Index rises to 7934.30, pushing it above previous record set on 3 February
The UK’s blue-chip shares index has hit a fresh all-time high, only days after a previous record was set last Friday.
The FTSE 100 index rose by almost 1% on Wednesday morning to hit 7934.30 points, surpassing the former high of 7,906.58 points set on 3 February.
Continue reading...Differing experts have urged the Monetary Policy Committee to both cut interest rates and to raise them
Turn up. Take the temperature of the economy. Raise interest rates. That’s the been the pattern from the responsible technocrats at the Bank of England for more than a year now – and they show no sign of stopping.
Between the depths of the global financial crisis in March 2009 and the start of the Covid-19 pandemic, interest rates were changed only five times, and three of those were in response to unexpected shocks: one after the Brexit vote in 2016, and two at the arrival of the pandemic in 2020. There was one period of more than seven years when interest rates were pegged at 0.5%.
Continue reading...Speech on ‘enterprise, education, employment and everywhere’ contained only vague, empty promises
Brexit will shake Britons out of their comfortable torpor, turn them into risktakers and put the UK at the forefront of the digital revolution – that was Jeremy Hunt’s message in his much-trailed speech on growing the UK economy.
The chancellor came to Bloomberg’s HQ in the City of London on Friday seeking to raise the country’s spirits, hail the split with Brussels and dispel the “declinism” he says saps Britain’s energy.
Continue reading...Chancellor also expected to tell markets that government spending will remain within strict limits
Jeremy Hunt will defend the government’s vision for Britain’s economic future in a speech to City executives in London on Friday when he will lay out plans for investment and growth.
The chancellor will say he wants to promote policies that allow the private sector to re-tool the UK’s industrial base and re-skill the workforce to generate strong growth over the next decade.
Continue reading...Exclusive: Forecasts predict exports will fall to £707bn next year and target will not be reached until 2035
Ministers have been accused of leaving a “record of failure and broken promises” as internal forecasts show Britain will be 15 years late in achieving its £1tn annual export target after being hit by Brexit.
Projections from the Department for International Trade (DIT) show the value of UK exports will not reach £1tn until 2035, based on current trends, with the total due to fall to £707bn next year.
Continue reading...Urban Institute economist Len Burman has a reality check for those in Congress flirting with not raising the debt ceiling.
A default could undermine the America’s pre-eminence in global markets, where the dollar is used as many countries’ dominant reserve currency. But more immediately, it would actually force Washington to spend even more, because a default would drive up interest rates, forcing the government to shell out more money to owners of its trillions of dollars in debt:
Continue reading...Latest updates: West Midlands mayor Andy Street says it should be for local decision-makers to determine where money is spent
Rishi Sunak has defended the distribution of levelling up funds, saying that the north of England has received more per head than the south.
Speaking on a visit to Accrington, in Lancashire, he said:
The region that has done the best in the amount of funding per person is the north. That’s why we’re here talking to you in Accrington market, these are the places that are benefiting from the funding.
If you look at the overall funding in the levelling-up funds that we’ve done, about two-thirds of all that funding has gone to the most deprived part of our country.
With regard to Catterick Garrison, the thing you need to know is that’s home to our largest army base and it’s home to actually thousands of serving personnel who are often away from their own families serving our country.
Continue reading...Treasury secretary says department will take ‘extraordinary measures’ to skirt default while also urging Congress to act
The US government has hit the ceiling on its debt, brushing up against its legal limit of $38.381tn and piling pressure on Congress to approve an increase to avoid a debt default in the coming months that would send a shock wave through the global economy.
In a letter to congressional leaders, the treasury secretary, Janet Yellen, said it would begin taking “extraordinary measures” to make the government’s cash on hand last until Congress acts. These include a “debt issuance suspension period” lasting from today until 5 June, as well as suspending investments into two government employee retirement funds.
Continue reading...Jamie Dimon warns that US creditworthiness should be ‘sacrosanct’ as country’s debt races toward $31.4tn limit
The US should not be “playing games” with the debt ceiling, the JP Morgan chief executive, Jamie Dimon, warned warring US political factions on Thursday as a heated row over the federal borrowing limit reached a crisis point.
“We should never question the creditworthiness of the US government. That is sacrosanct and it should never happen,” Dimon said on Thursday in an interview on CNBC. “This is not something we should be playing games with at all.”
Continue reading...Sector reacts to post-pandemic shift in digital spending and gloomy economic outlook for 2023
Microsoft is cutting 10,000 jobs as it cited a post-pandemic shift in digital spending habits and weakness in the global economy.
The tech group joined a list of US peers making extensive job cuts, including Facebook owner Meta, Amazon, and business software-maker Salesforce, who have scaled back on workforce expansions stoked by a pandemic-related boom in demand for their services and products that have lost momentum.
Continue reading...Bank of England must proceed with caution as households are still cutting back and business confidence is weak
There is hope for households across Britain that inflation, finally, has peaked. After hitting a 41-year high of more than 11% in October as energy bills soared, the fall in the annual inflation rate in December for a second consecutive month will come as a relief.
However, prices remain high and are still rising fast. Lower inflation rates do not mean prices are falling for consumers; it is just that they are not rising quite as fast as a month ago. The cost of living crisis may be fading but it is very far from over.
Continue reading...Janet Yellen told Congress that ‘extraordinary measures’ would be taken to avoid default until legislation is passed to raise ceiling
Janet Yellen, the US treasury secretary, has notified Congress that the US is projected to reach its debt limit on Thursday, 19 January, and will then resort to “extraordinary measures” to avoid default.
In a letter to House and Senate leaders on Friday, Yellen said her actions will buy time until Congress can pass legislation that will either raise the nation’s $31.4tn borrowing authority or suspend it again for a period of time.
Continue reading...Fraud and error have left ‘eye-watering’ amount owed to HMRC, says public accounts committee
The government has been criticised for failing to collect £42bn in unpaid tax from businesses and individuals amid concern over the strain on the public finances as the UK’s economy stands on the brink of recession.
The cross-party Commons public accounts committee (PAC) said that an “eye-watering” amount of tax was owed to HMRC, while also criticising tax collectors for lacking ambition to tackle fraud and error.
Continue reading...Campaigners say bank should rush to rescue countries facing recession – but can it do so without resulting in mass debt write-offs?
Not since the early 1990s has the world faced such a period of low growth.
Discounting the havoc caused by the financial crash of 2008 and the initial impact of the Covid-19 pandemic, the World Bank says that by the end of 2024 it will have been 30 years since the global economy grew at an average of less than 2% a year.
Continue reading...Exclusive: 182 experts say only debt cancellation offers chance of recovery but private investors are playing hardball
Some 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...People with disabilities more likely to cut back on energy use and food, Resolution Foundation says
Disabled 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...Centre for Retail Research says 17,145 stores shut in total, up almost 50% on 2021, during pandemic
Last 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...Almost every facet of life in the UK – courts to cost of living, transport to healthcare, environment to asylum system – is at breaking point
In 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...US oil firm contests legal authority for ‘solidarity contribution’ to raise funds to offset soaring energy prices
ExxonMobil 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...Analysts says lifting of many rules may soften impact of higher interest rates and unblock supply chains in 2023
China’s decision to ease rules on travel in and out of the country, the world’s second-largest economy, has offered investors hope that it could soften the toll from higher interest rates on global stock markets and unblock supply chains amid a dark outlook for 2023.
Chinese authorities said late on Monday that inbound travellers would not have to quarantine on arrival, from 8 January onward. The announcement marked the latest in a series of steps to reopen the country, which is home to vital global supply chains and 1.4 billion people.
Continue reading...