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Sterling slides after Bailey says BoE could be ‘a bit more aggressive’ on rates

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The pound dropped more than 1 per cent against the dollar on Thursday, its biggest daily fall since March last year, after Bank of England governor Andrew Bailey opened the door to a faster pace of interest rate cuts.

The bank’s rate-setters could be “a bit more aggressive” on lowering borrowing costs if inflationary pressures continued to wane, Bailey told the Guardian newspaper.

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Sterling fell to $1.3099 in London trading from $1.3268, extending its decline from last week when the currency traded above $1.34.

Following the publication of Bailey’s remarks, investors put the chance of the BoE delivering two quarter-point cuts this year at 75 per cent, up from 50 per cent.

The comments from Bailey challenged investors’ expectations that the BoE, faced with persistent price pressures in the key services sector, would cut rates far more slowly than the Federal Reserve and the European Central Bank.

“Given that inflation in the UK has been higher than in the US and Europe, the market has been pricing a shallower cycle,” said Athanasios Vamvakidis, global head of G10 FX strategy at BofA. “But these comments suggest that the BoE could go faster.”

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UK inflation held steady at 2.2 per cent in August, but services inflation, the BoE’s key measure of domestic price pressures, rose to 5.6 per cent, up from 5.2 per cent in July.

However, Bailey told the Guardian he was encouraged by the fact that cost of living pressures had not been as persistent as the central bank thought they might be.

If the news on inflation continued to look encouraging there was a chance of the BoE becoming more “a bit more activist” in its approach to cutting interest rates, he said.

The BoE held interest rates at 5 per cent last month but signalled it may cut borrowing costs as soon as November. In August, the bank reduced rates from a 16-year high of 5.25 per cent, its first cut in more than four years.

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Bailey’s remarks came as a survey from the BoE published on Thursday showed price pressures remain in the economy. According to the monthly survey, UK businesses forecast wage growth of 4.1 per cent in the coming year, in line with expectations over the past few months.

The survey also found that businesses expect to be able to lift prices by 3.6 per cent in the coming year.

The findings of the survey “shows stubborn wage and price growth, supporting only gradual interest rate cuts”, said Rob Wood, economist at the consultancy Pantheon Macroeconomics.

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My Old Ass film review — Aubrey Plaza meets her younger self in slyly charming comedy

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For roughly a decade and a half, Aubrey Plaza has been one of the best things about American film and TV; she’s currently the main redeeming feature of Francis Ford Coppola’s preposterous Megalopolis. For years, she was a brilliant young supporting asset, the embodiment of cool disdain, with eyes that appeared to roll ironically even when they didn’t. Now she is eminent enough to be the star guest in someone else’s story: in My Old Ass, she drops by now and then as, essentially, the fairy godmother to her character’s younger self.

In Megan Park’s spiky but tender-hearted comedy, 18-year-old Elliott (Maisy Stella) is celebrating her last summer at home in rural Ontario before leaving for the city and the dazzling adventures that await. At first, her summer is defined by intense romance with another young woman, but then — one night guzzling mushroom tea — she meets her future 39-year-old self.

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This is a wiser, world-weary Elliott — and a softer than usual Plaza, whose nevertheless caustic aura leavens the script as she delivers such cosy wisdoms as, “The only thing you can’t get back is time.” Plaza carries it off gamely but with a characteristic air of disbelief. In a smart reversal, it’s left to Stella to make the wiseacre retorts.

Maisy Stella as Elliott

Older Elliott also has some urgent advice to impart from two decades hence: steer clear of someone called Chad. At which point, a rangy stranger by that name (Percy Hynes White) steps into view.

Set against a shimmering backdrop of water and woods, this turns out to be a sweetly philosophical coming-of-age story in which it’s the older self who comes of age, reconciling with her past and young Elliott’s future. It takes all of Plaza’s weird chanting inflections and Stella’s exuberantly twitchy enthusiasm to make it pay off — but it does, with sly charm.

★★★★☆

In cinemas from October 4

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A Different Man review — a bravura tale of boy meets girl meets doppelgänger

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No one tell Joaquin Phoenix, but Joker: Folie à Deux is only the week’s second best psychodrama made with a pining for early 1980s New York. The actual winner of that contest is A Different Man, though you wouldn’t know it from the marketing. In the UK, Aaron Schimberg’s jagged black comedy is being released with fanfare so hushed, it may be audible only to bats. For those who do seek it out, the reward will be one of the most interesting films of the year: a singular tale of boy meets girl meets doppelgänger.

The first of the male characters is played by Adam Pearson, the actor whose genetic condition neurofibromatosis causes extensive facial tumours. (You might have seen him in Jonathan Glazer’s Under the Skin.) Pearson is British, but his character, Edward, is American: an actor too, though less successful. His face is the central fact of a life lived timidly in a cramped Manhattan walk-up while besotted with Ingrid, the wannabe playwright next door. (She is played by Renate Reinsve from 2022’s The Worst Person in the World.)

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The thought of a jobless actor and aspiring writer making the rent in New York feels wilfully dated: the ghost of a gamier version of the city, present too in scenes of exotic bar life and gags about Woody Allen. That stretch to reality also sets the tone for the turning point: an experimental medical process that “cures” Edward. (You can see the film as a less gory companion to last week’s feminist body horror The Substance.) 

The punchline is droll. An all-new Edward now emerges, played by Marvel actor Sebastian Stan. Yet even gifted with the features of a movie star, his aims stay modest. A job in real estate beckons.

But this is not the last we see of Pearson. That much is down to a bravura flip Schimberg gives the script, keeping us off balance while questions spark from the film. Are we made or self made? Does what we see in the mirror ever really change? Ticklish ideas keep coming in a grimly funny movie that can even be weirdly uplifting in its own skewed way. 

The story comes to focus on Ingrid’s debut play, drawn from Edward’s life. Cyrano de Bergerac is referenced, but in telling the tale of a disabled character, the movie is very much about itself. The surprise is how self-aware it can be without losing the attention of everyone else. Schimberg deserves credit, so too Stan and Reinsve — but it is Pearson who brings depth and delight to this peekaboo game of life and art.

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★★★★☆

In UK cinemas from October 4, and in US cinemas now

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My £450,000 lottery win has been slowly ruining my life – relatives I hate are gagging for cash

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My £450,000 lottery win has been slowly ruining my life - relatives I hate are gagging for cash

A LOTTERY winner who scooped a staggering £450,000 says it ruined her life.

The woman became bombarded by her family members who wanted a chunk of her cash.

The woman said her parents believed they deserved the money

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The woman said her parents believed they deserved the moneyCredit: Alamy

She explained how what first started as a dream come true became a living nightmare.

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“I never thought winning the lottery would be anything other than a dream come true,” she wrote on Reddit.

“But here I am, with more money than I ever imagined, and it feels like my life is falling apart.”

Her troubles first started with her boyfriend, who took it upon himself to decide what they would do with the cash.

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“I couldn’t believe my eyes—I had won £450,000. At first, I was in shock. I called my boyfriend, James, and he rushed over, equally ecstatic.

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“We were both over the moon, dreaming of what we could do with the money. But the dream quickly turned into a nightmare.”

She said James wanted to quit his job, buy a luxury car and invest in ‘risky’ ventures.

“When I suggested we take things slow and maybe talk to a financial advisor, he got defensive. He accused me of not trusting him and said I was trying to control everything,” she explained.

She won the staggering amount of money after buying a lottery ticket on a whim.

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I won $1m at 28 playing a lottery scratch-off – I swore I wouldn’t be a statistic & after 8 years I have nothing left-

It wasn’t until she saw the number draw on TV and realised she’d won.

The woman added: “Then my family got involved. My parents, who I’ve always had a strained relationship with, suddenly wanted to reconnect.

“They started dropping hints about their financial struggles and how they could use some help.”

After having issues with her parents, her sister also wanted a share of the winnings.

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“My sister, who’s always been jealous of me, outright demanded a share, saying she deserved it for all the times she ‘supported’ me. It felt like they were all looking at me differently, like I was just a bank to them now.”

Her boyfriend started to distance himself from her and they eventually split up.

The lottery winner said that when he moved out, he took some of the money with him as a “parting gift”.

At the time, her parents became “more aggressive” in their demands for the cash.

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Her mum and dad believed they were entitled to her winnings because they’d raised her.

“My sister called me greedy and accused me of abandoning my family. I felt trapped and overwhelmed, unable to make anyone happy,” the woman added.

“I’m alone with my fortune, but I’ve never felt poorer. My family is barely speaking to me, and I’ve lost someone I thought I’d spend my life with.

“I’ve hired a financial advisor and a therapist to help me navigate this new reality, but the emotional toll is immense.”

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Blackstone says property rebound will not save over-indebted office owners

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Blackstone president Jonathan Gray said an accelerating recovery in most of the commercial property market would not be enough to save some over-indebted owners from having to take losses, mainly on offices.

Gray said he believed the commercial property market had reached the bottom after a two-year downturn caused by higher interest rates, and that values for most property types were now rising. Blackstone holds real estate assets worth $603bn worldwide.

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But some investors who have so far held off from recognising falls in the value of office buildings are likely to have to take writedowns, which in some cases will have a knock-on effect on lenders too.

“Most of the losses will happen in the equity market, but there will be banks,” he said. “Could a regional bank show up next month and say: ‘I have to take a $500mn or $1bn writedown’? Yeah. There are still some losses that will work their way through the system.”

Building owners can often avoid acknowledging the value that their properties have lost until forced to sell by a debt deadline, meaning declining prices drip-feed into the market for years.

“It takes time,” said Gray. “A lot of these buildings might be leased. The debt might get extended.”

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Offices, which make up 20 per cent of commercial real estate, have suffered especially steep price declines as the effects of higher debt costs have combined with the rise of hybrid working.

The Blackstone president, a real estate veteran who oversees the private capital group’s day-to-day operations, said more workers would return to offices. But he added: “It doesn’t feel like we’re going back to five days a week. So there is less demand.” 

Although debt levels in commercial real estate were lower in recent years than during the global financial crisis, Gray said some investors neglected interest rate risks during the period of ultra-low rates after the pandemic. 

“When rates fall below some sort of long-term natural rate — which they did after Covid — pricing that in as a more permanent state of affairs can be riskier,” he said. “There are still deals that have too much leverage, particularly office deals.” 

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However, he cautioned against taking negative headlines about particular over-indebted buildings as a sign of ill-health for the commercial real estate market.  

“You’re going to read . . . about those [buildings] and people will say values are now declining,” Gray said. “But that’s actually in the past. It’s a little bit of separating the storm from the wreckage, which takes some time to work its way through the system.” 

The broad index of commercial property values from analysts Green Street rose 3.3 per cent in the year to August. But the index remains 19 per cent below its 2022 peak. 

Gray in January said the real estate market was “bottoming”. Blackstone has started buying more real estate this year as it tries to invest in cheap properties before prices rise significantly. It has large holdings in warehouses, housing and hotels and a smaller allocation to offices. 

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One challenge for investment managers has been the sluggish market for property transactions, which has made it difficult to sell properties and generate cash. Gray said there were already more buyers in the market and that the pace of larger deals would pick up over the next few months.

He predicted the acceleration would be boosted by real estate investment trusts (Reits) — publicly traded landlords.

“I think there will be some Reit IPOs,” Gray said. “But I also think you’ll see existing public companies who will issue equity to sellers and/or do secondary offerings. I would expect the Reits will end up being fairly acquisitive.”

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Travel

Wizz Air passengers fume as flights are ‘cancelled or changed’ after ‘technical issue’ hits airline – The Sun

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Wizz Air passengers are fuming after being told their flights have been scrapped

WIZZAIR passengers have been told their flights are CANCELLED amid a confusing “technical issue”.

Airline customers were baffled after their travel plans were suddenly scrapped at the last moment.

Wizz Air passengers are fuming after being told their flights have been scrapped

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Wizz Air passengers are fuming after being told their flights have been scrappedCredit: Alamy

A confusing statement has been issued by the Hungarian ultra-low cost carrier with holidaymakers still in the dark about their trips.

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One customer even alleged they’ve spent “hours sitting on the terminal floor” with no information and branded the company “disgraceful”.

A spokesperson wrote on X: “Dear customers,

“We are experiencing a technical issue affecting our booking system. As a result, you may notice changes to your booking on the app or website or receive related notifications.

“Please disregard these changes, and rest assured that we will update you as soon as the issue is resolved.

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“Out team work diligently to fix the problem and restore the affected flights.

“Thank you for your understanding and patience, Wizz Air.”

Passenger vented their frustration underneath the social media post.

“No email confirmation received yet for a flight booked yesterday. Customer services said it was been sent,” wrote one.

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Another penned: “I have a flight this weekend and I have a notification my flight is cancelled, this is less than 72 hours before the flight and it’s a total sham! Please can you provide an update on the process and a CLEAR statement to say that the flights are not cancelled and this isn’t clear.”

A third claimed: “Still no info on why flights from Naples were cancelled? Hours sitting on the floor of terminal with no information and not even a bottle of water. Disgraceful.”

“Are flights cancelled or not? I have rebooked my flight because my flight is this weekend. This is unacceptable,” wrote a fourth.

Fuming passengers have so far complained that flights to and from Istanbul, Jordan, and Albania have been scrapped.

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A Wizz Air spokesperson told The Sun: “We are currently experiencing a technical issue affecting our flights. As a result, customers may notice changes to their bookings on the app, website, or receive related notifications.

“We kindly ask the customers to disregard these changes, and rest assured that we will update them as soon as the issue is resolved.

“Our team is working diligently to fix the problem and restore the affected flights.

“Thank you for your understanding and patience.”

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Wizz Air statement

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Wizz Air statementCredit: Wizz Air

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Italy seeks to raise more windfall taxes from companies

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Giorgia Meloni’s government will seek to raise more taxes from companies currently earning windfall profits, as Rome struggles to plug a budget deficit that has raised alarm bells in Brussels.

Italian finance minister Giancarlo Giorgetti said Thursday that the upcoming budget “will require sacrifices from everyone”. He did not clarify whether that meant increased tax rates or how they planned to avoid a repeat of last year’s failed attempt to slap banks with a levy on windfall profits.

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“There will be a general call for everyone to contribute, not just banks,” Giorgetti said. “We’re all part of a country that has been called to put its accounts in order . . . and everyone must contribute.” 

He mentioned defence companies as possible targets, noting that they had been doing extremely well owing to growing conflict in the world, like Russia’s war in Ukraine.

“Paradoxically, today, one could say that with all these wars, companies that produce weapons are doing particularly well.”

Share prices of Leonardo, the state-owned Italian defence company, fell 2.56 per cent just after the minister’s comments, while bank stocks also fell slightly.  

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“There won’t be a repeat of the narrative or a discussion on banks’ extra profits because at that time, banks were making extra profits,” he said in reference to last year’s surprise move put forward in August and then significantly watered down after bank shares tanked.

Italy is under intense pressure to raise additional revenues to bring its deficit — projected to be 3.8 per cent this year — down to the EU target of 3 per cent. Meloni has so far resisted to cut back on electoral promises that require extra spending, including plans to grant a €100 Christmas bonus to low income families. Her government says it is still on track to reach 3 per of GDP by 2026.

In recent weeks, government officials have held talks with banks, insurance companies and other financial companies about raising more revenues, sparking speculation that companies were under pressure to make “voluntary contributions” to public coffers. 

Giorgetti on Thursday dismissed such suggestions, saying: “Companies don’t engage in charity, so voluntary contributions don’t exist.”  

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The Italian Banking Association said last week that it was evaluating “further measures that may make greater liquidity available for the state budget”.

It added that such measures should be temporary and not be applied retroactively “so as not to penalise the competitiveness of banks operating in Italy” compared with their European rivals. 

The Italian parliament is also set to approve a tax amnesty for small businesses to encourage them to declare incomes they received between 2018 and 2022 which would be taxed at a discounted rate.

Participants in the so-called “repentance scheme” will also be obliged to commit to pay a fixed amount of taxes on their expected earnings for the next two years — regardless of how much they actually earn.

Meloni has long vowed to improve the tax system, which she said this year should not “oppress families with obtuse, incomprehensible rules, and an unjust level of taxation that often does not correspond to the level of services that the state provides”.

However, critics, including members of the opposition Democratic party, have described the amnesty schemes as a reward for tax evaders and say it will incentivise further cheating. 

Analysts also warn that the measures may be poorly received in Brussels, where Italy is expected to make long-term structural changes to its taxation and spending policies rather than look for piecemeal solutions to raise revenues year by year.

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Additional reporting by Giuliana Ricozzi

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