Chancellor calls on firms to tackle high prices as government remains far from pledge of halving inflation to 5%
Jeremy Hunt has said he must “double down” on high prices after admitting a package of pre-election tax cuts this autumn was looking unlikely.
The government would not make moves to “pump billions of additional demand” into the economy, the chancellor added.
Continue reading...Thinktank challenges view that those taking early retirement under Covid were relatively well off
Half of older adults who left the UK workforce amid mass redundancies in the first year of the Covid pandemic ended up falling into relative poverty, according to the Institute for Fiscal Studies (IFS).
Britain’s foremost economics thinktank said job losses during the early stages of the crisis, coupled with the additional health risks faced by older workers, were likely to have forced many people into early retirement.
Continue reading...UK economy became reliant on cheap money due to the Bank’s actions, warns former permanent secretary to the Treasury
The Bank of England’s quantitative easing money-printing programme enabled high inflation to take root in Britain, while creating “windfall gains” for the rich, a former Treasury mandarin has warned.
Nick Macpherson, who was permanent secretary to the Treasury under the last Labour government and during David Cameron’s premiership, said the central bank’s £895bn bond-buying stimulus programme had gone “too far” and made the inflation shock hitting Britain worse.
Continue reading...Unit owners particularly vulnerable as profitable national housing sales sank to 92.3% in the three months to March 2023, according to CoreLogic data
Properties sold at a loss increased in the March quarter with almost one in six units offloaded for less than the owner paid, data group CoreLogic said.
As owners eyed the rising cost of servicing their debts, the national proportion of resales with a nominal profit sank to 92.3% in the January-March period, down from 93.2% in the preceding three months and marking the third quarter in a row of declines.
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Continue reading...British Retail Consortium says figure eased to 8.4% in June from 9% in May
Britain’s biggest retailers have said shop price inflation is easing ahead of a crunch meeting with MPs on Tuesday over the soaring cost of groceries, but warned food prices were continuing to rise at near record rates.
The British Retail Consortium (BRC) said annual inflation in overall shop prices eased to 8.4% in June, down from 9% in May, as retailers cut the price of many staples including milk, cheese and eggs. Clothing and electrical goods prices also fell ahead of the summer holidays.
Continue reading...Associated British Foods says group sales rose by 16% with Primark saying rises supported by steeper prices
The owner of Primark and food brands including Twinings has upgraded its profit forecast for this year as sales revenue jumped thanks to inflation-fuelled price increases and as shoppers bought summer clothes.
Associated British Foods, which also owns brands including Ovaltine as well as a sugar business, said that group sales rose by 16% to £4.7bn in the three months to 27 May. Sales at Primark were up by 13% to nearly £2bn.
Continue reading...Critics say Bank should pay less attention to economic models and more to what is happening on the ground
With Thursday’s 0.5 percentage point increase in interest rates to 5%, the Bank of England is hoping to land a knockout blow against inflation.
The latest hike is an admission that 12 rises over more than 18 months have not been enough to tackle the problem. Or, as the minutes said, the impact of shocks from Covid and the energy price crisis “were likely to take longer to unwind than they had done to emerge”, adding that the risks of inflation remaining high “were skewed to the upside”.
Continue reading...Shadow chancellor Rachel Reeves says party would force banks to take a range of steps to protect borrowers
Labour has piled further pressure on Rishi Sunak to take action to help struggling mortgage holders as the Bank of England prepares to raise interest rates again to levels not seen since before the 2008 financial crash.
Rachel Reeves, the shadow chancellor, said on Wednesday that if Labour were currently in power, it would force banks to offer a range of support to borrowers, including letting them move on to interest-only mortgages and extending their repayment period.
Continue reading...Largest amount of money Kyiv previously worked with was $6bn a year in 2014, Mustafa Nayyem says
Ukraine will struggle to absorb the expected billions of western private and public sector aid for its recovery not due to corruption, but a simple lack of capacity to process and invest such huge sums, a senior Ukraine official has said on the eve of the UK-sponsored Ukraine recovery conference in London.
“It is about the capacity to work with this amount of money,” said Mustafa Nayyem, the head of the Ukraine State Agency for Restoration and Infrastructure Development.
Continue reading...While the rate has fallen from its October peak of 11.1%, the figure for May is expected to stay stubbornly high
UK inflation is expected to have remained stubbornly high in May despite a string of forecasts earlier this year predicting a sharp fall in response to tumbling energy prices.
Official figures are expected to show on Wednesday that the UK’s consumer prices index (CPI) eased slightly last month, to 8.4%, from 8.7% in April.
Continue reading...Supermarket inflation slows to lowest rate this year, although households still under pressure
Supermarket inflation in Great Britain has eased to its lowest level this year but remains high, forcing people to change how they eat and cook as household budgets are strained, according to the data firm Kantar.
Grocery inflation declined to 16.5% in the four weeks to 11 June, down from 17.2% last month and a record 17.5% in March. It remains at its sixth-highest level since the financial crisis in 2008, Kantar said.
Continue reading...Author of landmark UK review into the economic value of nature joins UN environment chief in calls for ‘action, not just words’ on biodiversity goals
Humans are exploiting nature beyond its limits, the University of Cambridge economist Prof Sir Partha Dasgupta has warned, as the UN’s environment chief calls on governments to make good on a global deal for biodiversity, six months after it was agreed.
Dasgupta, the author of a landmark review into the economic importance of nature commissioned by the UK Treasury in 2021, said it was a mistake to continue basing economic policies on the postwar boom that did not account for damage to the planet.
Continue reading...The midweek inflation bulletin could be the most significant piece of government data published this year
This Wednesday will mark the longest day of the year and not long after the sun comes up the Office for National Statistics (ONS) will publish its latest cost of living bulletin. To say the data is eagerly awaited is an understatement. There is unlikely to be a more significant piece of official data released in the current parliament.
The reason is simple. Despite raising interest rates 12 times since December 2021 in an attempt to quell upward price pressures, inflation is proving harder to shift than the Bank of England imagined.
Continue reading...Ken Murphy says higher costs of grocery imports because of Brexit are partly to blame for rising prices
The chief executive of Tesco has said food inflation has probably peaked but warns that prices are likely to stay high.
Ken Murphy, the head of the UK’s biggest supermarket chain, said the price of milk, bread, cooking oil and some vegetables such as broccoli had come down this month but inflation continued in other essentials, including rice and potatoes, as aweather issues and locked-in increases in the price of labour and energy continued to bite.
Continue reading...President Tinubu’s policies please foreign investors, but a devalued currency and soaring petrol prices mean ‘national sacrifice mode’ is widely unpopular
Nigerians are feeling the strain as their new president pushes through a series of unpopular policies that have earned him praise from foreign investors.
Bola Tinubu, who was sworn in on 29 May, has surprised many observers by taking a running start to his tenure of Africa’s most populous country. In little over two weeks he has banished a longstanding petrol subsidy, ejected the country’s central bank governor and ended restrictions on the rate of the naira, Nigeria’s currency.
Continue reading...Start of superstar’s world tour ‘seems to have coloured inflation’, says economist, after tens of thousands of fans flocked to the capital for concerts
Swedish inflation fell below 10% in May, official statistics showed, but was still higher than expected with some analysts suggesting superstar Beyoncé had tipped the scales.
Consumer prices rose by 9.7% in May year-on-year, down from 10.5% in April, the first time inflation has come in under 10% in over six months.
Continue reading...Unemployment rate unexpectedly falls to 3.8% in three months to April, in sign of strength for jobs market
UK wages grew at a faster than expected pace in April, reinforcing expectations the Bank of England will raise interest rates next week.
Figures from the Office for National Statistics show growth in average regular pay, excluding bonuses, strengthened to 7.2% in the three months to April – the highest level on record, excluding the Covid pandemic.
Continue reading...Households and firms can expect more financial pain despite Britain dodging technical recession, says KPMG
Britain will be left with deep scars from the pandemic despite narrowly escaping a second recession within three years and growing signs of an economic pick up, according to new forecasts.
A new report by the accountancy firm KPMG has found that the economy has enjoyed a better start to the year than it had thought, and is now expected to grow by 0.3% this year, compared with its previous prediction of an uplift of just 0.1%.
Continue reading...Opposition finds fallout of Liz Truss mini-budget has raised average mortgage interest payments by £150 a week in two years
Homeowners are being hit with a “Tory mortgage penalty” of £7,000 a year with interest rates triple what they were two years ago, according to Labour.
Pat McFadden, shadow chief secretary to the Treasury, blamed what he called the “reckless economic gamble” taken by the Conservatives during September’s mini-budget when Liz Truss was prime minister.
Continue reading...GDP shrank 0.1% in first quarter of 2023 and final three months of 2022 after revisions to earlier estimates
The eurozone slipped into recession in the first three months of the year, after official figures were revised to show the bloc’s economy shrank as the rising cost of living weighed on consumer spending.
Figures from Eurostat, the EU’s statistical agency, showed gross domestic product (GDP) fell by 0.1% in the first quarter of 2023 and the final three months of 2022 after revisions to earlier estimates. A technical recession is generally defined as two consecutive quarters of negative growth.
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