Category Archives: Economics

M&S chair attacks ‘pointless’ post-Brexit rules for Northern Ireland

Posted on by

Archie Norman backs UK plans to scrap parts of protocol, saying lorries require ‘700 pages of documents’

The chairman of Marks & Spencer has backed government plans to override parts of the Northern Ireland protocol, saying that some food exported south of the border now requires 700 pages of customs documents, partly written in Latin.

Archie Norman, a former Conservative MP, called on the UK government and EU to come to an agreement, saying the rules for sending food between them were “highly bureaucratic and pretty pointless” given that British food standards were in line with or higher than those of Brussels.

Continue reading...

‘Apocalyptic’ food prices will be disastrous for world’s poor, says Bank governor

Posted on by

Bank of England’s Andrew Bailey blames UK’s highest inflation rate for three decades on Russia-Ukraine war

The Bank of England governor has blamed the war in Ukraine for the highest inflation in the UK for three decades and warned that “apocalyptic” food prices caused by Russia’s invasion could have a disastrous impact on the world’s poor.

Giving evidence to MPs, Andrew Bailey said while he was unhappy about the level of price rises, 80% of the inflation overshoot was caused by factors outside the Bank’s control.

Continue reading...

Cutting City regulation risks another financial crash, say economists

Posted on by

Leading economists publish letter to Rishi Sunak in response to proposed financial services and markets bill

A group of 58 leading economists and politicians, including the former business minister Vince Cable, has written to the chancellor to say that scaling back City regulation will put the UK at risk of another financial crash.

The open letter, which has also been signed by the former Greek finance minister Yanis Varoufakis and Columbia University professor Adam Tooze, was sent in reaction to the Queen’s speech, which outlined Rishi Sunak’s plans to “cut red tape” through a financial services and markets bill.

Continue reading...

The Northern Ireland protocol is said to be a blight on regional economy. That’s just not true

Posted on by

After an initial shock to businesses, manufacturing jobs are growing four times faster here than the UK average

Whenever Boris Johnson’s government wades into battle over the Northern Ireland protocol, it wields one assertion like a broadsword: that the protocol is ruining the region’s economy. Checks on goods entering Northern Ireland are disrupting trade, increasing prices and bankrupting businesses, and the damage will worsen unless the protocol is changed, goes the argument.

The Institute of Economic Affairs (IEA), a rightwing thinktank, joined the fray last week with a report that estimated the annual cost of the agreement at £850m.

Continue reading...

John Lewis boss calls for Covid-style cost of living aid package

Posted on by

Dame Sharon White follows Tesco chief in urging UK government to help with rising energy and grocery bills

The boss of John Lewis has urged the governmentto intervene with a financial package of support to protect families from the cost of living crisis on the same scale as it did to help the nation deal with the Covid pandemic.

Dame Sharon White, a former second permanent secretary at the Treasury, said the government needed to act urgently as families struggle to pay utility and food costs as energy bills and inflation soars.

Continue reading...

US inflation rate slows but remains close to 40-year high

Posted on by

Consumer price index reveals costs rising by a monthly rate of 0.3% in April, down from 1.2% in March, the first fall since August 2021

Price rises slowed in the US in April but the annual inflation rate remained close to a 40-year high, leaving many Americans struggling to afford necessities including food, shelter and fuel.

The latest consumer price index (CPI) figures – which measure a broad range of goods and services – showed prices rising by a monthly rate of 0.3% in April, down from 1.2% in March, the first fall since August 2021.

Continue reading...

Sri Lanka is the first domino to fall in the face of a global debt crisis

Posted on by

The south Asian country is the first to buckle under economic pressures compounded by Russia’s war on Ukraine, but it won’t be the last

The departure of Sri Lanka’s prime minister, Mahinda Rajapaksa, follows weeks of protest and a deepening crisis. There is no bankruptcy system for states but if there was then the south Asian country – down to its last $50m (£40m) of reserves – would be first in line to use it.

A team from the International Monetary Fund (IMF) this week started work with officials in Colombo over a bailout that will include a tough package of reforms as well as financial support. But as the IMF and its sister organisation, the World Bank, know full well, this is about more than the mismanagement of an individual country. They fear Sri Lanka is the canary in the coalmine.

Continue reading...

Russia’s war in Ukraine ‘causing £3.6bn of building damage a week’

Posted on by

Kyiv School of Economics estimates cost of conflict could rise to $600bn, almost four times the nation’s GDP

Russia’s invasion of Ukraine is inflicting damage to the country’s infrastructure at a cost of $4.5bn (£3.6bn) a week as bombs tear through thousands of buildings and public utilities, and miles of road.

According to estimates compiled by the Kyiv School of Economics (KSE), and supported by the Ukrainian government, the total amount of direct infrastructure damage has reached $92bn since Vladimir Putin ordered the invasion in February.

Continue reading...

Bank of England ‘duty bound’ to trigger recession to curb inflation

Posted on by

Ex-official says policymakers must shrink the UK economy to limit upward pressure on prices made worse by Brexit

Britain’s central bank policymakers are “duty bound” when they meet this week to push the UK into recession to cap rising inflation, a former Bank of England (BoE) official has said.

Adam Posen, who runs Washington-based thinktank the Peterson Institute, said that while the Bank of England would not want workers to lose their jobs, it should hike interest rates now to squeeze out inflationary pressures made worse by Brexit trade and immigration restrictions.

Continue reading...

Rising feed prices mean chicken could soon cost as much as beef, says Co-op

Posted on by

Price of UK’s most popular meat is rising faster than any other protein, according to retailer’s boss

Chicken’s relative affordability has helped make it the country’s meat of choice but one of the UK’s biggest food retailers has warned it could soon be as pricey as beef as production costs soar.

Steve Murrells, chief executive of the Co-op, said that feed costs had become a huge challenge for the poultry industry. “Chicken could become as expensive as beef. Chicken, which was incredibly cheap and great value for money, is rising quicker than any other protein.”

Continue reading...

Unprecedented inflation ahead as Ukraine war adds to costs, says Unilever

Posted on by

Rise in energy and ingredient costs suggests consumers will have to pay more for well-known brands

The consumer goods firm Unilever has said “unprecedented cost inflation” lies ahead as Russia’s war on Ukraine has added to a surge in energy and ingredient costs, and said that shoppers will pay even more for well-known brands in the coming months.

The company, which makes goods ranging from Dove soap to Magnum ice-cream and Marmite, said on Thursday it expected its costs to rise by €2.7bn (£2.3bn) in the second half of 2022, after an already steep increase on the €2.1bn expected for the first half.

Continue reading...

Shelf shock: soaring supermarket prices shoppers find hard to swallow

Posted on by

From dog food to coffee, readers are reporting some basic goods’ prices are rising by far more than inflation

Inflation is rampant, and supermarket prices are no exception. Shoppers are returning to stores to find old favourites have leapt in price from one week to the next. The cost of consumer goods is spiralling at such a rate that retail analysts have coined a new term, shelf shock.

Nestlé, the owner of KitKat, Häagen-Dazs and Felix cat food, became the latest consumer goods group to warn of more pain to come on Thursday, saying it had raised prices by 5.2% in the first three months of this year and that rising production costs would force another increase soon.

Continue reading...

UK consumer confidence even lower than in 2008 financial crisis

Posted on by

Slowdown in retail sector feared as public gripped by pessimism about the economy as well as personal finances

Fears that Britain is heading for a marked slowdown in consumer spending have intensified as it emerged that the public is gloomier about the economy than when banks were on the brink of collapse during the financial crisis of 2008.

A combination of rocketing energy prices, higher taxes and a surge in the annual inflation rate to its highest level in three decades meant confidence was in freefall, according to the latest monthly snapshot of sentiment.

Continue reading...

Russia ‘preparing legal action’ to unfreeze $600bn foreign currency reserves

Posted on by

Elvira Nabiullina says lawsuits aim to release gold and foreign currency frozen amid Ukraine invasion sanctions

Russia is preparing to take legal action to challenge the freeze on its $600bn (£462bn) foreign currency war chest put in place by western governments after the invasion of Ukraine, the head of the country’s central bank has said.

Elvira Nabiullina said plans were being made to launch lawsuits after governments including the US, UK and EU froze the Russian central bank’s foreign currency reserves held within their jurisdictions.

Continue reading...

Jump in UK wages fails to keep pace with cost of living

Posted on by

Pressure for more support for households and businesses after consumer prices rise 6.2%

Business live updates: jobless rate drops and wage squeeze continues

Britain’s cost of living crisis moved into its fourth consecutive month in February despite a jump in wages and a fall in unemployment to just 3.8%, its lowest level since 1974.

The Office for National Statistics said average earnings growth of 5.4%, including bonuses, failed to keep pace with a 6.2% rise in the consumer prices index in February, while for those who missed out on a bonus the situation was even worse after average wages increased by only 4%.

Continue reading...

National insurance rise forces UK employers to shoulder £9bn tax burden

Posted on by

Bosses say 1.25-point rise heaps pressure on firms already enduring soaring costs linked to Covid and Brexit

Britain’s employers are being forced to shoulder a £9bn tax rise after the government pushed ahead with raising national insurance on Wednesday despite stiff opposition.

Company bosses said the 1.25-percentage-point rise in national insurance contributions (NICs), which is paid by workers and their employers, would add to already severe pressure from runaway inflation and soaring business costs this year linked to Covid, Brexit and Russia’s war in Ukraine.

Continue reading...

Ukraine war to slow growth and drive up poverty in Asia, World Bank warns

Posted on by

Conflict adds strain to developing economies in east Asia and Pacific already struggling with Covid and inflation

Russia’s invasion of Ukraine has further dampened the economic prospects for developing countries in east Asia and the Pacific, meaning lower economic growth and higher poverty in the region this year, the World Bank has warned.

The Ukraine factor came on top of the existing risks that the region – home to 2.1 billion people and stretching from China to Papua New Guinea – has been facing in recent years. They included the ongoing Covid-19 pandemic, the financial tightening in the US, and the pandemic resurgence amid China’s zero-Covid policies.

Continue reading...

Thousands of UK workers to take part in four-day week trial

Posted on by

With work changed forever by the pandemic, firms say shorter week could help attract and retain staff

More than 3,000 workers at 60 companies across Britain will trial a four-day working week, in what is thought to be the biggest pilot scheme to take place anywhere in the world.

Employees from a wide range of businesses and charities are expected to take part in the scheme, which will run initially from June to December, including the Royal Society of Biology, the London-based brewing company Pressure Drop, a Manchester-based medical devices firm, and a fish and chip shop in Norfolk.

Continue reading...

High energy-using industries fear lack of support from UK ministers

Posted on by

Firms say they need the kind of help that EU competitors get as gas and electricity prices soar

Britain’s strategic heavy industries have warned they risk being left high and dry by a lack of support in the government’s upcoming energy strategy, warning that failure to follow European countries’ measures to reduce gas and electricity costs will put UK businesses at risk.

The government is expected to outline long-awaited proposals this week for a once-in-a-generation drive to invest in nuclear power and possibly more onshore wind and solar power, as well as approving continued North Sea oil and gas exploration.

Continue reading...

Failure to consider long Covid impact will hit UK economy, says expert

Posted on by

Dr Nathalie MacDermott says condition has substantial impact on people’s ability to work and costs to government and business

The UK will pay an economic price for failing to consider long Covid when lifting restrictions and recommending vaccinations for children, a doctor has warned.

The decision to drop all Covid rules in England was largely based on whether the NHS could handle the number of sick patients, but far more people are expected to develop long-term medical problems after fighting off the virus.

Continue reading...