Germany’s Engine, Carbon Tax, Anti-Powell Progressives: Eco Day

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Welcome to Tuesday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the day.

• The engine of the German economy is turning into a brake in the face of a global supply crunch, threatening to derail the nation’s recovery
• The world’s first pollution-import levy, proposed by the European Union on goods from steel to aluminum, may not actually cost the bloc’s competitors that much, according to a study by environmental groups
• British companies are expecting to raise prices and boost wages amid the strongest business confidence in more than four years, according to a survey
• Chair Jerome Powell risks allowing inflation to get out of control, former Richmond Fed chief Jeffrey Lacker said. Meantime, progressive Democrats are urging President Joe Biden not to reappoint Powell
• Former Reserve Bank of India Governor Raghuram Rajan, one of the leading global critics of the Fed’s 2013 “taper tantrum” episode, is now worried that the central bank could fall behind the curve as it gradually removes Covid-era monetary stimulus
• China’s economy took a knock from the delta virus outbreak in August, with the services industry contracting for the first time since February last year and manufacturing hit by supply-chain problems
• Mexico’s public debt chief, who designs the country’s bond issuances, is stepping down as Finance Minister Rogelio Ramirez de la O rearranges his team after taking over the job
• EU countries voted to subject the U.S. to fresh restrictions on nonessential travel amid a surge in new coronavirus cases, dealing a blow to the tourism industry
• Canada’s economy sprang back to life over the summer as vaccine-led reopenings spurred a return to growth
• Nigeria’s central bank selected Bitt Inc. as a technical partner to help create its digital currency by the end of the year
• South Korea’s smallest budget increase in four years will still push the country’s debt load to a record level of more than half the size of the economy
• The economic toll from a deadly second wave of Covid-19 that swept through India last quarter doesn’t appear to be as bad as feared

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