MoneySavingExpert’s Martin Lewis says deal is a ‘corker’ as prices are likely to rise later this yearAn energy tariff offering fixed prices for a year has sold out within hours of being publicised, after consumers rushed to try to protect themselves from the effects of the war in Ukraine on household bills.E.on’s Next Online V11 tariff promised prices fixed for a year, set at the same level as Ofgem’s new capped rate. Continue reading...
Mirror and Express owner expects ‘modest’ drop in operating profits this year due to inflation and soaring costsThe value of the publisher of the Daily Mirror and Daily Express newspapers plunged by a quarter on Tuesday after it warned that inflationary pressure and soaring newsprint costs would hit profits this year.The London-listed publisher Reach, which also owns 200 regional print and digital titles, including the Manchester Evening News and Liverpool Echo, warned that it expects to see a “modest” drop in operating profits this year. Continue reading...
Food price inflation climbed to 4.3% in February as Ukraine conflict deepened cost-of-living crisisGrocery prices rose at their fastest rate in more than eight years in February, according to the market analysts Kantar, which predicted the squeeze on shoppers would continue as a result of supply-chain disruption and the conflict in Ukraine.Food price inflation hit 4.3% last month, the highest since September 2013, as the price of savoury snacks, fresh beef and cat food increased the fastest. However the cost of some products, including bacon, beer, and spirits fell. Continue reading...
Rising global stock markets and increased property prices swelled ranks of ultra-high net worth individuals, according to new reportMore than 51,000 people joined the ranks of the “ultra-wealthy” last year as the fortunes of the already very rich benefited from rising global stock markets and increased property prices during the pandemic.The number of ultra-high net worth individuals (UHNWIs) – those with assets of more than $30m (£22.4m) – rose by a record 9.3% last year to 610,569, according to a report by the property consultants Knight Frank. Continue reading...
by Richard Partington Economics correspondent on (#5WM22)
As Ukraine crisis drives energy prices up, firms say tax rise could put Covid recovery at riskRishi Sunak is facing renewed pressure from business leaders to delay a planned £12bn rise in national insurance, amid warnings over soaring costs for companies and households as the Russian invasion of Ukraine drives up inflation.The manufacturing trade body Make UK, which represents 20,000 firms of all sizes across the country, said the tax hike planned for April should be pushed back until the UK economy is in a stronger position. It warned the government that pressing ahead would risk firms slamming the brakes on recruitment and putting the economic recovery from Covid at risk. Continue reading...
Government claims it will boost bilateral trade by 60% but critics call its benefits ‘economically marginal’Britain and New Zealand have signed a free trade deal, which the UK government said would boost bilateral trade by 60% by eliminating tariffs, cutting red tape and enabling freer movement of professional workers.Most business leaders welcomed the deal, which was agreed in principle in October and follows on the heels of a similar agreement with Australia, but the National Farmers’ Union (NFU) said it would lead to unfair competition in their sector. Continue reading...
Inflation and higher energy bills could lead to sharpest fall in UK living standards since 1956These are challenging times. The reconstruction job from Covid-19 had barely begun when Russia invaded Ukraine. Now the international consensus to build back better from the pandemic has been replaced by an urgent need to prevent the conflict from escalating.With such high stakes, economic sanctions, not bombs, are the western weapon of choice, limiting Vladimir Putin’s ability to muster guns and butter. But while there will be harsher consequences for Russia, made a pariah under the Putin regime, it is a battle not without economic collateral damage. European leaders will this week announce a strategy to cut Europe’s reliance on Russian energy – a plan in the works before the first tank rolled into Ukraine, now given added urgency. With Russia accounting for 40% of EU gas imports – rising to 65% in Germany and 100% for some eastern European states – it is a prudent move. Yet it is a process likely to take years. In the meantime, the shock of war will drive up energy prices across the continent – adding to what was already the worst squeeze on living standards in decades. Continue reading...
Biden’s green energy plan could be derailed since Russia mines and produces a significant amount of key metals“I will not pretend this will be painless,” Joe Biden warned Americans before Russia’s invasion of Ukraine. And as the war disrupts already hard-hit international trade, US consumers are likely to soon see just how painful the consequences of the conflict will be in the US.Inflation is already at a 40-year high in the US and, depending on the length and depth of Russia’s war, any further disruption could cause prices to rise at the pump and perhaps on store shelves. Continue reading...
The attitudes of the first fund chief to come from a former communist country were shaped by her early life, but her focus is now on a greener post-Covid futureAnyone in charge of the International Monetary Fund would be concerned about what is happening in Ukraine, but Kristalina Georgieva has a personal reason for being anxious about events in eastern Europe. In London, two days before Vladimir Putin launched his invasion, the IMF’s managing director tells the Observer she has a family connection to the north-eastern city of Kharkiv – an early target for Russian air strikes.“My brother married a Ukrainian and he and his wife went there to look after her mother,” says the Bulgarian-born economist. “They stayed because they didn’t want to leave her in a time of uncertainty. I speak to him every day.” Continue reading...
Russia’s aggression will fuel the energy price crisis. The Bank of England, and Sunak, must change course to avoid recessionRussia’s attack on Ukraine poses a dilemma for the UK government and the Bank of England with an obvious answer.The dilemma centres on the cost of living crisis, which is only going to worsen now that gas prices are on course to rocket again and oil prices along with them. Continue reading...
by Richard Partington Economics correspondent on (#5WHDM)
Russian invasion of Ukraine could further hike global energy prices and cut real incomes by 3.1%, economists fearUK households could suffer the biggest annual decline in their living standards since the 1950s as the Russian invasion of Ukraine pushes up global energy prices, experts have warned.With inflation already at the highest rate for 30 years, analysts said a sustained rise for wholesale oil and gas markets would further add to the squeeze on families from soaring utility bills. Continue reading...
by Presented by Katharine Murphy. Produced by Karishm on (#5WGY7)
Katharine Murphy speaks to economics writers Shane Wright and Greg Jericho to discuss the state of Australia’s economy, the upcoming federal budget and the impact of Russia’s invasion of UkraineRead more: Continue reading...
With global economy hooked on fossil fuels economists are drawing parallels with the the oil shocks of the 1970sEconomists are warning Russia’s invasion of Ukraine will fuel a sharper rise in inflation, despite the rising cost of living having already hit the highest levels for three decades.With Russia the world’s biggest natural gas exporter and second-largest for oil, the stakes are high in a global economy still hooked on fossil fuels – drawing parallels with the Yom Kippur war and oil price shocks of the 1970s which led to galloping inflation and economic crises worldwide. Continue reading...
Analysts warn of 10% inflation and weaker growth across western economies as Ukraine crisis raises oil price to $99 a barrelUK petrol prices are poised to hit a record 150p a litre later this week after the worsening tension in Ukraine added fresh pressure to the cost of living crisis facing households.Crude oil prices reached more than $99 a barrel at one point on Tuesday in response to Vladimir Putin’s decision to recognise the independence of two breakaway regions in eastern Ukraine. Prices later slipped back after markets viewed the west’s initial sanctions response as weak. Continue reading...
Analysis: The west will adopt step-by-step approach, leaving toughest sanctions as last resortAfter all the tough talk of the past month, the sanctions imposed on Russia by the west are unlikely to lose Vladimir Putin much sleep. The response to Boris Johnson’s announcement that five of the less important Russian banks and three individuals would be targeted was: is that it?The most dramatic news was Germany’s decision to halt approval of the Nord Stream 2 gas pipeline from Russia to western Europe. That will have an impact, but may end up affecting Germany more than it does Russia. Continue reading...
Survey highlights cost inflation as Bank of England’s Dave Ramsden predicts more interest rate risesThe largest number of British manufacturers plan to raise prices in the next three months than at any point since 1976, according to a business survey that underscores the inflationary pressures hitting the UK economy.With energy prices rocketing and wages on an upward path, the CBI said four-fifths of firms expect to increase the cost of manufactured goods in the next three months. Continue reading...
by Richard Partington Economics correspondent on (#5WCQM)
Government faces record monthly interest costs of £6.1bn on national debt pile of £2.3tnThe UK government has recorded the first monthly budget surplus since the start of the coronavirus pandemic, despite a weaker than expected January performance as rising inflation pushed up debt interest costs.The Office for National Statistics said public sector net borrowing was in surplus of £2.9bn last month – the first month in which income outstripped expenditure since January 2020. Continue reading...
Evidence of strongest performance in private sector since June convinces analysts of increase next monthThe prospect of a third successive interest rate rise from the Bank of England is looming larger after news that the easing of Covid restrictions is generating growth and inflationary pressure.Evidence of the strongest performance by the private sector since last summer left economists convinced Threadneedle Street would again increase borrowing costs when its monetary policy committee meets next month. Continue reading...
by Gwyn Topham Transport correspondent on (#5WBMM)
Labour fears public grants to operators will be slashed on Wednesday prompting cuts to up to one-in-three bus servicesLabour has urged the government to “come clean” on bus funding as operators prepare to slash services, with a critical moment for decisions over routes approaching on Wednesday.Almost one in three services are at risk, the industry and local authorities have warned, with the Treasury refusing to confirm if it will continue grant funding to support operators whose bus revenues have yet to recover to pre-pandemic levels. Continue reading...
It is time for the Tory chancellor to stand up – and there’s no better opportunity than the Mais lectureThere’s something odd about Rishi Sunak. The chancellor has rarely been out of the news since he took over at the Treasury from Sajid Javid two years ago and his approval rating with the public is high. His reputation as a safe pair of hands means he could be the next prime minister – yet we know little about what he believes.To the extent that while a picture of Sunak has emerged through the blizzard of budgets and mini budgets of a technocrat fascinated by Silicon Valley-style capitalism, in truth there have been only hints of an over-arching philosophy. Continue reading...
Persevering with this policy, as Labour suggests, is as bad for the country as persevering with this charlatan prime ministerMy Irish mother taught me always to try to see the good in people. But it has to be admitted that the attempt to see the good in Alexander “Boris” Johnson would, in another of her favourite sayings, “try the patience of Job”.It is already a commonplace in this country and around the civilised world that our prime minister is a charlatan on an industrial scale. John Major knew what he was about when declaring, as a prime minister himself, that Johnson should not even be allowed to fight a parliamentary seat. Continue reading...
Starbucks, McDonald’s, Chipotle, Amazon – all protect profits by making customers pay more. We need the political courage to say they can and should cover rising costs themselvesThe Biden White House has decided to stop tying inflation to corporate power. That’s a big mistake. I’ll get to the reason for the shift in a moment. First, I want to be clear about the relationship between inflation and corporate power.While most of the price increases now affecting the US and global economies have been the result of global supply chain problems, this doesn’t explain why big and hugely profitable corporations are passing these cost increases on to their customers in the form of higher prices. Continue reading...
by Richard Partington Economics correspondent on (#5WA65)
Analysis: official figures are fuelled by bumper City bonuses but many key workers still getting below inflation risesPay growth is picking up, official figures showed this week, but for key workers on the pandemic frontline the champagne is firmly on ice.The detail behind annual pay growth of 4.9% in December revealed the gulf between the size of awards being handed to public sector workers, and those in the private sector, boosted in part by swelling banker bonuses. Continue reading...
UK, US, Canada, Australia and New Zealand team up to identify collusion between suppliers and shippersThe UK competition watchdog is teaming up with its counterparts in the US, Canada, Australia and New Zealand in a drive to detect and investigate collusion between suppliers or shipping groups to hike prices.The Competition and Markets Authority said it was linking up with its fellow agencies in other “five eyes” nations after receiving “multiple complaints” from businesses about supply chains, where, for example, fees for shipping have soared by up to 10 times compared with pre-pandemic levels in the past two years. The CMA said that despite the complaints it was yet to find evidence of potential breaches of the law. Continue reading...
Nestlé joins other firms in passing on rising costs, adding to financial squeeze facing UK householdsThe KitKat-maker Nestlé and the Dettol manufacturer Reckitt have both indicated they will pass on rising costs in the form of higher prices this year, adding to the cost of living crisis facing consumers.Nestlé, which also makes Nespresso coffee pods, Häagen-Dazs ice-cream and Purina pet food, increased its prices throughout 2021, and by the final three months of the year they were 3.1% higher. Continue reading...
Former archbishop and campaigners say one-off tax on wealthiest 1% would help close gap between rich and poorRowan Williams, the former archbishop of Canterbury, has called on the UK government to impose a wealth tax on the super-rich to help tackle “spiralling inequality”, which he said was “deeply damaging to our collective morale and trust”.Williams, who was the most senior bishop in the Church of England from 2002 to 2012, on Thursday joined a growing group of moral leaders demanding a one-off tax on the richest 1% of the population to help close the “staggering” gap between the richest and poorest in society. Continue reading...
A free-market thinktank says it’s time to start selling off ‘plots of moon land’ – we need to act now before the plundering startsEver heard of the overview effect? It was coined by a space writer called Frank White to describe how looking down at our little blue planet from above can create a shift in how astronauts think about Earth: all of a sudden you realise how fragile the Earth is and how important it is that we all work together to protect it. “Looking at the Earth from afar you realise it is too small for conflict and just big enough for cooperation,” the astronaut Yuri Gagarin said.Alas, it looks like we needed to replace the overview effect with the avarice effect, because attitudes towards space seem to have shifted. Rather than making people imagine a better world, modern space exploration seems to be all about money, money, money. Elon Musk’s SpaceX has been working with a Canadian startup on plans to launch satellites with billboards on them into space so that adverts can light up the night sky. No doubt some of those ads will be for space tourism: on Wednesday Virgin Galactic opened ticket sales to the public for the first time. And by the “public” I mean that the small sliver of the public that can afford $450,000 for a joyride 300,000 feet above Earth. Continue reading...
Each month is the same – UK inflation rises and there are ‘I feel your pain’ messages from chancellorEvery month the story is the same. The annual inflation rate goes up and the chancellor puts out a statement saying he understands life is tough for the British public.The only real difference between this month and last was that, in the interim, Rishi Sunak announced his package of measures to soften – but by no means fully offset – the blow from the huge increase in energy costs households are facing in April. Continue reading...
Brewer predicts 15% increase in costs and says speed of Covid recovery uncertainHeineken has said beer prices will go up as it faces “crazy increases” in the cost of ingredients, energy and transport.The brewer said inflation was “off the charts” and its costs would increase by about 15%, forcing it to charge more – which could lead to lower beer consumption. Continue reading...
by Richard Partington Economics correspondent on (#5W5Z7)
As households face the biggest fall in living standards in three decades staff and businesses feel the pressurePay growth in the UK continued to lag behind inflation in December as households faced the biggest fall in living standards in three decades. Average weekly pay, excluding bonuses, fell in real terms, according to official figures. The Guardian spoke to workers and employers about the pressure to keep up with inflation. Continue reading...