The daily business briefing: April 12, 2023

Ernst & Young has dropped its plan to break up its auditing and consulting units. The company, one of the Big Four accounting giants, announced the split preparations in September to address regulators' concerns that its auditing arm would have a conflict of interest reviewing accounts for clients that also used the firm as a consultant. The decision, revealed in a note to EY's 13,000 partners, came after the firm spent more than $100 million on the the plan, Project Everest. The breakup proposal had triggered "bitter infighting," The Wall Street Journal reported, and that could continue, as some partners still think it is a good idea. "This is the beginning of a real period of nastiness," said one U.S. partner who supported the deal.

The Environmental Protection Agency announced Wednesday that it is proposing its strictest automobile pollution limits ever to encourage more electric-vehicle sales. The proposed tailpipe pollution regulations for the 2027 to 2032 model years don't set a requirement for EV sales, but meeting the limits on greenhouse gas emissions would require that EVs account for at least 60 percent of passenger vehicle sales in 2030, and up to 67 percent by 2032, the EPA projected. Meeting those levels would require nearly a tenfold increase over current EV sales, according to The Associated Press. The plan is expected to be finalized next year in what would be the Biden administration's strongest push yet to support the shift from gasoline-powered cars to EVs.

Disgraced Theranos CEO Elizabeth Holmes has lost her bid to avoid going to federal prison while she appeals her fraud conviction. U.S. District Judge Edward Davila issued an 11-page ruling saying Holmes' lawyers hadn't produced evidence compelling enough to justify allowing her to remain free while she appeals her conviction for misleading customers and investors about the capabilities of her now-defunct blood-testing startup's technology. Holmes, 39, is scheduled to surrender on April 27 to start serving her 11-year prison sentence, which Davila imposed in November. Holmes and her lawyers had argued that prosecutors omitted key evidence that ultimately will exonerate her.

The tightening of lending policies by U.S. banks after the failures of two regional banks last month could slow U.S. economic growth by 0.44 percent this year, the International Monetary Fund estimated in a report on global financial stability released Tuesday. U.S. banks will see their lending capacity fall by 1 percent in 2023 as bank stocks lose value, according to the report. In a separate report, the IMF forecasted a 1.6 percent expansion of the U.S. economy this year, down from 2.1 percent last year. The global economy is expected to grow 2.8 percent, down from 3.4 percent in 2022. Global growth is getting a boost from China's abrupt reopening after ending its extended pandemic lockdowns.

U.S. stock futures rose slightly early Wednesday ahead of the release of March inflation data and the minutes from the Federal Reserve's last policy meeting. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up about 0.2 percent at 7 a.m. ET. Nasdaq futures were little changed. Economists surveyed by Dow Jones predicted the March consumer price index rose by 0.2 percent last month, down from a 0.4 percent gain in February. The report could affect the Fed's next decision on its campaign to raise interest rates to fight high inflation. The March Fed minutes could provide insight on the central bank's March decision to raise rates by 25 basis points despite banking sector turmoil.