Proportion of people experiencing shortages of food items has risen over the last year, ONS says

Consumer prices rose 0.6% from December to January, up sharply from a 0.2% increase from November to DecemberThe Federal Reserve’s preferred inflation gauge ticked higher in January, a sign that price pressures remain entrenched in the US economy and could lead the Fed to keep raising interest rates well into this year.Friday’s report from the commerce department showed that consumer prices rose 0.6% from December to January, up sharply from a 0.2% increase from November to December. On a year-over-year basis, prices rose 5.4%, up from a 5.3% annual increase in December. Continue reading...

UK rent and rate rises plus tougher rules are fuelling a crisis for both tenants and owners

Thérèse Coffey, Defra secretary of state, has predicted that the UK’s fruit and vegetable shortages could last up to four weeks

Catherine Mann, a hawkish member of the MPC, says high rates necessary to stop inflation becoming embedded in wages and pricesInterest rates will need to rise again to prevent inflation becoming a persistent problem in the UK, a Bank of England policymaker has warned.A shortage of workers and high wage demands were likely to continue pushing up inflation, acting as a counterweight to falling energy prices, said Catherine Mann, a member of the Bank’s monetary policy committee (MPC), which sets the base rate. Continue reading...

Loan is on top of £25bn that cash-strapped Islamabad already owes Beijing and Chinese commercial banksChina has agreed to loan Pakistan $700m (£580m) to help it weather its worst economic crisis in a generation, in a development that will intensify concern among western countries about cash-strapped Islamabad’s debt burden to Beijing.The loan comes on top of $30bn (£25bn) that Pakistan already owes China and Chinese commercial banks. Securing the financing will help to unlock bailout cash from the International Monetary Fund (IMF). Continue reading...

Chief executive Charlie Nunn could receive £9.1m payout, while top performing bankers to share £446m bonus pot for work in 2022Lloyds Banking Group has been accused of “stuffing the pockets of already overpaid bankers” after proposing increases for top bosses that could result in a £9.1m payout for its chief executive, Charlie Nunn.The bank revealed on Wednesday that staff would share a £446m bonus pot – the highest in four years – for their work in 2022, despite reporting flat annual profits, after an increase in the money put aside for a potential jump in defaults. Continue reading...

Falling gas prices and CPI decline could boost public finances before 2024 general electionBritain’s inflation rate could fall to below 2% by the end of the year, according to new financial industry forecasts, handing the chancellor a boost to the public finances before a general election in 2024.Predictions that falling gas prices will accelerate the decline this year in the consumer prices index (CPI) from last month’s level of 10.1% could also support a recovery in household living standards and persuade the Bank of England to cut interest rates earlier than expected. Continue reading...

British Steel plans to close its coke ovens, a move that could result in 260 job losses at its Scunthorpe site in northern England

Can Putin weather the west’s economic attack? Plus: Global disinformation.

Now Modi’s government has modernised it must make growth sustainable, inclusive and fairIndia is poised to become the world’s most important country in the medium term. It has the largest population (which is still growing), and with a per-capita GDP that is just one-quarter that of China’s, its economy has enormous scope for productivity gains. Moreover, India’s military and geopolitical importance will only grow, and it is a vibrant democracy whose cultural diversity will generate soft power to rival the US and the UK.One must credit the Indian prime minister, Narendra Modi, for implementing policies that have modernised India and supported its growth. Specifically, Modi has made massive investments in the single market (including through de-monetisation and tax reform) and infrastructure (not just roads, electricity, education and sanitation, but also digital capacity). These investments – with industrial policies to accelerate manufacturing, a comparative advantage in tech and IT, and a customised digital-based welfare system – have led to robust economic performance after the Covid-19 slump. Continue reading...

The RBA tells us the pain is only temporary, but it could be here for a while. Here’s whyAustralia’s politicians and Reserve Bank officials have obfuscated the extent of the economic challenges ahead.The spin is that interest rate rises are temporary and for the best. The truth is that the cost of living and interest rates may stay high for some time to come. Continue reading...

Jeremy Hunt says he will not improve pay offer despite surprise budget surplusJeremy Hunt has insisted the government is unable to afford a bigger pay increase for nurses and other public sector workers at next month’s budget, despite official figures showing an unexpected boost for the exchequer in January.Batting away calls for an improved pay offer to break months of strike deadlock, the chancellor said the government finances still remained under pressure after recording a surprise £5.4bn surplus last month. Continue reading...

Woking says it is at risk of issuing section 114 notice, which would force central government to interveneA local council in Surrey has signalled it is close to effective bankruptcy after amassing debts worth almost £2bn to fund a property investment spree, raising fresh questions over the fragile health of local authorities after years of austerity.Woking borough council said it was “in the territory” of being unable to meet its financial obligations, amid a surge in debt interest costs on its investments, which include a shopping centre, residential skyscrapers and 23-storey Hilton hotel. Continue reading...

Asda introduces a limit on tomatoes, peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries, after bad harvest hits supplies

Pound edges up as stronger economic growth increases chances of further interest rate risesA rebound across the UK’s services sector in February has raised hopes that the country might avoid recession in the first half of this year.Analysts said the bigger than expected surge in business activity appeared to show that the UK would narrowly avoid a recession, though the squeeze on consumer spending from the energy crisis and a struggling manufacturing sector would continue to put the brakes on the economic recovery. Continue reading...

I was in a six-month trial for the four-day week – it transformed people’s spare time and their working lifeI’m interested in any idea that makes staff happier and more productive, because I work in HR. But until last year I hadn’t given a lot of thought to asking people to work less. When I first heard about the idea of a four-day week, I have to admit I thought it sounded a bit too good to be true. When we gave it a try, though, my teams and I thought it was a huge success.Last year, from July to December, Citizens Advice Gateshead – where I work – was one of 61 companies, comprising about 2,900 workers, who took part in a six-month trial run by the 4 Day Week campaign. So far we’ve been continuing with the trial as our staff have found it so rewarding. We want conversations to continue so that staff are thinking about how they can improve their work-life balance and what we can do to support them.Claire Hall is head of HR and agile working at Citizens Advice Gateshead Continue reading...

Surprise surplus lands the chancellor with a dilemma – but he is unlikely to listen to calls to change courseInflation is the chancellor’s friend if he only considers his income.The official figures for the public finances show total tax revenues rose by 13.2% in January from the same month a year ago. Continue reading...

Nearly all companies taking part opt to continue with new pattern as staff report better work-life balanceThe vast majority of companies taking part in the world’s largest trial of a four-day week have opted to continue with the new working pattern, in a result hailed as evidence that it could work across the UK economy.Of the 61 companies that entered the six-month trial, 56 have extended the four-day week, including 18 who have made it permanent. Continue reading...

Wholesale milk price hit all-time record in December, after months of farmers absorbing higher costsOn a misty February morning, a few dozen of Michael Oakes’ herd of dairy cows are busy tucking into their food, inside one of the large sheds on his farm near Bromsgrove in Worcestershire.“They’re worse than teenagers,” laughs Oakes, of his 160-strong herd of mostly black and white Holstein Friesians, as well as 30 brown Jersey cows. “All they do is sleep, eat and go to the toilet.” Continue reading...

Exclusive: Ukrainian economic adviser urges energy firms to heed deadline to halt trade of ‘Russian-origin oil products’

Many believe there is little future in trying to tackle problems of the 2020s with institutions created in the 1940sWanted: a new president for the World Bank, a venerable global institution with a mission to eradicate poverty. The successful candidate will have a plan for tackling the crisis in human development caused by the global pandemic. Climate-change deniers and non-Americans need not apply.By all accounts, the US has already made up its mind who it wants to run one of the two bodies established at the Bretton Woods conference in 1944. Rajiv Shah, who runs the Rockefeller Foundation and was formerly the head of the US agency for international development (USAID) is the hot favourite to take over from the departing David Malpass. Continue reading...

The Conservatives’ long assault on the public sector has been multifaceted. But the meanness over public sector pay is its ugliest aspectBefore we get on to Brexit – don’t worry: we shall – I want to draw attention to what I regard as the epitome of the meanness and duplicity of what is indubitably the worst government of most of our lifetimes.Sorry, did I say “government”? A neighbour asked me the other day if I was aware of a new oxymoron. Tell me, I replied. “The very phrase ‘Conservative government’,” he said. Continue reading...

Unite union calls for a windfall tax on big banks’ excess profits generated by interest rate rises

UK share index has hit record levels this morning, before surprise jump in US producer price inflation hits stocks

Calls for White House to lose stranglehold on choosing bank’s leadershipThe head of the Rockefeller Foundation, Rajiv Shah, has emerged as the favourite to succeed David Malpass as head of the World Bank amid calls for the White House to lose its stranglehold on choosing who should run the global development body.Shah, a doctor, health expert and former head of the US Agency for International Development, is one of the names hotly tipped to be the Joe Biden’s administration choice as a replacement for Malpass following his announcement that he would be leaving his post by June. Continue reading...

David Malpass was criticised when he dodged question about fossil fuels’ link to climate crisisThe World Bank president, David Malpass, has announced his resignation months after sparking controversy by failing to say whether he accepted that fossil fuels were driving the climate crisis.Malpass, who was appointed to the post by Donald Trump in 2019, said he would step down from the multilateral development bank, which provides billions of dollars a year in funding for developing economies, by the end of June. Continue reading...

The index of largest companies listed on the London Stock Exchange reaches its highest levelBritain’s FTSE 100 share index has passed 8,000 points for the first time, as fears of a global recession ease.In an afternoon surge, the index of the largest 100 companies listed on the London Stock Exchange hit 8,003.65 points, a new record. Continue reading...

Live, rolling coverage of business, economics and financial markets as transport and motor fuel prices contribute to decline in inflationUK inflation fell for a third consecutive month in January, although in double digits it remained at among the highest levels in 40 years amid the cost of living crisis.The latest prices data comes as the Bank of England considers a further rise in interest rates to tackle inflation at the highest levels since the early 1980s, in a move adding to pressure on borrowers after 10 successive rate rises in the past 18 months.While any fall in inflation is welcome, the fight is far from over. High inflation strangles growth and causes pain for families and businesses – that’s why we must stick to the plan to halve inflation this year, reduce debt and grow the economy.Household electricity and gas costs remain by far the biggest drivers, while transport costs saw a further easing. Producer price inflation, however, remains much higher at 14.1%.The stubbornly high rate means that we are now seeing a compounding effect on what was already a spiking inflation rate this time last year. The peak may have started to pass but prices have settled at a much higher level than two years ago. Continue reading...

From low-fat milk to eggs, passenger transport to recreation, how costs have soared

With food inflation at 16.7% and cost of gas up 130%, poorer households are still bearing the brunt of the cost of living crisis

This online tool will help you discover what is contributing to your household’s cost of living increasesInflation is soaring in the UK as people are hit by higher prices for everyday essentials.Now in double digits, the latest inflation rate for the 12 months to January 2023 means that goods and services cost over 10.1% more than they did a year ago – in most cases, surpassing any pay rises workers can expect to receive. Continue reading...

Official annual rate drops in January for third straight month, although households still under pressure

The banks! We cannot send them to Pluto because they have our money squirrelled away in their bankholes

Not only is demand even greater than it was year ago, but rampant inflation means the pound is buying lessThe shelves should be chock-a-block with baked beans, soup and tuna but it looks as if someone has played Supermarket Sweep and Angela Gardiner admits she has never seen supplies at the food bank so depleted.“I have never seen it like this,” Gardiner says, pointing to yawning gaps on the blue racks filling the unit at the Canterbury food bank, where she is operations director. “This is normally full of beans, but we are short of tinned stuff.” Continue reading...

Blue-chip share index has hit 7996 points for first time, but drops back as US consumer prices index is higher than expected in January

Falling prices are welcome news, but latest reading is still far higher than the Federal Reserve’s annual target rate of 2% inflationUS inflation continued to cool in January, rising at an annual rate of 6.4%, according to figures released by the Bureau of Labor Statistics.The consumer price index (CPI) – which measures a basket of goods and services – has now fallen for seven consecutive months, down from a four-decade high of 9.1% last June, and down from an annual rate of 6.5% in December. Continue reading...

The fact that unemployment has started to rise suggests more painful days lie aheadBritain’s economy is suffering from a textbook case of stagflation, and the symptoms are clear from the latest labour market trends. It looks like a complex picture. The number of people looking for work rose while the number of job vacancies fell. Hours worked in the economy were down while days lost through strikes in 2022 were the highest annually since 1989.In fact, the diagnosis is straightforward. There was zero growth in the final three months of 2022 while the annual inflation stood at above 10%. Attempts by the Bank of England to reduce inflationary pressure through higher interest rates are feeding into lower levels of activity – but only slowly. There has been no sudden collapse of the sort seen during the global financial crisis of 2008. Continue reading...

Jonathan Haskel says UK’s current productivity penalty is about 1.3% of GDP, or £29bn, due to business investment flattening out after 2016 referendum

Investment in the country since the referendum has ‘stopped in its tracks’, according to a study led by Jonathan HaskelThe UK has suffered a loss of business investment since the 2016 Brexit referendum worth £29bn, or £1,000 a household, according to a study by a senior Bank of England official.Jonathan Haskel, an external member of the Bank’s nine-strong monetary policy committee that sets UK interest rates, said private sector investment “stopped in its tracks” in the years following the decision to quit the EU. Continue reading...

Economic growth forecast to be 0.8% in 2023 but households still face cost of living pressuresThe EU is predicted to narrowly avoid recession as a result of a milder-than-expected energy shock, although households face difficult times ahead as cost of living pressures ease only gradually, the European Commission has said.Economic growth for the 27 countries of the EU is forecast to be 0.8% in 2023, compared with a 0.3% projection last autumn, when fears of winter power outages and the rising cost of living ran high. In the 20-country eurozone, the economy will expand by 0.9% in 2023, boosted by a better-than-expected performance in Germany and Italy, as well as relatively stronger growth in Spain. Continue reading...

Britain has a shrinking economy and a worker shortage – so why aren’t part-time workers increasing their hours?Tougher benefit rules have boosted employment in the UK, but have also trapped workers in dead-end jobs and weakened incentives to move from part to full-time work, according to the Institute for Fiscal Studies (IFS).As Britain is expected to be the only major industrialised country to see its economy shrink this year, amid rising interest rates and higher taxes, the government is frantically trying to find ways to boost economic growth. Continue reading...

Survey figure is highest in at least a decade as businesses face pressure to help staff in cost of living crisisUK employers expect to give workers pay rises of 5% this year, the highest in at least a decade, according to a survey of more than 2,000 businesses.Against a backdrop of worker shortages, more than half of employers said they expect to raise base or variable pay further in 2023 to better recruit and retain staff, according to the Chartered Institute of Personnel and Development (CIPD), a body representing employers. However, expectations for public sector pay rises are lower. Continue reading...

Billions in gifts or loans given when children are in early adulthood and buying first home or getting marriedBillions of pounds loaned by the “bank of mum and dad” to help with property purchases and to boost the finances of newly married offspring are helping to fuel rising levels of inequality, according to a thinktank.The Institute for Fiscal Studies said parents would provide £17bn in gifts and informal loans this year. Most transfers come from the over-50s to children in their late 20s and early 30s. Continue reading...

Neil Kinnock and Simon Price respond to an article by Larry Elliott which argued that a benefit of Brexit is that UK firms will have to invest in machinery to boost productivityLarry Elliott has a surprisingly neat view of labour demand and supply, and of British capitalism’s ability and willingness to respond to the “real incentive to invest more in new kit” in order to overcome labour shortages and raise productivity (If you want a benefit of Brexit, here it is: British employers must now innovate again, 9 February).He is, of course, right that labour shortages now are not solely the result of Brexit. Covid, chronic underinvestment in training, the self-harm of “austerity” and a decade of wage stagnation all play a part. Continue reading...

Flirtation with recession, along with new era of austerity and stagnation are consequences of policy response to pandemicThe UK economy is flatlining and has been for the best part of a year. Recovery after the deep slump of 2020 has petered out. Higher inflation, higher interest rates and higher taxes are all exacting a toll.Technically, the strict definition of a recession has not been met because the economy has yet to contract for two successive quarters. But official estimates showing zero growth in the final three months of 2022 meant it was a mighty close thing. With the full impact of higher borrowing costs yet to be felt, neither the chancellor nor the governor of the Bank of England would bet against a recession at some point this year.The Covid Consensus by Toby Green and Thomas Fazi is published by Hurst Continue reading...

Quitting the EU has stalled business investment, making us reliant on workers who are now scarce. Hence rising wages, high inflation and increased interest rates. Result? A looming recessionWhenever Andrew Bailey, the governor of the Bank of England, talks about the economy, he is forced to mention the toll taken by Brexit.Business leaders, initially reluctant to criticise the Tory decision to quit the EU, have begun to find their voice. Most recently, leading City figure Guy Hands called Brexit a “complete disaster” and a “bunch of total lies” that has harmed large parts of the economy. Continue reading...

The fall in petrol and oil prices is helping bring down the inflation rate, but an uncertain jobs market urges cautionAt long last, Britain’s annual inflation rate is on the way down. After hitting the highest level since the 1980s, heaping pressure on millions of households as living costs soared, official figures this week could bring some rare good news.City economists expect UK inflation to have cooled for a third month running in January – the exact number is announced on Wednesday – helped by falling petrol prices and a broader decline in the global price of oil and gas in recent months. The hope now is for a sustained decline in the months ahead, continuing a steady drop from the peak of 11.1% seen in October. Continue reading...

Weighed down by Brexit and austerity, the chancellor cracks his whip• You can order your own copy of this cartoon Continue reading...

Kept aloft by North Sea oil or privatisations, the economy under the Conservatives never got the long-term vision it neededListening to Bank of England officials in recent days, the message is clear: Britain’s economy is in a dire state.Bombed out by the 2008 banking crash and stunned by the Brexit vote before being poleaxed by Covid-19 and then a war in Ukraine, every industry is suffering, and to a considerable extent. Business tries to drag the economy out of the morass only to find the bog is so deep there is no traction. Continue reading...