Bank of England’s Haldane sees ‘pretty punchy’ price pressure, as China inflation rises – as it happened

Julia Kollewe

from on 2021-06-09 14:12 (#5JV5R)

3.12pm BST

US stocks are inching higher, while European markets are in the red (the UK's FTSE 100 index has lost 0.2% while Germany's Dax is down 0.55%), with investors waiting for US inflation data tomorrow.

In Europe, travel stocks rose, led by Air France KLM, Lufthansa and British Airways owner IAG after the European parliament approved vaccine passports to ease summer travel and the US relaxed travel recommendations on 110 countries and territories, including Japan ahead of the Olympics.

Fed officials may finally begin talking about talking about' tapering their asset purchases at next week's FOMC meeting. But with recent data leaving the economy still some way from making substantial further progress" towards the Fed's full employment goal, we suspect that taper won't begin until early next year.

Inflation is creating uncertainty about what central banks will do or say going forward. We think central banks will be patient, but we also believe that an adjustment in communication about inflation and policy changes will start in the summer.

2.41pm BST

On Wall Street, US indices have opened slightly higher in lacklustre trading, with investors waiting for US inflation data tomorrow.

Economists are forecasting a rise in the annual inflation rate to 4.7% in May from 4.2% in April, with the core rate (which strips out volatile food and fuel costs) seen climbing to 3.4% from 3%.

1.47pm BST

And here is our full story on the owner of Upper Crust and Caffe Ritazza, which slumped to a pre-tax loss of almost 300m in the six months to the end of March, as Covid restrictions kept customers away from its outlets in airports and railway stations.

SSP Group operates its food and beverage branches in 35 countries, and its sales of takeaway sandwiches and coffees plunged by 79% to just under 257m, down from 1.2bn a year earlier.

1.45pm BST

Britain will seek to exclude the City of London's financial services companies from a global tax overhaul targeting the world's most profitable businesses agreed between G7 finance ministers last weekend, my colleagues on the economics desk Phillip Inman and Richard Partington report.

The chancellor, Rishi Sunak, is concerned that under a version of the plan put forward by the US president - which involves redistributing the profits of the world's 100 largest businesses - digital businesses such as Google, Amazon and Facebook will be joined by banks that he says already pay a fair share of tax.

11.51am BST

Britain's housing market is booming. About 704,000 homes are marked Sold Subject to Contract' and currently going through the sales process, the highest number the property website Rightmove has recorded over the past ten years and 78% higher than in May 2019.

Its research among buyers expecting to benefit from the stamp duty holiday has found only 4% would abandon their plans to buy a property if they missed either the June or September deadline in England.

The easing of restrictions, extended stamp duty holiday, better mortgage availability for first-time buyers, race for space and relocation plans have all combined to create the biggest conveyancing logjam we've ever recorded over the past ten years. We really hope those who had at least four months to make it through to completion will make it in time to beat the first stamp duty deadline, but with the tapering until September many will still make some savings so all will not be lost.

The pace of properties coming on and off the market is also the quickest we've recorded, and agents are telling me they have multiple viewings followed by a number of offers within days of a property first appearing on Rightmove. At the start of this year we had anticipated a quieter second quarter of the year, but buyer demand and the pipeline has continued at pace, making it an incredibly busy time for agents and conveyancers in many areas right now.

11.24am BST

Oil prices are rallying again today, boosted by expectations of strong demand for crude in western economies as they recover from the coronavirus pandemic. The prospect of Iranian crude exports returning faded as the US secretary of state said sanctions against Tehran were unlikely to be lifted.

Brent crude, the global benchmark, rose to $72.83 a barrel earlier, the highest since May 2019, and is now trading 25 cents higher at $72.47 a barrel.

The widespread faith that oil demand growth will trend significantly higher in the second half of the year is paving the way forward for the price rally.

11.12am BST

El Salvador has become the first country to adopt bitcoin as legal tender.

Lawmakers in the Central American country's Congress voted by a supermajority" in favour of the Bitcoin Law, which received 62 out of 84 votes. Bitcoin rose 5% shortly after the vote, and is now trading 1.3% higher at $34,068.

The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress.

62 out of 84 votes!

History! #Btc

10.41am BST

Europe's main stock markets are now all in the red.

9.40am BST

Here is our full story:

9.33am BST

IAG, which owns British Airways as well as several other carriers including Iberia, Aer Lingus and Vueling, is now the top riser on the FTSE 100 index, up 1.6% -- despite the UK competition watchdog launching action against BA and Ryanair over their refusal to give refunds to customers who were unable to travel during coronavirus lockdowns.

A BA spokesperson said:

During this unprecedented crisis we have issued well over 3m refunds and helped millions of our customers change their travel dates or destinations and we're grateful to them for their ongoing support. We continue to offer highly flexible booking policies at the same time as operating a vastly reduced schedule due to government-imposed travel restrictions, and we have acted lawfully at all times.

It is incredible that the government is seeking to punish further an industry that is on its knees, after prohibiting airlines from meaningful flying for well over a year now. Any action taken against our industry will only serve to destabilise it, with potential consequences for jobs, business, connectivity and the UK economy.

Ryanair today welcomed the UK CMA's update on its review of airline policies on refund requests made by UK consumers whose flights operated during periods of lockdown. Ryanair has approached such refund requests on a case by case basis and has paid refunds in justified cases. Since June 2020, all our customers have also had the ability to rebook their flights without paying a change fee and millions of our UK customers have availed of this option.

9.25am BST

Travel stocks are up this morning after the EU parliament approved vaccine passports to ease travel this summer. This has boosted the Anglo-German tour operator Tui, along with airlines IAG, the BA owner (up 2.1%), easyJet (up 1.3%) and Ryanair (up 1%). Intercontinental Hotels Group and Premier Inn owner Whitbread are also higher, by 1% and 0.5% respectively.

Neil Wilson, chief market analyst at Markets.com, says:

Meanwhile, the US eased travel restrictions for 61 countries, but not the UK. Nevertheless, there is a real sense that vaccines are working to open up the US, EU and UK to travel this summer, albeit not quite how it once was.

"Today Parliament has set the pace to restore free movement and a fully functional Schengen while we continue to fight this pandemic. "#VaccineCertificate #EU https://t.co/rH4yup4sWW

9.10am BST

The owner of the baguette chain Upper Crust, SSP, has fallen deep into the red as it was hammered by the slump in travel over the past year due to the coronavirus crisis.

The London-based snack food group, whose outlets are at train stations and airports, made a pre-tax loss of 300m in the year to 31 March, up sharply from the previous year's 34m loss. Like-for-like sales crashed 79% as as far fewer people travelled over the past year.

The recovery in domestic and leisure travel has now begun in a number of our territories, and our teams are busy re-opening units in line with passenger demand.

8.23am BST

The Bank of England's chief economist Andy Haldane said this morning there were already some pretty punchy pressures on prices" and this could prompt the central bank to rein in its massive stimulus programme at some point.

He told LBC radio:

We could start tightening the tap on that, slowing down the amount of money we're printing, and ultimately, perhaps even starting to turn that around.

8.13am BST

Stock markets have opened in Europe.

8.04am BST

Rolls-Royce has appointed Anita Frew as chair designate. She will join the board on 1 July and succeed Sir Ian Davis as chair on 1 October. He will retire after nearly nine years in the role.

Until recently, Frew was the deputy chairman of Lloyds Banking Group and currently chairs the technology and chemicals group Croda. She has held chair and board roles in the industrial, engineering and utilities sectors, and also served as director of corporate development at the advertising giant WPP (which holds its annual meeting at noon in London today).

7.42am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The UK's competition watchdog has launched action against British Airways and Ryanair over their refusal to give refunds to people during UK lockdowns, when they were lawfully unable to fly" due to travel bans and restrictions imposed by the government.

While we understand that airlines have had a tough time during the pandemic, people should not be left unfairly out of pocket for following the law.

Customers booked these flights in good faith and were legally unable to take them due to circumstances entirely outside of their control. We believe these people should have been offered their money back.

Consumer prices continued to be affected by last year's high pork prices, which started to come down in May last year. As such the high base effect from now will dissipate, and therefore we will see CPI edging higher from now on.

While some of the rise can be attributed to base effects due to the huge slide in commodity prices that we saw in March and April last year which saw producer prices decline 3.7%, there is increasing evidence that various supply side issues are starting to create a situation where rather than being transitory, inflation pressures could become more persistent. It is certainly something Chinese business is becoming more concerned about, along with Chinese authorities given recent steps to curb the recent sharp rise in commodity prices.

This is a situation that central bankers appear to be remarkably relaxed or complacent about, depending on which side of the fence you happen to be on.

Source	RSS or Atom Feed
Feed Location	http://feeds.theguardian.com/theguardian/business/economics/rss
Feed Title
Feed Link	http://feeds.theguardian.com/