Category: 3. Business

Airbus has cut its plane delivery target for this year after it identified a problem with the fuselage panels on its bestselling A320 family of aircraft that has forced it to inspect hundreds of jets.

The world’s largest plane manufacturer said it would now deliver “around 790” commercial aircraft this year, a drop of 30 from its previous target of 820 planes.

Airlines around the world cancelled and delayed flights over the weekend after the French firm ordered immediate fixes to software updates on 6,000 of its A320s, more than half of its global fleet.

While most of the glitches were fixed by Monday, the company then identified separate quality problems on metal panels at the front of some planes.

Reuters reported that a presentation to airlines showed that the total number of planes needing inspections was 628, including 168 already in service, 245 in assembly lines and 215 in an earlier stage of production known as major component assembly.

The affected parts are the wrong thickness, following work carried out by the Seville-based supplier, Sofitec Aero, the presentation showed.

The affected panels are metal skins which are located behind the cockpit, on each side of the two forward doors. There are not thought to be any safety concerns about the panels.

Despite the lower delivery number, Airbus said it was sticking to its previous financial forecast, as it targets a full-year adjusted operating profit of about €7bn (£6.1bn).

When Airbus issued its weekend recall to more than 350 operators, about 3,000 jets in the A320 family were in the air. The setback came just weeks after the A320 became the most-delivered plane model in history, when it overtook Boeing’s 737.

Airbus has struggled with ongoing disruptions to its supply chain in recent months, including delays in deliveries of engines from the US manufacturer Pratt & Whitney, while it has also had to take some planes out of service while they are maintained.

Airbus shares rose by more than 2% on Wednesday morning, but have not yet recouped all of the losses seen in the past week since the software glitch was first reported.

Airbus is due to report its November delivery figures on Friday.

Three- and Four-Laser BD FACSDiscover™ A8 Cell Analyzers Expand Accessibility of Spectral, Real-Time Imaging Cell Analysis

FRANKLIN LAKES, N.J., Dec. 3, 2025 /PRNewswire/ — BD (Becton, Dickinson and Company) (NYSE: BDX), a leading global medical technology company, today announced the global commercial release of new configurations of cell analyzers featuring breakthrough spectral and real-time cell imaging technologies, enabling more labs in academia, pharma and biotech – across scales, needs and budgets – to advance discoveries in immunology, cancer immunotherapy and cell biology.

The new BD FACSDiscover™ A8 Cell Analyzers feature BD SpectralFX™ Technology, which allows scientists to analyze up to 50 or more characteristics of a single cell with optimal resolution and sensitivity, and BD CellView™ Image Technology, which enables high-speed imaging, revealing spatial and morphological insights – like the location of a protein within a single cell – that can be visually analyzed in real time. The three- and four-laser additions to the BD FACSDiscover™ A8 Cell Analyzer portfolio complement the five-laser instrument launched earlier this year, providing more scientists worldwide the opportunity to incorporate industry-leading capabilities in their labs. Both versions have the option to start with a free trial of CellView™ Image Technology and upgrade later via software – giving labs further flexibility.

“The BD FACSDiscover™ A8 Cell Analyzer has become our new standard, changing how our flow cytometry core operates,” said Gert Van Isterdael, head of VIB Flow Core Ghent. “Once you experience the integration of spectral and imaging data, you don’t want to go back. It opens a new dimension for our work, helping us see more, understand faster, and enable discoveries that simply weren’t possible before. The BD FACSDiscover™ A8 Cell Analyzer is a game changer, and having more configurations will only make this leading technology more accessible to a wider range of labs.”

All configurations of the BD FACSDiscover™ A8 Cell Analyzer feature high-throughput, walkaway automation that enables best-in-class cost-per-insight economics through real-time imaging. The intuitive software makes it easy to manage large datasets, and is designed for out-of-the-box standardization. The analyzers also pair seamlessly with the ecosystem of BD FACSDiscover™ Cell Sorters and BD Reagents. This includes the recently launched BD Horizon RealViolet™ 828 and RealBlue™ 824 fluorochromes, pioneering entries into the near-infrared spectrum that, when used with a cell analyzer, can unlock new discoveries through spectral flow cytometry.

“In today’s complex research landscape, access to leading-edge technologies through flexibility and modularity is crucial, from basic to translational science,” said Steve Conly, worldwide president of BD Biosciences. “Alongside the entire BD ecosystem of sorters, reagents, and informatics, the BD FACSDiscover™ A8 Cell Analyzer continues to be rapidly adopted by leading biopharmaceutical companies, and now with more entry points, organizations of all sizes can access the same technology.”

BD FACSDiscover™ A8 Cell Analyzers are now available to order through local sales representatives. For researchers facing capital expenditure constraints, flexible financing options are now available. More information is available at bdbiosciences.com.

About BD
BD is one of the largest global medical technology companies in the world and is advancing the world of health by improving medical discovery, diagnostics and the delivery of care. The company supports the heroes on the frontlines of health care by developing innovative technology, services and solutions that help advance both clinical therapy for patients and clinical process for health care providers. BD and its more than 70,000 employees have a passion and commitment to help enhance the safety and efficiency of clinicians’ care delivery process, enable laboratory scientists to accurately detect disease and advance researchers’ capabilities to develop the next generation of diagnostics and therapeutics. BD has a presence in virtually every country and partners with organizations around the world to address some of the most challenging global health issues. By working in close collaboration with customers, BD can help enhance outcomes, lower costs, increase efficiencies, improve safety and expand access to health care. For more information on BD, please visit bd.com or connect with us on LinkedIn at www.linkedin.com/company/bd1/, X (formerly Twitter) @BDandCo or Instagram @becton_dickinson. 

SOURCE BD (Becton, Dickinson and Company)

Global energy and technology leaders are gathering this week at IAEA headquarters in Vienna for the first ever International Symposium on Artificial Intelligence (AI) and Nuclear Energy. The two-day event is bringing together senior representatives from government ministries, international organizations, the nuclear industry and major tech firms — including OpenAI, Google and Oracle — to discuss how nuclear energy can help meet the surging electricity demand of AI data centres, and how AI can support nuclear technology development. 

The two-day event kicked off today and the programme and livestream are available on the IAEA website.  

 IAEA Director General Rafael Mariano Grossi said at the opening ceremony: 

“Two forces are reshaping humanity’s horizon at an unprecedented pace: the rise of artificial intelligence and the global transition towards clean, reliable energy. The world’s energy map is being redrawn before our eyes. “The essential point, our opportunity and our responsibility, is that these forces are not unfolding separately. They are converging and redefining the new global economy.”  

He added that nuclear energy is the only source capable of low-carbon generation, round-the-clock reliability, high power density, grid stability and scalability. He described the link between nuclear and AI as structural alliance of  “Atoms for Algorithms.” 

According to the International Energy Agency, data centres accounted for 1.5% of worldwide electricity demand in 2024 – a figure that could double by 2030. 

Nuclear power, with its ability to deliver reliable, low-carbon electricity, is increasingly seen as a solution to meet this demand. At the same time, AI offers powerful tools to optimize reactor performance, streamline construction and enhance operational efficiency — enabling nuclear energy to reach its full potential while maintaining the highest standards of safety, security and safeguards. 

The symposium will provide a venue to build partnerships and develop recommendations for a framework of cooperation between the AI and nuclear sectors with IAEA support. It will delve into opportunities offered by AI and nuclear energy, supporting global efforts toward clean, reliable and sustainable energy by connecting diverse stakeholders. 

2026 copper production range 380,000 to 420,000 tonnes and 2027 copper production range 500,000 to 540,000 tonnes

2026 copper sales expected to exceed production as surplus concentrate inventory at smelter is cleared; first feed is expected at the end of December

Medium-term annualized copper production target maintained at 550,000 tonnes

Kakula Mine Stage 2 dewatering progressing well at over 60% complete; high-capacity submersible pumps lowered to continue dewatering efforts

Johannesburg, South Africa–(Newsfile Corp. – December 3, 2025) – Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) Executive Co-Chairman Robert Friedland and President and Chief Executive Officer Marna Cloete announce today Kamoa-Kakula’s copper production guidance for 2026 and 2027, as well as an update on the Kakula Mine’s dewatering activities.

Dewatering of the Kakula Mine is progressing well, with dewatering approximately 70% complete on the western side of the mine and 60% complete on the eastern side. To date, 13.4 kilometres of underground workings have been rehabilitated and made safe for resumption of operations, including 4.6 kilometres which were dewatered.

Positive progress to date on underground rehabilitation, along with ongoing mine planning, provides Kamoa-Kakula’s management team with sufficient confidence to issue copper production guidance of 380,000 to 420,000 tonnes for 2026 and 500,000 to 540,000 tonnes for 2027. Kamoa-Kakula is still targeting medium-term production of approximately 550,000 tonnes. An updated life-of-mine plan for Kamoa-Kakula is on target for completion in late Q1 2026.

Following the commencement of the Kamoa-Kakula Copper Smelter as announced on December 1, 2025, copper sales in 2026 are expected to be higher than copper production as the on-site inventory of unsold copper concentrate is destocked by approximately 20,000 tonnes of copper.

Ivanhoe Mines Founder and Executive Co-Chairman Robert Friedland commented:

“The turnaround at Kamoa-Kakula is advancing with confidence. Even during the recovery years of 2025 and 2026, this remarkable copper complex is set to produce approximately 400,000 tonnes of copper … an extraordinary testament to the quality of Kamoa-Kakula’s world-leading natural endowment. As we move through this transition and into the next phase of growth in the coming years, Kamoa-Kakula and the Western Forelands will become one of the largest, if not the largest, copper complexes in the world. Our stakeholders are blessed with a Tier-One mining complex that will operate for generations to come.

“We are also on the cusp of a transformational change for Kamoa-Kakula and the Democratic Republic of the Congo as we transition from producing copper in concentrate in huge volumes, to producing copper anodes for sale to consumers all over the world, at our own smelter complex, the largest in Africa.”

Ivanhoe Mines President and Chief Executive Officer Marna Cloete commented:

“We extend our deepest gratitude to the entire team at Kamoa-Kakula for their unwavering dedication throughout the dewatering and rehabilitation of the Kakula Mine. They have worked under pressure, and done so with discipline, resilience, and an unshakable commitment to doing things the right way. Most importantly, they have carried out this demanding work with an outstanding focus on safety. Their dedication and professionalism are the foundation of our progress, and we are extremely proud of their achievements.”

Kakula copper grades improving as dewatering activities re-open higher-grade mining areas

The revised Kakula mine design has been developed based on geotechnical expert guidance, including new pillar designs and extraction sequencing.

Mining rates on the western side of Kakula have increased to an average rate of 350,000 tonnes per month, equivalent to 4.2 million tonnes (Mt) annualized.

Mining activities have been focused on higher-elevation areas in the north and southwest, where copper grades are lower than those of the higher-grade centre section. As water levels on the western side recede, mining crews are advancing towards the high-grade centre section, where grades increase to between 3.5% and 4.0% from mid-December.

Mining rates at Kakula are expected to improve gradually through 2026. Selective mining within the existing workings on the eastern side of the Kakula Mine is expected to start in Q1 2026, augmenting rising production rates from higher-grade areas on Kakula’s western side. This is expected to increase production rates to 450,000 tonnes per month, or 5.5 Mtpa annualized, by the end of the quarter. In addition, underground development towards a new mining area further to the east is expected to begin mining ore from mid-year 2026.

Approximately 6 Mt of ore is expected to be mined at Kakula during 2026, which is expected to increase to between 7 and 8 Mt during 2027. Grades are expected to range from 3.5% to 4.5% during this period. Approximately 70% of the ore will be sourced from the western side of the Kakula Mine during 2026, which will reduce during 2027 as new mining areas on the eastern side are opened up. All ore mined from the Kakula Mine will be processed by the Phase 1 and 2 concentrators.

Mining rate of the Kamoa mines targeted to increase to 10 million tonnes per annum in 2027, filling the Phase 3 concentrator and supporting the Phase 1 and 2 concentrators

The combined annualized mining rate of Kamoa 1, Kamoa 2 and Kansoko underground mines (the Kamoa mines) is targeted to increase from approximately 6.5 Mt currently, to approximately 8.5 Mt in 2026 and to over 10 Mt in 2027. Grades from the Kamoa mines are expected to average approximately 2.5% during this period.

Increased mining rates will be supported by a newly commissioned belt at Kamoa 1, new mine accesses at Kansoko Sud to improve efficiency and new mine accesses at Kamoa 2 to increase the number of underground crews. Mining efficiency is also expected to improve through increased end availability and redundancy, as well as other productivity enhancements.

The Kamoa mines are operating in accordance with similar geotechnical expert guidance, incorporating learnings from Kakula.

The increased mining rate will enable the Kamoa mine to feed the Phase 3 concentrator and provide supplementary feed to the Phase 1 and 2 concentrators, as shown in Figure 1.

Total processing capacity of Phase 1, 2 and 3 concentrators to reach 17 million tonnes per annum from 2027

The Phase 1 and 2 concentrators will continue to process ore from the western side of the Kakula Mine and surface stockpiles until Q1 2026 when the stockpiles are depleted. In addition, from Q1 2026, Phase 1 and 2 will be supplemented with an increasing quantity of ore from the eastern side of Kakula, as well as ore trammed from Kamoa.

In 2026, approximately 2 Mt of ore from Kamoa is expected to be processed by the Phase 1 and 2 concentrators. In 2027, this is expected to increase to 2.5 Mt.

The Phase 1 and 2 concentrators have demonstrated combined operating capacity of 10.5 Mtpa, or 5.25 Mtpa per line, since various de-bottlenecking activities were completed.

The Phase 3 concentrator will continue to process at a rate of 6.5 Mt per annum, which has also been demonstrated over many months of operations, fed by the Kamoa mines.

The recoveries of the Phase 1 and 2 concentrators are expected to improve following the completion of Project 95 in Q2 2026, after which recoveries are expected to increase to approximately 95% over time. A similar capital project to increase copper recoveries from Phase 3 to approximately 92% is under consideration but not included in the 2026 or 2027 production profile.

Figure 1. Kamoa-Kakula Copper Complex processing strategy by mining area in 2026 and 2027 (Mt)

Updated life-of-mine integrated development plan on track for Q1 2026; targeting return of annualized copper production to approximately 550,000 tonnes

Work is advancing on track for the updated life-of-mine integrated development plan to be completed by end of Q1 2026. The plan includes a full review of both the Kakula and Kamoa life-of-mine plans, based on Phase 1, 2 and 3 at a processing rate of 17 million tonnes per annum, prior to the Phase 4 expansion. The study will also include an expansion scenario for Phase 4, intended to increasing processing capacity by 6.5 Mt per annum by constructing a duplicate of the Phase 3 concentrator.

Production rates are expected to steadily improve as the Kakula Mine recovery plan is completed, and annualized copper production expected to return to approximately 550,000 tonnes over the medium and long term.

Kakula Mine Stage 2 dewatering progressing well at over 60% complete; high-capacity submersible pumps lowered to continue dewatering efforts

As announced on September 18, 2025, Stage 2 dewatering activities have been underway since early September, when two pairs of high-capacity submersible pumps, with a combined capacity of 2,600 litres per second were installed and commissioned in under six weeks.

Dewatering activities successfully split the flooded areas into discrete western and eastern zones during the month of November. Dewatering from the western side of the mine is 70% complete (measured by total volume of water) as at the start of December and is expected to be fully completed by the end of January by Stage 3 (steady-state) dewatering.

Stage 3 dewatering consists of re-commissioning the existing, water-damaged underground horizontal pump stations which are used during steady-state operations. The rehabilitation work consists of fitting new pump motors, substations and electrical cabling. All the required equipment is on site, and the installation work will take place once access to the horizontal pump stations becomes available. To date, approximately 800 litres per second of Stage 3 pumping capacity has been re-established. Access to an additional 800 litres per second of pumping capacity is expected by year end, with access to a further 600 litres per second of pumping capacity expected in January 2026.

On the eastern side of the mine, Stage 2 dewatering is 60% complete. The first pair of pumps (Pumps 3 and 4) ran dry during the last week of November, as planned, with the water level declining by a total of 38 metres, or approximately 84% from the initial water level measurement. Following an underground survey, Pumps 3 and 4 were repositioned lower by up to 19 metres to enable pumping to continue for a further 3 weeks.

The second pair of pumps (Pumps 1 and 2), which were installed in a deeper section of the mine, as shown in Figure 2, have reduced the water level by 45 metres, or approximately 48% from the initial measurement. Pumps 1 and 2 are expected to continue operating into Q1 2026, as Stage 3 dewatering is ramped up.

Over 2,200 megalitres of water lie below the level of the Stage 2 dewatering pumps, which will be pumped out gradually using the Stage 3 dewatering infrastructure. This existing flooded mine area is not on the critical path for ramping up mining rates on the eastern side of the Kakula Mine, which will be focused on a new mining area on the east beyond a barrier pillar. Future mining will be de-risked by dewatering in advance of the working face, using similar technology to the Stage 2 dewatering system.

Figure 2. A schematic of the underground water levels at the Kakula Mine as at December 1, 2025, overlaid with the underground pumping infrastructure. 

Looking south over the two surface-mounted pump stations that provide the Stage 2 dewatering. Combined, both pumps operate at 2,600 litres per second. 

2026 & 2027 COPPER PRODUCTION GUIDANCE

Guidance figures are on a 100% project basis.

Kamoa-Kakula’s 2026 and 2027 production guidance is based on several assumptions and estimates. It involves estimates of known and unknown risks, uncertainties, and other factors that may cause the actual results to differ materially.

The 2025 production guidance was revised on June 11, 2025 following the seismic activity as reported on May 20, 2025, and associated interruptions in mining operations at the Kakula Mine. The Kamoa-Kakula Copper Complex produced 316,395 tonnes of copper in concentrate for the nine months ended September 30, 2025 and is on track to meet revised full-year guidance of 370,000 to 420,000 tonnes of copper.

Although mining on the western side of the Kakula Mine has restarted, risk factors remain, including the integrity of underground infrastructure once dewatering is complete, the ability to ramp up underground operations, the ability to complete dewatering activities, and the time required to access the new mining areas. The updated 2026 and 2027 production guidance ranges for Kamoa-Kakula are based on an assessment of these factors that management believes are reasonable at this time, given all available information.

Kamoa-Kakula’s adjusted 2025 and 2026 capital expenditure guidance, as announced on October 29, 2025 remains unchanged. Cash cost (C1) guidance for 2026 will be provided with the 2025 full-year financial results in February 2026.

Qualified Persons

Disclosures of a scientific or technical nature at the Kamoa-Kakula Copper Complex in this news release have been reviewed and approved by Steve Amos, who is considered, by virtue of his education, experience, and professional association, a Qualified Person under the terms of NI 43-101. Mr. Amos is not considered independent under NI 43-101 as he is Ivanhoe Mines’ Executive Vice President, Projects. Mr. Amos has verified the technical data disclosed in this news release.

Ivanhoe has prepared an independent, NI 43-101-compliant technical report for the Kamoa-Kakula Copper Complex, which is available on the company’s website and under the company’s SEDAR+ profile at www.sedarplus.ca:

• Kamoa-Kakula Integrated Development Plan 2023 Technical Report dated March 6, 2023, prepared by OreWin Pty Ltd.; China Nerin Engineering Co. Ltd.; DRA Global; Epoch Resources; Golder Associates Africa; Metso Outotec Oyj; Paterson and Cooke; SRK Consulting Ltd.; and The MSA Group.

The technical report includes relevant information regarding the assumptions, parameters, and methods of the mineral resource estimates on the Kamoa-Kakula Copper Complex cited in this news release, as well as information regarding data verification, exploration procedures and other matters relevant to the scientific and technical disclosure contained in this news release.

About Ivanhoe Mines

Ivanhoe Mines is a Canadian mining company focused on advancing its three principal operations in Southern Africa; the Kamoa-Kakula Copper Complex in the DRC, the ultra-high-grade Kipushi zinc-copper-germanium-silver mine, also in the DRC; and the tier-one Platreef platinum-palladium-nickel-rhodium-gold-copper mine in South Africa.

Ivanhoe Mines is exploring for copper in its highly prospective, 54-100% owned exploration licences in the Western Forelands, covering an area over six times larger than the adjacent Kamoa-Kakula Copper Complex, including the high- grade discoveries in the Makoko District. Ivanhoe is also exploring for new sedimentary copper discoveries in new horizons including Angola, Kazakhstan, and Zambia.

Website: www.ivanhoemines.com

Forward-looking statements

Certain statements in this release constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws. Such statements and information involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the company, its projects, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified using words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar terminology, or state that certain actions, events, or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. These statements reflect the company’s current expectations regarding future events, performance, and results and speak only as of the date of this release.

Such statements include, without limitation: (i) statements regarding production guidance of 380,000 to 420,000 tonnes for 2026 and 500,000 to 540,000 tonnes for 2027; (ii) statements that Kamoa-Kakula is continuing to target medium-term production of approximately 550,000, as the Kakula Mine recovery plan is completed; (iii) statements that updated life-of-mine plan for Kamoa-Kakula is on target for completion in late Q1 2026; (iv) statements that copper sales in 2026 are expected to be higher than copper production as the on-site inventory of unsold copper concentrate is destocked by approximately 20,000 tonnes of copper; (v) statements that mining rates at the Kakula Mine are expected to improve gradually through 2026; (vi) statements that selective mining within the existing workings on the eastern side of the Kakula Mine is expected to start in Q1 2026, augmenting rising production rates from higher-grade areas on Kakula’s western side, which is expected to increase production rates to 450,000 tonnes per month, or 5.5 Mtpa annualized, by the end of the quarter; (vii) statements that underground development towards a new mining area further to the east is expected to begin mining ore from mid-year 2026; (viii) statements that approximately 6 Mt of ore will be mined at Kakula during 2026, which is expected to increase to between 7 and 8 Mt during 2027, and that grades are expected to range from 3.5% to 4.5% during this period; (ix) statements that approximately 70% of the ore will be sourced from the western side of the Kakula Mine during 2026, which will reduce during 2027 as new mining areas on the eastern side are opened up; (x) statements that all ore mined from the Kakula Mine will be processed by the Phase 1 and 2 concentrators; (xi) statements that the combined annualized mining rate of Kamoa 1, Kamoa 2 and Kansoko underground mines (the Kamoa mines) is targeted to increase from approximately 6.5 Mt currently, to approximately 8.5 Mt in 2026 and to over 10.0 Mt in 2027, with grades from the Kamoa mines expected to average approximately 2.5% during this period; (xii) statements that increased mining rates will be supported by a newly commissioned belt at Kamoa 1, new mine accesses at Kansoko Sud to improve efficiency and new mine accesses at Kamoa 2 to increase the number of underground crews, and that mining efficiency is also expected to improve through increased end availability and redundancy, as well as other productivity enhancements; (xiii) statements that the increased mining rate will enable the Kamoa mine to feed the Phase 3 concentrator and provide supplementary feed to the Phase 1 and 2 concentrators; (xiv) statements that in 2026, approximately 2 Mt of ore from Kamoa is expected to be processed by the Phase 1 and 2 concentrators, and that in 2027, this is expected to increase to 2.5 Mt; (xv) statements that the recoveries of the Phase 1 and 2 concentrators are expected to improve following the completion of Project 95 in Q2 2026, after which recoveries are expected to increase to approximately 95% over time; statements that a capital project to increase copper recoveries from Phase 3 to approximately 92% is under consideration but not included in the 2026 or 2027 production profile; (xvii) statements that dewatering from the western side of the Kakula mine is expected to be fully completed by the end of January by Stage 3 (steady-state) dewatering; and (xviii) statements that access to an additional 800 litres per second of pumping capacity is expected by year end, with access to a further 600 litres per second of pumping capacity expected in January 2026.

Forward-looking statements and information involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indicators of whether such results will be achieved. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements or information, including, but not limited to: (i) uncertainty around the rate of water ingress into underground workings; (ii) the ability, and speed with which, additional equipment can be secured, if an as required; (iii) the continuation of seismic activity; (iv) the full state of underground infrastructure; (v) uncertainty around when future underground access can be fully secured; (vi) the fact that future mine stability cannot be guaranteed; (vii) the fact that future mining methods may differ and impact on Kakula operations; and (viii) the ultimate conclusion of the assessment of the cause of the seismic activity at Kakula and the impact of same on the final mining plan at the Kamoa Kakula Copper Complex. Additional factors also include those discussed above and under the “Risk Factors” section in the company’s MD&A for the three and nine months ended September 30, 2025, and its current annual information form, and elsewhere in this news release, as well as unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; changes in the rate of water ingress into underground workings; recurrence of seismic activity; the state of underground infrastructure; delays in securing full underground access; changes to the mining methods required in the future; the failure of parties to contracts with the company to perform as agreed; social or labour unrest; changes in commodity prices; and the failure of exploration programs or studies to deliver anticipated results or results that would justify and support continued exploration, studies, development or operations.

Although the forward-looking statements contained in this news release are based upon what management of the company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this news release.

The company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the factors outlined in the “Risk Factors” section in the company’s MD&A for the three and nine months ended September 30, 2025, and its current annual information form.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/276774

On a cloudy winter day, a state government inspector named Ryan Coffield walked into a Family Dollar store in Windsor, North Carolina, carrying a scanner gun and a laptop.

Inside the store, which sits along a three-lane road in a county of peanut growers and poultry workers, Coffield scanned 300 items and recorded their shelf prices. He carried the scanned bar codes to the cashier and watched as item after item rang up at a higher price.

Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50. Kellogg’s Frosted Flakes, Stouffer’s frozen meatloaf, Sprite and Pepsi, ibuprofen, Klondike Minis – shoppers were overpaying for all of them. Pedigree puppy food, listed at $12.25, rang up at $14.75.

All told, 69 of the 300 items came up higher at the register: a 23% error rate that exceeded the state’s limit by more than tenfold. Some of the price tags were months out of date.

The January 2023 inspection produced the store’s fourth consecutive failure, and Coffield’s agency, the state department of agriculture & consumer services, had fined Family Dollar after two previous visits. But North Carolina law caps penalties at $5,000 per inspection, offering retailers little incentive to fix the problem. “Sometimes it is cheaper to pay the fines,” said Chad Parker, who runs the agency’s weights-and-measures program.

The dollar-store industry, including Family Dollar and its larger rival, Dollar General, promises everyday low prices for household essentials. But an investigation by the Guardian found that the prices listed on the shelves at these two chains often don’t materialize at checkout – in North Carolina and around the country. As the cost of living soars across America, the customers bearing the burden are those who can least afford it – customers who often don’t even notice they’re overpaying.

These overcharges are widespread.

Dollar General stores have failed more than 4,300 government price-accuracy inspections in 23 states since January 2022, a Guardian review found. Family Dollar stores have failed more than 2,100 price inspections in 20 states over the same time span, the review found.

Among these thousands of failed inspections, some of the biggest flops include a 76% error rate in October 2022 at a Dollar General in Hamilton, Ohio; a 68% error rate in February 2023 at a Family Dollar in Bound Brook, New Jersey; and a 58% error rate three months ago at a Family Dollar in Lorain, Ohio.

Many of the stores that failed state or local government checks were repeat violators. A Family Dollar in Provo, Utah, flunked 28 inspections in a row – failures that included a 48% overcharge rate in May 2024 and a 12% overcharge rate in October 2025.

The chains’ pricing disparities are drawing increasing attention. In May, Arizona’s attorney general announced a $600,000 settlement to resolve a consumer-fraud investigation against Family Dollar. In October, Colorado’s attorney general settled with Dollar General for $400,000 after its stores failed 15 out of 23 state inspections. Dollar General has also settled with New Jersey, Vermont and Wisconsin, and both companies have settled with Ohio.

Linda Davis, a 64-year-old Family Dollar shopper in Dayton, Ohio, called the state attorney general’s office in February after walking home from the dollar store and discovering that 12 of her 23 purchases had rung up incorrectly. “I’m adding it up in my head as I’m shopping,” she told the Guardian. “But I was way off and I didn’t know why … I thought: Where did I miscalculate? I’ve [only] got so much cash on me.”

Davis, who lives on Social Security, said she could shop elsewhere, but that would involve paying for a bus ride. “I don’t have money like that,” she said.

Both Family Dollar and Dollar General declined interview requests and did not answer detailed lists of questions from the Guardian. Instead, both sent the Guardian brief statements.

“At Family Dollar, we take customer trust seriously and are committed to ensuring pricing accuracy across our stores,” the company said. “We are currently reviewing the concerns raised and working to better understand any potential discrepancies. We continue to be focused on providing a consistent and transparent shopping experience.”

Dollar General said it was “committed to providing customers with accurate prices on items purchased in our stores, and we are disappointed any time we fail to deliver on this commitment”. In one court case in Ohio, Dollar General’s lawyers argued that “it is virtually impossible for a retailer to match shelf pricing and scanned pricing 100% of the time for all items. Perfection in this regard is neither plausible nor expected under the law.”

The Guardian’s examination of inspection failures by the two chains was based on record requests to 45 states and more than 140 counties and cities in New York, Ohio and California, along with court documents and public databases.

In nearly half of US states, information about whether customers are being overcharged was limited or unavailable. Many states do little or nothing to monitor retail stores’ pricing practices. Some, like Maryland, Idaho and Washington, do no random inspections, responding only to consumer complaints. Illinois, South Carolina and others don’t inspect at all. In 2020, auditors in Kansas revealed that these inspections were a low priority in many states. “Consumers can check price accuracy themselves,” they wrote.

Even in states with tougher enforcement, financial penalties don’t always solve the problem: In the 23 months after Dollar General agreed in November 2023 to pay Wisconsin $850,000, its stores failed 31% of their price inspections. During the same period, Wisconsin’s Family Dollar stores failed 30% of their state inspections.

According to industry watchers, employees and lawsuits, overcharges often stem from labor practices within the dollar-store sector. When a company changes prices, the registers are updated automatically. But the shelf prices are not: someone needs to remove the old labels manually and replace them with new ones. In an industry known for minimal staffing, workers don’t always have time to put up the new shelf tags.

In many instances, customers may not notice that they are being charged more than what’s listed on the shelf. If they notice at the register, they may decide to put those items back – or ask a store employee to honor the shelf price.

Dollar General, in its statement, said its store teams “are empowered to correct the matter on the spot”. But customers and current and former employees said that while some dollar stores will correct the price, others refuse to make fixes at the register – and turn away customers who return later and request a refund.

“Overcharging even by a small amount per item can strain a really tight budget,” said Elizabeth M Harris, acting director of the New Jersey division of consumer affairs. “If you’ve ever gone into any store … with a child like I have, there’s chaos at the checkout counter and you’re not really paying attention.” With items being rung up quickly, she added, “consumers are trusting that the retailer is actually charging them the price that’s displayed.”

Her state settled in 2023 with Dollar General for $1.2m after finding more than 2,000 items rung up as overcharges across 58 stores.

Even if the overcharges paid by dollar-store customers are accidental, they still reflect the industry’s decision not to correct a problem it has known about for years, according to Kennedy Smith, a researcher at the non-profit Institute for Local Self-Reliance, which works to protect communities from negative impacts of big corporations.

“If they’re called on it, they’ll say, ‘Oh yeah, our mistake,’” Kennedy said. “Until they’re called on it, they’re happy to let those scanner errors bring in the millions.”

‘The cheap stuff’

When consumers feel economic pain, as they do now thanks to rising costs exacerbated by tariffs, price gouging and other inflationary pressures, one place they turn to are dollar stores. These one-stop centers for inexpensive food, clothing and housewares tend to sell in small quantities, one $1 chicken-noodle-soup can at a time. And they are relatively easy to get to: 75% of Americans live within five miles of a Dollar General, according to the company.

The industry’s largest player is flourishing. Todd Vasos, the CEO of Dollar General, told investors in August that his company’s quarterly sales had increased 5% over the same period last year. Some of that growth, he said, came from middle- and higher-income shoppers tightening their belts. But the company’s low-income “core customers” were spending more at the chain too.

Those customers have been the industry’s niche from the beginning. When a 48-year-old former tobacco farmer and traveling salesman named James Luther Turner opened JL Turner and Son Wholesale Dry Goods, Shoes, Notions and Hosiery in Scottsville, Kentucky, in 1939, his mission was “to sell the cheap stuff to the poor folks”. (Someone else had cornered the market on “selling the good stuff” to Scottsville’s rich folks.)

By 1955, Turner and his eldest son, Hurley Calister “Cal” Turner Sr, were overseeing 36 stores in small southern towns. Cal Sr decided that year to co-opt the “Dollar Days” sales at big department stores and to open outlets featuring a single low price of $1. Adopting a name that nodded to the general store, he designed a bold black-and-yellow sign and that June christened the first Dollar General in Springfield, Kentucky.

Dollar General now operates over 20,000 stores in 48 states – more than any other retailer of any kind in the US. (It has long since abandoned its $1 price limit.) Though it has more than 195,000 employees and net sales of $40.6bn, the company still calls itself “America’s neighborhood general store”.

Family Dollar began in 1959 in Charlotte, North Carolina, and now operates 8,000 stores nationwide. For most of the past decade, it was owned by yet another chain, Dollar Tree, but the two brands divorced last summer.

What Dollar General and Family Dollar have in common is a conspicuous presence in places that don’t offer a lot of other retail: low-income urban neighborhoods and rural towns like Windsor.

A predominantly Black county seat of 3,400 on North Carolina’s coastal plain, Windsor used to be a retail hub. “All the streets were full on a weekend,” recalled Russell Parker, a 66-year-old retired pilot. “There were people everywhere, people playing music.” And people spending money: at the fish market, the cobbler, the independent groceries, the automotive-supply store. But today Windsor’s downtown – like many rural main streets – is pocked with empty storefronts. The town never fully recovered from Hurricane Floyd, in 1999. “Every young person that graduates from high school gets on the first thing smokin’ to somewhere else,” Parker said.

One supermarket remains on the edge of town. Shopping for clothes often means driving to the next county, at least for those who drive. But Windsor does have three stores that help fill the gap: a Dollar General and two Family Dollars.

At the Family Dollar that failed multiple inspections, some regulars remain vigilant. Chris Outlaw, a 54-year-old hemodialysis technician, shops there because it’s near his house and workplace. Experience has taught him to buy only a few items at once and to examine his receipts. Not all his neighbors do the same. “I’ve seen people in there with baskets full,” he said. “You can just imagine how much of that stuff didn’t ring out right, and they had so much they couldn’t catch it.”

‘Big old savings’

Customers walking into Dollar General stores are often greeted by a bright yellow sign blaring “Hello, Low Prices”– and by as many as 10,000 items cramming shelves and, often, cluttering the aisles.

“They will send you more than what you need of any product,” said Stephanie, a former lead sales associate in Louisiana. “Your shelf can only hold 10 Glade air fresheners, right? But they will send you 50.”

Rarely is there enough staffing, current and former employees say, to complete all of the tasks expected of them, including stocking shelves, ringing up sales, looking out for shoplifters, mopping floors – and updating price changes and sales stickers.

More than two dozen current and former employees of the chain in 15 states interviewed by the Guardian agreed that price discrepancies are the byproduct of the company’s employment policies. (Most, including Stephanie, spoke on the condition of anonymity because of fear of retaliation.)

Often there are only one or two people on duty. “You’re lucky if you get to work two to four hours of your eight- to 13-hour shift with another human being,” a former assistant manager in Illinois said.

Every Tuesday, employees are supposed to print and post hundreds of shelf stickers representing price changes already updated in the computer system. On Saturdays, stacks of sales stickers arrive; often, workers are expected to remove all the previous week’s stickers by 5pm and put up new stickers – as many as 1,000 of them – before closing up that night. Stickers fail to get put up, they fall off easily, and they are confusing, with some sales instant and others linked to coupons. “I threw away tags sometimes, to keep me or a coworker out of trouble,” Stephanie admitted.

A former store manager at a Dollar General in Connecticut noted that many of his customers were poor or disabled enough that they got by on public assistance. “I didn’t want people to get screwed over, but I knew that it was happening,” he said. “If I’m in the store, I’m gonna try to do the best I can for them. But at the end of the day, they’re still probably gonna get overcharged for a few things.”

Dollar General, in its statement, said it schedules time each week for “price change execution”, among other measures to ensure accuracy.

Ten current and former employees in eight states claimed that – along with allowing pricing errors caused by understaffing and overstocking – some Dollar General stores engage in a tactic designed to fool customers: special sales that don’t actually lower the price of an item. A manager from Florida, for example, sent the Guardian two photos of price stickers for Café Bustelo ground coffee. In the first photo, a sticker said “SALE” in white block letters against a red background. It advertised a markdown from $7.95 to $6.50. In the second photo, the top sticker had been peeled away to show the original price: $6.50.

A sales associate from Illinois sent photos showing cutlery with what he said was a fake original price of $8.50. “It’s trying to say that you’re making this big old savings by buying this item here,” explained the employee, “when it’s actually always been $6.95.”

Dollar General declined to comment on these workers’ claims.

‘We have little choice’

When the Ohio attorney general, Dave Yost, sued Dollar General in 2022, he submitted 114 pages of customer complaints as part of the case.

One of them came from Melanie Hutzler, who lives in Canton without a car and whose mobility is limited by arthritis and multiple sclerosis. Hutzler, 51, relies on government food assistance and said she was cautious about spending money. At the time of her complaint, she could reach two food stores on foot. Getting to the Save A Lot grocery required crossing a busy road, but getting to a Dollar General did not.

“Every single time we went into that store, something would ring up wrong,” she told the Guardian. “They never had a manager there that would fix the prices.” Hutzler said she would walk the cashier over to the shelf and point out the listed price, only to be told, “There’s nothing we can do about it.”

Other Ohioans expressed similar frustrations. “My 87-year-old mother and I have frequented Dollar General for years, and there have been innumerable times we have made purchases that were well higher than advertised,” wrote Robert Hevlin of Dayton. “My mother and I have literally lost thousands over the years with this company, but both of us being on Social Security, we have little choice in where we shop.”

In September 2023, Yost reached a $1m settlement with Dollar General, which he said had error rates at some stores that ran as high as 88%. In February 2024, he announced a $400,000 settlement with Family Dollar to resolve similar allegations. Most of that money went to charitable organizations that distribute food and personal-care items.

Both chains agreed in the settlements to tighten their pricing practices. Yost’s office continues to receive complaints. A Dollar General customer in Garfield Heights said in February that he was charged $6.35 for a carton of eggs with a shelf sticker of $5.10, but the “cashier was too busy having a personal call on her cell phone to address the price discrepancy”. The same month, a Family Dollar shopper in Genoa reported being charged $2.65 for cough medicine listed on the shelf at $1.50. “I was told by the cashier that there was nothing that could be done about it,” the complaint said.

Over in Missouri, state officials are pursuing a lawsuit that accuses Dollar General of “deceptive” pricing practices. The suit, filed in 2023, says 92 of the 147 stores the state checked failed their inspections, with discrepancies as high as $6.50 an item.

The companies declined to comment on these state lawsuits.

Dollar General has also been hit with private lawsuits, including several filed by its shareholders. In a document filed in August in federal court in Nashville, lawyers for Dollar General investors argued that understaffing, poor inventory control and overcharging were all interrelated.

The investors allege that the company deceived them by portraying itself as financially sound. In truth, the court filing says, “Dollar General’s inventory management processes were broken, which caused a massive bloat of excess product to clog the company at both its distribution centers and stores, and its workforce had been slashed.” These problems gave rise to price discrepancies and other “dire consequences”, the court filing asserts.

The filing includes the stories of 36 former employees who claimed direct knowledge that Dollar General managers and executives knew about the problems. Several reported notifying the top leadership directly. “All the prices were off in the stores,” said one of those ex-employees, a manager who monitored inventory levels in Ohio and Pennsylvania. She claimed to know firsthand, based on calls she participated in, that company vice-presidents and regional directors were aware of the “huge” price mismatches.

Dollar General, in response, said that the testimony of a handful of ex-workers does not prove that it misled investors. In their “years-long search for fraud”, the company’s lawyers claimed, the shareholders “came up empty”.

Earlier this year, a federal judge in New Jersey halted a class-action lawsuit against Dollar General filed by a shopper who said he was overcharged for groceries. Dollar General argued that when customers create accounts – for example, by downloading the company’s mobile app – they agree to use arbitration to resolve disputes and forfeit the right to file class-action suits. The judge agreed.

This victory for Dollar General threw up an obstacle for customers seeking justice. “Who’s going to bring a consumer arbitration with a $225 filing fee over a 50-cent overcharge?” asked Marc Dann, a former Ohio attorney general whose law firm filed the New Jersey case. “They’ve essentially closed the door to the courthouse to people.”

Dann’s firm did reach a settlement with Dollar General in another case this fall, though the details have not been made public.

‘This endless cycle’

The dollar-store chains describe themselves as mission-driven companies. “Our stores are conveniently located in neighborhoods, and often in ‘food deserts’ where other stores choose not to locate,” Family Dollar says on its website. Dollar General takes pride in offering value to families who, according to CEO Vasos, “have had to sacrifice even on the necessities”.

The industry’s critics say the cause and effect are reversed. “Dollar stores are often seen as a symptom of economic distress,” said the Institute for Local Self-Reliance’s co-executive director, Stacy Mitchell. “What we found is that they’re, in fact, a cause of it.” Sometimes, she said, a chain dollar store will open near an independent grocer and skim off enough of its business that it is forced to close. That limits the availability of fresh produce and forces shoppers to buy more packaged and processed foods.

In a statement, Dollar General said its stores often “operate along with local grocers and business owners to collectively meet customers’ needs”. It added that 7,000 of its 20,000 stores sell fresh produce and that the company also partners with local food banks “to further help nourish our neighbors in need”.

The people enduring the effects of hollowed-out local economies – and getting hit with overcharges at dollar-store chains – include residents of Essex county, New York. The county, tucked among the stately pines of the Adirondack Mountains, has a population of 37,000. It has five Dollar Generals and two Family Dollars. All seven regularly fail pricing-accuracy tests. The Dollar General in Port Henry, which sits on the shores of Lake Champlain, was fined $103,550 for failed inspections between November 2022 and June 2025.

Over the course of seven inspections, 279 out of 700 tested items were overcharges – a combined error rate of just under 40%. One inspection yielded a 78% error rate, including overcharges on Flintstones vitamins, Peter Pan peanut butter and Prego pasta sauce.

The Port Henry store is five miles from the Mineville Dollar General, which occupies a lonely stretch of country road across from an auto-repair shop with spare parts littering its lawn. Down the block, an abandoned church presides over a stretch of grass that looks like it hasn’t been mown for years.

Aside from a whiskey warehousing operation and a health center, opportunities for employment are limited. The high-security prison built atop the iron mine for which Mineville is named closed in 2022, taking 100 jobs with it.

The local playground is littered with trash, cigarette butts and the occasional syringe. The town “is nice from the outside”, said Kaitlyn Miller, a 26-year-old Port Henry resident who lives with her mother, six-year-old daughter and two-year-old son. But “you hear about a lot of crack-den places, like blowing up or getting busted.’” Drug use is rampant in the county, which is 92% white. “Everybody around here seems to be on pain meds or buying someone else’s, because they’re also working themselves to death.”

When it comes to grocery shopping near Miller’s home, the choice is between the two Dollar Generals and a gas station/convenience store. “We live in a food desert,” she said, “even though you would think living in all this farmland, we would have more access.”

There is a Walmart 30 minutes away, in Fort Ticonderoga. Miller said she recently bought salmon there only to arrive home and discover that the $20 piece of fish had gone bad. “So I had to go to Dollar General and get the Stouffer’s,” she said, adding that she feels “caught in this endless cycle of never having food that will nourish me and my family, and instead having to get 2,000 grams of sodium because at least it has meat”.

The region’s economic straits put regulators in a bind when it comes to overcharges. Daniel Woods, the county’s director of weights and measures, said in 2023 that he didn’t always assess the full penalty on violators. “We’re not trying to put people out of business,” he told a local newspaper. “In some towns that’s their [only] store. I don’t want to pull that away from people, but at the same time, I’m trying to fix the problem.”

On the way out

When Coffield, the North Carolina inspector, visited the Windsor Family Dollar in April 2023, the pricing issues seemed to have abated. Of the 300 items he scanned, he only found five overcharges: incontinence pads, laundry sanitizer, two coffee products and, again, Red Baron pizza. With an error rate below the state’s 2% threshold, the store passed its inspection, and it did so again in November 2024.

But customers still reported problems. Chris Outlaw, the hemodialysis technician, stopped by the Family Dollar earlier this year and noticed a sale: a $1.25 savings on five bags of Cheez Doodles. He bought them but discovered on the way out that he had been charged the regular price. The manager refused to refund the difference, Outlaw said, because he had already walked through the exit door.

Another time, he saw some discounted socks near the counter that he thought would make good Christmas gifts. “I was like, ‘Oh, I like these socks, so I’ll probably give them to somebody,’” he recalled. “Nice, plushy socks.” But they rang up at a higher price, so he left the store without them.

During a visit in August, a Guardian reporter found the Windsor Family Dollar closed for much of the afternoon. “Be Back Soon!” read a handwritten sign taped to the door. Two waiting customers said that they frequently paid prices higher than the shelf listing, including a cook whose nearby restaurant buys some of its ingredients there. “It is aggravating,” she said. “Very aggravating.”

Workers reopened the doors after a few hours. Inside, carts of unshelved dog food and other merchandise blocked the aisles. The Guardian compared the prices of 15 items. Two of them rang up higher than advertised, including a frying pan set that was $10 on the shelf and $12 at the register. Though the cashier offered to honor the lower prices, that was still an error rate of 13% – more than six times the state’s standard.

Ensuring global security at an international level, responding proactively to today’s increasingly complex and rapidly evolving cyber threats. With this aim, the new Regional Cyber Center was inaugurated in Kuala Lumpur (Malaysia), strengthening Leonardo‘s position as a technological leader in global security.

Leveraging the integration of Leonardo’s proprietary technologies in cyber security, physical security and mission-critical communications, and its experience in strategic sectors in Italy and abroad, the new Center will contribute to global protection against new hybrid threats, strengthening digital autonomy and supporting the sustainable development of Malaysia and the entire region.

The new regional hub will be part of Leonardo’s Global CyberSec Center (GCC), which includes the headquarter in Chieti (Italy) and the federated Regional Cyber Centers in Brussels (European Union), Bristol (United Kingdom) and Riyadh (Saudi Arabia). The GCC’s global network is designed to ensure cyber mission assurance for strategic customers – including defence organisations and critical national infrastructures – by pooling processes, information on threats, and cutting-edge technologies. This federated model ensures both the ability to operate on a global scale in preventing, countering and responding to new threats, and the control of strategic data, fully respecting individual national sovereignty.

The court rejected a claim by CEK Investment that a default rate of interest of 4% per month (compounded), under a loan it obtained from London Credit, amounted to a penalty clause.

Deputy High Court Judge Richard Farnhill said 4% was above market rates but not, itself, unreasonable and represented the lender protecting itself in offering high-risk, short-term lending, which was legitimate.

Eilidh Smith, a financial services disputes expert with Pinsent Masons, said the decision provided clarity in respect of the application of the test for penalty clauses, as pronounced by the UK Supreme Court in its judgment in Cavendish Square Holdings v Makdessi in 2015, to default interest rates. 

The Makdessi judgment established that a clause will be an unenforceable penalty if it is a secondary obligation – such as an obligation to pay default interest if a primary obligation under a loan agreement, such as a repayment obligation, is breached – and imposes a detriment on the party in breach which “is out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation.”

“This judgment provides guidance as to how courts will approach the application of the Makdessi test to default interest rates in lending, which lenders will need to be aware of,” Smith added.

“It is an indicator that even above market rates can be enforceable, so long as they are commercially justifiable and such justification can be evidenced. This will be welcome news particularly to lenders offering high risk lending, such as bridging loans.”

The long-running case revolved around a £1.88m bridging loan CEK had obtained from London Credit, secured against various properties including the family home of CEK’s directors Mr and Mrs Houssein, which carried interest of 1% per month, plus the 4% per month default interest. London Credit had alleged that CEK was in breach of the terms of the agreement and took enforcement action, including seeking default interest. 

The particular event of default on which CEK relied was that the Housseins resided at the family home contrary to a non-residence requirement in the loan agreement. After London Credit appointed fixed charge receivers to sell the properties the loan had been secured against, CEK and the Houssein family raised the action, arguing that the default interest rate was a penalty clause.

In June 2023 the High Court had ruled that the default ratewas in fact an unenforceable penalty, but this was overturned by the Court of Appeal the following year on the basis that the High Court judge had applied the wrong test, and the issue was sent back down for the High Court judge to reconsider.

“While the decision will be welcomed by lenders, it does demonstrate the need for careful consideration of any proposal to apply a single or ‘static’ default rate of interest in the event of breaches of any of a number of different primary obligations – for example, non-payment by the contractual repayment date and breach of a non-residence requirement,” explained Emilie Jones, a commercial litigation expert with Pinsent Masons.

“The court in this case found that, where this is the approach taken, it is necessary to consider the legitimate interests underlying each of the primary obligations and whether the default interest is extortionate by reference to any of them.  As the judge explained: “If, by reference to any one interest, the provision is extortionate, it fails in relation to all of them.” 

“In this case, the judge identified a number of categories of legitimate interests for the lender which were protected by the default interest rate and concluded that the rate was not extortionate in relation to any of them.  For example, the lender had a ‘very strong interest’ in repayment of the loan, but also had a ‘strong interest’ in the non-residence requirement given the potentially ‘catastrophic consequences’ of providing loans to individuals secured against their primary residence given London Credit’s status as an unregulated lender.

“The default interest rate was not extortionate by reference to either of these interests, nor by reference to further interests which the judge labelled the security interest, the credit risk interest and the representations interest.

“It will, however, be important for lenders who are considering applying a single default interest rate in the event of breaches of diverse primary obligations to consider whether the rate can be justified by reference to legitimate interests underlying each and every one of those primary obligations, and to record their rationale.”

On September 30, 2025, the Supreme People’s Court (SPC) released the Interpretation of the Supreme People’s Court on Several Issues Concerning the Implementation of the Company Law (the “draft judicial interpretation”). This 90-article draft consolidates and revises the Provisions on the Implementation of the Company Law (I)–(V), forming the first comprehensive systematic update to China’s Company Law judicial interpretations since their gradual introduction beginning in 2006. 

This article is the third in our series on the draft judicial interpretation. It examines two major parts of the document: nominee shareholders and the protection of investor rights, including issues of actual investors, disclosure, defective capital contributions, and enforcement and equity transfers and preemptive rights, including acquisition of equity, conflicting transfers, the legal effect of the shareholder register, and the exercise of statutory right of first refusal in both voluntary and judicial transfers. 

Nominee shareholders and protection of investor rights 

Disclosure of the actual investor 

Article 31 of the draft judicial interpretation, which revises Article 24 of the Company Law Judicial Interpretation (III), addresses how actual investors in limited liability companies (LLCs) can obtain legal recognition when shares are held in another person’s name. 

The article first defines the parties to litigation in such cases. When an actual investor seeks recognition of shareholder rights, the investor is the plaintiff, the company is the defendant, and the nominee shareholder is a third party. Other shareholders may also participate as third parties, clarifying the legal roles in nominee shareholding disputes.  

It then sets out two conditions – the “disclosure (显名) conditions” – under which courts should recognize the actual investor as a shareholder and order related registration changes unless otherwise stipulated by laws and regulations or the Articles of Association (AoA): 

1. The company, by resolution of the shareholders’ meeting, acknowledges the investor’s shareholder status; or
2. More than half of the other shareholders agree that the actual investor may exercise shareholder rights, or​ more than half of the other shareholders know or should have known the fact of equity holding on behalf of another party, and have not raised any objection to the actual exercise of shareholder rights by the actual investor. (Alternatively: A majority of the other shareholders consent to or are aware of the nominee arrangement and do not object to the investor exercising shareholder rights.) 

If these conditions are not met, the investor can request the sale or auction of the shares to recover their capital. The revised article also allows the nominee shareholder to claim compensation if agreed in the contract, or otherwise based on their participation and benefits. Either party may seek damages if any losses are caused by the fault of the other party.  

The article also requires courts to carefully assess whether a genuine nominee relationship exists. Relevant factors for assessing this relationship include the existence of a valid agreement, actual payment of capital, the source and capacity of funds, and the relationship between the parties. 

Invalidity of nominee shareholding arrangements  

Article 32 of the draft judicial interpretation, a newly added provision, defines when nominee shareholding agreements are invalid and outlines the legal consequences.  

Nominee arrangements are invalid in the following situations:  

1. They involve financial institutions that are in violation of laws or regulatory rules affecting financial stability;
2. They concern listed company shares that breach securities regulations or disclosure obligations;
3. They are used by civil servants or similar persons to evade restrictions on profit-making activities; or
4. Other cases violating laws or public policy.

When a nominee agreement is declared invalid, courts determine the treatment of shares based on the actual investor’s eligibility. If the investor meets the disclosure conditions outlined in Article 31, the court may recognize them as the shareholder. Otherwise, the shares may be sold or auctioned, and proceeds or compensation are distributed under the Civil Code. This follows the principle of restoring the parties to their pre-contract state or, if impossible, equitably allocating interests.  

If the agreement involves potentially illegal activity or unjust enrichment, courts must report or refer the matter to the relevant regulatory or criminal authorities.   

Unauthorized disposal by nominee shareholders  

Article 33, which is also revised Article 24 of the Company Law Judicial Interpretation (III), governs cases where a nominee shareholder transfers, pledges, or otherwise disposes of shares without the actual investor’s consent.

If such unauthorized actions occur, the actual investor may request that the transferee return the shares or confirm that a pledge was not validly established. Courts generally uphold such claims unless the transferee acquired the shares in good faith under Article 311 of the Civil Code.

A presumption of good faith applies: the transferee is deemed bona fide unless the actual investor proves that the transferee knew or should have known of the nominee arrangement.

This shifts the evidentiary burden to the actual investor, aligning with commercial appearance and transaction reliability principles.

If the unauthorized disposal causes losses, courts will support damage claims against the nominee shareholder.

Company claims for defective capital contributions

Article 34 refines rules for liability in defective or incomplete capital contributions under nominee shareholding structures, amending Article 26 of Company Law Judicial Interpretation (III).

Under the revised article, in a shareholding arrangement where a shareholder has failed to fully pay their capital contribution obligations, if the actual investor meets the disclosure conditions outlined in Article 31, and the company sues for unpaid capital, the court will hold the investor liable. The investor cannot avoid liability by arguing that they are not on the shareholder register.

If the company sues the nominee shareholder instead, the nominee cannot simply deny responsibility. However, the nominee may request to add the actual investor as a third party. If the nominee proves the investor meets the disclosure conditions, the court may guide the company to adjust its claim toward the actual investor. If the company refuses, the case will be dismissed.

The article also specifies that the company cannot demand joint and several liability from both the nominee and the investor, and that it must select one responsible party.  

Creditors’ claims for defective capital contributions

Article 35, a newly added article, extends the principles outlined in Article 34 to company creditors. When a shareholder in a nominee arrangement fails to fully contribute capital, creditors may sue either the nominee or the actual investor within the limits of Articles 21 to 24 of the draft judicial interpretation. Courts apply the framework outlined in Article 34 to determine liability.  

This reflects the principle that nominee shareholding is an internal company arrangement and cannot defeat external creditor claims. Creditors can therefore pursue either party to ensure that corporate capital remains available for debt repayment.  

Additionally, the article states that when a nominee shareholder transfers shares to the actual investor, courts must determine which of the following two legal relationships applies: 

1. A genuine equity transfer; and
2. Recognition of the actual investor’s ownership.

The issue must also be handled by the courts under the provisions of Article 34. 

By closing this loophole, Article 35 prevents evasion of capital obligations through delayed registration or proxy holding, ensuring creditors’ protection and the integrity of corporate capitalization.  

Protection of actual investor equity from enforcement 

Article 36 of the draft judicial interpretation, a newly added provision, clarifies when an actual investor can prevent enforcement against equity registered in the name of a nominee shareholder, and when creditors may instead execute against that equity to satisfy debts.

Find Business Support

Specifically, when a creditor seeks compulsory enforcement over equity recorded under the nominee’s name, an actual investor who either fulfills the disclosure conditions in Article 31 or has fully paid all subscribed capital can file an action for execution objection requesting that the equity be excluded from enforcement. If these requirements are met, the court must uphold the objection. However, this protection is not unlimited, and if the actual investor fails to raise the objection within a reasonable time after the court’s first seizure of the equity, they lose the ability to prevent enforcement, even if they otherwise qualify for recognition.

The article also addresses the reverse situation in which enforcement is initiated by the monetary creditor of the actual investor. If that creditor can show that the actual investor satisfies the disclosure conditions or has fully completed capital contributions, the court must allow enforcement directly against the equity registered under the nominee’s name. In this case, the nominee shareholder cannot block enforcement simply by pointing to the shareholder register or company registration records. 

Validity and performance of valuation adjustment mechanisms

Article 37 of the draft judicial interpretation, a newly added provision, addresses the validity, enforceability, and limits of valuation adjustment mechanisms (VAMs, also commonly referred to as bet-on agreements).

The article first upholds the general validity of VAMs, stipulating that courts should not invalidate VAM terms on the grounds that the agreement stipulates that if the company fails to meet agreed performance targets or fails to achieve listing conditions within a certain period, the company or its shareholders or actual controller will repurchase the shares or assume monetary compensation obligations, unless exceptions are otherwise stipulated in the interpretation. 

The article then clarifies that courts will not support the following requests regarding VAMs: 

• A request for continued performance of a VAM in the event that an investor enters into a VAM with a company, and the company fails to legally fulfill the capital reduction procedure or legally distribute profits.
• A request by the investor for the company to bear liability for breach of contract or guarantee liability based on such agreement, if the parties agree that the company will bear liability for breach of contract or provide collateral due to the company’s failure to legally fulfill the capital reduction procedure or legally distribute profits. 

However, the article also clarifies that where a third party provides a guarantee, the court will support the investor’s request for the third party to bear the guarantee liability. 

Article 37 confirms the validity of VAMs in principle but ties their enforceability to strict adherence to statutory processes. To mitigate risk, investors should secure guarantees from shareholders, actual controllers, or third parties rather than relying on direct contractual penalties against the company for procedural failures. 

Characterization and enforcement of equity repurchase agreements 

Article 38 of the draft judicial interpretation, another newly added provision, creates a structured framework for three common forms of equity repurchase arrangements: conditional repurchase, conditional repurchase with investor choice, and fixed term repurchase mechanisms.

Find Business Support

The first paragraph addresses conditional repurchases, where equity is transferred to the investor, and the shareholder must buy it back once a defined condition occurs. In these arrangements, the investor is treated as a real shareholder before the repurchase is completed and must bear shareholder obligations, including outstanding capital contribution responsibilities. In disputes, the company must be added as a third party, and any judgment must specify that, once the shareholder pays the repurchase price, the company must update the shareholder register and complete registration. If the shareholder cannot pay, the investor may auction or sell the equity and satisfy its claim from the proceeds.

The second paragraph concerns conditional repurchase agreements with investor choice. Once the triggering condition occurs, the investor must exercise their repurchase option within the agreed period or, if none is specified, within a reasonable period after the shareholder issues a demand. Failure to exercise the option in time bars the repurchase claim unless the shareholder consents, thereby ensuring transactional certainty.

The third paragraph governs fixed term repurchases, where equity is transferred as part of a financing arrangement requiring the shareholder to repurchase it at maturity with principal plus premium. When such agreements function substantively as security interests, courts apply the rules on equity transfer-as-collateral in the Civil Code’s Security Interest Interpretation. However, if the investor actually exercises shareholder rights in a manner exceeding the security purpose, the relationship is re-characterized as a conditional repurchase under paragraph one, with all corresponding shareholder obligations. 

Shareholder requests for share repurchase 

Article 39 introduces a clearer exit right for minority shareholders where controlling shareholders abuse their rights to the extent that participation in company management or the realization of investment returns becomes impossible.

The court will support a request by shareholders of a company to repurchase their shares at a reasonable price if a controlling shareholder of a company abuses their shareholder rights and prevents the other shareholders from participating in the company’s management or obtaining investment returns. Moreover, the court will not support a defense raised by the company that the controlling shareholder has already borne liability for damages in accordance with Article 21, Paragraph 2 of the Company Law.

If, instead, a controlling shareholder of a company abuses their shareholder rights, causing losses to other shareholders, but does not prevent the other shareholders from participating in the company’s management or obtaining investment returns, and the other shareholders request the controlling shareholder to bear liability for damages, then the court will support such a request. However, in this instance, the court will not support a request by the other shareholders of the company to repurchase their shares. 

When shareholders request the company to repurchase their shares, the repurchase price of the shares must be clearly specified. The court will, in conjunction with the adversarial proceedings between the parties, consider a variety of factors such as the number of shares transferred, the company’s net assets as recorded in the previous year’s balance sheet, and the transaction prices of shares in the company and similar companies within the past six months to determine a reasonable price for the shares. If it is still difficult to determine the price, it can be determined through judicial appraisal or other means. 

Equity transfers and preemptive rights 

Equity acquisition in LLCs 

Article 40 of the draft judicial interpretation, a new provision, clarifies at what point a transferee in an LLC legally acquires equity and obtains shareholder status. 

These are stipulated thus: 

• If parties transfer shares in an LLC, except where it is legally required that the contract requires approval, the transferee acquires the shares from the date of their registration in the shareholder register.
• However, ff the company does not maintain a shareholder register, then the transferee acquires the shares from the date they actually exercise their shareholder rights or notify the company of the share transfer. 

Additionally, the article stipulates that if the transferee is registered in the shareholder register but the change of registration has not been completed with the company registration authority, and the transferor’s monetary creditors apply for enforcement against the shares in the transferor’s name, the court will support the transferee’s request to exclude enforcement. This means that the transferee’s share rights are effective even if the change of registration has not been completed, and the transferor’s debtors cannot claim rights in this regard. 

Conflicting transfers (one share sold twice) 

Article 41 of the draft judicial interpretation, which is an amendment of Article 27 of the Company Law Judicial Interpretation (III), addresses disputes arising from double transfers of the same equity. 

In a scenario in which a share transfer agreement has been concluded but the change of registration has not been completed, the original shareholder disposes of their shares through transfer, pledge, or other means, and a third party claims to have acquired the shares or established a pledge on the shares, the court will refer to the unauthorized disposition rule of Article 311 of the Civil Code. 

If the transferee claims that the third party is not acting in good faith, the court will consider a range of factors such as: 

• Whether the company maintained a shareholder register when the third party acquired the shares or established the pledge;
• Whether the transferee was recorded as a shareholder in the shareholder register;
• Whether the shareholder register record is consistent with the company registration; and
• Whether the third party inspected the shareholder register or company registration, and asked the company about the share transfer. 

In these circumstances, the court will support a request by a third party or the share transferee who has not legally acquired the shares or established a pledge for the transferor to bear liability for breach of contract based on the contract. The court will also support requests by the transferee that the directors or senior managers who are at fault for failing to promptly complete the change of registration bear liability for damages in the case that a third party acquires equity or pledge rights in good faith. However, the liability of the directors or senior managers at fault may be reduced if the transferee is found to have failed to promptly cooperate in completing the change of registration. 

Validity of shareholder register entries 

Article 42, a new provision, defines when entries in the shareholder register have legal effect and how courts should address inconsistencies among contracts, internal records, and registration filings.

The article first confirms that the court will not support a claim that a transfer agreement is invalid on the grounds that it violates provisions of the law in cases where the capital contribution obligations stipulated in an equity transfer agreement are inconsistent with those stipulated in Article 88 of the Company Law. This means that the provisions of an equity transfer agreement have a higher legal effect than those stipulated in Article 88 of the Company Law.

However, such an agreement cannot be asserted against the company or its creditors, and the court will not support a claim from a party that the relevant agreement has been approved by the company through a shareholders’ meeting or board resolution and asserts that they should bear liability according to this agreement. 

Equity transfer under subscribed capital contribution 

Article 43, a new provision, details how existing shareholders may exercise statutory preemptive rights when another shareholder transfers equity to a non-shareholder.

It clarifies that when a shareholder transfers equity that has not yet reached the capital contribution deadline, and the statutory grounds for acceleration of maturity have been met, the court will not support the company, company creditors, or other parties that request the transferor to bear liability or the transferor and transferee to bear joint and several liability within the scope of insufficient capital contribution, as stipulated in Article 88 of the Company Law. However, the court may organize the parties to fully examine and debate the application of law and related factual issues as the focus of the dispute, and then directly make a judgment in accordance with Article 88 of the Company Law. 

In the enforcement of monetary claims, if the applicant for enforcement applies to change or add the shareholder transferring equity that has not yet reached the capital contribution deadline as the judgment debtor, the court will reject the application for change or addition and inform the applicant to file a separate lawsuit. If the applicant is dissatisfied with the ruling, then they may apply to the higher-level court for reconsideration. However, a directly filed objection to enforcement will not be accepted. 

Equity transfer in cases of incomplete capital contribution 

Article 44, an amendment of Article 18 of the Company Law Judicial Interpretation (III), outlines the allocation of liability when equity is transferred before capital contributions have been fully paid, and clarifies how responsibility is determined in cases involving insufficient contributions or withdrawn capital.

Find Business Support

The article stipulates that where a shareholder transfers equity without fully fulfilling their capital contribution obligations, and the company, company creditors, or other parties request the transferor and transferee to bear joint and several liability for the insufficient capital contribution in accordance with Article 88 of the Company Law, the transferee bears the burden of proof if they assert a defense that they did not and could not have known that the transferor had failed to fully perform their capital contribution obligations. After assuming liability, the transferee may seek recourse from the transferring shareholder, unless otherwise agreed by the parties. 

The article further clarifies that where a shareholder transfers equity after withdrawing their capital contribution, the court will not support requests by the company, company creditors, or other parties for the transferee to bear joint and several liability under Article 88 of the Company Law.  

However, if the transferor and the responsible directors, supervisors, and senior managers are unable to compensate the company for losses caused by the withdrawal of capital, the court will support a claim by the company requiring the transferee, who knew of the withdrawal of capital, to bear supplementary compensation liability. If the company fails to assert its rights through litigation or arbitration, resulting in its creditors being unable to realize their due claims, the court will also support actions brought by the company’s creditors against the transferor, the responsible directors, supervisors, senior managers, and the transferee, with the company as a third party, seeking that the transferee bear supplementary compensation liability for their due unrealized claims. 

Shareholders’ waiver of the right to transfer equity 

Article 45, which is an amendment of Articles 18 and 20 of the Company Law Judicial Interpretation (III), adjusts principles from prior interpretations by addressing transfers where the actual transfer price differs from the price disclosed to shareholders. 

First, when a shareholder of an LLC transfers shares to a person other than a shareholder, and other shareholders claim the right to purchase the shares under the same conditions but then disagree with the transfer, the court shall not support the other shareholders’ request for preemptive rights, unless otherwise stipulated in the company’s AoA or agreed upon by all shareholders. 

When determining the “same conditions”, the court will consider a variety of factors, including the quantity, price, payment method, performance period of the share transfer, as well as other matters that constitute conditions of the transaction, such as loans or services provided by the transferor to the company, as evidenced by the transferring shareholder. 

Consequences for infringing preemptive rights 

Article 46, an amendment to Article 21 of the Company Law Judicial Interpretation (IV) revises earlier provisions by clarifying how preemptive rights apply when a shareholder’s equity is sold through judicial auction or enforcement. 

First, if a shareholder of an LLC transfers shares to a person other than a shareholder without notifying the other shareholders, or uses fraud, malicious collusion, or other means to impair the other shareholders’ preemptive rights, the court will support a claim by the other shareholders to purchase the shares under the same conditions. However, this does not apply in the following circumstances: 

1. Where the other shareholders have not asserted their preemptive rights within 30 days of the date they knew or should have known of the same conditions for exercising their preemptive rights;
2. Where the other shareholders have not asserted their right within one year from the date of the change of the shareholder register;
3. Where, if the company does not maintain a shareholder’s register, the other shareholders have not asserted their right within one year of the date of registration of the company’s change of registration. 

However, the court will not support claims in cases where the other shareholders only request confirmation that the share transfer contract is invalid, but do not also claim the right to purchase the shares under the same conditions, and still do not claim the right to purchase after the court has explained the situation. 

The court will support requests by the other shareholders for the transferor to bear liability for damages because their preemptive right has been infringed if the shareholders were unable to exercise their preemptive rights due to no fault of their own. The court will also support requests from the transferee for the transferor to bear liability for breach of contract based on the share transfer agreement if the transferee is unable to acquire shares due to other shareholders exercising their preemptive right. 

Preemptive rights in competitive contractual situations 

Article 47, an amendment of Article 22 of the Company Law Judicial Interpretation (IV), addresses the transfer of equity through competitive contracting methods.

Related Reading

When transferring equity in an LLC to persons other than shareholders through competitive contracting methods such as auctions, issues concerning preemptive rights can be handled with reference to the relevant provisions of the Provisions of the Supreme People’s Court on Auctions and Sales of Property in Civil Enforcement by People’s Courts. The court will not support requests from other shareholders who did not participate in the auction or sale due to no fault of their own to exercise their preemptive rights. However, the court will support their requests for the transferor or auction institution at fault to bear liability for damages. 

No preemptive rights in non-listed joint-stock companies 

Article 48, a new provision, clarifies preemptive rights of shareholders in a non-listed joint-stock company.

Specifically, if a shareholder of a non-listed joint-stock company claims a  preemptive right against the transferor based on the provisions in the company’s AoA that other shareholders have the preemptive rights under the same conditions, the court will not support such a claim, unless the transferee knew or should have known of the provisions in the company’s AoA. 

Keynote speech by Philip R. Lane, Member of the Executive Board of the ECB, at the 15th workshop on exchange rates, co-organised by Banka Slovenije with the Banca d’Italia, the Bank for International Settlements, the European Central Bank and the Nationale Bank van België/Banque Nationale de Belgique

Ljubljana, 3 December 2025

It is an honour to participate in this excellent workshop on exchange rates and to visit Bank of Slovenia.

This speech has two parts.^[1] In the first part, I will discuss the appropriate monetary policy response to deviations of inflation from the ECB’s symmetric two per cent medium-term target. In the second part, I will turn to the topic of this conference and outline some analytical perspectives on the interplay between the exchange rate and monetary policy.^[2]

Inflation deviations and monetary policy

The ECB has a clear orientation for the conduct of monetary policy: a symmetric two per cent inflation target over the medium term. This is articulated in our monetary policy strategy statement as follows:

“The Governing Council considers that price stability is best maintained by aiming for two per cent inflation over the medium term. The Governing Council’s commitment to this target is symmetric. Symmetry means that the Governing Council considers negative and positive deviations from this target as equally undesirable. The two per cent inflation target provides a clear anchor for inflation expectations, which is essential for maintaining price stability.”

In pursuing the symmetric two per cent target, a working definition of the medium term is required. Our monetary policy strategy statement provides a nuanced description:

“The flexibility of the medium-term orientation takes into account that the appropriate monetary policy response to a deviation of inflation from the target is context-specific and depends on the origin, magnitude and persistence of the deviation. Subject to maintaining anchored inflation expectations, it also allows the Governing Council in its monetary policy decisions to cater for other considerations relevant to the pursuit of price stability.”

How should such high-level strategic guidelines be implemented in practice? Let me make a few comments.

It is straightforward that small inflation deviations that are not expected to persist do not call for a monetary policy response. Most obviously, lags in the transmission of monetary policy mean that it would be counterproductive to seek to respond to near-term deviations that are solidly expected to be transitory. Moreover, a small and transitory deviation is unlikely to trigger the adjustment dynamics that can turn temporary deviations into longer-lasting deviations.

At the other extreme, it should also be clear that a sufficiently large and persistent deviation from the target requires a monetary policy response, regardless of its origin.

First, through the cost-of-living channel, the current inflation rate may influence subsequent price and wage-setting, as firms and workers respond to lower cost pressures in relation to negative deviations and higher cost pressures in relation to positive deviations.

Second, the real interest rate channel can reinforce an inflation shock that is expected to display some persistence: if a drop in inflation today is associated with ongoing low inflation for, say, the next year or two, this translates into a higher real interest rate (nominal rate minus expected inflation) over the relevant horizon. In turn, this puts downward pressure on consumption and investment, adding to the disinflationary impulse. Symmetrically, above-target inflation that is expected to persist for some time maps into a lower real interest rate and amplifies inflationary pressures.

Third, a persistent shift in the inflation rate can influence the formation of inflation expectations if people put some weight on simple extrapolation in forming expectations. Under such extrapolative behaviour, if inflation runs below target for a year or two, there is some risk that people might revise down their beliefs about the de facto medium-term inflation target. Symmetrically, if inflation runs above target for a year or two, there is some risk that people might revise up their beliefs about the de facto medium-term inflation target.

Fourth, a material inflation deviation that does not trigger a monetary policy response poses a communication risk, since markets, firms and households may find it difficult to understand the reaction function if there is no reaction.^[3] In turn, greater uncertainty about the reaction function can give rise to higher volatility in expectations about inflation and the policy rate path.

Given these mechanisms, a material deviation of inflation from the target calls for a monetary policy response. Since the cost-of-living, real interest rate, expectations-deanchoring and communication channels operate in a plausibly non-linear manner (individually and collectively), the appropriate monetary policy is also non-linear, with an incremental adjustment to mid-sized deviations but a more forceful or persistent adjustment to large deviations. 

This non-linearity is recognised in our monetary policy strategy statement, which highlights that:

“To maintain the symmetry of its inflation target, the Governing Council recognises the importance of appropriately forceful or persistent monetary policy action in response to large, sustained deviations of inflation from the target in either direction, to avoid deviations becoming entrenched through de-anchored inflation expectations.”

How should monetary policy respond to material deviations that fit neither the “small, transitory” category that can clearly be ignored, nor the “large, sustained” category that clearly triggers a non-linear response that is appropriately forceful or persistent? For this intermediate category of “mid-sized, somewhat persistent” deviations, the origin of the inflation deviation should play an important role in determining the appropriate monetary policy reaction.^[4]

In particular, an intermediate-category broad-based inflation deviation likely calls for an incremental adjustment in the monetary stance. In essence, this is the standard prescription of monetary policy feedback rules (such as the “family” of Taylor rules). However, if the origin of the inflation deviation is a supply-driven relative price level shock, the case for an active monetary policy response is more nuanced.^[5]

In particular, a supply shock to the relative price level of energy does not pose the same risk to medium-term inflation as a shock to domestic demand.

While an intermediate-category shock to the relative price level of energy may visibly alter headline inflation for a substantial fraction of the projection horizon (energy comprises about 10 per cent of the overall Harmonised Index of Consumer Prices (HICP)), it might not materially alter the broader underlying inflation dynamics that are most important in determining the medium-term inflation trend. In particular, an intermediate-category supply-driven relative energy price level shock might not be sufficiently large or persistent to generate a broader wave of price changes, with energy-using sectors choosing to absorb the cost shock in margins rather than passing it through to the consumer.

The impact of a supply-driven relative price level shock on overall inflation also tends to have an inbuilt, self-correcting element. For instance, a decrease in the relative price level of energy will boost activity levels in energy-using sectors, with less slack in the economy putting upward pressure on inflation over the medium term. More broadly, since energy has a high import content, a decrease in the relative price level of energy typically constitutes an improvement in the terms of trade, boosting the real incomes and consumption levels of euro area households and thereby further adding to medium-term inflation pressures. In the opposite direction, symmetric mechanisms apply in relation to a positive shock to the relative price of energy.

These considerations mean that, within the intermediate category, a supply-driven inflation deviation that is primarily sectoral in origin does not pose the same risk to the medium-term inflation target as a broad-based inflation deviation. This means that it is essential in determining the appropriate monetary policy stance to carefully analyse the realised and projected dynamics of supplementary inflation measures, such as non-energy inflation (the sum of all categories excluding energy) and core inflation (further excluding the food category).^[6]

Clearly, it is a judgement call to determine how to respond to intermediate-category inflation deviations. Such judgement calls are best made on a meeting-by-meeting, data-dependent basis that draws on a comprehensive and rigorous analytical framework to take account of the unfolding evidence in relation to the shocks driving inflation deviations, and whether there are incipient signs that relative price shocks are transforming into broader inflation dynamics. This meeting-by-meeting, data-dependent approach is especially helpful under conditions of elevated uncertainty.

This analytical framework necessarily involves inspecting and modelling the current and projected behaviour of wages, profit margins, the suites of underlying inflation indicators and indicators of inflation expectations to assess whether a moderate inflation deviation might turn into a larger or longer deviation. It also involves a wide-ranging risk assessment. Amongst other dimensions, an important set of risk scenarios relates to possible amplification shocks, by which an inflation deviation might grow larger or become more persistent. This means that upside inflation shocks are especially salient if the baseline exhibits a positive inflation deviation. Symmetrically, downside inflation shocks are especially salient if the baseline exhibits a negative inflation deviation.

In summary, this discussion has emphasised that the appropriate monetary policy response to an inflation deviation from the target is context specific and requires a careful analysis of a broad set of considerations. Of course, the capacity to consider “looking through” some types of inflation deviations depends on a strong institutional commitment to delivering the symmetric inflation target over the medium term, underpinning firmly-anchored medium-term inflation expectations.^[7]

The interplay between the exchange rate and monetary policy

Let me now switch gears and turn to the interplay between the exchange rate and monetary policy. Chart 1 shows the nominal and the real effective exchange rates of the euro against 18 major trading partners, indexed against their values in 1999. While there have been prolonged and substantial currency swings over the lifetime of the euro, there has been no clear overall trend with currency shifts tending to reverse over time.

Chart 2 zooms in on the last decade and shows the euro exchange rate against the US dollar, the Chinese renminbi and a basket of selected Asian currencies since 2014. Since the start of the hiking cycle in Summer 2022, there has been marked appreciation of the euro against these major trading partners. For the renminbi in particular, this appreciation has been even stronger in real terms than in nominal terms, reflecting the much larger cumulative inflation in the euro area relative to China during this period.

Chart 2

The euro against the US dollar, Chinese renminbi and Asian currencies

Nominal and real USD/EUR	Nominal and real CNY/EUR	Effective exchange rates for the euro against selected Asian currencies
(USD per EUR)	(CNY per EUR)	(index: 31/01/2014 = 100)

Chart 3 zooms in further by examining the evolution of the dollar-euro exchange rate over the last year (Q4 2024 through Q3 2025) in the context of a BVAR model maintained by ECB staff. A striking feature of this analysis is the contribution of risk sentiment to euro appreciation in Q2 2025, reflecting some mix of a decline in risk sentiment towards the dollar and an improvement in risk sentiment towards the euro.

Transmission of the exchange-rate: model-based impact

Model-based analysis allows for a broader analysis of the transmission of exchange rate changes on the key macroeconomic variable. Simulations based on the ECB’s semi-structural multi-country model indicate that a 10 per cent appreciation in the euro plays out over several years, with inflation markedly lower for about three years and a peak disinflation impulse of 0.6 percentage points after about a year.^[8] The level of GDP declines throughout this adjustment period, with a cumulative loss of about one per cent of GDP after three years. In relation to trade dynamics, the euro appreciation reduces export volumes by about 3 per cent over this horizon and import volumes by about 1.5 per cent.

In the model, the transmission of the exchange rate shock operates primarily through the effects on trade deflators, which in turn influence export and import volumes. The appreciation makes euro area exports more expensive on international markets, reducing export volumes. At the same time, the appreciation also lowers the price of imports, dampening domestic inflationary pressures. Overall, imports decline despite the reduction in import prices as the demand drag dominates, with both private consumption and investment decreasing: consumption falls as economic activity contracts and labour demand slows. Investment declines as higher real interest rates and the appreciation’s disinflationary effects take hold. The resulting drop in the relative price of investment goods further suppresses investment, especially in externally exposed sectors.

Chart 4

Impulse responses to a 10 per cent euro appreciation in the ECB Multi-Country Model

HICP inflation	Real GDP	Real exports	Real imports
(percentage point deviation from steady-state year-on-year growth rate)	(percentage deviation from steady state)	(percentage deviation from steady state)	(percentage deviation from steady state)

Transmission of the exchange-rate: financial conditions

It is important to analyse the impact of currency movements using a range of different approaches. In addition to standard macroeconomic models, it is also helpful to study the impact of the exchange rate on financial conditions. In particular, currency movements operate via financial channels in addition to trade channels by altering the relative wealth of domestic investors versus foreign investors and affecting home and foreign asset prices.

Chart 5 shows the contribution of the exchange rate to the “Macro-Finance” financial conditions index (MF-FCI) that has been developed by ECB staff. ^[9] While the exchange rate only accounts for a relatively minor proportion of the total variation in the MF-FCI, it still adds significant explanatory power on top of the contributions of nominal and real interest rates and risk asset prices.^[10]

In the run-up to the global financial crisis, euro appreciation added to the tightening of financial conditions in the euro area. During the European debt crisis and in its aftermath, the weaker euro reinforced the generally accommodative monetary policy by contributing to the loosening of financial conditions. Since 2017, the regained strength of the euro has tightened financial conditions to varying degrees. Most recently in 2025, the euro has recorded its strongest tightening impulse on the MF-FCI , partly explained by the relative weakening of the US dollar.

In the baseline version of the MF-FCI, the coefficient of the euro NEER is positive, in line with the notion that an appreciation in the euro tends to tighten financial conditions in the euro area (Chart 5, hollow bar). A benefit of the methodology underlying the new index is its flexibility in estimating other specifications. The coefficients in the baseline do not only resemble average effects over the estimation sample from 2007 until 2025, but possibly also across underlying variables. In the case of the NEER, a meaningful model extension substitutes the NEER with euro exchange rates (Chart 5, filled bars). The positive average coefficient of the NEER is primarily driven by the EUR/USD, pointing to the importance of the US dollar for global financial markets and the relevance of a stronger euro relative to the US dollar as a dampener of the euro area economy. By contrast, a stronger euro relative to the Chinese renminbi indicates a loosening of financial conditions. Finally, a stronger euro relative to the Swiss Franc is also associated with a loosening of financial conditions, which is consistent with the special status of the Swiss France as a safe haven currency that weakens during “risk on” phases.

Model-based impulse responses to a surprise monetary policy expansion

Finally, it is also important to understand how the exchange rate responds to monetary policy decisions. In what follows, I show model-based simulations of a surprise monetary policy easing carried out by ECB staff. The simulations use the ECB-BASE and New Area-Wide Model (NAWM) models, which treat the euro area as a small, open economy, as well as a two-region model calibrated on the euro area and the rest of the world (GMGS henceforth).^[11] All three models account for changes in trade and asset flows across regions following changes in euro area monetary policy.

The impulse responses show the effect of a surprise 100-basis point monetary policy easing (in annualised terms; see Chart 6, panel a). The shock lowers domestic interest rates relative to foreign interest rates, triggering asset outflows that result in a nominal and real exchange rate depreciation (Chart 6, panels b and d). In the ECB-BASE model, the reaction is less frontloaded, as it is linked to long-term yields, which react more sluggishly. In the GMGS model, the real depreciation is less pronounced than in the NAWM, as in the latter inflation responds more sluggishly due to partial backward indexation and stickiness also affecting importers.

The depreciation makes domestic goods cheaper relative to foreign goods, improving price competitiveness in international markets. As the domestic currency depreciates, foreign demand for domestically produced goods increases, leading to an increase in real exports (Chart 6, panel e). The increase is more sluggish in the ECB-BASE model, reflecting the slower adjustment of the real exchange rate and a shock transmission mechanism with backward-looking expectations.

On the import side, two opposing forces come into operation following the monetary policy easing, as both import prices and domestic demand increase. On the one hand, the weaker exchange rate raises the domestic currency price of foreign goods, which tends to reduce imports. On the other hand, monetary easing stimulates overall domestic demand, including for imported goods. In the GMGS and the NAWM models, the demand effect slightly outweighs the price effect, leading to an increase in real imports, which is more limited than the increase in exports (Chart 6, panel f). Therefore, there is an improvement in the trade balance (Chart 6, panel g). By contrast, the domestic demand effect is stronger in the ECB-BASE model, as – which has a high import content – increases in response to the shock, leading to a deterioration in the trade balance. In the longer term, the trade balance also deteriorates in the GMGS and NAWM models: as higher prices feed through to export prices, the initial boost to exports fades. By contrast, domestic demand remains stronger more persistently, keeping imports higher for longer.

Overall, the results align with the empirical evidence shown in the context of my keynote speech at the CEPR International Macroeconomics and Finance Programme Meeting in 2019.^[12] Empirically, a monetary policy easing shock weakens the euro and stimulates both euro area exports and imports. In net terms, the trade balance improves as the response of exports is stronger than the increase in imports.

In order to obtain a better understanding of the importance of the role of the exchange rate in the transmission of monetary policy, it is helpful to “switch off” this channel in an alternative simulation exercise. The model simulations in Chart 7 examine the same policy trajectory as those in Chart 6, but with the nominal exchange rate held constant.^[13] Under this counterfactual scenario, exports would remain largely stable as they would no longer benefit from improved terms of trade (Chart 7, panel e), while imports would grow more significantly due to the absence of currency depreciation, which would prevent foreign goods from becoming more expensive (Chart 7, panel f).

As a result, the trade balance would worsen (Chart 7, panel g), leading to a somewhat smaller increase in GDP (Chart 7, panel h). In addition, the rise in inflation would be smaller (Chart 7, panel c), as the absence of currency depreciation would prevent imports from becoming more expensive. In summary, in response to an easing impulse, the depreciation in the exchange rate strengthens the impact of monetary policy on output and inflation.

Wrapping up, the aim of this part of the speech has been to explain some of the analytical approaches used by the ECB staff to understand the macroeconomic role of the exchange rate. Of course, the exchange rate is just one variable among many in determining euro area macroeconomic dynamics and our overall evaluation of economic and financial developments is based on an integrated assessment of all relevant factors.