Category Archives: Inflation

UK’s 10% inflation casts doubt on Truss and Sunak’s tax cut promises

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Soaring cost of living is forcing up government spending on benefits, pensions and debt leaving no spare cash to lower taxes

Britain’s first double-digit inflation in more than four decades has cast doubts on the plausibility of the tax cuts being promised by Liz Truss and Rishi Sunak during their leadership battle, one of the UK’s leading thinktanks has said.

Following news that the government’s preferred measure of the cost of living rose by 10.1% in the year to July, the Institute for Fiscal Studies said higher inflation would mean extra spending on welfare benefits, state pensions and on debt interest.

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Cooking oil price surges hurt Australian takeaway outlets including fish and chips

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Covid-induced inflation, drought in Canada and global instability are putting the squeeze on key ingredients of a national staple

Takeaway businesses are feeling the pinch as prices surge for cooking oil and potatoes – two key ingredients of an Australian staple: fish and chips.

Justin Quinton, the owner of Saltmine Fish and Chips in the New South Wales Hunter region, told Guardian Australia his Salamander Bay eatery previously used a blend of cottonseed, canola and sunflower oil.

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UK economy shrank by 0.1% in three months to June

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ONS says two bank holidays to mark Queen’s jubilee contributed to fall in output in June

Britain’s economy contracted by 0.1% in the three months to June, according to official figures that revealed the weakening outlook for the UK, which is expected to enter a recession later this year.

The dip in output in the second quarter followed 0.8% growth in the first quarter and was driven by the health sector – as Covid testing and the vaccine programme was wound down – and by retail, as household spending fell. Economists had forecast a bigger fall in output of 0.2% in the second quarter.

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Trump says he invoked fifth amendment in New York attorney general’s investigation: ‘I declined to answer’– live

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In lengthy statement, Trump says he refused to answer questions during deposition as part of inquiry into real estate dealings

The justice department has announced charges against a Tehran-based member of Iran’s Revolutionary Guards for attempting to hire someone in the United States to kill John Bolton, a national security adviser under Donald Trump.

According the department, 45-year-old Shahram Poursafi last year promised an unnamed person in the United States $300,000 to kill Bolton, probably as retaliation for Washington’s assassination of Qassem Suleimani in January 2020. The goal was apparently to have Bolton killed by the 3 January anniversary of Suleimani’s death in Baghdad, but the person Poursafi allegedly hired for the job was actually a confidential informant.

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US inflation falls to 8.5% in July but still close to multi-decade high

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Gas prices drop sharply after a hitting a national average of $5 a gallon in mid-June

The pace of price rises dipped in the US in July as gas prices eased, bringing down the annual rate of inflation to 8.5%, still close to a multi-decade high but lower than the four-decade peak it hit in June.

July’s figure, while still high, represents a significant fall from the annual rate of 9.1% recorded in June and will raise hopes that inflation has finally peaked in the US. It follows other indicators that have suggested price rises are moderating.

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A third of UK parents cutting back on children’s pocket money

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Cost of living crisis has meant the average amount given to children has fallen to lowest level since 2001

Children’s piggy banks are paying a high price for the cost of living crisis after almost a third of parents cut back on pocket money during the last year.

The average amount that is going into the pockets of under-16s each week has dropped by 23% to £4.99 this year from £6.48 in 2021, according to research from the lender Halifax – the lowest amount since 2001.

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Two-thirds of UK’s top restaurants in the red after Brexit, Covid and inflation

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Meanwhile £700m of support funds in business rates relief remains unpaid by local councils

Debt repayments, staff shortages and rising energy bills have pushed almost two-thirds of the UK’s top 100 restaurants into the red, according to research that reveals the impact of the pandemic, Brexit and the cost of living crisis on the hospitality sector.

With a recession looming and further increases in energy bills weighing on businesses, a separate report found that £700m of business rates relief remains unpaid with only half of English councils paying out the support funds.

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Gordon Brown: ‘Set emergency budget or risk a winter of dire poverty’

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Former PM has warned of a financial timebomb awaiting families as Labour plans a major intervention to address crisis

Boris Johnson and the Tory leadership candidates should agree an immediate emergency budget tackling the spiralling cost of living, Gordon Brown has said, or risk “condemning millions of vulnerable and blameless children and pensioners to a winter of dire poverty”.

The intervention by the former prime minister comes as new figures seen by the Observer show that more than 4 million households are on course to spend a quarter of their net income on energy.

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Truss ‘irresponsible’ for threatening to review Bank of England remit

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Labour’s Rachel Reeves says Conservatives are ‘playing blame game’ for UK’s economic problems

Liz Truss has been accused of being “deeply irresponsible” for threatening to tinker with the Bank of England’s mandate on the brink of a recession.

The shadow chancellor, Rachel Reeves, attacked the Tory leadership frontrunner after Truss and her allies repeatedly questioned the performance of the Bank’s governor, Andrew Bailey, and said she would review the institution’s remit.

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Bank of England hikes interest rates and says inflation will hit 13%

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Base rate raised by 0.5 percentage points to 1.75%, as Bank says inflation will hit 13% in October

Vladimir Putin’s invasion of Ukraine has left Britain on course for a recession lasting more than a year and inflation above 13%, the Bank of England has warned as it raised interest rates for a sixth successive time.

Threadneedle Street said it had no choice but to increase borrowing costs by 0.5 percentage points to 1.75%, blaming Russia for cost of living pressures not seen in more than four decades and a 5% drop in living standards straddling this year and next – the biggest since records began in the 1960s.

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Visits to shopping centres and high streets dip below pre-pandemic levels

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South of England experiencing faster recovery than north, Scotland and Northern Ireland

Visits to high streets and shopping centres dipped to below pre-pandemic levels last month, with the north of England – plus Scotland and Northern Ireland – trailing behind the south in terms of the overall recovery from Covid-fuelled gloom.

Footfall decreased by 14% in July compared with 2019, reversing gains made in April, as retailers struggled to entice shoppers amid a heatwave in the third week of the month and surging inflation.

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More than one in eight UK households fear they have no way of making more cuts

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As energy bills soar, survey shows almost half of homes are worried about paying rent or mortgage

More than one in eight UK households fear they have no further way to make cuts to afford a sharp increase in annual energy bills this autumn.

More than a quarter of households earning less than £20,000 worry they will be unable to cope with higher bills, with families in Yorkshire, the south-west and Northern Ireland the least confident about covering their costs, according to the latest rebuilding Britain index of 20,000 people by Legal & General.

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Eurozone inflation hits record high of 8.9% as energy prices soar

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Cost of living crisis comes as 19-member currency bloc beats growth forecasts in second quarter

Inflation in the eurozone reached a record high of 8.9% this month, closing the gap with the UK’s 9.4% rate.

Dearer energy was blamed for the lion’s share of the increase from 8.6% in June, as the fallout from the Russian invasion of Ukraine continues to hammer European economies.

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Despite Australia’s soaring inflation rate, some economists say the peak may be ‘coming into view’

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Analysis: Inflation optimists look to falling global supply chain pressures but spiking energy prices suggest we haven’t reached a plateau yet

Some economists have tipped that the inflation rate has started to plateau, even after the Australian consumer price index on Wednesday showed the fastest annual pace of inflation since 2001.

Australian prices rose 6.1% in the June quarter, the quickest pace in 21 years. Yet even in that dire news from the Australian Bureau of Statistics, some economists were able to spy a silver lining.

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Lloyds profits take hit after more money put aside for defaults

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Bank says number of customers in arrears at ‘low levels’ despite soaring inflation

Lloyds Banking Group has revealed it is struggling to boost profits, amid fears that soaring inflation could lead to a jump in defaults on loans and mortgages.

The country’s largest mortgage lender, which is considered a bellwether for the British economy, took a £200m charge between April and June as it put aside more money to protect the bank from potential defaults. That compares with the £374m it released during the same period last year.

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Cost of living 2022: see how inflation has changed prices in Australia in the June quarter – interactive

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Use this data explorer to see which goods and services are getting cheaper or more expensive in different Australian cities

Data released on Wednesday by the Australian Bureau of Statistics showed prices climbing by 6.1% in the June quarter – the fastest annual pace since 2001 – driven primarily by the increasing cost of food and fuel.

Russia’s invasion of Ukraine has pushed up global oil and gas prices as well as food, with Ukraine unable to export its grain harvest as Russian missile strikes continue on its ports.

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UK factory growth slows to weakest in 18 months as business optimism falls

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Supply bottlenecks, cost pressures and softer demand hit British industry

Growth in UK factories’ order books and output has slowed to its weakest in 18 months as cost pressures, supply bottlenecks and softer demand hit British industry.

The latest update on manufacturing from the CBI found business optimism fell for a third quarter running amid signs that the strong expansion of the past year has come to an end.

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Government ‘recognises concern’ over monkeypox with 44 cases recorded – as it happened

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Labor wants consensus between business and unions – Burke

Burke says “everything is on the table” including the potential for fixed enterprise bargaining. He also says that the government would like to seek consensus between business and union groups if it can. Asked specifically about a deal struck between the ACTU and the Business Council last year, Burke says he doesn’t know whether that is possible now but he’d be interested in exploring it.

If I can find agreements where there’s consensus I don’t know whether the consensus of that agreement of a couple of years ago still existed in identical form, but if a consensus like that turns up at the job summit you could work on the basis I will be inclined to grab it, because that did have safeguards around it to prevent workers from in fact going backwards.

When you don’t have an energy policy for a decade that’s inflationary. When you have a skills crisis and refuse to invest in skills, that’s inflationary. So in establishing the first bill will be dealing with in the Parliament will be jobs and Skills Australia, we have already had Chris Bowen taking action in terms of making sure we are dealing with the energy crisis. But none of this turns around straight away.

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Co-op Group to cut 400 jobs at Manchester head office

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The group blamed rising inflation for job losses as it vows to protect shoppers from higher prices

The Co-op Group is cutting 400 jobs at its head office in Manchester as the retailer said it faced tough trading conditions amid rising inflation.

The job cuts come after the Co-op, which employs more than 63,000 people including 4,000 at its head offices, warned in April of continuing problems with food supplies and inflation after its annual profits more than halved amid supply chain disruption and higher staff wages.

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Tory leadership race: Rishi Sunak calls himself ‘common sense’ Thatcherite – as it happened

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Former chancellor says UK ‘needs to control borders’ and again references Margaret Thatcher

In an interview with GB News, Liz Truss was asked if she would keep the expensive wallpaper in the Downing Street flat, installed as part of Boris Johnson’s controversial refurbishment, if she became PM. In what is being seen by some as a dig at Johnson, she replied:

I’m not going to have the time to be thinking about the wallpaper in No 10, because we’ve only got two years until the general election – we need to hit the ground running.

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