rate on the richest 1% of the country from next year. That is in addition to its windfall taxes on large energy companies and banks. Socialist Prime Minister Pedro Sánchez said Friday the change is meant to help fund the welfare state amid hardship brought by higher prices for energy and food. The annual inflation rate climbed to 10.5% in Spain last month. The government says the tax hike targets only millionaires. It says the exact increase and scope of the tax measure are still being worked out.
Inflation, unrest challenge Bangladesh’s ‘miracle economy’
DHAKA, Bangladesh (AP) — Bangladesh’s economic miracle is under severe strain as fuel price hikes amplify public frustrations over rising costs for food and other necessities. Protests have erupted in recent weeks, adding to pressures on the government of Prime Minister Sheikh Hasina, which has sought help from the International Monetary Fund to safeguard the country’s finances. Experts say Bangladesh’s predicament is nowhere nearly as severe as Sri Lanka’s, where months’ long unrest led its long-time president to flee the country. But it faces similar troubles: excessive spending on showcase projects, public anger over corruption and cronyism and a weakening trade balance. Such trends are undermining Bangladesh’s progress toward becoming a more affluent, middle-income country.
The S&P 500 shed 64.76 points, or 1.7%, to 3,693.23. The Dow Jones Industrial Average lost 486.27 points, or 1.6%, to 29,590.41. The Nasdaq fell 198.88 points, or 1.8%, to 10,867.93. The Russell 2000 index of smaller companies tumbled 42.72 points, or 2.5%, to 1,679.59.