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

  • Britain’s economic difficulties are multiplying, threating to erase the euphoria that accompanied the end of coronavirus lockdowns and leave policy makers with a delicate balancing act
  • The U.K. is exploring joining an existing free-trade agreement between the U.S., Mexico and Canada, a recognition the Biden administration won’t start negotiations on a bespoke deal any time soon
  • The EU and U.S. are cautiously moving to rein in China, seeking stronger enforcement of investment-screening rules and trying to keep technology from being misused to threaten security
  • Norway is poised to raise its key rate this week in the first such post-pandemic move among nations with the world’s 10 most-traded currencies
  • The Federal Reserve is expected to signal scaling back asset purchases later this year, with scrutiny also on forecasts that could reveal growing internal pressure to raise interest rates in 2022
  • What would it take to knock the U.S. recovery off course and send Fed policy makers back to the drawing board? Not much — and there are plenty of candidates to deliver the blow
  • Veteran Fed watcher Mickey Levy says investor worry over an eventual pullback from bond purchases is overdone
  • The Bank of Japan held its key stimulus tools in place while flagging Covid-linked pressures on the economy ahead of a key ruling party election that is almost certain to determine the country’s next prime minister
  • China’s virus restrictions have disrupted another holiday spending period, worsening the growth outlook for the world’s second-largest economy, which was already facing a slump in consumption
  • Australia’s new Indo-Pacific security partnership with the U.S. and U.K. that allows it to acquire nuclear-powered submarines drew a swift verbal retort for all three nations from China. But Beijing might have more than just words to come for Canberra

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