Global shocks likely to drive more frequent interest rate changes, RBA says

Central banks will need to adjust rates more often to respond to unpredictable levels of inflation, Philip Lowe says

Inflation is likely to become more volatile in the future as globalism retreats and climate shocks mount, requiring central banks to adjust interest rates more often, the Reserve Bank governor has said.

Philip Lowe, in a Committee for Economic Development of Australia speech in Melbourne on Tuesday, said the current spike in prices was soon expected to peak at around 8% before declining to “a little over 3%” by the end of 2024. Improving post-Covid supply chains, cheaper commodities and the effects of interest rate hikes – with more possible – would combine to rein in inflation.

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UK warned tax won’t return to pre-Covid levels for decades after ‘series of economic own goals’ – UK politics live

Chancellor defends tax rises as Institute for Fiscal Studies says UK now entering a ‘new era’ of higher taxation

Chancellor Jeremy Hunt has conceded that Boris Johnson’s hard Brexit deal has caused damaging trade barriers with the European Union, as he said immigration will be “very important” for the economy.

Hunt insisted the UK would find a way to improve trading ties with the EU without rejoining the single market.

His comments came after the Office for Budget Responsibility (OBR) said Brexit caused a “significant adverse impact” to trade volumes and business relationships between UK and EU firms.

Asked if rejoining the single market would boost growth, the Chancellor told BBC Radio 4’s Today programme:

I think having unfettered trade with our neighbours and countries all over the world is very beneficial to growth.

I have great confidence that over the years ahead we will find outside the single market we are able to remove the vast majority of the trade barriers that exist between us and the EU. It will take time.

I don’t think it’s the right way to boost growth because it would be against what people were voting for when they supported Brexit which was to have control of our borders and membership of the single market requires free movement of people.

So I think we can find other ways that will more than compensate for those advantages.

There needs to be a long-term plan if we’re going to bring down migration in a way that doesn’t harm the economy.

We are recognising that we will need migration for the years ahead - that will be very important for the economy, yes.

They don’t look obviously deliverable. If you take the spending cuts that are in place and subtract out the protected departments like health and defence, you end up with really big falls in those unprotected departments.

Hard to see how given the legacy of austerity, given public sector wages are already lagging behind and given this is effectively tying the hands of governments, it’s really hard to see how those will be delivered.

What we saw yesterday was the biggest deterioration in the overall forecasts since the OBR started producing these forecasts.

What is doing the damage here is higher interest rates.

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CBI urges Jeremy Hunt to relax immigration rules to ease UK staff shortages

Lobby group says failure to tackle workforce shortages would be highly damaging for the economy

Britain’s foremost business lobby group has urged Jeremy Hunt to use this week’s autumn statement to shake up immigration rules to support companies struggling with chronic staff shortages and a looming recession.

The head of the Confederation of British Industry (CBI) said urgent action was required from the chancellor on Thursday to bolster the economy, including “tough political choices” to allow more overseas workers in Britain as employers struggle with a desperate lack of staff.

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Truss allies challenge Kwarteng’s claim he tried to slow down tax cuts

One backer of ex-PM says ‘that wasn’t what was going on’, as Jeremy Hunt also appears to dispute version of events

Kwasi Kwarteng’s claims that he tried to get Liz Truss to slow down her financial plans have been challenged by her allies.

In his first interview since he was sacked as chancellor by Truss, Kwarteng said he had told the then prime minister to be more cautious with their £45bn programme of tax cuts.

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US inflation rate cools slightly as consumer prices rise 7.7% in October

Bureau of Labor Statistics data represents decrease from September but core inflation rate remains high

Prices of goods and services in the US were up 7.7% in October compared with the same time last year, a sign that inflation is slowly starting to cool after reaching decades-high records over the last few months.

The US Bureau of Labor Statistics reported on Thursday that in October, the consumer price index showed a 7.7% rise in prices over the last 12 months, a 0.5 percentage-point decrease from September, which saw a rate of 8.2%. The October inflation rate is the lowest since January, when rates rose to 7.5%.

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Wall Street surges and dollar tumbles as US inflation rate drops to 7.7% – business live

Dollar slides and stocks rally in New York on hopes that the Federal Reserve will slow its interest rate rises

The cost of living crisis is driving UK food banks to “breaking point” with almost 1.3m emergency parcels given to people over just six months.

The Trussell Trust charity has said families face record-breaking levels of need, with one in five individuals referred to its network now coming from working households.

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We need serious public policy, not more printed money – the US economy is in tatters

Decades of bailouts have convinced some that the Fed will always come to the rescue – but this only papers over the fundamental flaws of the US economy

With the Federal Reserve leading the world’s central banks in a tightening cycle of interest rate rises, the likes of which we haven’t seen since 2006, commentators across the political spectrum are noting the fondness of the Fed chair, Jerome “Jay” Powell, for his legendary predecessor, Paul Volcker. On the left, the comparison is fearful; on the center and on the right, it’s one of admiration. But circumstances don’t really support the comparison.

On taking office in October 1979, Volcker declared “the standard of living of the average American has to decline” as a consequence of the war against the chronic inflation of the 1970s. He quickly set to work making that happen by driving interest rates up towards 20% and creating the deepest US recession since the 1930s.

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UK food prices soar by fastest rate on record as cost of living crisis bites

Rise of 11.6% in October from 10.6% a month earlier comes as milk, teabags and sugar become more expensive

Food prices in the UK soared by 11.6% in October – the fastest rate on record – as staples such as teabags, milk and sugar became more expensive along with fresh food, data shows.

Annual food inflation rose from 10.6% in September, the latest monthly report from the British Retail Consortium and the data firm Nielsen showed.

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Interest rates to keep rising as RBA warns it will do ‘what is necessary’ to curb inflation

Reserve Bank governor Philip Lowe says half percentage point increases to cash rate possible if economic conditions do not improve

Interest rates will be rising for the foreseeable future and the Reserve Bank of Australia will not hesitate in making higher increases than predicted if inflation does not begin to settle, the RBA governor, Philip Lowe, has warned.

Tuesday’s seventh interest rate hike saw the cash rate increase by the standard quarter of a percentage point, taking rates to a nine-year high of 2.85%, and Lowe said the RBA board would not hesitate to move to half percentage point increases if economic conditions didn’t improve.

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Cost of living crisis: Stop the Squeeze calls for wealthiest to ‘pay proper share’ of tax

Coalition of 40-plus charities and groups launches amid fears of spending cuts to plug public finances

Pressure is building on the leaders of Britain’s two biggest political parties to support higher taxes on wealth amid growing fears over the impact that a renewed austerity drive would have amid the cost of living crisis.

In an intervention which comes as the new prime minister, Rishi Sunak, considers options for filling a £35bn black hole in the public finances, a new coalition of 40 charities and campaign groups – including Oxfam, Save the Children and Christians Against Poverty – said Britain’s tax system was broken and those who paid the most should “pay their proper share”.

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Bank of England left in the dark ahead of new interest rate decision

With fiscal statement deferred and mixed government messaging on tax and spending the BoE has little to go on

The Bank of England will next week consider how much to raise interest rates without having received any guidance from the government about its tax and spending policies, after Jeremy Hunt pushed back the date for this year’s “autumn statement”.

Its policymakers meet on 3 November to decide the increase in the cost of borrowing required to tackle a rate of inflation that climbed above 10% in September.

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UK economic outlook downgraded to ‘negative’ by rating agency

Moody’s say downgrade from ‘stable’ was driven by political instability and high inflation

The UK’s economic outlook has been downgraded from “stable” to “negative” by the rating agency Moody’s because of political instability and high inflation.

Moody’s said the change in outlook was driven by “heightened unpredictability in policymaking amid weaker growth prospects and high inflation” and “risks to the UK’s debt affordability from likely higher borrowing and risk of a sustained weakening in policy credibility”.

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One in 7 Britons skipping meals in cost of living crisis, says TUC

UK heading for ‘Victorian levels of poverty’ unless pay and benefits rise with inflation, says union body

One in seven people in the UK are skipping meals or going without food, according to new polling data released by the Trades Union Congress (TUC).

The data from an MRP poll by Opinium reveals that more than half of British people are cutting back on heating, hot water and electricity in the cost of living squeeze, and one in 12 have missed the payment of a household bill.

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Australian fuel prices likely to rise as Opec+ countries cut oil production to ‘squeeze the market’

Cuts by world’s biggest petrol producers will work against other governments’ efforts to tame inflation by releasing fuel stocks

Australian motorists could be hit by higher petrol prices as the world’s largest oil exporting nations cut production, analysts say.

The Australian government reinstated the full fuel excise tax in September after the Morrison Coalition government introduced a temporary, six-month cut to lower the cost of fuel at a time of rising inflation.

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Broadband customers face up to 14% hike in bills, warns Which?

BT customers face £113 rise as providers such as EE and TalkTalk prepare controversial ‘inflation-plus’ mechanism

Broadband bills could surge by as much as £113 next year if a number of the UK’s biggest telecoms firms push ahead with inflation-busting price increases next spring, says consumer watchdog Which?

Many of the country’s main internet providers – including the largest player BT, along with TalkTalk, EE, Plusnet and Vodafone – use a mechanism to increase the cost of bills annually by the rate of inflation as measured by the consumer prices index (CPI) in January, plus 3.9%.

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For the love of cars: will steep gas prices stall Democrats’ midterm hopes?

Economy in focus: America has a love affair with cars – but soaring prices are causing a rift. In the midwest, Adam Gabbatt asks voters what they think

The Henry Ford museum, in Dearborn, Michigan, is a tribute to America’s obsession with the motor vehicle.

The sprawling complex, set across 12 acres, is home to early examples of the Ford Model T, the mass-produced, affordable vehicle that set the US on the path of a car-dominant culture, as well as other era-defining vehicles right up to today.

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Poorer families risk £1,000 hit from earnings-related benefits rise

Below-inflation rise would save exchequer tenth of £40bn to be given out through tax cuts, says thinktank

If the government raises benefits in line with earnings rather than inflation next year, it would drastically cut the incomes of poorer working-age families, while saving less than a tenth of the cost of recent tax cuts, a leading economic thinktank has calculated.

Such a change, which would mean a significant real-terms cut given that wages are rising at 5.5% with inflation close to 10%, could see the effective income of some families reduced by up to £1,000 a year, the Resolution Foundation said.

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Kwarteng considers extending mortgage guarantee scheme

Initiative may continue beyond December as bank bosses raise concerns over mortgage market

The chancellor is considering extending the government’s mortgage guarantee scheme after UK bank bosses raised concerns over the state of the UK’s mortgage market at a high-level meeting at No 11 Downing Street.

The meeting on Thursday – which was attended by chief executives including Alison Rose of NatWest, Charlie Nunn of Lloyds Banking Group, HSBC UK’s Ian Stuart, Mike Regnier of Santander and TSB’s Robin Bulloch – was scheduled amid mounting fears about the potential fallout from rapidly rising mortgage rates.

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Nurses across UK to vote in first ever RCN strike ballot over pay

Major disruption to NHS over winter feared if ballot of 300,000 staff over 5% pay increase results in industrial action

Hundreds of thousands of nurses across the UK are to be balloted about going on strike in a move that risks disrupting the NHS this winter.

For the first time in its 106-year history the Royal College of Nursing (RCN) is balloting 300,000 of its members about strike action and recommending that they vote in favour.

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Fears grow over oil price as Opec+ agrees to bigger than expected output cuts

Cartel curbs production by 2m barrels a day despite strong US pressure, further squeezing supplies

The Opec oil cartel and its allies have agreed to a bigger than expected cut in oil production targets despite significant pressure from the US.

The Opec+ group of oil-producing nations signed up to a cut in output of 2m barrels a day, surpassing predictions earlier in the week of cuts of 1m to 1.5m barrels, squeezing supplies in a tight market.

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