Drop off in demand for raw materials signals slowing economic growth

In July, the GEP Global Supply Chain Volatility Index signalled underutilised capacity at global suppliers for the first time since April, falling to a four-month low. The most significant level of slack in supply chains was in Europe, which continues to grapple with recession conditions in its manufacturing sector, especially in Germany. 

Asia's growth also cooled as factory demand in the region contracted to its weakest since December 2023. Underlying data revealed a decrease in purchasing activity by Chinese factories - the first time this has occurred in nine months. Japan’s manufacturing sector was also a source of weakness.

Suppliers to North American companies reported slightly underutilised capacity during July, as was the case in June. Slowing purchasing activity was seen across all three countries within the region, with Canada reporting the steepest contraction. Notably, Mexican factories, which have been a growth driver in the region this year, reported lower input demand for the first time since October 2023.

The inventory cycle has stabilised. While reports from global businesses of safety stockpiling due to price or supply concerns were below typical levels, the underlying indicator has generally trended in line with its long-term average so far this year. Reports of item shortages fell slightly in July, down to their lowest level since January, signalling high stock levels at vendors of commodities and critical raw materials. 

The supply of labour is not an inhibiting factor for global manufacturers, as reports of backlogs due to insufficient staffing capacity are at typical levels. Although supply chain activity dipped in July, global transportation costs are at the highest in 21 months, driven mainly by Asia.

 

Northern Ireland leads positive month for UK business growth

The latest NatWest UK Growth Tracker showed a rise in private sector output in ten of the 12 nations and regions monitored, up slightly from nine in June. In July, business activity growth was led by Northern Ireland for the second time in the past three months. Just behind it was the South West, which continued to gain momentum and recorded its steepest output rise for over two years. At the other end of the scale, Wales and the East Midlands both recorded modest reductions in business activity.

The latest data showed a rise in the number of nations and regions reporting higher inflows of new business, up from six in June to 11 in July. This reflected renewed upturns in the East of England, Scotland, South East, Wales and Yorkshire & Humber. The most marked increase in new work was recorded in the South West, where the growth rate accelerated sharply to the highest since March 2022.

Growth expectations generally improved across the UK in July. The only exception was Northern Ireland, which saw business confidence slip to a six-month low. Firms in the South East were the most upbeat about the outlook, as has been the case in three of the past four months, followed by those in South West. The biggest upswing in optimism was recorded in Yorkshire & Humber.

Northern Ireland topped the rankings for employment growth at the start of the third quarter, recording its fastest rate of job creation since April 2023. The North East posted the next-steepest rise in employment, followed by Wales. As was the case for business activity, the East Midlands was one of just two areas to see a decrease in employment, this time alongside the West Midlands.

Not only did Northern Ireland again record the only increase in backlogs of work of the 12 monitored nations and regions, but the accumulation rate there accelerated sharply to the strongest in over two years. Firms in Wales recorded the most marked decrease in outstanding business, followed by those in Scotland.

Most areas of the UK saw business costs increase at rates just above their respective long-run averages in July. This included the South West, which recorded the steepest overall rise in input prices, albeit one that was the slowest for six months. As was the case in June, the softest rate of cost inflation was recorded by firms in the South East.

Relatively strong cost pressures and improved underlying demand led to a marked rise in average prices charged for goods and services in the South West - the fastest recorded across the UK in July. The North West posted the next-quickest rate of output price inflation. Northern Ireland registered the slowest increase and was one of seven nations and regions where the inflation rate eased since June.

 

Standard Chartered launches ESG-linked cash account

Standard Chartered has announced the launch of an ESG-linked cash account for corporate banking clients. The account rewards clients for meeting material environmental, social, and governance (ESG) targets. The solution will be gradually rolled out across the bank’s markets.

The new offering links the cash account's credit balance interest rate or fee pricing with the client’s ESG-related performance. The selected key performance indicators must be material and relevant to the client’s business, and the associated targets must be ambitious when compared to an external benchmark, peers or the client’s previous performance.

The cash account builds on Standard Chartered’s existing suite of ESG-related transaction banking solutions. These include the sustainable account, which allows clients to retain access to their cash for day-to-day liquidity requirements whilst using surplus cash to support activity that contributes to the United Nations Sustainable Development Goals. The bank also has a sustainable trade finance proposition, which offers solutions to help clients implement more sustainable practices in their operations and across their ecosystems. This includes its sustainable financial institution trade loan offering, which provides financial institutions with the liquidity needed to support the underlying trade flows associated with sustainable development.

The ESG-linked cash account will be launched in Hong Kong and Singapore as pilot sites, and it is expected to be rolled out to further markets in due course.

 

ClearBank secures Dutch banking licence and expands to Europe

ClearBank, an enabler of real-time clearing and embedded banking, has announced it has expanded into Europe, working to fulfil client demand for Euro settlement and accounts.

The newly established ClearBank Europe N.V. secured a Credit Institution Licence from the European Central Bank under the supervision of De Nederlandsche Bank. Expansion to Europe marks the first step in ClearBank’s international growth plans, with the company now competing on a regional level.

ClearBank’s services are accessed via a single API, underpinned by a scalable, flexible, real-time cloud-native platform. It also operates a unique business model, where client funds are held at the central bank for maximum security.

The new banking licence allows ClearBank to meet that demand by providing Euro accounts and payments in addition to Sterling. This will include operating accounts, virtual accounts, and access to European payment rails, including SEPA Credit Transfer, SEPA Instant Credit Transfer and TARGET2 (T2).

ClearBank Europe N.V. will also offer multi-currency and FX services to its European clients and upgrade ClearBank UK’s FX capabilities. The company will soon begin rolling out embedded banking services to European clients, with protected bank accounts and funds held under the Deposit Guarantee Scheme.

 

MultiPass gets licence to operate in the UAE

MultiPass, a global payment solution that provides modern financial products for businesses trading globally, has obtained a financial services licence in the United Arab Emirates, regulated by the Dubai Financial Services Authority (DFSA). This will allow the company’s clients to access local currency and payout.

For clients, the UAE serves as a strategic gateway to the Middle East, providing a path to a broader market and new business opportunities. Obtaining the licence has allowed access to the dirham (UAE currency) and local payout options, which can be executed within seconds. Its multi-currency IBANs facilitate payment solutions across the world. In a statement, the company noted that its clients get a dedicated relationship manager assigned to businesses.

“Middle East is a region that offers a great potential for growth and innovation,” said Rami Chedid, Chief Executive Officer of MultiPass for the UAE and the Middle East. “This expansion is in line with our vision to provide exceptional financial services and create value for our clients – international businesses with frequent cross-border payment flows.”

 

National Bank of Fujairah chooses iGTB cloud platform for digital banking transformation

Intellect Global Transaction Banking (iGTB) has partnered with the National Bank of Fujairah (NBF), a UAE-based corporate bank, to enhance its digital capabilities. This deal marks the first cloud-managed service for iGTB in this region.

NBF currently serves corporates and SMEs through its network in the UAE, providing financial services to optimise commercial opportunities and achieve sustainable growth for its clients. Now with the eMACH.ai Digital Transaction Banking solution, NBF plans to offer their clients a suite of more advanced solutions.

The platform's digital capabilities should improve information visibility, ensuring its corporate and SME clients can make quick decisions. iGTB will provide a fully managed cloud service, which should free NBF to focus on business development and client service.