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U.K. government reassures investors about bank stability

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Markets have been making headlines for all the wrong reasons recently

The stock markets have been making headlines for all of the wrong reasons recently but, thankfully, stocks around the world have bounced back.

Governments in the U.S. and U.K. have reassured investors about the stability of banks following a string of banking failures.

These failures were triggered by depositors rushing to withdraw money after anxiety over the banks’ financial health.

In the UK, the FTSE closed 1.79 per cent higher after gains in top bank shares.

Chancellor Jeremy Hunt told MPs Britain’s financial system is “fundamentally strong” after facing questions from Labour’s shadow chancellor Rachel Reeves.

Reeves asked whether the system is “adequate to protect taxpayers and depositors” and if the government can be confident that no other U.K. banks are vulnerable to failure after Silicon Valley Bank collapse.

There has also been further instability, with Credit Suisse having to be rescued by rival UBS.

But, while Hunt says the markets are unsettled, he is certain the U.K. financial system can ride the wave.

“We have a robust plan to deal with the globally significant banks that would cause a danger to our stability if they were allowed to fail,” he said.

“There are procedures in place and we haven’t yet had to test those procedures, even though one of those banks has been bought by another.”

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When will airfares begin to fall?

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As the global aviation market rebounds, airlines are changing their service offerings

 
Over 46 million workers in the global aviation sector lost their jobs as global aviation came to a grinding halt at the onset of the pandemic.

However, Geoffrey Thomas from AirlineRatings.com said passengers have returned to airport terminals and boarded flights in droves.

“When travelled returned, many of us wondered what sort of low airfares will we have to be charged to entice people back onto airplanes.”

In February 2023, total traffic (measured in revenue passenger kilometres) rose 55.5 per cent when compared to February 2022.

Globally, traffic is at 84.9 per cent of February 2019 levels.

“It was a stampede, the likes of which we have never seen before,” Mr Thomas said.

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The worst of inflation could be behind us

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The unprecedented nature of the pandemic continue to shape international fiscal policy

As reserve banks and federal reserves continue to battle the impacts of Covid-19, inflation has become a dominate issue.

In some parts of the world, rising household costs have slowed consumer spending by more than expected.

It means the end of aggressive rate hikes could come to an end in a matter of months.

In Australia, recent data from the Australian Bureau of Statistics confirmed inflation has passed its peak and is beginning to moderate.

The numbers show annual inflation peaked in December 2022 but will still remain higher for longer than anticipated.

Matt Grudnoff is a Senior Economist at The Australia Institute, who said these are uncharted waters.

“I don’t think they should be fully blamed.

“The pandemic was an entirely different kind of recession, one that we have never seen before.

“The world went into recession because the world shut down for very good health reasons.

“But the economy rebounded extremely quickly, simply because there was no underlying problem with the economy,” he said.

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“I think there is a great risk”: will AI steal our jobs?

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Artificial Intelligence has become an increasingly powerful and pervasive force in our modern world.

 
Artificial intelligence is not a new concept. However, the growing advancements have the potential to revolutionise industries, improve efficiency, and enhance the quality of life.

Along with its promising advancements, artificial intelligence also brings certain risks and challenges that must be acknowledged and addressed.

It has become the focus of lawmakers, who are working towards greater regulation of the sector.

U.S. and European Union officials recently met in Sweden to weigh up the benefits and challenges of artificial intelligence, and other emerging technologies.

“The AI process is creeping up on us,” said Dr Keith Suter, who is a global futurist.

“You’ve got competition between companies.”

It’s almost like some of us can see this raft that’s heading towards the rapids and a disappearance towards the waterfall, and we’re giving a warning but it’s not being heeded because everybody’s in this race to get down to the river,” Dr Suter said.

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