Consumer price rises were down from 3.7% in September continuing a downward trend from high of 9.1% in June 2022The rate of US consumer price rises cooled in October amid lower gasoline prices and slowing increases in housing costs.The annual rate of inflation measured by the Consumer Price Index (CPI) - which tracks the cost of a basket of goods and services - slowed to 3.2% last month, lower than the 3.7% reading in September and the coolest rate since July. Continue reading...
Payments designed to help people cope insufficient to meet scale of problem, says committeeMinisters have come under further pressure to expand the financial support for Britons struggling with the cost of living crisis, after a committee of MPs found some had slipped through the safety net".The cross-party work and pensions committee said that support payments designed to help people cope with soaring household bills had proved insufficient to meet the scale of the problem and offered only a short-term reprieve" for many. Continue reading...
Generation Y counterparts in the US have closed living standards gap on previous generationsMillennials in the UK are still bearing the economic scars" of the 2008 financial crisis and are struggling to catch up with the living standards of older groups while their US counterparts have closed the gap, new research shows.In its annual intergenerational audit", the Resolution Foundation compares the fortunes of millennials - born between 1981 and 2000 - with their predecessors, including Generation X, born between 1966 and 1980. Continue reading...
Western nations are caught in a low-growth trap, with tricky political choices to make - but there is a way outThe past 15 years have been the most difficult for western economies since the 1920s and 1930s. Public anger has risen as living standards have been squeezed by a prolonged period of weak growth. American politics is as ugly as it has ever been, while parties of the far right have emerged as powerful political forces in Germany, Italy, Austria, Finland, France and Sweden.The new age of anger is a far cry from the six decades between 1948 and 2008. Sure, there were recessions - often deep ones - during that period, but growth resumed and living standards bounced back. Certainly, there were protests - sometimes prolonged, as in the demonstrations against the Vietnam war - but the young people who marched eventually secured a stake in the system. Continue reading...
When the former PM crashed the economy, working people suffered. We can never let it happen again, writes the shadow chancellorRead more: Labour motion to ban Truss-style budget meltdowns puts pressure on Tory MPs Leadership is not just about having the conviction to take the right decision. It is about having the strength to follow it through. The behaviour of Suella Braverman last week was deeply irresponsible. At a time when those in power should be working with the police to keep our streets safe, she was undermining them. And at a time when our leaders should be working to bring our communities together, she was trying to pull them apart.Rishi Sunak knew this. He knew what she was saying and doing was wrong, but he was too weak to do anything about it. Putting party first, country second. Unable to take the tough decisions. It's a pattern of behaviour we see time and time again from this prime minister - including on the economy. Continue reading...
Party loyalty would force Conservatives to vote against plan for fiscal responsibilityRead more: I challenge Rishi Sunak: vote with Labour to stop a Truss-style disaster happening again,' writes Rachel ReevesLabour will force a Commons vote this week aimed at creating new legal safeguards against fiscal disasters such as Liz Truss's catastrophic mini-budget, which sent the financial markets into meltdown and drove up mortgage rates.The party's plan for a fiscal lock" to protect personal, family and the national finances from reckless politicians will be contained in an amendment to the king's speech that will be voted on by MPs on Tuesday. The manoeuvre will present Conservative backbenchers with a dilemma over whether to back a Labour amendment, or vote against what is a plan designed to embed fiscal responsibility into the budgetary process, and protect it from wild or accidental political misjudgments. Continue reading...
From privatisation to Brexit to its current collapse, the damage done by the Conservative party leaves one longing for the pastWhen thieves fall out, they certainly know how to do it. The sight of former cabinet ministers such as Nadine Dorries slagging off the prime minister, and the home secretary - at the time of writing - plumbing the depths of extreme rightwing prejudice, shows that there are now no depths to which the Conservative party will not sink.They are desperate, and with reason. The chickens bred during George Osborne's austerity chancellorship, and let out of captivity by Boris Johnson's Brexit, are finally coming home to roost. Continue reading...
Slower price growth, due partly to tighter Treasury purse strings, won't lift the gloom of a flatlining economyUK inflation could be found to have fallen below 5% for the first time in two years when figures for October are published this week. It would be a landmark moment for Rishi Sunak, who in 2022 promised to halve inflation from its 10.7% level.The prime minister made inflation one of the five pledges by which the nation should judge his premiership. And a drop to less than 5% in the consumer prices index could well be one of the few pledges he can comfortably say has verifiably been achieved. Continue reading...
Company cites continued political polarization' and risks to the nation's fiscal strength as reason for changeThe credit ratings agency Moody's reduced its outlook on the US government from stable to negative, citing division in Washington DC and risks to the nation's fiscal strength.While Moody's maintained the US's current top-grade AAA rating, it raised the prospect that this may be cut. Continue reading...
In 1923, the country was rocked with hyperinflation, now the retreat from globalisation is exposing the fragility of its industrial modelGermany has come a long way in 100 years. Back in November 1923, people were trundling wheelbarrows stacked high with cash through its streets to buy a loaf of bread. Now its reputation is that of an economic powerhouse.That episode of hyperinflation left deep scars on the nation's psyche. Government printing presses were working flat out to produce mountains of worthless bank notes and the currency collapse was so severe a single US dollar was worth 1tn marks. Never again" has been the mantra ever since. Continue reading...
Institutions asked to model impact of sharp price movement in wake of Liz Truss market chaosThe Bank of England has asked more than 50 City institutions to model the impact of a sharp movement in bond prices caused by a severe geopolitical shock as part of its first financial system-wide stress test.The request comes after the September 2022 crisis in bond markets and sterling that followed Liz Truss's mini-budget, when pension funds came under pressure and some were driven to near-collapse. A sharp shift in bond prices and the corresponding interest rates, or yields, laid bare major risks that certain kinds of liability-driven investing (LDI) posed to retirement savings. Continue reading...
After two bad years for investors the smart money' is piling back inThe last two years have been catastrophic for investors in US Treasury bonds. By one measure, 2022 was the worst year for such investors since 1788. Bond prices are poised to fall again in 2023, making this the first time in US history that they declined for three consecutive years.But now the smart money" is jumping back in. With interest rates on 10-year Treasuries close to 5%, more than triple the levels of two years ago, yields are attractive. If the fundamental factors driving them haven't changed dramatically, then it's possible that interest rates will fall and bond prices will recover now that the inflation scare has passed. Continue reading...
Major banks are accused of a staggering lack of compassion as more borrowers fall behind on their mortgagesNewsflash: The number of mortgages in arrears has risen, partly fuelled by a jump in buy-to-let landlords falling behind on their payments.Trade association UK Finance has reported that there were 87,930 homeowner mortgages in arrears of at least 2.5% of their outstanding balance, in the third quarter of this year. Continue reading...
War, economic breakdown and the climate crisis spell the end of the end of history'. But the comedy villains in charge are obliviousThe hall is shrouded in blackness, the audience ensconced in plush red seats. All heads are turned to the bright lights on stage for that annual ritual, the panto.In front of us stands Cinderella or Aladdin or Peter Pan, lost in their usual patter, and blind to the baddie looming up ...Aditya Chakrabortty is a Guardian columnist Continue reading...
Andrew Bailey says free trade demands greater international cooperation on financial rule-makingThe governor of the Bank of England has called for greater cooperation on financial rule-making, warning that Brexit has affected the openness of the UK economy".In an apparent swipe at those calling for the UK to develop a separate rulebook for banking and insurance activities, Andrew Bailey said free trade needed strong regulation based on agreements with foreign watchdogs. Continue reading...
Thinktank says stronger than expected tax revenues have given chancellor scope for bold package in autumn statementJeremy Hunt risks condemning Britain to a decade in the doldrums unless he uses this month's autumn statement to announce a 30bn-a-year investment plan to upgrade public infrastructure, a leading thinktank has warned.The National Institute for Economic and Social Research (NIESR) said the chancellor should ignore calls by Tory MPs for pre-election tax cuts and instead focus on measures to boost growth through improvements to transport, digital networks, skills and housing. Continue reading...
Retailers hope new version of top-selling board game plus Dog-E will help fuel festive sales recoveryA new version of Pictionary that pits artist against artificial intelligence and a pet robo-dog" with a wagging tail are among the toys destined to appear on Christmas lists this year as retailers pray for better sales during the key festive trading period.With the cost of living crisis looming large over another year's celebrations, the Toy Retailers Association's annual DreamToys list of the 20 hottest" gifts includes a dozen that are under 50. Among them is Pictionary vs AI (24), a new version of the classic board game that pitches (terrible) human sketches against the might of AI processing power. Continue reading...
Upmarket estate agent says prices will start to bottom out in 2024 as interest rates fall and will return to growth in 2025Britain's housing market is past peak pain" and prices look likely to bottom out by next summer, according to the estate agency Savills.The average UK house price is projected to fall by 3% in 2024, after a 4% drop this year, the upmarket estate agent and property advisory firm said in its five-year outlook. Continue reading...
Upbeat comments by Associated British Foods CEO come as grocery price rises fall to single digits for first time in 18 monthsFood inflation could be all but gone by Easter, according to the owner of Kingsmill bread, Twinings tea and Silver Spoon sugar - as long as there are no further shocks to the global system.George Weston, the chief executive of Associated British Foods (ABF), which also owns the Primark budget clothing chain, said: Food price inflation hit 20% last year and by the back of 2024 I think it will be close to zero. Continue reading...
The yield on UK government bonds drops as the City expects interest rates cuts next summer, as German factory output falls againHere's Victoria Scholar, head of investment at interactive investor, on today's grocery inflation data:UK Kantar grocery inflation drops into single digits for the first time this year.In the four weeks to 29 October, grocery inflation hit 9.7%, the lowest level since July 2022 and down from 11% in the previous month. Some prices have been falling year-on-year including for butter, dried pasta, and milk, however most prices are still going up. Although it is moving in the right direction, grocery inflation is still stuck sharply above the headline rate of inflation in the UK, highlighting the squeeze on individuals and families from the rising price of food items.Consumer spending on promotions has now hit 27.2% of total grocery sales - the highest level we've seen since Christmas last year. This is a big gear shift from October 2022 when this figure was less than a quarter. Continue reading...
Drop in retail sales also because of consumer worries over high energy bills and mortgages, surveys suggestFears that the UK is heading for a recession this winter have intensified amid signs Britain's hard-pressed households are cutting spending as they save for Christmas and higher fuel bills.Two monthly snapshots of retail activity found shops and online outlets struggling because of consumer budgets being squeezed by dearer mortgages and the UK's lingering cost of living crisis. Continue reading...
Price tag' of non-communicable diseases, malnutrition, poverty and harm to planet is 10% of global GDP, says UN food agencyThe health and environmental damage caused by food production costs the world $10tn (8tn) a year, or 10% of global GDP, the UN said.Conditions such as diabetes and heart disease, the consequence of poor diets, account for $7.3tn, according to the Food and Agriculture Organization (FAO), which has put a price tag" on the hidden costs of the global food industry in its annual report, published on Monday. Continue reading...
Fear adds to Russia-Ukraine conflict risk and increases probability of European and of US recession'A global recession could be set in motion by the conflict in the Middle East as the humanitarian crisis compounds the challenges facing an already precarious world economy, two of Wall Street's biggest names have warned.The downbeat comments come as the City braces for another gloomy update on the UK economy, with the Office for National Statistics due to provide an update on how it fared during the third quarter on Friday. Continue reading...
In her new book, Endangered Eating, Sarah Lohman chronicles disappearing foods - and why they need protectingThe American buff goose. Amish deer tongue lettuce. The Nancy Hall sweet potato. The mulefoot hog. When food historian Sarah Lohman stumbled on these fantastical-sounding ingredients in a database of vanishing foods called the Ark of Taste, she set off on a journey across the United States to discover more ingredients and traditions that had been abandoned in the annals of history.The endeavor was the latest installment of a storied career that has included cooking 19th-century recipes at a living history museum and chronicling American cuisine in her book Eight Flavors, which documents how foods like black pepper and sriracha have helped reshape what Americans eat. Continue reading...
Britain is in a low-growth bind and too many policies have political rather than economic goalsThe prospects are bleak. For more than 70 years the British economy has grown steadily, if not always spectacularly. There have been setbacks - not least the 1970s energy shock, 1990s property crash, and 2008 financial crisis - before eventual recoveries took hold. This time is different.Should last week's forecasts from the Bank of England come to pass, Britain is heading for the weakest sustained period of economic growth of the postwar age, and quite possibly of the past century or more. Continue reading...
Donor fatigue is setting in among western states. But a Russian victory would embolden its leader to sow economic chaosUkraine's top general has admitted the fightback against Russian aggression has reached a deadlock, and the prospect of a deep and beautiful breakthrough" is unlikely.A deadlock is exactly what Russian president Vladimir Putin wants, because it allows him to plant the idea of perpetual stalemate in the minds of western leaders who, staring at a difficult economic outlook for 2024, want a settlement. Continue reading...
This live blog is now closed, you can read more on this story hereKeir Starmer is delivering his speech to the North East Chamber of Commerce now.He starts by saying they are near the A1, where there is a stretch of road that Rishi Sunak recently promised to upgrade.It's a story you see right across Britain. Infrastructure projects, some with billions already committed, businesses planning around the structures developed in rooms like this.But the projects and investment get blocked by objections, consultations, legal challenges, ballooning costs delays, delays, delays - until it's easier just to give up and move on. Continue reading...
Market cools as number of jobs added comes in lower than the 180,000 that economists had been expectingThe US added fewer than expected jobs in October and the unemployment rate rose amid signs that the white-hot US jobs market is cooling.There were 150,000 jobs added last month, according to closely watched figures from the Bureau of Labor Statistics, which was below the 180,000 predicted by economists. The unemployment rate picked up to 3.9% from 3.8%. Continue reading...
Human rights expert says US companies trap workers in poverty, forcing them to rely on food stamps and MedicaidThe UN special rapporteur on extreme poverty and human rights has called on the CEOs of Amazon, Walmart and DoorDash and the US government to address allegations that top US corporations pay such low wages that they trap workers in poverty, forcing them to rely on government-assistance programs to survive.Olivier De Schutter has written to the three major US corporations and the US government, requesting responses to numerous allegations. They include a 2020 US Government Accountability Office report that found Amazon and Walmart were listed among the top 25 employers with workers relying on the supplemental nutrition assistance program (Snap), formerly known as food stamps, or Medicaid in nine states studied, with Walmart ranked first and Amazon ranked sixth. Continue reading...
Mexico, Brazil, South Africa and Turkey have shown economic resilience despite wave of defaultsAs finance ministers and central bankers convened in Marrakech for the International Monetary Fund and World Bank annual meetings on 9-15 October, they faced an extraordinary confluence of economic and geopolitical calamities: wars in Ukraine and the Middle East, a wave of defaults among low- and lower-middle-income economies, a real estate-driven slump in China, and a surge in long-term global interest rates - all against the backdrop of a slowing and fracturing world economy.But what surprised veteran analysts the most was the expected calamity that hasn't happened, at least not yet: an emerging market debt crisis. Despite the significant challenges posed by soaring interest rates and the sharp appreciation of the US dollar, none of the large emerging markets - including Mexico, Brazil, Indonesia, Vietnam, South Africa and even Turkey - appear to be in debt distress, according to the IMF and interest rate spreads. Continue reading...
by Richard Partington Economics correspondent on (#6G226)
Long period of high interest rates expected, meaning higher costs for homeowners whose fixed-rate deals are coming to an endLabour has warned that more than half a million homeowners face a surge in mortgage costs before the local elections in England in May, as ministers battle to contain the damage from what is expected to be a long period of high interest rates.With the Bank of England widely expected to hold its key base rate at 5.25% on Thursday, the party released analysis that showed 630,000 more homeowners would be hit by higher borrowing costs before local elections next year. Continue reading...
Western companies that sell their Russian assets restricted from taking proceeds in dollars and eurosRussia has reportedly imposed additional currency controls in an attempt to prop up the falling rouble, restricting western companies that sell their Russian assets from taking the proceeds in dollars and euros.International companies that want to exit Russia after its invasion of Ukraine have to sell their assets in roubles under new government restrictions, according to the Financial Times, which cited people familiar with the matter. Continue reading...
by Kalyeena Makortoff Banking correspondent on (#6FZAZ)
Bank criticised by MPs for being too slow to reward savers as it announces 15% rise in net interest income and $3bn share buybackHigher interest rates helped HSBC to more than double its profits and hand over $3bn (2.5bn) to shareholders, as MPs criticised the largest UK banks for being too slow to reward savers.The London-headquartered bank said it was launching a share buyback, and paying a dividend worth 10 cents a share, after what its chief executive, Noel Quinn, hailed as three consecutive quarters of strong financial performance". Continue reading...
by Richard Partington Economics correspondent on (#6FZF0)
Remortgaging at lowest level since January 1999 as borrowers face higher repaymentsUK mortgage approvals slumped in September amid mounting signs of stress in the property market, according to official figures before the Bank of England's next decision on interest rates on Thursday.Figures from the central bank showed net borrowing of mortgage debt decreased from 1.1bn in August to a net repayment of 900m in September - the lowest since April this year. Continue reading...
Economics | The Guardian