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Updated 2024-12-24 01:00
Bank of England warns high inflation could last longer than expected
Chief economist says risks remain despite fall in wholesale energy prices and UK on brink of recessionThe Bank of England’s chief economist has warned high rates of UK inflation could persist for longer than expected, despite a fall in wholesale energy prices in recent weeks and the economy on the brink of recession.Huw Pill said the slowdown in the British economy and sharp fall in European gas prices could help to take the sting out of the highest rates of inflation in more than four decades. Threadneedle Street forecasts headline inflation – which was running at 10.7% in November – will ease from the middle of this year. Continue reading...
UK to cut energy support scheme for firms; BoE’s Pill sees risk of persistent inflation – as it happened
Rolling coverage of the latest economic and financial news
UK manufacturers fear blackouts and job losses after energy subsidy cut
Impact of reduced state support with company power bills could prompt job cuts, warns industry bodyAlmost two-thirds of manufacturers in Britain fear blackouts this winter amid the fallout from the energy crisis, according to an industry survey, as concerns grow about government plans to cut financial support for businesses.As the chancellor, Jeremy Hunt, prepares to announce a sharp reduction in industry support, the trade body Make UK said the impact from sky-high energy costs on manufacturers showed no sign of abating. Continue reading...
UK household income likely to fall by £2,000 a year, says thinktank
Resolution Foundation says UK only halfway through two-year cost of living crisis, with only very richest likely to see income rise in 2023-24British households are only halfway through a two-year cost of living crisis, with average incomes likely to fall by more than £2,000, a leading thinktank has warned.Typical disposable incomes for working-age family households are on track to fall by 3% in this financial year, and by 4% in the year to April 2024, according to the Resolution Foundation. Continue reading...
Hedge funds holding up vital debt relief for crisis-hit Sri Lanka, warn economists
Exclusive: 182 experts say only debt cancellation offers chance of recovery but private investors are playing hardballSome of the world’s most powerful hedge funds and other investors are holding up vital help for crisis-hit Sri Lanka by their hardline stance in debt-relief negotiations after the Asian country’s $51bn (£42bn) default last year, according to 182 economists and development experts from around the world.In a statement released to the Guardian on Sunday, the group said extensive debt cancellation was needed to give the economy a chance of recovery and that Sri Lanka would be a test case of the willingness of the international community to tackle a looming global debt crisis. Continue reading...
The US should break up monopolies – not punish working Americans for rising prices | Robert Reich
The Fed is putting people out of work to reduce workers’ bargaining power and reduce inflation. They’ve got it all wrongJob growth and wages are slowing. Employers added 223,000 jobs in December, the labor department reported on Friday – lower than the average in recent months.Average hourly wages rose by 4.6% in December, according to Friday’s report. That’s a slowdown from 4.8% in November.Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com Continue reading...
No matter their differences, Starmer and Sunak face the same obstacle | Larry Elliott
Whether it’s Labour plan for renewal or the Tory path to recovery, both remain hostage to circumstance in 2023Think back 12 months to January 2022. Boris Johnson was prime minister and had resisted calls for a lockdown in response to the Omicron variant of Covid-19. It was assumed inflationary pressure from post-pandemic supply-chain bottlenecks would soon abate. Russia’s invasion of Ukraine was still several weeks away. There were rumblings of discontent in the Labour party at Sir Keir Starmer’s failure to register a commanding opinion-poll lead.All of which is a way of making the point that a lot can happen – to the economy and in politics – in the course of a year. And given that the next election is not going to be held until 2024 it would be unwise to assume the next year will be any more predictable. Continue reading...
Mortgage payers face squeeze in 2023 after UK interest rate rises
Wealthy people who own home outright will avoid higher costs and benefit from better return on savingsHomeowners with mortgages will be among the biggest losers from the cost of living crisis in 2023 due to interest rate rises, while the wealthiest UK households will benefit from better returns on savings and investments, according to analysis by a leading thinktank.The Resolution Foundation said the way the government had tackled the spike in inflation this year – relying heavily on the Bank of England’s interest rate rises – put “mortgage households at the heart of the Britain’s income squeeze”. Continue reading...
Brexit is just one of the three Tory errors that have brought Britain to its knees
Years of austerity, and then the Truss-Kwarteng fiasco, have compounded the self-inflicted isolation of leaving the EUI did not get where I am today making forecasts about how the economy will perform in a new year. But I do feel it is my duty to emphasise the tangle into which this benighted government has got itself and us, and the connection between the three macroeconomic policy errors that have made us what we are – namely the “sick man of Europe”, with an economic performance worse than any other member of the G20 economies apart from Russia.What prompted me to do this was a BBC Today programme last week, guest-edited by Dame Sharon White, chairman – her own preferred term – of the John Lewis Partnership. White took the opportunity to invite other economists to discuss the present UK economic malaise. What struck me was the way they agreed that, after the fiasco of the brief Truss-Kwarteng “fiscal event”, the prime macroeconomic objective of the UK – which in this case means the government and the Bank of England – was to restore “credibility”. Continue reading...
British firms set to feel chill as Jeremy Hunt cuts energy bill relief
This week the chancellor performs his latest Scrooge act with a revamp of the energy bill relief scheme – and the signs aren’t good“Can I cut it?” asks Jeremy Hunt, in a clip set to A Tribe Called Quest’s 1990 song Can I Kick It?. “Yes you can,” responds Rishi Sunak in a satirical video recently released by left-leaning social media publisher PoliticsJoe.This week Hunt will enact the latest cut of his short tenure as chancellor – one which has been typified by moves to rein in the work of his bulldozing predecessor Kwasi Kwarteng. Hunt plans to announce a revamp of the energy bill relief scheme, which subsidises all “non-domestic” gas and electricity customers, from businesses and charities to hospitals, schools and care homes. Continue reading...
Markets rally as US jobs report beats forecasts; UK house prices drop again – as it happened
223,000 new jobs created in US last month, more than expected, while slowing wage growth cheers Wall Street
Remembering Martin Ravallion, ‘superstar’ Australian economist who made poverty his life’s work
When the World Bank set its mission to a ‘world free of poverty’, it was ‘Martin’s definition and Martin’s measure’Martin Ravallion, an Australian economist who devoted his career to fighting poverty, occasionally found his reputation preceded him to remote parts of the world.In 2016 the Dutch publication De Correspondent described a 2005 field trip Ravillion took to the southern Chinese province of Guizhou – one of the country’s poorest – where he asked the county statistician what approach he used to calculate how many people in the region were poor. Continue reading...
US adds 223,000 jobs in December, ending 2022 on high note
Continued strength of jobs market comes as Fed struggles to cool hiring and bring down inflation by raising interest ratesThe US jobs market ended 2022 on a high note, adding another 223,000 jobs in December, the department of labor reported on Friday. The unemployment rate dipped to 3.5%, back to its pre-pandemic low.The continued strength of the jobs market comes as the Federal Reserve has struggled to cool hiring and bring down inflation by raising interest rates at a pace unseen in a generation. Continue reading...
First Abu Dhabi Bank considered offer for Standard Chartered; crypto bank Silvergate cutting jobs – as it happened
First Abu Dhabi Bank confirms that it had considered a possible offer for FTSE 100-listed Standard Chartered, but is no longer doing so
The world economy faces a huge stress test in 2023 | Kenneth Rogoff
With inflation on the rise and the era of ultra-low interest rates over, there could well be a systemic crisisThe fact that the world did not experience a systemic financial crisis in 2022 is a minor miracle, given the rise in inflation and interest rates, not to mention a massive increase in geopolitical risk. But with public and private debt having risen to record levels during the now-bygone era of ultra-low interest rates, and recession risks high, the global financial system faces a huge stress test. A crisis in an advanced economy – for example, Japan or Italy – would be difficult to contain.True, tighter regulation has reduced risks to the core banking sectors but that has only led to risks shifting elsewhere in the financial system. Rising interest rates, for example, have put huge pressure on private equity firms that borrowed heavily to buy up property. Now, with housing and commercial real estate on the brink of a sharp, sustained drop, some of those firms will most likely go bust. Continue reading...
The Guardian view on Sunak’s agenda: trapped by a legacy of failure | Editorial
The prime minister cannot be honest about Britain’s problems without repudiating 12 years of Tory ruleTo govern in difficult times, a prime minister needs a candid account of problems matched with credible solutions. Rishi Sunak provided neither in what had been billed as a significant policy speech on Wednesday. He referred fleetingly to Covid and the war in Ukraine as causes of the present difficulties, but there was no critical analysis of the way Britain has been governed in recent years.Of course there wasn’t. To speak honestly about public services would have meant admitting that budget austerity has depleted provision and demoralised staff. To explain the economic malaise, the Tory leader would have had to acknowledge Brexit as national self-sabotage. Continue reading...
A global recession may be looming, but there is a way out of this rut | Larry Elliott
Last century investment, innovation and greater equality led to a huge rise in productivity. Policies to encourage those are vital nowGreat things were expected of the 2020s. After the disappointments of the previous decade, this was to be the time when the global economy powered up and got going again. There would be a flowering of new technologies and a colossal boom. It would be the roaring 20s all over again.It hasn’t worked out like that. Instead, the world faces the grim prospect of a second recession in three years. The three biggest economies – the United States, China and the European Union, which between them account for roughly half of all global output – are slowing at the same time. That’s unusual and troubling.Larry Elliott is the Guardian’s economics editor Continue reading...
UK households spent £1.1bn more on groceries in December for fewer items
Spending higher than year earlier, with World Cup football pushing up beer salesHouseholds in the UK spent £1.1bn more on groceries in December than a year earlier, taking Christmas spending to a record £12.8bn, but got fewer items in their baskets as rampant inflation hit home.In a clear indication of how soaring prices are hammering household budgets, the latest monthly report from retail analysts Kantar showed that despite the overall amount shoppers spent rising more than 9%, the volume of sales was down 1% on the same month in 2021. Continue reading...
Record 13.3% UK food inflation raises fears of ‘another difficult year’
British Retail Consortium figures come amid concern over economy and rising cost of energy billsUK food price rises soared to a record rate in December, figures show, as retail industry bosses warned that high inflation would continue in 2023 amid the fallout from surging energy bills.Annual food inflation jumped to 13.3% in December, up from 12.4% in November, according to the latest monthly report from trade body the British Retail Consortium (BRC) and the data firm Nielsen. The BRC said this was the highest monthly rate since it began collecting data in 2005. Continue reading...
Disabled people among hardest hit by cost of living crisis, finds study
People with disabilities more likely to cut back on energy use and food, Resolution Foundation saysDisabled people in the UK are much more likely to struggle to heat their homes and cut back on food this winter, according to a report highlighting “massive” income gaps amid the cost of living squeeze.Research from the Resolution Foundation found people with disabilities had an available amount to spend that was about 44% lower than that of other working-age adults, exposing them hugely to the rising cost of essentials. Continue reading...
An alternative to government borrowing? Just print more money | Letter
Fawzi Ibrahim on why printing money doesn’t have to cause a rise in inflationAnne McElvoy is right (‘It’s the economy, stupid’ says the US campaign slogan. Starmer would do well to learn it, 26 December); Labour has to move beyond “simply redistributive ideas, to those that move the needle on growth”, but she fails to confront one essential component to achieve this. Taxation and borrowing from the private sector remain central to any government economic policy. So far, “borrow to invest” has conditioned even leftwing thinkers to accept the unequal distribution of wealth.But there is an alternative that will also aid redistribution: print and regulate. The opposition to the government printing money is that it would cause inflation by increasing demand on resources. But this is only true if private finance is allowed the same capacity to invest. If the latter’s investment capability is restricted by the same amount as increased public spending, then demand for resources would remain unchanged and inflationary forces contained. Continue reading...
Will 2023 be a year of muddling through for the UK economy?
Despite the gloomy predictions, an extended period of lower energy prices could bring some cheerTypical. After a round of new year prediction punditry that made one think that 2023 could only be bleaker and weaker than 2022, the FTSE 100 index charged off in the opposite direction. It was up 180 points after two hours of trading to a shade over 7,600, enough to bring the all-time high (7,877, in the faraway pre-Ukraine, pre-Covid days of 2018) into view, a prospect that did not feature heavily in most “what to expect” checklists.By the close, the gain was a more modest 102 points but still out of tune with the general diagnosis that a third of the world would be in recession this year (the IMF) and that the UK’s downturn was likely to be the worst and longest in the G7 (a Financial Times poll of 101 UK economists). Never mistake share price for the real economy, but it’s worth asking the question: is it possible that 2023 could be a tale of muddling through, as opposed to a story of unmitigated financial gloom? Continue reading...
‘It is one minute before midnight’: the view from Germany’s industrial heartland
Energy crisis piles pressure on small and medium-sized businesses that are struggling with other costs
UK firms less likely to borrow than at any time since financial crash
Demand for credit is waning among UK’s leading companies, according to accountancy firm DeloitteThe UK’s leading companies are less inclined to borrow now than at any point since the financial crisis of 2008, a survey of directors has found.Demand for credit is flagging among chief financial officers, with barely a quarter of those polled at FTSE 100 and FTSE 250 companies expecting to increase borrowing in the next year. Continue reading...
The Guardian view on excessive unemployment: the creation of unnecessary suffering | Editorial
Joblessness is such a waste of resources that no one interested in efficiency can be complacent about itThe misguided attempts by some central banks to reduce inflation by raising interest rates and generating unemployment seem to be about credibility. Their reputations as anti-inflation fighters must be preserved despite the heavy cost. Even when the Nobel laureate and prominent monetarist Franco Modigliani renounced this theory in 2000, central banks continued to follow the creed he abandoned. More pain is being inflicted on the public through rate rises while the evidence stacks up that this is unnecessary suffering.Last October, the Peterson Institute for International Economics produced a paper looking at 11 advanced economies and said the “little noticed dark side” of low inflation before the Covid pandemic was that “unemployment was almost continuously higher than needed to keep inflation low. Unless central bankers change their economic models, the world is likely to return to chronically excessive unemployment in the years after the [current] inflation surge.” The problem is that central bankers see economies running hotter than they actually are – and hike borrowing costs when there is no reason to do so. Continue reading...
Global economic forecast for 2023? A stormy start followed by a ray of hope
Wall Street predicts turbulent first six months but growing optimism at ebbing inflation, slowing pace of rate hikes and China’s reopeningInvestors should brace for another turbulent year in the financial markets, economists have warned as central banks fight inflation, China reopens its economy after Covid-19 restrictions and the Ukraine war pushes the global economy towards recession.The first half of the new year is likely to be choppy, according to Wall Street predictions, after global markets suffered their biggest fall since the 2008 financial crisis last year. Continue reading...
Bumper profits at KitKat maker Nestlé? They should give consumers a break | Phillip Inman
Workers and consumers are paying for the cost of living crisis, through product price rises and stagnant wages – shareholders, it seems, are notNestlé is on course to report its best profit figures since 2008 when full-year figures appear next month. The Swiss maker of consumer favourites from KitKat to Nespresso coffee is expected to shrug off the cost of living crisis affecting consumers in most of its big markets to keep shareholders smiling in 2023.US rival Procter & Gamble, which competes on several fronts with Nestlé, has performed a similar magic trick. Back in October, the maker of Pampers nappies said average prices across its product lines rose 9% in the first quarter to the end of September, more than offsetting a 3% fall in sales. Continue reading...
Croatia takes final steps into EU with open border and euro switch
Common currency was already used for valuations and bank deposits in former Yugoslav country, which joined the EU in 2013Croatia has adopted the euro and joined the European Union’s borderless Schengen zone, two steps that its prime minister said represented a historic moment.“Nothing is the same after this,” said Andrej Plenković, promising that joining the euro would better protect Croatians from financial crises, and joining the Schengen zone would make travelling easier and boost tourism. Continue reading...
Almost 50 UK shops closed for good every day in 2022, says report
Centre for Retail Research says 17,145 stores shut in total, up almost 50% on 2021, during pandemicLast year was a “brutal” one for Britain’s retail sector, with more shops shutting down than at any other point in the last five years, and 2023 will be similarly challenging, according to industry groups.About 47 shops on average pulled down their shutters for the final time every day last year, according to analysis from the Centre for Retail Research (CRR). It found a total of 17,145 shops on high streets and in other locations closed for good over 2022. This is up almost 50% on the 11,449 shops closed in 2021, during the Covid pandemic. Continue reading...
Third of world economy to hit recession in 2023, IMF head warns
China’s lagging growth a key threat this year, IMF managing director Kristalina Georgieva said, while the US is ‘most resilient.’For much of the global economy, 2023 is going to be a tough year as the main engines of global growth – the US, Europe and China – all experience weakening activity, the head of the International Monetary Fund has warned.The new year is going to be “tougher than the year we leave behind,” IMF managing director Kristalina Georgieva said on the CBS Sunday morning news program Face the Nation on Sunday. Continue reading...
UK inflation will fall in 2023 but energy bills and taxes will rise as house prices drop. Happy new year | Larry Elliott
Britain’s recession, however, will be relatively mild, although such forecasting is a mug’s gameWar in Europe. Political turmoil. A stagnant economy. Soaring energy bills. The highest inflation rate in more than four decades. Higher interest rates. That was the story of 2022. Truly, the year just gone was – in the words of the late queen – an annus horribilis.So 2023 will have to go some to match its predecessor for drama. The bookies would, for example, give you relatively long odds on it being another year of three prime ministers and four chancellors of the exchequer. Continue reading...
Rishi Sunak’s failure to negotiate on strikes is sabotaging UK, Labour warns
• Rachel Reeves says Tory approach is ‘increasingly reckless’• Business leaders claim that small firms are being ‘hammered’The UK economy faces a “massive hit” in 2023 because Rishi Sunak’s government is refusing point blank to negotiate with unions over ending public sector strikes, shadow chancellor Rachel Reeves has told the Observer in a marked escalation of rhetoric from Labour.This week will see five consecutive days of shutdowns on the rail system but Reeves says ministers appear to have “given up” on governing altogether and are instead seeking confrontation with the unions for political reasons. Continue reading...
The Guardian view on Latin America’s left leaders: pink tide could lift all boats | Editorial
The region’s politicians need a different model to deal with social unrest and political instabilityFootball and national identity in Argentina fused after the Albiceleste won the World Cup in 1986 with Diego Maradona. The country’s democracy, recently restored after decades of coups and murderous army rule, celebrated Maradona’s rise from a shantytown to almost single-handedly defeating the rest of the world. The burst of countrywide pride, however, belied Argentina’s fall: it began the 20th century as the seventh richest nation in the world, but had dropped to the 70th place by 1990.Decades later, it’s much the same story. In the year that Maradona led his nation to the title, inflation averaged 116%. Annual inflation today is approaching 100%. Between Maradona and the World Cup-winning team led by Lionel Messi this year, the country has defaulted on its foreign debt three times, has had two national currencies, and received, in 2018, the biggest-ever International Monetary Fund bailout. Continue reading...
FTSE 100 ends 2022 slightly up despite global turmoil
Share index is one of few to post rise but pound has worst year against US dollar since 2016
FTSE 100 index posts 0.9% gain for 2022; pound’s worst year since 2016 – as it happened
Blue-chip share index finishes turbulent year slightly higher, beating global markets
UK retail spending falls in 2022 amid cost of living crisis
Barclaycard data shows number of transactions was up but high inflation led to smaller basket sizesRetailers have failed to benefit from a post-lockdown boost in UK high street activity this year after soaring energy bills and the cost of living crisis forced households to rein in their spending.Despite an increase in face-to-face shopping after the lifting of Covid 19 restrictions, Barclaycard data released for the whole of 2022 showed retail spending fell 0.8% on the previous year. Continue reading...
If ‘permacrisis’ is the word of 2022, what does 2023 have in store for our mental health? | André Spicer
Whether there are more crises or we’re just more aware of them, a sense of our shared fate is key to surviving them
Inflation, waiting lists, strikes, rail chaos, climate emergency: the 2022 polycrisis
Almost every facet of life in the UK – courts to cost of living, transport to healthcare, environment to asylum system – is at breaking pointIn mid-November Rishi Sunak was asked in a Channel 4 interview to name one public service that “was working, adequately, working properly”.The prime minister didn’t give a direct answer. But the exchange feeds into an ever-more-common discourse: that the UK is facing “polycrisis” in almost every facet of life in Britain. From courts to the cost of living, transport to healthcare, environment to the asylum system – everywhere appears to be affected. Continue reading...
Tax super-rich on private jet travel to fund public transport, says UK charity
Campaign for Better Transport calls on government to make wealthy pay for ‘hugely damaging’ private flightsThe super-rich should be forced to pay an extra tax each time they fly on “hugely damaging” private jets to help fund better and cleaner public transport, a charity has said.The Campaign for Better Transport (CfBT) called on the government to introduce a “super tax” on private jet travel, saying it is “about time that these individuals started paying for the damage their flights cause and the proceeds used to help improve public transport for communities up and down the country”. Continue reading...
‘Groundhog year’: UK disposable incomes to fall by 3.8% in 2023
The Resolution Foundation thinktank forecasts a drop in living standards for a second year as the cost of living crisis deepensHouseholds are facing a “groundhog year” in 2023, as soaring gas bills and planned tax rises squeeze disposable incomes and send living standards tumbling for the second year running.Higher mortgage costs as fixed-rate loans come to an end and new deals are negotiated will add to the financial burden already felt by millions of households reeling from the worst fall in living standards in a century. Continue reading...
Oil hit by China Covid fears; European natural gas prices dip below pre-Ukraine war levels – as it happened
Oil prices fall amid fears over a Covid wave from China, while European wholesale gas prices hit 10-month low on WednesdayLondon-listed iron pellet producer Ferrexpo told the City this morning that its controlling shareholder, billionaire oligarch Kostyantyn Zhevago, has been detained in France.Ferrexpo, which operates iron-ore mines and an iron ore pellet production facility in Ukraine, said it believes the detention is not related to the company.The Company is aware that Mr Zhevago has been detained in France by the French authorities, and the Company understand that this is in relation to matters unrelated to Ferrexpo.The Board of Directors of Ferrexpo is seeking to clarify the situation and will update the market as appropriate.“Ferrexpo’s owner Kostyantyn Zhevago has reportedly been arrested in Courchevel in the French Alps at the request of Ukraine. He will stand in front of the appeals court of Chambery in France on 5 January. The billionaire is wanted on suspicion of financial crimes including money laundering linked to the bankrupt Finance & Credit Bank.Ferrexpo has had a difficult year with shares down around 45% year-to-date as the war in Ukraine caused major interruptions and instability which have impacted its operations and production. In October a Russian missile hike nearby infrastructure leaving Ferrexpo with minimal power supply.” Continue reading...
Five charts that show the UK’s economic prospects in 2023
Inflation, faltering GDP and rising unemployment are all on the cards for the country this yearThe UK is beginning 2023 on the brink of recession as households and businesses come under intense pressure from the cost of living crisis, with inflation at the highest rates since the early 1980s.The Bank of England has said the country is on track for a prolonged recession, as households struggle to keep up with the soaring costs of food, energy and other basic essentials. Here are five charts for the UK’s economic prospects in 2023. Continue reading...
Goldman Sachs boss unveils plan to cut jobs amid global economy fears
CEO David Solomon said he will make cuts in January with reports claiming investment bank will axe about 4,000 postsThe boss of Goldman Sachs has told staff that he will make job cuts early next month, as the US investment bank seeks to improve its profits amid concerns over the global economy.The bank is reportedly considering cutting about 8% of its 49,000 employees, which could equate to as many as 4,000 job losses. It is also thought to be considering cuts to its bonus pool of up to 40%. Continue reading...
Predictions that global economy is heading for a recession are premature | Jeffrey Frankel
Despite many forecasts, a worldwide downturn in 2023 is not inevitable – and it can be avoidedThe world’s leading economists spent most of 2022 convincing themselves that, if the global economy was not already in a recession, it was about to fall into one. But with the year’s end, the global slump has been postponed to 2023.Clearly, the reports that the US was in recession during the first half of the year were premature, especially given how tight the country’s labour market is. And, despite the confidence with which many again proclaim the inevitability of a downturn, the chances of one in the coming year are well below 100%. But, owing to the rapid interest rate rises by the US Federal Reserve and other big central banks, there is something like a 50% chance of a recession in 2023 and a 75% chance of it happening at some point during the next two years. Continue reading...
Two-thirds of UK consumers plan to cut non-essentials in 2023
Cost of living crisis forcing families to cut back on eating out, holidays and other discretionary items, survey findsTwo-thirds of UK consumers are planning to cut their discretionary spending in 2023 amid concerns about the cost of living crisis, according to a survey.Highlighting the pressure on families and the wider economy from inflation, the accountancy firm KPMG said 61% of consumers in a poll of 3,000 were preparing to reduce their spending on eating out, holidays and other non-essentials. Continue reading...
ExxonMobil launches legal challenge to EU’s windfall tax on energy firms
US oil firm contests legal authority for ‘solidarity contribution’ to raise funds to offset soaring energy pricesExxonMobil has launched a legal challenge against the EU in an attempt to derail the bloc’s windfall tax on the profits of energy producers.In a high-stakes political battle as countries across Europe and the wider western world struggle with soaring energy costs and sky-high inflation, the US oil firm said it believed the EU had overreached its powers with the windfall tax. Continue reading...
No 10 says Sunak wants unions to ‘reach fair agreement’ with employers as head of PCS warns action will escalate in January – as it happened
PCS says it is planning to escalate industrial action after Christmas as Downing Street calls for talks between unions and employers. This live blog has closed
Extra bank holiday proves even more popular with shoppers than Boxing Day
About 40% greater footfall recorded at retailers on Tuesday than on traditional day for festive salesMore shoppers flocked to British retail parks, high streets and shopping centres on 27 December than on Boxing Day, exploiting the extra bank holiday to hunt for bargains in the post-Christmas sales.The number of people hitting the shops was nearly 40% higher than on Monday, according to research by retail data analysts Springboard, and higher than a year ago. Continue reading...
Adam Smith would have recognised the monsters of modern capitalism | Letter
Terry Peach responds to an article by Robert Reich on Donald Trump, Sam Bankman-Fried and Elon MuskRobert Reich’s conjecture (Trump, Bankman-Fried and Musk are the monsters of American capitalism, 24 December) that Adam Smith “would have bemoaned the … corruption, and cynicism spawned by modern capitalism and three of its prime exemplars” is certainly consistent with Smith’s known beliefs. But he would not regard these dismal phenomena as anything new. From his 18th-century perspective, the avarice and ambition of the rich was not only the driving force behind economic development, it was also the harbinger of “rapine”, “injustice” and the “corruption of our moral sentiments”.As for self-preening plutocrats, obsessed with “the gratification of their own vain and insatiable desires” and with “no love of mankind”, they may well come to bask in the applause of the foolish masses. But that may not be the end of their story. Even if they escape legal censure, the “furies of shame and remorse” may finally exact their vengeance. Reich’s “monsters” should take note.
China’s move to ease Covid travel restrictions lifts hopes for global economy
Analysts says lifting of many rules may soften impact of higher interest rates and unblock supply chains in 2023
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