Category Archives: Inflation

Weaker economy, higher inflation: Bank of England’s dilemma

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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%.

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Focus on NHS and inflation to keep poll hopes alive, Sunak tells ministers

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Cabinet told about bleak outlook for governing party at next general elections at Chequers awayday

The Conservatives must “relentlessly focus” on inflation and the NHS if they are to have a chance at the next election, cabinet ministers have been told.

Rishi Sunak gathered ministers at his country retreat Chequers on Thursday for a midday political cabinet – where a number of ministers gave presentations on the government’s key priorities and took a fresh look at the strategy for the next election.

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Australia’s softening inflation unlikely to spell an end to interest rate hikes

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The worst of the current inflationary cycle may be behind us, but the pain is probably not over for many households

When normally well-to-do shoppers of inner-west Sydney start trimming spending on fruit and vegetables, it’s a hint that households everywhere are feeling the pinch.

“Now people are really conserving what they are spending on,” said Yousef Lakda, owner of the Nature Spot greengrocer in Rozelle. “They walk in, they check your prices and they walk out and go and compare the prices … it wasn’t [like that] before.”

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Poorest in UK have £40 a month less to spare than a year ago, study finds

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Richest have gained similar amount over same period, reflecting differing impacts of inflation

The UK’s least affluent households have almost £40 a month less spare cash than they did a year ago while the richest have gained a similar sum in the same period, according to figures exposing how inflation has hit the poorest the hardest.

The wealthiest 20% of households had £36 a month more in discretionary income in December compared with a year before, as they enjoyed record earnings growth which offset rising energy and food bills, analysts at Retail Economics found.

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How will drop in inflation affect plans to raise UK interest rates?

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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.

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Jobs and retail sales hold up in resilient Australian economy despite 2023 growth fears

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Consumer prices rose 7.3% in the year to November, boosting the chances of another RBA interest rate rise in February

Australia’s economy was resilient towards the end of last year, with job vacancies and retail sales holding up, even as the World Bank joined other agencies to slash the outlook for growth in 2023.

Data for November, released by the Australian Bureau of Statistics (ABS) on Wednesday, showed consumer price inflation picked up in the month while the number of firms advertising for staff increased and consumers set fresh records for retail spending.

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Sunak strives to be reassuring but is five-point plan all sleight of hand?

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PM plans a ‘no tricks’ reset but with an inflation fall already expected this is more about hanging on at an election

In his first big speech since taking over at No 10, Rishi Sunak promised “no tricks, no ambiguity” as he announced his five promises to reset the government after a difficult year.

The prime minister said he would be focusing on halving inflation, growing the economy, reducing debt, cutting NHS waiting lists, and stopping small-boat crossings to the UK.

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Inflation, waiting lists, strikes, rail chaos, climate emergency: the 2022 polycrisis

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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.

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ExxonMobil launches legal challenge to EU’s windfall tax on energy firms

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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.

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Bank of England raises interest rates to 3.5% in ninth increase in a year

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Majority of MPC rate-setters back hike of 0.5 percentage points despite fears UK is entering a long recession

Mortgage payers are braced for higher borrowing costs, after the Bank of England pushed up its base rate by 0.5 percentage points to 3.5% despite saying inflation has peaked and Britain is about to enter “a prolonged recession”.

The Bank hiked interest rates on Thursday for the ninth time in a year, to the highest level in 14 years, but told borrowers to prepare for fresh increases in the new year.

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Is the UK really facing a second winter of discontent?

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Comparisons with 1979 are misleading – strikes over pay now are smaller in scale and focus, and stoked by inflation

Britain is facing a winter of strikes, as industrial action on the railways spreads to the health service and other key sectors of the economy. Such is the wave of discontent that more than 1m working days could be lost to disputes in December, the most since 1989, during Margaret Thatcher’s final years in power.

With inflation at the highest rate in 41 years amid the cost of living crisis, it’s not difficult to see why workers are pushing for better pay. Coming after the worst decade for average wage growth since the Napoleonic wars, including deep real-terms pay cuts for many in the public sector, it’s even less surprising still.

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Harvester owner warns of inflation cost ‘headwinds’

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Pub and restaurant group Mitchells & Butlers lauds sales rise but warns of risks ahead

The All Bar One owner, Mitchells & Butlers, has lauded recent encouraging sales at the pub and restaurant group but warned that risks from rising food and energy costs lie ahead.

The hospitality chain, which also owns Toby Carvery and Harvester, told shareholders on Wednesday that like-for-like sales had increased by 6.5% since the end of its latest financial year in late September.

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UK retailers boosted by November sales of winter coats and hot water bottles

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Total sales rose by 4% but figures were helped by inflation masking lower volumes, says BRC

Britain’s retailers benefited from a November sales boost fuelled by Black Friday discounts and colder weather as consumers bought winter coats, hot water bottles and hooded blankets, according to industry data.

In its latest snapshot of high street and online spending, the British Retail Consortium (BRC) said sales growth picked up last month compared with October, despite mounting concern over the cost of living crisis.

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UK house prices fall at fastest pace since 2020 amid fallout from mini-budget

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Nationwide warns inflation and rising interest rates will weigh down housing market

UK house prices have fallen at their fastest rate for two and a half years as the fallout from Liz Truss’s disastrous mini-budget put buyers off according to Nationwide, which warned inflation and rising interest rates would weigh on the market in the coming months.

The price of an average home dropped 1.4% to £263,788 in November, according to the lender’s house price index, accelerating a slowdown that saw prices fall 0.9% in October. It was the third monthly fall in a row, and the biggest drop since June 2020.

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New York and Singapore top the list of world’s most expensive cities in 2022

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Sydney sneaks into Top 10 as rising energy prices send inflation soaring globally, Economist Intelligence Unit survey finds

New York was the world’s most expensive metropolis in 2022, sharing the unwanted title with Singapore, as soaring energy prices doubled the inflation rate across the major global cities, according to the Economist Intelligence Unit’s annual survey.

Last year’s leader Tel Aviv dropped to third, while Sydney snuck into the Top 10 and Moscow and St Petersberg in Russia scaled the rankings by as much as 88 places as sanctions and buoyant oil prices propelled prices higher, the EIU’s Worldwide Cost of Living report found.

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Australia politics live: Dodson ‘taken aback’ by Nationals’ call on Indigenous voice but doesn’t see it as a setback

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Coalition is alienating young voters, PM says

Over on ABC radio Melbourne, Anthony Albanese has been asked what he thinks about the Victorian election and the lessons for the Liberal party.

One of the things that we’re seeing, I believe is an alienation from younger voters from the Coalition.

When you have a position where you have senior members of the Coalition [who] can’t say that climate change is real in spite of the floods and bushfires and all of the evidence of the heating of the planet that we’re seeing, let alone any time something is put up to take action on climate change. They dismiss it.

[It] depends where you work. There will be some businesses, for example, which refuse to bargain with their staff where they used to and their staff where they used to and the better-off-overall test became too complex. Getting rid of the red tape we got there will bring some of the businesses back to the table straight away.

Also, any businesses that are concerned, like ... that actually don’t want to be involved in multi-employer bargaining, the simple fix for them is for them to negotiate with their staff now.

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Reserve Bank review to consider changing inflation target and board selection

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With the RBA challenged by the pandemic, surging inflation and calls for reform, one expert says its recent report card has been ‘mixed’

The Reserve Bank review is assessing calls for changes to the central bank’s inflation target, the selection of board members and how authorities should manage shocks from asset bubbles to the climate crisis.

The review, launched in July with a reporting deadline for next March, has received more than 114 submissions, interviewed 230-plus people and surveyed almost 1,100 current and former RBA staff, the panel told a CEDA briefing in Sydney on Thursday.

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Annual UK energy bills would have hit £4,279 without emergency support, Ofgem says

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Regulator raises cap for start of 2023 by £730 but government limits typical bill to £3,000 from April

The energy regulator Ofgem has said its price cap will reach £4,279 from January – but households will be shielded by the government’s emergency intervention to keep a lid on bills.

Ofgem said the cap, which is adjusted every quarter, will increase by £730 for the three months from the start of next year. However, the government’s energy price guarantee (EPG) will limit typical household bills to £2,500. Analysts had expected the cap to sit at about £4,200.

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UK single parents skipping meals due to food price inflation, Which? finds

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Consumer body says one in three lone parents forced to miss meals or visit food banks to make ends meet

Close to a third of single parents have resorted to skipping meals to make ends meet because of rising food costs, according to research revealing the household types worst hit by the cost of living crisis.

Three in 10 single parent households surveyed said they had missed meals as a consequence of runaway food prices. That compared with one in seven parents in couples and an overall figure of 14% in the poll by the consumer group Which?

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Australia politics live: Qantas plays ‘hardball’ on workplace relations, Shorten says; Karen Andrews makes emotional speech on domestic violence

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Liberal MP Karen Andrews addressed the International Day for the Elimination of Violence Against Women in parliament. Follow all the day’s news

Independents to launch report on whistleblower protections

Independent MP Andrew Wilkie has been arguing for more protections for whistleblowers for years. The attorney general, Mark Dreyfus, has proposed new laws to boost whistleblower protections, but there are still calls the law needs to go further.

Protecting Australia’s Whistleblowers: The Federal Roadmap draws on landmark research and synthesises three decades of reviews to outline a comprehensive, 12-step roadmap for better protecting and empowering whistleblowers.

Establishment of a whistleblower protection authority to oversee and enforce Australia’s whistleblower protections;

Upgraded whistleblower protections for Australian public servants in line with domestic and international best practice, including a positive duty to protect whistleblowers and steps to make it easier for whistleblowers to enforce their rights;

Consolidation and harmonisation of whistleblowing laws across the private sector in one new single law covering all non-public sector whistleblowers; and

Stronger, simpler protections for whistleblowers who make disclosures to the media and members of parliament.

The mortality ratios from Covid in Australia are quite similar to those estimated in other advanced nations. As a share of the population, fewer people died from Covid in Australia than in most other affluent nations. Yet among those who died, the same health inequalities can be seen in Australia as in other advanced countries.

What might have driven the socioeconomic disparities in Covid mortality? And why might many of those disparities have been largest in the Delta wave? As I have noted, disadvantaged people may be less able to work remotely, more reliant on public transport, and more likely to live in crowded households. Uptake of vaccination and antiviral treatments have varied across society as vaccines and treatment became increasingly available. Another factor is that successive Covid waves have had varying degrees of severity. A final factor is that in the years since Covid began, population immunity has steadily risen.”

Across all waves of the pandemic, deaths from Covid were highest among those aged 80‑89 years. The median age of those who died from Covid was 87.4 years for females and 83.6 years for males. Males had a higher number of registered Covid deaths than females. For every 100 female Covid deaths, there were 126 male Covid deaths. Around 3-quarters of all Covid deaths occurred in Victoria and New South Wales.

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