Mario Centeno says the decision of the European Central Bank to accelerate interest rate increases is 'very important'. Bloomberg
Mario Centeno says the decision of the European Central Bank to accelerate interest rate increases is 'very important'. Bloomberg
Mario Centeno says the decision of the European Central Bank to accelerate interest rate increases is 'very important'. Bloomberg
Mario Centeno says the decision of the European Central Bank to accelerate interest rate increases is 'very important'. Bloomberg

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ECB council member calls for caution after historic interest rate increase

Portuguese central bank chief Mario Centeno says officials must 'remain predictable and acting at the margin in as small steps as possible'

Bloomberg

September 10, 2022

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The European Central Bank must tread carefully in coming meetings after signalling its determination to fight record inflation with a jumbo interest-rate increase this week, according to governing council member Mario Centeno.

While the decision to accelerate the rate increases was “very important”, officials must “remain predictable and acting at the margin in as small steps as possible”, the Portuguese central bank chief said in Prague.

“The worst-case scenario for a policymaker is to be seen going back and forth in decisions and going after the data,” he said.

Mr Centeno spoke a day after the ECB lifted its key interest rates by a historic 75 basis points — matching the urgency of the US Federal Reserve in stamping out soaring prices.

Officials said they expect to raise borrowing costs further at the next several meetings, without specifying by how much.

While Mr Centeno — one of the governing council’s more dovish members — declined to reveal his preference, he highlighted that the council described Thursday’s decision as “front-loading”.

“It means that we are acting faster than we envisaged in June or even in July,” he said. “That doesn’t mean that we are moving the end point up.”

The peak of the monetary tightening cycle, known as the terminal rate, has yet to be determined as officials adopt a meeting-by-meeting approach on interest rates in the face of immense uncertainty stemming from the war in Ukraine.

But for Mr Centeno, describing recent moves as “front-loading” suggests subsequent steps will be smaller if the terminal rate doesn’t move higher, even if other governing council members are open to a second 75 basis point increase in October.

Without more clarity on the cycle’s peak, he considers it premature to discuss reducing the €5 trillion ($5.02tn) of bonds that the ECB purchased during recent crises — first to head off deflation risks, then to support the economy through the pandemic.

Some of his colleagues have urged a debate this year on when and how to offload those securities — a process know as quantitative tightening.

“The policy rates are clearly the best instrument for us to deal with the present situation,” Mr Centeno said.

Despite his caution, and even after recently warning against excessively rapid rate increases, he called Thursday’s unusually large move “the right signal to send”, demonstrating the ECB’s inflation intent to governments and workers.

Fiscal policy or excessive wage settlements shouldn’t undermine those efforts, according to Mr Centeno, a trained labour economist.

To uphold Europe’s favourable employment trends — the eurozone jobless rate is a record low 6.6 per cent — “wages can’t increase above what the market can pay”, he said.

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What is the FNC?

The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning. 
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval. 
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
 

Red flags
  • Promises of high, fixed or 'guaranteed' returns.
  • Unregulated structured products or complex investments often used to bypass traditional safeguards.
  • Lack of clear information, vague language, no access to audited financials.
  • Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
  • Hard-selling tactics - creating urgency, offering 'exclusive' deals.

Courtesy: Carol Glynn, founder of Conscious Finance Coaching

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FTO designations impose immigration restrictions on members of the organisation simply by virtue of their membership and triggers a criminal prohibition on knowingly providing material support or resources to the designated organisation as well as asset freezes. 

It is a crime for a person in the United States or subject to the jurisdiction of the United States to knowingly provide “material support or resources” to or receive military-type training from or on behalf of a designated FTO.

Representatives and members of a designated FTO, if they are aliens, are inadmissible to and, in certain circumstances removable from, the United States.

Except as authorised by the Secretary of the Treasury, any US financial institution that becomes aware that it has possession of or control over funds in which an FTO or its agent has an interest must retain possession of or control over the funds and report the funds to the Treasury Department.

Source: US Department of State

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10 tips for entry-level job seekers
  • Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
  • Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
  • Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
  • For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
  • Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
  • Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
  • Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
  • Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
  • Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
  • Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.

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What the law says

Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.

“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.

“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”

If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.

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