This online tool will help you discover what is contributing to your household’s cost of living increases
Inflation has been soaring in the UK, with people being hit by higher prices for everyday essentials, but cost of living pressures are finally starting to ease.
The latest inflation rate for the 12 months to November 2023 means that goods and services cost 3.9% more than they did a year ago – in most cases, surpassing any pay rises workers can expect to receive.
Continue reading...Interest rates will need to stay high for sufficiently long to return inflation to 2% target
The Bank of England has said Britain is facing a tougher job to crush persistently high inflation than other advanced nations, as it kept interest rates on hold at the highest level since the 2008 financial crisis.
Pushing back against expectations in financial markets for a deep round of interest rate cuts next year, the central bank said there was still a long way to go before it could declare victory on inflation, despite a worsening outlook for the UK’s stagnant economy.
Continue reading...Package of spending cuts introduced in attempt to tackle country’s worst economic crisis in decades
Argentina has devalued its currency, the peso, by more than 50% as part of a package of large-scale spending cuts intended to address the country’s worst economic crisis in decades.
The plans, introduced under the newly inaugurated administration of Javier Milei, include cutting energy subsidies and cancelling tenders for public works.
Continue reading...Strong growth in earnings has been driven by increases in cost of living, says Resolution Foundation
Bank of England concerns over the high level of pay awards are likely to be eased in the coming months as wage settlements fall in response to a tumbling annual inflation rate, a thinktank has said.
The Resolution Foundation said recent strong growth in earnings was primarily caused by a sharp increase in the cost of living, with workers trying to prevent their living standards being eroded.
Continue reading...Cost of festive season is up almost a quarter in three years, according to the Centre for Economics and Business Research
Consumers will pay more for less this Christmas, economists have warned, getting less of a bang for their buck than the faint phutting of a puny, overpriced cracker being pulled.
Although Britons will spend more than in the belt-tightening 2022 festive season, the resultant fare won’t yet match the pre-pandemic Christmases past.
Continue reading...Stubbornly high inflation forces central banks to avoid cuts, but markets expect falls next year
The western world’s largest central banks are poised to keep interest rates on hold this week amid concerns over stubbornly high inflation, despite growing expectations for sharp cuts in borrowing costs next year.
In a crunch week for the global economy, the US Federal Reserve, Bank of England (BoE) and European Central Bank are expected to keep interest rates at their current restrictively high levels to ensure inflation continues to fall back from the highest levels in decades.
Continue reading...Vacancies declining as growth falters, recruiters’ body tells Bank of England
Britain’s largest recruiters have warned the Bank of England that demand for permanent hiring among UK businesses has plunged at the second fastest rate since the pandemic, amid worsening headwinds for the UK economy.
Ahead of the central bank’s decision on interest rates on 14 December, the Recruitment and Employment Confederation (REC) trade body said lingering economic uncertainty and hesitancy to commit to new hires had weighed on activity in November.
Continue reading...Treasury select committee says Edinburgh reforms launched a year ago have had little impact on UK economy
Jeremy Hunt’s post-Brexit City shake-up has been dismissed as a “damp squib” that has had little impact on the UK economy a year after its launch.
The chancellor announced the “bold collection” of policy changes known as the Edinburgh reforms in December 2022 with the claim they would “create jobs, support businesses and power growth across all four nations of the UK”.
Continue reading...Economy grows more slowly than expected, with consumer spending flat under the pressure of high interest rates
Australia’s economy surprisingly slowed in the September quarter, as the toll of higher interest rates hit consumers and trade turned negative.
Gross domestic product expanded 0.2% in the September quarter compared with the previous three months, marking an eighth consecutive quarter of growth, the Australian Bureau of Statistics said on Wednesday. Economists had forecast GDP growth would quicken to 0.5% from 0.4% in the June quarter.
Continue reading...Commission moves to delay 10% sales charge after intense lobbying by EU and UK carmakers
The European Commission looks set to propose a three-year delay to a 10% tariff on sales of electric vehicles between the EU and the UK, in a major boost for car industries across Europe.
Duties were due to kick in on 1 January 2024 but all the major carmakers in the UK and Europe including BMW, Volkswagen and Stellantis have been lobbying for a temporary reprieve.
Continue reading...European Commission chief Ursula von der Leyen to meet Chinese president Xi Jinping at summit on Thursday
The EU is to tell China that its €400bn (£343bn) trade deficit is not sustainable long term amid fears that it will flood the bloc with subsidised electric cars, solar panels and medical devices, threatening European manufacturing and jobs.
Ursula von der Leyen, the European Commission chief, and Charles Michel, the European Council president, will meet Xi Jinping at a summit on Thursday, the second of its kind this year.
Continue reading...Rating agency says Beijing may need to bail out local governments as property sector collapses
China’s ability to repay its government borrowing has been downgraded by the credit rating agency Moody’s, which said the ripple effects from a crisis in the property sector would undermine efforts to revive its flagging economy.
Moody’s warned that Beijing would need to bail out local and regional governments and state-owned enterprises that were struggling with rising debts, hampering efforts to boost investment and growth.
Continue reading...Resolution Foundation report underlines lack of progress by Tories but Labour proposals seem woolly
Britain’s economy is broken. That was the simple message given by the Resolution Foundation thinktank in the final report of its long-running look into the state of the nation.
Monday’s conference to launch the report was a high-powered affair, containing past and present members of the Bank of England’s monetary policy committee, the head of the Office for Budget Responsibility, Richard Hughes, and other members of the great and good.
Continue reading...Home secretary to announce big hike in salary requirement for migrants to the UK as Rishi Sunak tries to cut net migration figures
Hunt says the government wants to speed up the time it takes to get a connection to the national grid by 90%.
Zanny Minton Beddoes, the editor of the Economist, is interviewing Hunt. She says he has mentioned the 110 policies, but she wants to know what the growth strategy is.
Continue reading...Richard Walker calls for price cap on infant formula as competition watchdog finds evidence of greedflation
The boss of Iceland has hit out at “exploitation” of new parents and joined calls for a price cap on baby formula after the competition watchdog found evidence of greedflation by leading manufacturers.
The Competition and Markets Authority (CMA) on Wednesday revealed manufacturers had increased prices by more than their costs during the inflation crisis, fattening profit margins and imposing an average 25% increase on shoppers in two years. It warned competition could be hampered because the market is dominated by two companies, Danone and Nestlé, which between them account for 85% of sales.
Continue reading...Stance on inflation poses threat to ‘soft landing’ forecast for global economy, says OECD
Continued tough action by central banks to tackle stubborn inflation risks tipping Britain and other developed countries into recession next year, the west’s leading economic thinktank has warned.
The Organisation for Economic Co-operation and Development (OECD) said the chances of policymakers getting it wrong were “pretty high” and posed a threat to its central “soft landing” forecast for the global economy.
Continue reading...At summit to drum up foreign investment PM says he does not intend to change policy towards Beijing
Rishi Sunak has said the UK will not return to the close relationship with China pursued under David Cameron, as the prime minister met business leaders in an effort to drum up foreign investment.
The government on Monday said £29.5bn of new investment had been earmarked for the UK, including projects by the ScottishPower owner, Iberdrola, and BioNTech, the German company that partnered with Pfizer on its Covid vaccine.
Continue reading...Inequalities of income, wealth and power cost UK £106.2bn a year compared with average developed OECD country
The UK spends more than anywhere else in Europe subsidising the cost of structural inequality in favour of the rich, according to an analysis of 23 OECD countries.
Inequalities of income, wealth and power cost the UK £106.2bn a year compared with the average developed country in the Organisation for Economic Co-operation and Development (OECD), according to the Equality Trust’s cost of inequality report.
Continue reading...Net migration to the UK in 2023 is estimated at 672,000, and the PM says a more ‘sustainable’ level is needed. This live blog is closed
When Nigel Farage was leading the Brexit party, it was considerably influential for a party with no MPs, winning the European elections in 2019 and helping to push the Conservative party into a harder position on Brexit. After the 2019 election it was renamed Reform UK, Richard Tice took over as leader and it became much more marginal. But in an interview on the Today programme this morning Tice claimed that the government’s failure to bring down immigration was presenting it with an opportunity. He told the programme:
The British people voted to control immigration, and the government have betrayed the people’s promises. And that’s why so many thousands of people, former Tory members, are joining us. Our polling numbers – we got record polling last week, four different polls where we’re in double figures. This week, we’ve had Tory donors joining us. Frankly, I fully expect Tory MPs who are furious and angry with the government to be calling me next week.
[Cleverly] has made the point that he says that it was not aimed at a particular place. Knowing James well, he’s not the sort of person, in my opinion, who would have made that kind of remark in that kind of context.
But he has accepted that this was certainly unparliamentary language and he has rightly apologised.
Continue reading...Chancellor cuts employee national insurance to 10% while abolishing class 2 national insurance
Keir Starmer has said that a pause in hostilities between Israel and Hamas must be used to tackle the “urgent and unacceptable humanitarian catastrophe” in Gaza.
Welcoming the deal, which is expected to involve the release of 50 hostages being held by Hamas and a number of women and teenagers from Israeli jails, the Labour leader said his party had been calling for “a substantial humanitarian pause”. He said:
There must be immediate access to aid, food, water, fuel and medicine to ensure hospitals function and lives are saved. Aid and fuel need to not just get in but be distributed widely and safely.
We must also use the space this pause creates to take more steps on a path towards a full cessation of hostilities rather than an escalation of violence.
The real function of the projected spending squeeze is as a trap for Labour. If the opposition rejects the Tory trajectory, it will be accused of planning a profligate spree with public money. And if it pledges adherence to impossible targets, it will enter government with its hands bound too tight to deliver prompt satisfaction to the people who voted for it.
Keir Starmer and Rachel Reeves have so far operated a sensible policy of not walking into traps of this kind. That approach restored swing voters’ trust in Labour as stewards of the economy. But it tests the patience of an activist base that sees reversal of austerity as a moral imperative and can smell the incipient disappointment in promises of fiscal discipline.
Continue reading...