By Naomi Rovnick, Nell Mackenzie and Yoruk Bahceli

LONDON (Reuters) - Investors who had been enjoying a brief rebound in long-suffering UK markets are hunkering down for a stretch of losses as ructions in the pound, government bonds and stocks feed on each other and put Britain at risk of a wave of hedge fund attacks.

As global borrowing costs rise in a trend led by the U.S. Treasury market, the UK's high-debt, low-growth economy that just months ago appeared to be shrugging off years of post-Brexit gloom is now viewed as vulnerable to capital flight.

Traders now expect months of volatility for the pound, which ended 2024 as the top-performing major currency against the dollar due to optimism that the Labour Party's landslide July election win marked the end of years of political instability. 

That is creating a negative feedback loop by sapping interest in UK stocks that now face fresh currency risks, and casting doubt over Bank of England interest rate cuts, threatening already stagnant economic growth as the nation's debt burden rises.

There are signs that the pain will be sustained. Options trading data and evidence from hedge fund industry insiders and securities dealing desks point to speculators having piled into bets against the pound and UK gilts.

"I don't think it's going to end quickly," Brandywine Global fixed income portfolio manager Jack McIntyre said of the UK rout, noting that investors remain scarred by memories of the 2022 gilts and sterling crisis sparked by former Prime Minister Liz Truss' mini-budget. 

The U.S.-based asset manager said he had taken on exposure to UK gilts on the basis that these assets would benefit from rate cuts, but hedged this with contracts that profit if sterling, now 2.5% lower versus the dollar this month, keeps falling. 

BUYERS' STRIKE 

Just months ago, UK markets were shining as a beacon of stability amid political chaos in France and seemed poised to recover from a long period of government turmoil, currency volatility and being shunned by overseas investors. 

January's market moves were "refocusing the minds of many around the world on Britain, its economic and its financial condition," said Mario Monti, the economist who was tapped in 2011 to lead Italy as it faced financial implosion. 

Long-term UK borrowing costs have touched 27-year highs and the domestically focused FTSE 250 share index is down almost 6% since August. A gauge of buying protection against sterling volatility is near its highest since March 2023. 

“The UK is more vulnerable to a buyers' strike post-Brexit because it is a less core holding for many global investors and it has a less obvious growth story," U.S. investment bank Evercore ISI vice-chairman Krishna Guha said by email.

Bank of America this week warned of "a significant worsening of the situation that could lead to disorderly moves in gilts (and) sterling, in turn souring growth sentiment and impacting equities negatively." 

'WEAKEST LINK'

Surging debt costs have hampered finance minister Rachel Reeves' plan to revive growth via public investment, while sterling's drop has put the BoE in a bind in case rate cuts fuel more currency weakness, raising import cost inflation. 

By Katie Paul

NEW YORK - Advertisers reliant on TikTok as a major digital marketing tool rushed to prepare contingency plans this week, as the realization dawned on many that the popular Chinese-owned social media app may not be saved before a U.S. ban takes effect on Sunday.

One marketing executive described it as a "hair on fire" moment for the ad world, after months of conventional wisdom saying that a solution would materialize to keep the short-video app up and running.

"It seemed unbelievable even as of just a few weeks ago to imagine that there would be no TikTok," said Kerry Perse, the founder of marketing firm Influence & Inspire Consulting and former head of social media at Omnicom Group (NYSE:OMC)'s media agency OMD.

"We all thought that any access issues to the TikTok app would be slow and drawn-out," she said. 

Chinese tech firm ByteDance is facing a Jan. 19 deadline to sell TikTok's U.S. assets or accept an unprecedented ban of the app, used by 170 million Americans, on national security grounds.

TikTok plans to shut U.S. operations of the app on Sunday barring a last-minute reprieve, Reuters reported on Wednesday.

U.S. President-elect Donald Trump's incoming national security adviser said the new administration plans to put measures in place "to keep TikTok from going dark," but it was not immediately clear whether Trump - who takes office on Monday - could legally do so.

"I think after a long time feeling like this was a 'boy who cried wolf' situation, we may actually have a wolf sighting," said Craig Atkinson, CEO of digital marketing agency Code3.

If a ban does occur, more than $11 billion in annual U.S. ad investment would be up for grabs, according to a forecast from marketing group WARC Media.

Most of that spending is likely to shift to platforms where advertisers are already established and running short-video ad campaigns, primarily Meta's Instagram and Alphabet (NASDAQ:GOOGL)'s YouTube Shorts, four ad agency sources told Reuters.

TikTok staffers appeared to be in the dark about what exactly would happen to the app as of Sunday, the sources said, although two of the sources noted that TikTok was offering favorable refund terms in the event services stop in the middle of advertisers' campaigns. TikTok did not immediately respond to a request for comment.

Even as the ban approached, the company continued to pitch advertisers on new features, like a tool launching in test form on Thursday that would make it easier to create, modify and add advertisements in bulk, according to an email from this week described to Reuters.

It also planned to host a booth at the upcoming World Economic Forum meeting of political and business leaders in Davos,  Switzerland, next week, after holding cocktail parties at the Consumer Electronics Show in Las Vegas earlier this month.

Meanwhile, brands and content creators alike were downloading their data en masse in case the app becomes inaccessible as of Sunday, hoping to salvage at least some of the fruits of their labor.

One influencer, who hawks cereal and beauty products in her videos, posted on Tuesday advising her nearly 16,000 followers on how to save their videos.

“Here’s how to download your TikTok data so you don’t lose literally everything you’ve had from the past five years,” said Maria Slate, grimacing, as the words “it’s fine I’m fine” displayed over her head.

The sentiment was a marked change from the dominant mood last month, when advertisers told Reuters they were in no rush to shift their marketing budgets off TikTok despite a U.S. appeals court upholding the law requiring a divestment or ban.

As of Jan. 8, ad spending on TikTok was set to increase 57% in the first two months of 2025, according to Guideline.ai, a research firm that tracks forward booking data from major ad agencies.

TikTok has become a powerful tool for advertisers looking to reach young Americans in particular in recent years, growing to 20% of U.S. social media ad spending from only 2% in 2020, its first full year of operation in the United States, Guideline.ai said.

Part of that power has come from the platform's cultivation of influencers and online shopping culture, which has made it a reliable driver of e-commerce sales.

E-Marketer, another research firm, forecast late last year that some 43.8% of U.S. TikTok users would have made a purchase on the platform by the end of 2024, a higher share than on Meta-owned services Facebook (NASDAQ:META) and Instagram.

BEIJING (Reuters) -China's economy ended 2024 on better footing than expected helped by a flurry of stimulus measures, although the threat of a new trade war with the United States and weak domestic demand could hurt confidence in a broader recovery this year.

Exports, one of the few bright spots, could lose steam as United States President-elect Donald Trump, who has proposed hefty tariffs on Chinese goods, is set to return to the White House next week.

For the full-year 2024, the world's second-largest economy grew 5.0%, data from the National Bureau of Statistics (NBS) data showed on Friday, meeting the government's annual growth target of around 5%. Analysts had forecast 4.9% growth.

The economy grew 5.4% in the fourth quarter from a year earlier, significantly beating analysts' expectations and marking the quickest since the second quarter of 2023.

Analysts polled by Reuters had forecast fourth-quarter gross domestic product (GDP) would expand 5.0% from a year earlier, quickening from the third-quarter's 4.6% pace as a flurry of support measures began to kick in.

"China's economy is showing signs of revival, led by industrial output and exports," said Frederic Neumann, chief Asia economist at HSBC in Hong Kong.

However, he added, the strong GDP print last quarter may already have been flattered by front-loading of shipments to the U.S. - something that will inevitably lead to a pay-back with production and exports turning down once tariffs begin to bite.

"As exports come under pressure in 2025, dragged lower by U.S. import restrictions, there will be an even bigger need to apply domestic stimulus."

Chinese stocks drew some support following the GDP data. Mainland Chinese blue chips rose 0.3% as of 0207 GMT, while Hong Kong's Hang Seng added 0.14%.

The yuan was little changed against the dollar.

On a quarterly basis, GDP grew 1.6% in October-December, compared with a forecast 1.6% increase and a revised 1.3% gain in the previous quarter.

China's economy has struggled for traction since a post-pandemic rebound quickly fizzled out, with a protracted property crisis, mounting local debt and weak consumer demand weighing heavily on activity.

Policymakers have pledged more stimulus this year, but analysts say the scope and size of China's moves may depend on how quickly and aggressively Trump implements tariffs or other punitive measures.

But even as strong exports propelled the country's trade surplus to a record high of $992 billion last year, the yuan currency has come under selling pressure. A dominant dollar, sliding Chinese bond yields and the threat of higher trade barriers have pushed the yuan to 16-month lows.

A slew of December economic readings on Friday suggested the economy gained traction heading into the new year, helped by a flurry of government support measures.

Even the property sector witnessed signs of recovery as new home prices steadied in December for the first time since June 2023, NBS data showed earlier on Friday. But for the full year, property investment fell 10.6% from the previous year, marking the largest annual decline on record.

Industrial output grew 6.2% from a year earlier in December, quickening from November's 5.4% pace and beating expectations for a 5.4% increase in a Reuters poll. It marked the fastest growth since April last year.

Retail sales, a gauge of consumption, rose 3.7% last month, accelerating from the 3.0% pace in November as consumers started to prepare for the eight day-long Lunar New Year holidays in January.

"It (will) require large and persistent policy stimulus to boost economic momentum and sustain the recovery. To contain the rising unemployment rate the fiscal policy stance needs to become more proactive," Zhiwei Zhang, chief economist at Pinpoint Asset Management in Hong Kong.

As businesses remained wary of adding workers before the festival and with concerns over possible trade disputes with the U.S., the nationwide survey-based jobless rate climbed to 5.1% in December from November's 5.0%.

Investing.com-- U.S. President-elect Donald Trump is preparing to sign an executive order making cryptocurrency a national policy priority and granting industry leaders a significant role in shaping regulations, Bloomberg reported on Friday citing sources.

The move could reshape how the U.S. government approaches digital assets, marking a sharp turn from the current administration’s enforcement-heavy strategy.

The forthcoming order, expected as early as Monday, aims to elevate cryptocurrency to a national imperative. It may establish a crypto advisory council to advocate industry-friendly policies, signaling a warmer stance after years of regulatory crackdowns, the report stated.

Bitcoin was 0.4% higher at $100,285.5 as of 19:34 ET (00:34 GMT).

Federal agencies under President Joe Biden filed over 100 enforcement actions against crypto firms, including Binance and Ripple, and tightened restrictions on banking access for the sector following scandals such as FTX’s collapse.

Key measures under consideration include a review of existing digital asset policies by all federal agencies and a potential pause on litigation against crypto firms, Bloomberg said, citing unnamed sources familiar with the plans.

Notably, the order may create a national Bitcoin stockpile using the government’s $20 billion in confiscated Bitcoin holdings, the report stated.

Trump, who actively supported crypto during his campaign, has pledged to make the U.S. the global leader in digital assets.

The executive order, if issued, would build on momentum from private industry. Major financial players like BlackRock (NYSE:BLK) and BNY Mellon (NYSE:BK) launched crypto products, while Cantor Fitzgerald announced a Bitcoin financing venture, according to the report.

Bitcoin has rallied significantly since Trump’s election in November, reaching a record high above the $108,000 mark last month, bolstered by optimism surrounding his pro-crypto stance.

The executive order remains under discussion and could change, Bloomberg added.

By Andrea Shalal

WASHINGTON (Reuters) -The World Bank on Thursday warned that U.S. across-the-board tariffs of 10% could reduce already lackluster global economic growth of 2.7% in 2025 by 0.3 percentage point if America's trading partners retaliate with tariffs of their own.

U.S. President-elect Donald Trump, who takes office Monday, has proposed a 10% tariff on global imports, a 25% punitive duty on imports from Canada and Mexico until they clamp down on drugs and migrants crossing borders into the U.S., and a 60% tariff on Chinese goods. Some countries including Canada have already vowed to retaliate.

The World Bank said simulations using a global macroeconomic model showed a 10-percentage point increase in U.S. tariffs on all trading partners in 2025 would reduce global growth by 0.2 percentage point for the year, and proportional retaliation by other countries could worsen the hit to growth.

It said those estimates were consistent with outside studies which showed a 10-point increase in U.S. tariffs could "reduce the level of U.S. GDP by 0.4%, while retaliation from trading partners would increase the total negative impact to 0.9%."

But it noted that U.S. growth could also increase by 0.4 percentage point in 2026 if U.S. tax cuts were extended, it said, with only small global spillovers.

The Bank for International Settlements on Thursday also chimed in, warning of increased "frictions and fragmentation" in global trade and calling a broad-based trade war between Washington and other countries "a tangible risk scenario."

The World Bank's latest Global Economic Prospect report, issued twice yearly, forecast flat global economic growth of 2.7% in 2025 and 2026, the same as in 2024, and warned that developing economies now faced their weakest long-term growth outlook since 2000.

The multilateral development bank said foreign direct investment into developing economies was now about half the level seen in the early 2000s and global trade restrictions were five times higher than the 2010-2019 average.

It said growth in developing countries is expected to reach 4% in 2025 and 2026, well below pre-pandemic estimates due to high debt burdens, weak investment and sluggish productivity growth, along with rising costs of climate change.

Overall output in emerging markets and development economies was expected to remain more than 5% below its pre-pandemic trend by 2026, due to the pandemic and subsequent shocks, it said.

"The next 25 years will be a tougher slog for developing economies than the last 25," World Bank chief economist Indermit Gil said in a statement, urging countries to adopt domestic reforms to encourage investment and deepen trade relations.

Economic growth in developing countries dropped from nearly 6% in the 2000s to 5.1% in the 2010s and was averaging about 3.5% in the 2020s, the bank said.

It said the gap between rich and poor countries was also widening, with average per capita growth rates in developing countries, excluding China and India, averaging half a percentage point below those in wealth economies since 2014.

The somber outlook echoed comments made last week by the managing director of the International Monetary Fund, Kristalina Georgieva, ahead of the global lender's own new forecast, to be released on Friday.

"Over the next two years, developing economies could face serious headwinds," the World Bank report said.

Investing.com - The UK economy returned to growth in November, after the contraction seen in the prior month, but economic activity in the fourth quarter remains subdued, piling the pressure on the Bank of England to ease monetary policy further in 2025.

Data released earlier Friday by the Office for National Statistics showed that the UK economy grew by 0.1% in November, below the 0.2% expected, after contracting by 0.1% in October. This resulted in an annual growth rate of 1.0%, a drop from the revised lower 1.1% the prior month..

This sombre start to the fourth quarter marks a significant slowdown in growth momentum and output activity compared to the robust performance in the first half of the year.

Additionally, consumer and business confidence across major industries has declined significantly, compounding the existing headwinds, while the forthcoming increase in employers’ National Insurance Contributions, announced in the Autumn Budget, is expected to weigh on the labor market and dampen growth.

Throw in the potential for new tariff policies from the upcoming Trump administration and the possibility of a cut to government spending as the new Labour government contends with rising bond yields and significant downside risks to growth exist. 

The International Monetary Fund forecasts that the UK will grow by 1.1% in 2024, which is slower than previous periods but would put the UK in the middle of the pack of the world's leading nations. 

The BoE has reduced its benchmark Bank Rate twice since August - less than other central banks - and it has stressed it is likely to move gradually on further interest rate cuts, given persistent inflation pressures in Britain's economy.
 

It next meets in early February, and the pressure is mounting on the central bank to cut interest rates again, having last moved in November, reducing its base rate then to 4.75% from 5%. 

TOKYO (Reuters) - Two-thirds of Japanese companies are experiencing a serious business impact from a shortage of workers, a Reuters survey showed on Thursday, as the country's population continues to shrink and age rapidly.

Labour shortages in Japan, particularly among non-manufacturers and small firms, are reaching historic levels, the government has said, stoking concerns that this supply-side constraint could stifle economic growth.

Some 66% of respondents indicated that labour shortfalls were seriously or fairly seriously affecting their businesses, while 32% said the impact was not very serious.

"It goes without saying this drives up personnel costs, but it could even pose a business continuity risk," a manager at a railroad operator wrote in the survey.

The number of bankruptcies caused by labour shortages in 2024 surged 32% from a year earlier to a record 342 cases, according to credit research firm Teikoku Databank.

Nearly a third of respondents to the Reuters survey said the labour shortage is worsening, with only 4% reporting improvements and 56% saying the situation is neither getting better nor worse.

The survey was conducted by Nikkei Research for Reuters from Dec. 24 to Jan. 10. Nikkei Research reached out to 505 companies and 235 responded on condition of anonymity.

When asked about specific measures to address the labour shortfall in a question that allowed multiple answers, 69% said they were intensifying recruitment activities for new graduates and 59% were implementing such measures as extending retirement ages and re-hiring retired employees.

The official retirement age is set at 60 for about two-thirds of Japanese companies, although most have introduced measures allowing employees to keep working until they turn 65, a poll by the Health Ministry showed last year.

In response to a Reuters survey question about investment priorities for 2025, 69% chose capital investment and 63% selected wage hikes and other human resources-related investments. This question also allowed multiple answers.

"What's essential are wage hikes for retaining employees and capital investment for rationalising production," an official at a chemicals company said.

This trend in investment priority among Japanese firms aligns with the government's policy of seeking economic growth through higher wages and investments.

With labour shortages driving up wages and a weak yen raising import costs, 44% of Japanese companies plan to raise prices for their goods and services this year, the survey found. That compares with 17% that intend to keep their prices unchanged and 26% that plan to raise some prices but cut others.

"We just cannot help but raise prices because of an across-the-board increase in wages and other fixed costs, in transportation costs and in costs of raw materials," a manager at a metals company said in the survey.

Tokyo's core consumer price index, which excludes volatile fresh food costs, rose 2.4% in December from a year earlier. That was an acceleration from a 2.2% rise in November, keeping alive market expectations for a near-term interest rate hike.

By Jeslyn Lerh

SINGAPORE (Reuters) - Marine fuel sales reached fresh highs at the world's largest bunker hub of Singapore in 2024, official data showed on Wednesday, driven by record container throughput and higher deliveries of alternative marine fuels.

Sales totalled 54.92 million metric tons in 2023, data from the Maritime and Port Authority of Singapore (MPA) showed. Total (EPA:TTEF) sales surpassed a previous record of 51.82 million tons in 2023.

Container throughput climbed to 41.12 million twenty-foot equivalent units (TEUs) in 2024, also logging new highs. Meanwhile, annual vessel arrival tonnage grew to a fresh record of 3.11 billion gross tons (GT).

More bunker volumes emerged in 2024 as shipping tensions in the Red Sea altered refuelling patterns and buoyed marine fuel demand, while shipowners also lifted more alternative fuels to support emission cuts, said industry sources.

The year also saw significantly stronger sales in high-sulphur marine fuel, with volumes totalling 20.15 million tons, up 21% from 2023, calculations based on MPA data showed.

The uptick in high-sulphur marine fuel sales came amid a higher fleet of vessels fitted with scrubbers.

In contrast, sales of low-sulphur fuel dropped 4% year-on-year to 29.58 million tons.

Meanwhile, sales of alternative bunker fuels exceeded one million tons for the first time, reaching 1.34 million tons in 2024, doubling from 2023, said MPA.

Sales of biofuel blends grew to about 880,000 tons, up about 69% from 2023, while sales of liquefied natural gas for bunkering rose to over 460,000 tons, more than quadrupling.

BP (NYSE:BP) SINGAPORE PTE. LIMITED

CHEVRON SINGAPORE PTE LTD

ENG HUA COMPANY (PTE) LTD

EQUATORIAL MARINE FUEL MANAGEMENT SERVICES PTE LTD

GLENCORE SINGAPORE PTE LTD

GLOBAL ENERGY TRADING PTE LTD

PETROCHINA INTERNATIONAL (S) PTE LTD

SINOPEC FUEL OIL (SINGAPORE) PTE. LTD.

TFG MARINE PTE LTD

VITOL BUNKERS (S) PTE LTD

CHEVRON SINGAPORE PTE LTD

MAERSK OIL TRADING SINGAPORE PTE LTD

MINERVA BUNKERING PTE LTD

SK ENERGY INTERNATIONAL PTE LTD

VITOL BUNKERS (S) PTE. LTD.

(Data Source: MPA Singapore)

By Cynthia Kim and Jihoon Lee

SEOUL (Reuters) - South Korea's central bank unexpectedly left its policy interest rate unchanged on Thursday, weighing the impact of its back-to-back cuts last year while supporting the won which weakened to a 15-year low versus the U.S. dollar in recent weeks.

The Bank of Korea held its benchmark interest rate at 3.00% at its monetary policy review, an outcome expected by only seven of 34 economists polled by Reuters. The remaining 27 had expected the bank to cut the rate by 25 basis points.

The decision is the first since impeached President Yoon Suk Yeol's attempt to impose martial law in early December threw Asia's fourth-largest economy into its biggest political crisis in decades. The turmoil prompted the government to cut its 2025 economic growth forecast to 1.8% from 2.2%.

The crash of Jeju Air flight 7C2216, which killed 179 people in the deadliest air disaster on South Korean soil, has also weighed on the economy.

On top of that, the won's slide has been a major concern among policymakers. In the final three months of 2024, the currency weakened 10.6% against the dollar, the biggest quarterly drop since the third quarter of 2008.

Local currency dealers said South Korea has been relying on smoothing operations in the onshore dollar-won market as well as the National Pension Service's currency hedging operations to support the won.

"(Thursday's rate decision) would be due to its (the BOK's) greater focus on economic and financial stability concerns, until political uncertainty eases. Instead of January, we expect the BOK to cut the policy rate again at its February meeting, after it revises its economic outlook." said Park Jeong-Woo, an analyst at Nomura Securities who was one of the seven analysts who correctly predicted the rate decision.

Analysts now see the central bank eying a more gradual pace of interest rate reduction in the year ahead.

Median forecasts in the survey showed one interest rate cut of 25 basis points this quarter and cuts of the same degree in both the second and third quarters taking the rate to 2.25%.

Market focus now switches to Governor Rhee Chang-yong's press conference at 0210 GMT, where the names of any dissenters to the policy decision could be announced. Dissenting votes typically lead to policy changes in subsequent months.

CARACAS (Reuters) - Venezuela inflation was 48% annually in 2024, the lowest in 12 years, Venezuelan President Nicolas Maduro told lawmakers in an annual address to the national assembly and other officials on Wednesday, just days after he was inaugurated for a third term.

Maduro, whose nearly 12 years in office have been marked by deep economic and social crisis and mass migration, was sworn in for a third term on Friday, despite a six-month-long election dispute and international calls for him to stand aside.

The government has employed orthodox methods to try to tamp down inflation, which has reached triple digits in recent years, with some success. Inflation was 189.8% in 2023, according to the central bank. Maduro said this month that the economy grew 9% last year.