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North American Edition
13th October 2021
IMF lowers global growth outlook as supply bottlenecks hobble pandemic recovery
Persistent supply chain disruptions and inflation pressures are constraining the global economy's recovery from the COVID-19 pandemic, the International Monetary Fund (IMF) said on Tuesday as it cut growth outlooks for the United States and other major industrial powers. In its World Economic Outlook, the IMF trimmed its 2021 global growth forecast to 5.9% from the 6.0% forecast it made in July. It left a 2022 global growth forecast unchanged at 4.9%. The growth outlook for the U.S. was trimmed 0.1 percentage point to 6% this year, while the projection for China also was reduced by 0.1 percentage point to 8%. Several other major economies saw their outlook cut, including Germany, whose economy now is projected to grow 3.1% this year, down 0.5 percentage point from its July forecast. Japan’s outlook was lowered by 0.4 percentage point to 2.4%. IMF economists say that inflation outlook is “highly uncertain” due to the unprecedented nature of the current recovery. Despite the upward revision in its price projections, the forecast for inflation to return to pre-pandemic levels is based on an ample labor supply in advanced economies that should weigh on wages.
L.A. port to join Long Beach in 24/7 operation
The U.S. government is to announce that the Port of Los Angeles will join the neighboring Port of Long Beach, Calif., in operating around the clock to try to resolve congestion issues which have been plaguing the supply chain for retailers and manufacturers for months. The Wall Street Journal quotes an unnamed official as saying: “By taking these steps, they’re saying to the rest of the supply chain, ‘You need to move, too, let’s step it up’.” Treasury Secretary Janet Yellen told CBS Evening News that while there would be some shortages over the next few months “there is an ample supply of goods. And I think there’s no reason for consumers to panic about the absence of goods that they’re gonna want to acquire at Christmas.”
CFOs expecting robust growth over the next year
Finance leaders say they’re bullish on their companies, and want to improve environmental, science, and governance (ESG) reporting and diversity and inclusion efforts, according to PwC’s latest Pulse Survey. They are interested in the growth of the digital economy, lasting shifts in consumer behavior, and the prevalence of work-from-home arrangements. Finance leaders are also looking to grow their influence within their companies and are keen to learn how to navigate staffing challenges. CFOs’ top priority for the finance function in 2021 is to establish finance as the business partner across the enterprise (47%). While driving deeper collaboration among functional business partners isn’t a new goal for finance, the pandemic has been a catalyst to expand the level and access of these partnerships. CFOs’ second-highest priority is automating processes using intelligent automation (41%).  In the meantime, economic optimism is high. Nearly half (46%) of respondents polled in March 2021 anticipate high growth from the rise of the digital economy, while 36% predict moderate growth. 
Inflation expectations remain elevated among U.S. consumers
U.S. consumers’ expectations for inflation continued to rise in September amid elevated price pressures, according to a Federal Reserve Bank of New York survey. Household expectations for inflation one year ahead rose to 5.3% last month from 5.2% in August, while median expected inflation three years ahead rose to 4.2% from 4%, results of the New York Fed’s monthly Survey of Consumer Expectations, published Tuesday, showed. Both marked the highest readings on record in the survey’s eight-year history. The September survey, which is based on a rotating panel of 1,300 households, showed that consumers lowered their expectations for how much some essential expenses will rise over the near term. The price of gas is expected to rise by a median of 5.9% over the next year, down "sharply" from 9.2% in August. Expectations for home prices decreased for the fourth consecutive month, with consumers now expecting prices to rise by 5.5% over the next year, down from 5.9% in August.
U.S. employers seek to prioritize well-being of remote workers
Early results from a national poll of 1,502 respondents that was conducted by employee benefits consultant Mercer between June and September indicate that one in five U.S. employers plans to prioritize the well-being of remote employees by offering perks such as home delivery of meals in an acknowledgement of the demands of working from home. Well-being measures such as virtual cooking, exercise, yoga classes and apps for relaxation can cost between $1 and $3 a month per employee, said Beth Umland, director of research for health and benefits at Mercer and Elissa Rosenbaum, principal in Mercer's health business.
Amazon to allow employees to work remotely indefinitely
Amazon has said that it will allow many tech and corporate workers to continue working remotely indefinitely, as long as they can commute to the office when necessary. Previously, the company had said it expected that most employees would need to be in the office at least three days a week when offices reopen from the COVID-19 pandemic in January. As with previous policies, the changes will apply only to Amazon's corporate workforce and not to its hundreds of thousands of warehouse workers and delivery drivers, most of whom have been working in person throughout the pandemic.
California law limits some workplace secret settlements
A new law in California bans secret settlements in most harassment and discrimination cases. A 2018 state law banned secret settlements for cases involving sexual misconduct, discrimination or assault, and the new law expands the reform for other types of discrimination cases, including those involving race, religion, gender and sexual orientation. Sen. Connie Leyva, a Democrat from Chino who authored the law, dubbed it the “Silenced No More Act,” and said “The California State Legislature and Governor Newsom have now spoken: California workers should absolutely be able to speak out — if they so wish — when they are a victim of any type of harassment or discrimination in the workplace, ” adding “It is unconscionable that an employer would ever want or seek to silence the voices of survivors that have been subjected to racist, sexist, homophobic or other attacks at work." Arizona, New Jersey, New Mexico and Tennessee also have laws that ban nondisclosure agreements in sexual harassment cases, but Leyva's office said California is the first state to ban these nondisclosure agreements as part of severance packages when a worker leaves a company.
Kroger and Ocado open automated delivery sites across U.S.
Kroger is using its partnership with Ocado to extend its reach with new automated fulfilment centres for online orders in the Northeast, Florida and California. The expansion announced Tuesday will give the largest U.S. supermarket chain by revenue its first operations in the Northeast and advance Kroger’s plans to double its digital sales and profitability rate by 2023, the company said. Ocado’s automation uses software, robotics and artificial intelligence to operate warehouses with a minimum of human workers in spaces that are more tightly confined than traditional distribution centres.
Best Buy announces acquisition of Current Health
Best Buy has signed a deal to buy telehealth start-up Current Health, as the electronics retailer looks to increase its presence in health care. Current Health’s technology allows health-care organizations to monitor patients at home. It uses data from biosensors, such as wearable devices, to give a doctor insights into a person’s medical condition and to flag if he or she needs attention. Current Health chief executive Christopher McCann said that Best Buy is a good fit for the acquisition because of its reach with stores and its trust with customers. “Over the coming decade, significantly more healthcare can be delivered in the home”, he said.
Request to remove Hong Kong from EU tax watch list
The Hong Kong Special Administrative Region’s (HKSAR) government wants the European Union to quickly remove Hong Kong from the watch list on tax cooperation after amending the relevant tax arrangements. The EU added Hong Kong to the list because it considered that the local non-taxation of certain foreign-sourced passive income might lead to situations of "double non-taxation." A spokesperson for the HKSAR government said Hong Kong has, over the years, adopted the territorial source principle of taxation, whereby offshore profits are generally not subject to profits tax in Hong Kong. “As an international financial centre, Hong Kong has all along been actively participating in and supportive of international tax cooperation,” the spokesperson added. The addition of Hong Kong to the EU's “grey list” of non-cooperative jurisdictions for tax purposes means that the bloc thinks aspects of Hong Kong's territorial tax system might facilitate tax avoidance or other tax practices it regards as harmful, according to a note published by accountancy firm KPMG.

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