Fall comes amid concerns that soaring inflation will curb spending by large manufacturersCopper has suffered its worst weekly plunge in price since the early months of the coronavirus pandemic, in a stark indicator of the worsening state of the global economy.The metal dropped below $7,000 (£5,913) a tonne for the first time since November 2020, as fears over a worldwide recession grew. Continue reading...

Shutdown of cities takes its toll, while property market remains in crisis and global outlook darkensChina’s economic growth has slowed sharply in the second quarter of the year, official data showed on Friday, highlighting the colossal toll from widespread Covid lockdowns and casting doubt over whether its pre-ordained growth target can be met.Output contracted by 2.6% between April and June compared with the previous quarter, the statistics bureau said, prompting many economists to revise their predictions for the world’s second biggest economy. Continue reading...

Shortage of workers in US forces firm to ship more drinks from UK amid rising freight costs and port holdupsThe soft drinks company Fever-Tree has warned that the soaring cost of glass for its bottles amid shortages, plus higher transport fees, mean its profits will be almost a third lower than hoped.The London-based tonic and mixer maker said it was experiencing an “exceptionally challenging environment” with glass prices rising by more than 10%. Continue reading...

It’s been almost 50 years since Australia had an unemployment rate lower than this. How did we get here and what about wages?

Largest US bank saw net income fall 28% from April to June and is concerned about economy and geopolitical tensionsJP Morgan Chase, the largest US bank, saw its net income fall 28% over the months of April to June as it boosted reserves to cover possible customer loan defaults amid concern over the economy and geopolitical tensions.The investment bank’s profits for the second quarter came in at $8.65bn (£7.3bn), or $2.76 per share, far less than $11.95bn, or $3.78 per share, over the same period a year ago. Shares in the bank dropped 4.3% on Thursday, hitting a fresh 52-week low. Continue reading...

Anxiety over global slowdown knocks sterling to a two-year low, as oil falls to its levels when the Ukraine war beganThe owner of the Upper Crust sandwich chain and Ritazza coffee shops doesn’t see any early respite from inflation.SSP reported this morning that:In common with the entire hospitality sector, we continue to face widespread and increasing inflationary pressures impacting our supply chain, labour and energy costs, and these are anticipated to persist well into next year.While there are clearly macro-economic uncertainties ahead, the housing market remains robust, our forward order book is strong and we have the resilience and flexibility to react to changes in the operating environment. Continue reading...

Body revises economic forecast and says outlook for EU and eurozone heavily dependent on course of warEurope’s economy faces the twin blows of slower growth and higher inflation as it struggles to deal with the fallout from Russia’s invasion of Ukraine, the European Commission has warned.In its summer forecast, the governing body in Brussels said the “protracted war” was sending shockwaves through the eurozone and the wider EU, leading to a marked slowdown in activity next year. Continue reading...

Ben van Beurden says Ukraine war fallout means big rise in bills and possible need to ration suppliesEuropean consumers could face energy rationing this winter as costs continue to soar amid the risk of Russia cutting off gas supplies, Shell’s chief executive has warned.“It will be a really tough winter in Europe,” Ben van Beurden told the Aurora spring conference in Oxford on Thursday. “We will all face very significant escalation in energy prices. In the worst case, Europe will need to ration its energy consumption.” Continue reading...

Cost-of-living crisis ‘only getting worse’ says IMF chief Kristalina Georgieva, predicting a tough 2022, and ‘even tougher 2023’The outlook for the global economy has “darkened significantly” in recent months, the head of the IMF has warned, and the world faces an increasing risk of recession in the next 12 months.The commodity price shock from the war in Ukraine had exacerbated the cost-of-living crisis for hundreds of millions of people, Kristalina Georgieva said on Wednesday, and it was “only getting worse”. Continue reading...

Inflation gap highlights need for Boris Johnson’s successor to stick to levelling up agenda – thinktankPoor home insulation and greater car dependency means inflation is up to 30% higher in northern English cities than it is in London, according to a new report.The Centre for Cities thinktank said a study of cities in England and Wales showed the north-south cost of living divide was intensifying regional inequality. Continue reading...

A fall in oil prices is small consolation – even ignoring fuel and food, US inflation is running at 6%Chapter one in the inflation story was central banks’ failure to recognise the threat as they spent most of 2021 warbling about supply-chain shocks and “transitory” factors. Chapter two was the belated realisation that action was needed, followed by several yanks on the interest rate lever. Chapter three – scheduled to arrive about now – was supposed to be firm signs that the inflationary peak is in sight.We’re not there yet. The shocker from the US on Wednesday was an inflation reading of 9.1% in June, a couple of notches higher than markets and economists had forecast. The US Federal Reserve’s promise-cum-threat to hike rates by 0.75% at the end of this month, after a similar move last month, now looks nailed on to be delivered in full. Cue another discomforting rise in the dollar, causing the euro to dip below parity for the first time since 2002. Continue reading...

Soaring prices a top concern for many Americans, and likely influencing many voters in a midterm election yearInflation in the US is at a 40-year high – an astounding 9.1% year-over-year, according to a government report released Wednesday.Prices have climbed every month, while consumer confidence has hit record lows. Inflation is now a top concern for many Americans, and is likely influencing many voters in a midterm election year. Continue reading...

News of 9.1% year-on-year increase for June virtually guarantees Fed will hike interest by three-quarters of a point this monthUS inflation accelerated in June by more than forecast, led by elevated prices for gasoline, food and housing costs and resulting in the largest annual increase in inflation in more than 40 years.The news virtually guarantees that the Federal Reserve will hike interest rates by another three-quarters of a point this month. Continue reading...

Analysis: May is only one month and there is likely to be a sharp contraction in June

Stocks fall after US inflation jumps to 9.1%, as UK economy grows faster than expected by 0.5% in MayMonthly GDP is now estimated to be 1.7% above its pre-pandemic levels (February 2020).Production grew by 0.9% in May, driven by 1.4% growth in manufacturing and a 0.3% rise in electricity, gas, steam and air conditioning supply. Continue reading...

Single currency tanked to low of $0.9998 as Ukraine war and high gas prices fuel concern of recessionThe euro dipped below parity against the dollar on Wednesday for the first time in almost two decades, as growing concern about rising recession risks in the eurozone continued to batter the currency.The European single currency started this year on a strong note, given a post-pandemic economic recovery. But Russia’s invasion of Ukraine, surging European gas prices and fears that Moscow could cut off supplies further has raised the spectre of recession and hurt the euro. Continue reading...

GDP rose by 0.5% in May after revised 0.2% decline for April, says ONS

Shipping delays and bottlenecks, along with rising popularity of hard liquor, cause shortage, accompanied by dip in chicken nugget stocksAs supply chain pressures and shipping delays are felt around the world, New Zealand is being hit by a nationwide dearth of bourbon, with shortages also hitting the craft beer and chicken nugget markets.“It’s a pain all right,” said Neil, a worker at the Bottle-O store in Mt Eden. “There’s a shortage of bourbon at the moment. We can’t get anything from out of America, apparently.” Continue reading...

Thinktank blames inequality and poor productivity as CBI calls for investment policies to fuel growthThe UK’s failure to get serious about inequality and weak growth over the past 15 years has left the average British household £8,800 poorer than its equivalent in five comparable countries, research has found.A “toxic combination” of poor productivity and a failure to narrow the divide between rich and poor had resulted in a widening prosperity gap with France, Germany, Australia, Canada and the Netherlands, the report from the Resolution Foundation said. Continue reading...

Analysis: Investors often turn to US currency in times of uncertainty and there are plenty of reasons for them to be jittery

Euro slides to a 20-year low of $1.0001 on anxiety that Europe will fall into recession, as Heathrow introduces limit on summer holiday passengersThe euro is teetering ever closer to parity with the dollar.It’s now trading at just $1.0005, on concerns that the shutdown of the Nord Stream 1 gas pipeline for maintenance could become permanent.“While we believe that a cessation of Russian gas supply to Europe is a real possibility, one that would cause a Eurozone-wide recession with three consecutive quarters of economic contraction, there are also good reasons to assume that gas supplies will resume after the maintenance.” Continue reading...

When a country's economy is discussed in the news, you often hear a number called the GDP or 'gross domestic product' thrown around. But what does it actually mean, and is it gross? In this episode of News glossary, Matilda Boseley explains the meaning of GDP and how it reflects economies in Australia and abroad► Subscribe to Guardian Australia on YouTube

Boost in demand in June on back of jubilee celebrations fails to prevent third successive fallBritain’s retailers are suffering the sharpest drop in spending since the depths of the coronavirus pandemic as hard-pressed consumers tighten their belts as a result of soaring inflation.The monthly health check from the British Retail Consortium (BRC) reported a third successive drop in activity as the cost of living crisis continued to bite. Continue reading...

Latest updates: nominations open and close on Tuesday, with first round of voting on Wednesday

Shares hit as China try to quell resurgent Covid-19 outbreaks, while shares in Twitter drop after Musk tries to cancel takeover, and Uber is hit by leakElon Musk has responded to Twitter’s pledge to sue him, with a series of photos of himself having a good old chortle:But will Twitter actually have the last laugh, having turned to New York-based law firm Wachtell, Lipton, Rosen & Katz to force Musk to complete the deal?“They will likely be asking for a declaratory judgment that they are not in violation of the contract. Also, they will ask for an order from the court that Musk specifically perform his obligations under the agreement,” said Brian Quinn, an associate professor at Boston College law school.Under the terms of the agreement the company can ask a judge for “specific performance”, which would compel Musk to buy the company for the $54.20 a share he agreed to in April. Alternatively, the company can also seek a $1bn break fee from Musk for walking away from the deal in contravention of the agreement. Continue reading...

Head of train drivers’ union takes pride in calling very few strikes – but enough is enough, he saysMick Whelan, general secretary of the train drivers’ union Aslef, prides himself in rarely calling a strike since taking the helm in 2011. Now though, three years since most of his members last had a pay rise, industrial action looks increasingly likely.Ballots close on Monday at eight major train operators where drivers are voting to back strikes, and three more are due in a fortnight – potentially giving Whelan the power to bring most of the railway around England to a halt.I don’t understand how the government buys trains that end up in the hands of rolling stock companies at low cost and then rented back to the industry at high rates. Continue reading...

A weak pound often appears as a harbinger of economic doom for the UK – now it looks poised to weaken furtherBoris Johnson’s chaotic government, and its equally chaotic collapse, are not the only source of panic in the UK nowadays. There is growing anxiety about the exchange rate of the British pound as well.Since peaking in the spring of last year, the pound has depreciated by about 10% against the dollar. “Britain’s currency is getting slaughtered on international markets,” we are told. Of the five currencies underlying the International Monetary Fund’s reserve asset, special drawing rights, only the Japanese yen has done worse than the pound. Continue reading...

Imaginative public spending is unlikely to feature in the Conservative leadership race, where tax cuts will be a key dividing lineThe UK isn’t going broke. More public spending – such as cheaper public transport and writing off student loans – can help counter price shocks. However, imaginative government action is unlikely to feature in a Tory leadership race dominated by austerity and trickle-down messages. Rishi Sunak is the torch-bearer for fiscal conservatism, with a message not to believe in his rivals’ “fairy tales”. They in turn cast the former chancellor as the Scrooge of British politics, insisting on lean budgets with tax increases to balance them. Britain seems caught between obsessive frugalists and reckless opportunists.The Office for Budget Responsibility made headlines with claims last week that Britain faces an “unsustainable” debt burden. Yet this forecast is based on projections 50 years from now. It seems a little unrealistic to think future governments will not be able to head off such a scenario and restart economic growth. The OBR is in thrall to orthodox economics, which perhaps explains why it persists in an analysis that can cause needless alarm. The watchdog sets itself an arbitrary target of keeping national debt to 75% of GDP – the level it reached in March 2020 – by 2072. To achieve this, the OBR suggests spending cuts or tax rises worth £37bn every decade. Continue reading...

Candidates’ focus on reducing tax would throw petrol on the inflationary fire and turbocharge inequalityBy the time the Conservative party gets around to electing a new leader, Britain will either be in recession or perilously close. The cost of living crisis will be entering a new, more painful phase with a fresh surge in energy bills. A tough autumn will be approaching, with inflation – already at a 40-year high – heading for 11%.These are far from ideal conditions for an incoming prime minister. Yet so far, none of the Tory candidates is offering real solutions to the cost of living challenge. Instead, the leadership contest is taking place in some parallel universe where the biggest tax cutter is king. Continue reading...

Policymakers can only wait and see how the next prime minister’s tax and spend policies will affect the economyOfficials at the Bank of England will be watching the progress of the race to replace Boris Johnson as Tory leader and prime minister with rapt attention.In normal times, central banks are supposed to pay little regard to the political gyrations that keep politicians occupied in Westminster’s tea rooms and bars. These are not normal times. Inflation has hit 9.1% and Bank staff are under pressure to push up interest rates to squeeze the economy and with it the inflationary pressures driving prices higher. Continue reading...

Analysis: If Johnsonomics stands for anything, it is a lack of plan or vision to address Britain’s economic woes

Cornwall Insight predicts UK energy cap will rise to £3,363 a year in January, as US economy shakes off recession worries by adding more jobs last monthThe CMA’s initial report into the fuel market, just released, highlights how prices have soared:The price of a litre of both petrol and diesel has gone up by over 60p in the last year. Households now pay on average more than £500 per year extra to run a medium-sized petrol car, and for those living in rural areas, the impact will generally be greater.More than half of motorists have changed their behaviour in response to this increased cost.Even with his resignation, he remains emboldened to continue as a caretaker PM until the autumn while a new leader is selected, eager to push through his economic agenda and make one final stand.Needless to say, at a time when the UK economy is already on its knees, these developments may continue to add to the negative sentiment and weigh on the outlook for UK financial assets. Continue reading...

US unemployment rate held steady at 3.6%, labor department said, as jobs report indicated resilienceThe US economy added 372,000 jobs in June, an indicator of resilience despite signs of slowing economic growth.The jobs reports is seen as a key indicator on whether high inflation – and central bank efforts to tame it with interest rates rises – is beginning to bite down on the wider American economy. Continue reading...

Japanese politician who as prime minister had sought to stimulate the economy through the radical monetary policy of AbenomicsFew other Japanese leaders in living memory have left as deep an imprint on their country as Shinzo Abe. One of the most transformative politicians of the postwar era, he was shot dead at the age of 67 while giving a campaign speech in the western city of Nara ahead of elections to the upper house.When he stepped down as prime minister in 2007 after only a year, most people assumed he would fade into an undistinguished career on the backbenches. Yet just over a decade later, he had become Japan’s longest-serving premier, with a host of major political reforms to his name and even his own globally recognised brand of economic stimulus, Abenomics. Continue reading...

From inflation to tax, labour shortages to R&D, ministers will need to confront these key issues and fastBritain has emerged from the pandemic with most economic indicators flashing red. The prospects for the UK economy have weakened this year and next in response to the Russian invasion of Ukraine, a messy divorce process from the EU that remains unresolved and global supply chain blockages hitting many business sectors.Following Boris Johnson’s departure, a new government will need to release itself from former chancellor Rishi Sunak’s spending constraints to ease the inflationary pressures on households while preventing a possible slide into recession with extra support for businesses. Continue reading...

Markets look at the wider picture and post-Brexit, post-pandemic economic policy is still a vacuumThe relief rally in sterling on the resignation of an incompetent prime minister wasn’t much to shout about. The pound rose very modestly in the morning and gave back some of the gain in the afternoon. At $1.20-ish against the dollar, the currency still sits at roughly its lowest level since the 2016 referendum, barring a few wild trading days at the start of the pandemic. In an ugly contest with the euro, which is spooked by the threat of rising bond yields among its weaker members, the two currencies are at level pegging.Markets look at the wider picture: post-Brexit and post-pandemic economic policymaking in the UK is still a vacuum. The economy almost certainly contracted in the second quarter of this year, even before consumers are hit with the next clunking hike in their energy bills in October, an event that will tip inflation over 10% in all likelihood and emphasise how the UK’s price squeeze is a notch or two more severe than that of other major economies. Continue reading...

Office for Budget Responsibility warns the world is becoming a riskier place, as UK faces cost of aging population and loss of fuel dutyElectricals goods retailer Curry’s has warned that the cost of living squeeze is likely to hit sales, as it passes on rising costs onto customers.Curry’s reported this morning that the cost of goods is rising:On most products we pay in local currency when the goods arrive in our markets, the price increases we are seeing at the moment will be felt by all of our competitors as well.These costs are passed on to consumers, but we seek to proactively mitigate through providing similar, different specification products at alternative price points.Currys is defying the gloomy headlines, jumping almost double digits despite lowering its profit forecast for this year and next year amid uncertainty around the outlook for UK consumer spending.Investors were encouraged by Currys’ full-year 2022 top and bottom line beats. Adjusted EBIT came in at £274 million versus expectations for £245 million while profit before tax hit £186 million, also ahead of consensus. Full-year group sales rose 24%, higher than expected thanks to the return to bricks and mortar shopping post pandemic. Continue reading...

Veteran retailer among business leaders and Tory donors calling for a new prime minister to boost UK’s ailing economyStuart Rose, the veteran retailer and Conservative peer, has urged Boris Johnson to leave No 10 now, describing him as a “lame duck prime minister”.His comments came as a series of business leaders and Tory donors, from the hotelier and Brexit backer Rocco Forte to the telecoms entrepreneur David Ross, gave their reaction to Johnson’s resignation and called for his successor to boost the UK long-term economic prospects amid fears of an impending recession. Continue reading...

Taxes ‘must be raised to offset mounting cost of ageing population and falling fuel income’Britain’s public finances are on an “unsustainable” long-term path with a debt burden that could more than treble without further tax rises to cover the mounting cost of an ageing population and falling fuel duties, the Treasury’s independent forecaster has warned.The Office for Budget Responsibility said that if economic shocks continue to hit the public finances, debt is on course to reach almost 320% of annual national income (GDP) in 50 years’ time – up from 96% now – unless successive governments raise revenues to offset rising costs. Continue reading...

The UK suffers from poor productivity and lacks investment, something Rishi Sunak’s planned tax rise aimed to addressNadhim Zahawi’s musings on business taxes may become irrelevant at any moment, but this week’s chancellor of the exchequer arrived with an idea to kick around: delay, reform or simply cancel his predecessor’s hike in corporation tax from 19% to 25%, due to take effect from next April.That, at least, seemed to be the meaning of Zahawi’s many references to the tax in his day-one interviews. “I know that boards around the world, when they make investment decisions, they’re long term, and the one tax they can compare globally is corporation tax,” he told Sky News. Continue reading...

Kyiv asks largest independent oil trader to state when it will ship last barrel and how much it will ship until that date

Analysis: Rishi Sunak’s successor treading tightrope between spending to keep PM in power and dealing with economic crisis

Planned hike from 19p to 25p maybe looked at again amid drive to ‘keep UK business competitive’Nadhim Zahawi, the new chancellor of the exchequer, has called for a review of the UK’s corporate tax policy in a clear hint that a rise from 19p to 25p due next year could be reduced or scrapped.Zahawi, who took up the post on Tuesday evening after Rishi Sunak’s resignation, said he wanted to examine the planned increases in corporation tax to make sure British companies remain competitive. Continue reading...

Chief economist Huw Pill wants to make strategy plain to the public in hint of more interest rate risesThe Bank of England will “deliver inflation back to its 2% target”, its chief economist has pledged, despite the challenges it faces from rising food and energy costs and a fall in the value of the pound that has made both more expensive.Huw Pill said he wanted to make plain to the public that the central bank’s single purpose at the moment was to bring down the rate of price growth, in a clear hint that more interest rate rises are on the way. Continue reading...

Inside the cryptocurrency crash. Plus: pictures that changed the worldGet the Guardian Weekly delivered to your home addressThe world of cryptofinance can be difficult to penetrate – and not without good reason. In the decade since bitcoin first became a tradable asset, complex and largely unregulated digital currency markets have boomed – fuelled latterly by a surge of activity from amateur home traders during the pandemic. But now, against a backdrop of more conventional global economic strife including the Ukraine war, rising inflation and higher borrowing costs, the digital finance sector is crashing.Could a bursting crypto bubble trigger serious problems elsewhere in the financial markets or the world economy? Alex Hern and Dan Milmo go behind the crypto crash, and ask how concerned we should all be. Continue reading...

The children’s commissioner for England urged MPs to take urgent steps to tackle child povertyThe children’s commissioner for England has called on the government to develop urgent plans to tackle child poverty, amid the cost of living crisis that is hitting the most vulnerable in society hardest.Rachel de Souza said children were increasingly worried about the soaring price of basic essentials and the impact on their lives, telling MPs on the Commons education committee that urgent steps were required to tackle poverty ahead of a difficult autumn for families. Continue reading...

Financial Stability Report warns that UK and global economic outlook has ‘deteriorated materially’, as pressure builds on households and businessesThe pressure on households will “only intensify” through the rest of this year, the boss of Sainsbury’s has warned as he said the supermarket would invest £500m in attempting to keep prices low.The pledge came as the UK’s second biggest supermarket, which also owns the Argos and Habitat chains, revealed that sales at established stores fell 4% in the 16 weeks to 25 June compared with the same period a year before and excluding fuel.Set against ever tightening competitive screws, Sainsbury had its work cut out on any number of fronts going into the statement. And the ferocity of competition in the sector is plain to see.Against strong comparatives from a partial lockdown last year, each of the main categories have fallen, with Grocery sales down 2.4%, Argos 10.5%, General Merchandise 14.6% and Clothing 10.1%. The picture is marginally better against pre-pandemic sales, although still mixed, with Grocery up 8.7% and Clothing up 3.9%, but Argos down 4.5% and General Merchandise down 13.8%. Continue reading...

UK households likely to face more inflationary pressures arising from Ukraine war, says central bankThe outlook for the UK and global economy has “deteriorated materially” due to inflationary pressures largely stoked by Russia’s invasion of Ukraine, putting extra strain on British household and business finances, the Bank of England (BoE) has warned.The worsening economic outlook has caused volatility in global markets in recent months with more turbulence likely, the Bank said in its quarterly health check on the UK’s financial system. Continue reading...

West’s response to effects of Covid and Ukraine war condemned as shortsighted ‘collective failure’ to invest in future human capitalThe international community would be “playing with fire” if it failed to help Africa recover from Covid and the impact of the Ukraine war, the International Monetary Fund’s director for the continent has said.Failure to invest and support the continent was shortsighted and detrimental to the global economy, as half of the new entrants into the global workforce over the next decade would come from sub-Saharan Africa, Abebe Aemro Selassie, director of the IMF’s Africa department, told the Guardian. Continue reading...

Women in Leicestershire on how soaring bills have hit their finances – and why one-off payments aren’t enough