Business

NEW YORK (AP) — U.K. Prime Minister Liz Truss said Tuesday that she’s ready to make “unpopular decisions” such as boosting bonuses for wealthy bankers in order to get the country’s sluggish economy growing.

Speaking before an emergency government budget statement at the end of the week, Truss said tax cuts were key to spurring economic growth, even though they benefit the wealthiest more than the poorest.

“We do have to take difficult decisions to get our economy right,” Truss said. “We have to look at all tax rates. So corporation tax needs to be competitive with other countries so that we can attract that investment.”

Truss, who has been prime minister for just two weeks, faces immediate pressure to deliver on her promises to tackle a cost-of-living crisis walloping the U.K. and an economy heading into a potentially lengthy recession.

Critics say her pro-free market, low-tax economic views, inspired by the likes of Margaret Thatcher and Ronald Reagan, is the wrong response to the crisis.

Truss, who is in New York to attend the U.N. General Assembly, confirmed the budget statement will reverse an income tax hike brought in this year to help fund health care and will scrap a plan to raise corporation tax.

She also made clear that the government will lift a cap on bankers’ bonuses imposed after the 2008 global financial crisis.

“I don’t accept this argument that cutting taxes is somehow unfair,” she told British broadcasters in interviews on the 102nd floor of the Empire State Building.

“We should be setting our tax policy on the basis of what is going to help our country become successful — what is going to deliver that economy that benefits everybody in our country. What I don’t accept is the idea that tax cuts for business don’t help people in general.”

She said the U.K. faces “incredibly tough” economic times, driven by Russia’s invasion of Ukraine, which has sent global energy prices soaring.

“What is important to me is we grow the British economy because that’s what will ultimately deliver higher wages, more investment in towns and cities across the country,” she said. “That’s what will ultimately deliver more money to people’s pockets.”

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By Hyunjoo Jin

SAN FRANCISCO (Reuters) – Tesla Chief Executive Elon Musk blamed overreliance on factory robots for sending the electric carmaker to “production hell” four years ago, saying humans were better at certain jobs.

My, how times have changed.

Musk’s Texas company now is floating ambitious plans to deploy thousands of humanoid robots, known as Tesla Bot or Optimus, within its factories, expanding eventually to millions around the world, according to job postings. Buzz is building within the company as Tesla is having more internal meetings on robots, a person familiar with the matter said.

Longer term, Musk said at a TED Talk robots could be used in homes, making dinner, mowing the lawn and caring for the elderly people, and even becoming a “buddy” or a “catgirl” sex partner.

The robot business eventually may be worth more than Tesla’s car revenue, according to Musk, who is now touting a vision for the company that goes well beyond making self-driving electric vehicles.

At its “AI Day” on Sept. 30, Musk said Tesla will unveil a prototype from its project Optimus, an allusion to the powerful and benevolent leader of the Autobots in the Transformers series. Production could start next year, he said.

Tesla faces skepticism that it can show technological advances that would justify the expense of “general purpose” robots in factories, homes and elsewhere, according to robotics experts, investors and analysts interviewed by Reuters.

Tesla already employs hundreds of robots designed for specific jobs for production of its cars.

Humanoid robots have been in development for decades by Honda Motor Co and Hyundai Motor Co’s Boston Dynamics unit. Like self-driving cars, the robots have trouble with unpredictable situations.

“Self-driving cars weren’t really proved to be as easy as anyone thought. And it’s the same way with humanoid robots to some extent,” the lead of NASA’s Dexterous Robotics Team, Shaun Azimi, told Reuters.

“If something unexpected happens, being flexible and robust to those kinds of changes is very difficult.”

At an “Autonomy” event in 2019, Musk promised 1 million robotaxis by 2020 but has yet to deliver such a car.

Musk’s robots may be able to demonstrate basic capabilities at the event, but it would be hard for them to impress public expectations of robots that are as capable as humans, experts say.

To succeed, Tesla will need to show robots doing multiple, unscripted actions, said Nancy Cooke, a professor in human systems engineering at Arizona State University. Such proof could provide a boost to Tesla stock, which is down 25% from its 2021 peak.

“If he just gets the robot to walk around, or he gets the robots to dance, that’s already been done. That’s not that impressive,” she said.

Tesla did not respond to Reuters’ request for comments, but Musk in the past proved skeptics wrong, jump-starting the electric car market and building a rocket company, SpaceX, although some product launches were behind schedule.

IN-HOUSE EXPERTISE

Initially, Optimus will perform boring or dangerous jobs, including moving parts around its factories, according to Musk.

Musk acknowledged that humanoid robots do not have enough intelligence to navigate the real world without being explicitly instructed.

But he said Tesla can leverage its expertise in AI and key components to develop and produce smart, yet less expensive, humanoid robots at scale.

Tesla is on hiring spree for people to work on humanoid bi-pedal robots, with about 20 job postings on “Tesla Bot” including jobs for designing key robot parts like “actuators”.

“The code you will write will at term run in millions of humanoid robots across the world, and will therefore be held to high quality standards,” one of the job postings said.

Tesla has over 2 million vehicles on the road.

Jonathan Hurst, chief technology officer at Agility Robotics, a humanoid robot firm founded in 2015 said the technology “is right now starting to turn the corner.”

“Certainly, an important measure of success is do they make money from it,” he told Reuters, referring to Tesla’s humanoid robot efforts.

HUMAN HELP?

Analysts see more pageant than product. “It’s all part of distracting people and giving them the next shiny object to chase after,” Guidehouse Insights analyst Sam Abuelsamid said.

“Investors are not excited about Optimus,” said Gene Munster, managing partner at venture capital firm Loup Ventures, which holds Tesla stocks. “It’s just such a low probability that it works at scale,” he said, saying it is “infinitely harder than self-driving cars.”

And then there is Musk’s own experience with robots in the factory.

During the 2018 production hell, Musk specifically noted the problems of the “fluff bot,” an assembly robot that failed to perform simple tasks that human hands can do – picking up pieces of “fluff” and placing them on batteries.

He said the cost of having technicians maintain the complicated robot far exceeded that of hiring someone to do the assembly.

The fluff bot is “a funny example but drives home the point that autonomy often doesn’t generalize well, and so handling soft fluffy material that isn’t as predictable as a rigid part was causing a huge problem,” Aaron Johnson, a mechanical engineering professor at Carnegie Mellon University, said.

“Human hands are way better at doing that,” Musk said.

(Reporting by Hyunjoo Jin; Editing by Peter Henderson, Ben Klayman and Lisa Shumaker)

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By Tom Hals

WILMINGTON, Del (Reuters) -Twitter Inc will question Elon Musk under oath in Delaware next week as part of the litigation in the billionaire’s bid to walk away from his $44 billion deal for the social media company.

A Tuesday filing in Delaware’s Court of Chancery said Musk’s deposition is scheduled for Sept. 26-27 and may stretch into Sept. 28 if necessary.

The two sides are locked in an increasingly acrimonious legal battle that has swept up of some of the biggest names in Silicon Valley and Wall Street.

Subpoenas have being issued to billionaire Larry Ellison, the co-founder of Oracle Corp, Intel Corp’s former Chief Executive Officer Robert Swan and Twitter co-founder Jack Dorsey, who is currently chief executive of Block Inc.

A five-day trial is scheduled to begin on Oct. 17 in Wilmington, Delaware.

Each side has accused the other of breaking the April takeover agreement. Twitter wants a judge to order Musk, who is chief executive of Tesla Inc and the world’s richest person, to buy the company as agreed for $54.20 per share.

Shares in San Francisco-based company were down slightly in early Tuesday trading at $41.54.

(Reporting by Tom Hals in Wilmington, Delaware; editing by Jonathan Oatis)

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WILMINGTON, Del (Reuters) – Twitter Inc will depose Elon Musk in Delaware on Sept 26-27 and Sept 28 if needed as part of the litigation in the billionaire’s bid to walk away from his $44 billion deal for the social media company, according to a Tuesday court filing.

(Reporting by Tom Hals in Wilmington, Delaware)

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By Ebru Tuncay and Jonathan Spicer

ISTANBUL (Reuters) -Turkish lenders Isbank and Denizbank have suspended use of Russian payment system Mir, the banks said on Monday, following a U.S. crackdown on those accused of helping Moscow skirt sanctions over the war in Ukraine.

The moves, announced separately, came after Washington expanded its sanctions last week to include the head of the entity running Mir, which is popular with the tens of thousands of Russian tourists who arrived in Turkey this year.

The suspensions by two of the five Turkish banks that had been using Mir reflect their effort to avoid the financial cross-fire between the West and Russia, as the Turkish government takes a balanced diplomatic stance.

Isbank, whose shares tumbled 10% on Monday, said it halted Mir payments and is evaluating the U.S. Treasury’s new sanctions. Isbank also said it was keen to comply with national and international laws, regulations and commercial business principles.

Asked for comment, Denizbank said: “We are currently unable to provide service” in Mir. The bank “acts in accordance with international sanction regulations,” it had said earlier on Monday.

NATO member Ankara opposes Western sanctions on Russia on principal and has close ties with both Moscow and Kyiv, its Black Sea neighbours. It also condemned Russia’s invasion and sent armed drones to Ukraine as part of its diplomatic balance.

Yet Western nations are growing concerned over increased economic ties between Turkey and Russia, diplomats say, particularly after several meetings between leaders Tayyip Erdogan and Vladimir Putin, including last week in Uzbekistan.

Last month the U.S. Treasury sent a letter to big Turkish businesses warning they risked penalties if they maintained commercial ties with sanctioned Russians.

Turkey’s Finance Minister Nureddin Nebati at the time called concerns over the letter “meaningless.” In April, he said Russian tourists – critical to Turkey’s beleaguered economy – could easily make payments since the Mir system was growing among Turkey’s banks.

Many Russians have gone to Turkey since the February invasion left them few other travel options, and sanctions cut off their use of major U.S. credit cards.

Russia calls its actions in Ukraine “a special military operation.”

After the two private lenders suspended Mir, it is still operated by state lenders Halkbank, Vakifbank and Ziraat.

Istanbul’s banking index tumbled sharply last week and shed more than 9% Monday, triggering circuit breakers halting trading. One banker said worries that so-called secondary sanctions could target Turkish banks or firms affected markets.

The expanded U.S. sanctions last week targeted the chief executive of the Bank of Russia’s National Card Payment System (NSPK), which runs Mir.

(Reporting by Ebru Tuncay and Jonathan Spicer; Additional reporting by Ece Toksabay; Editing by Josie Kao)

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SYDNEY (Reuters) – Australia’s central bank is set on raising interest rates again as it battles to contain red-hot inflation, but sees a case for slowing the pace of hikes as rates approached more normal levels.

Minutes of the Reserve Bank of Australia’s (RBA) September Board meeting out on Tuesday reiterated that policy was not on a pre-set path and would be balanced to try and keep the economy on an even keel.

“All else equal, members saw the case for a slower pace of increase in interest rates as becoming stronger as the level of the cash rate rises,” the minutes showed.

The central bank lifted its cash rate by 50 basis points to 2.35% at the Sept. 6 meeting, the fifth hike in as many months for a total increase of 225 basis points.

Markets are wagering on yet another half-point hike in October, in part to keep pace with the U.S. Federal Reserve, which is widely expected to lift its rates by 75 basis points this week.

RBA Governor Philip Lowe has flagged the chance of a slowdown in hikes at some point, but also underlined the importance in a very tight labour market of keeping inflation expectations anchored.

The emphasis on inflation and a hawkish outlook from the Fed has led Westpac chief economist Bill Evans to revise up his call on rates and he now sees a half-point move in October rather than 25 basis points.

He also looks for quarter-point hikes in November, December and February taking rates to a peak of 3.6%.

“Clear evidence of the expected slowdown in inflation will not be apparent until late February, allowing the RBA to go on hold in March on evidence that growth is slowing and that inflation and rates have also peaked in the U.S.,” said Evans.

(Reporting by Wayne Cole; Editing by Christopher Cushing and Sam Holmes)

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By Kevin Buckland

TOKYO (Reuters) – The dollar remained firm below a two-decade high versus major peers on Tuesday, as investors braced for the Federal Reserve to continue its aggressive interest-rate-hiking campaign to rein in overheated inflation.

The dollar index, which measures the greenback against six counterparts, was little changed at 109.53, stable for the moment after pulling back from as high as 110.79 earlier this month, a level not seen since June 2002.

The two-year U.S. Treasury yield, which is extremely sensitive to policy expectations, rose as high as 3.970% overnight for the first time since November 2007. The 10-year yield reached a high of 3.518%, a level not seen since April 2011.

Investors have fully priced another 75 basis point bump by the Federal Open Market Committee for Wednesday, and lay 19% odds for a super-sized full percentage point increase.

While still elevated, those bets have come down from around 38% on Wednesday, when they were shocked higher by a surprise acceleration in U.S. consumer prices for August.

The dollar eased 0.15% to 142.96 yen, continuing a week-long consolidation following two attempts at 145 this month that took it as high as 144.99 on Sept. 7 for the first time in 24 years. The dollar-yen currency pair tends to track the long-term yield spread between U.S. and Japanese government bonds.

The Bank of Japan decides policy on Thursday, and is widely expected to keep its ultra-easy stimulus settings unchanged. They include pinning the 10-year yield near zero.

“We have to see the FOMC,” said Tohru Sasaki, a strategist at J.P. Morgan in Tokyo.

“Dollar-yen will eventually break above 145, but the speed depends on how hawkish the Fed is, and developments in interest rate differentials.”

The euro was little changed at $1.0030, after grinding slowly higher over the past week and strengthening its position above parity. It dropped as low as $0.9864 on Sept. 6 for the first time in two decades.

Sterling was flat at $1.14295, finding its feet after a drop to a 37-year low of $1.13510 at the end of last week.

The Bank of England will decide policy on Thursday. Investors are split over whether a 50 or 75 basis point hike is on the way.

The risk-sensitive Australian dollar slipped 0.07% to $0.6722 and the New Zealand dollar fell 0.23% to $0.59435.

Bitcoin eased 0.48% to $19,445, after swinging between a two-month low of $18,540 and a 3 1/2-week high of $22,781 over the past two weeks.

(Reporting by Kevin Buckland; Editing by Bradley Perrett)

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By David Shepardson

BETHESDA, Maryland (Reuters) – Marriott International Inc believes its new $600 million high-rise headquarters will entice workers to return after more than two years mostly working at home.

The U.S. hotel company that owns and licenses about 8,100 hotels in 139 countries cut the ribbon Monday on the building near Washington, D.C.

Marriott Chief Executive Anthony Capuano told Reuters workers will want to return. “People crave that interaction,” Capuano said. “I’m not sure we have to pull that hard.”

During construction, Marriott turned 20% of fixed workstations into “collaboration spaces.”

“We find that more and more of the work we’re doing is projects across disciplines… sometimes for a day, sometimes for a week, maybe for a year or longer,” Capuano said.

The 21-story headquarters features a 11,000-square-foot child care center, 180 conference rooms, high-end cafeteria and design lab.

Capuano said employees are not required to be in the office but Marriott is “encouraging folks to be here several days a week — and not just for meetings.”

The new headquarters can accommodate about 3,500 workers. Capuano said over 1,000 are at the office on a typical workday.

Most workstations are shared and employees use an app to reserve a desk in a “neighborhood” near other workers with similar jobs and can use a locker for storage, Capuano said.

(Reporting by David Shepardson; Editing by Cynthia Osterman)

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By Leika Kihara and Takahiko Wada

TOKYO (Reuters) -Japan’s core consumer inflation quickened to 2.8% in August to hit the fastest annual pace in nearly eight years, data showed on Tuesday, as pressures from higher raw material costs and a weak yen broadened.

While core consumer inflation has exceeded the central bank’s 2% target for five straight months, the Bank of Japan (BOJ) is unlikely to raise interest rates any time soon as wage and consumption growth remain weak, analysts say.

The data highlights the dilemma the BOJ faces as it tries to underpin a fragile economy by maintaining ultra-low interest rates, which in turn are fuelling an unwelcome slide in the yen that is driving up households’ cost of living.

The rise in the nationwide core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, was slightly bigger than a median market forecast for a 2.7% increase and followed a 2.4% gain in July. It was the fastest pace of rise since October 2014.

The so-called “core core” index, which strips away both fresh food and energy costs, rose 1.6% in August from a year earlier, accelerating from a 1.2% gain in July and marking the fastest annual pace since 2015.

The core core index is closely watched by the BOJ as a gauge on how much of the inflationary pressure is driven by domestic demand.

Headline inflation hit 3.0% in August, the highest since 1991, underscoring the pain consumers are suffering from rising living costs.

“Headline inflation jumped in August to yet another high since 1991 and it still has a stretch higher to climb. That said, the Bank of Japan will remain steadfast in maintaining its ultra-easy monetary policy,” said Darren Tay, Japan economist at Capital Economics.

Once welcomed for giving exports a boost, the yen’s weakness has become a headache for Japanese policymakers because it hurts retailers and consumers by inflating the already rising prices of imported fuel and food.

The world’s third-largest economy expanded an annualised 3.5% in the second quarter, stronger than the preliminary estimate. But its recovery has been slower than many other countries as a resurgence in COVID-19 infections, supply constraints and rising raw material costs weighed on consumption and output.

While inflation is still modest compared with many other advanced nations, a global slowdown and high energy prices are clouding the outlook. The BOJ has pledged to keep interest rates ultra-low and remain an outlier in a global wave of monetary policy tightening.

(Reporting by Leika Kihara and Takahiko WadaEditing by Kim Coghill & Shri Navaratnam)

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SEOUL (Reuters) – Kia Corp is expected to produce electric vehicles in the United States from 2024, South Korean media Maeil Business Newspaper and TV channel SBS reported on Tuesday, citing an unidentified auto industry source.

Kia Corp was not immediately available for comment when contacted by Reuters.

The Inflation Reduction Act signed into law by U.S. President Joe Biden last month excludes Hyundai Motor Co and its affiliate Kia Corp from federal tax credits because they don’t yet make EVs in North America, knocking their EV ambitions in the short term at least.

(Reporting by Heekyong Yang and Joyce Lee; Editing by Kim Coghill)

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