Category Archives: Inflation

How a spring UK budget could fire the starting gun for an early election

Posted on by

UK economic prospects are bleak but an agenda-setting fiscal event such as sweeping tax cuts in March offers another roll of the dice

To grasp the nettle, or wait in the hope that things somehow miraculously improve. This is the choice Rishi Sunak will be weighing for the next general election, as the Conservatives limp towards the finishing line of another challenging year.

After Jeremy Hunt announced the government would hold an earlier than anticipated budget, with a date set for 6 March, the possibility of a poll in May, in the afterglow of some electioneering tax cuts, is clearly being given considerable thought.

Continue reading...

Ikea warns Red Sea attacks could disrupt supplies and deliveries

Posted on by

Firm says it is weighing up options to secure product availability amid Yemeni rebel attacks on shipping

Ikea has warned that the disruption to global trade caused by Yemeni rebel attacks in the Red Sea could delay its deliveries and affect availability of some products.

The world’s largest furniture company said it was “evaluating other supply options to secure the availability of our products” after many big shipping companies stopped sending vessels through the Suez canal in response to the attacks by Houthi militants’ protests against the Israel-Gaza war.

Continue reading...

UK inflation in unexpectedly steep fall to 3.9% amid lower bread and fuel prices

Posted on by

Forecast-beating drop in November takes rate to lowest level in more than two years

Britain’s two-year cost of living crisis eased last month as cheaper petrol and less expensive food helped send the annual inflation rate sharply lower to 3.9% – its second big monthly fall in succession.

In a much bigger decline than had been anticipated by economists, the annual rate of price rises fell from 4.6% in October to its lowest level since September 2021.

Continue reading...

Drop in UK inflation is welcome but does not erase two years of pain

Posted on by

Food prices were 29% higher last month than in September 2021, leaving many households still under pressure

At last, UK inflation has fallen far and fast enough to start to match countries such as France, where the annual rate of price rises has reduced at a faster pace this year.

At 3.9% last month, the headline figure remains almost double the 2% target set for the Bank of England but significantly lower than the 11.1% peak in October last year and below the 5.3% target Rishi Sunak set for the end of 2023.

Continue reading...

Inflation calculator: find out how much UK household price rises affect you

Posted on by

This online tool will help you discover what is contributing to your household’s cost of living increases

Inflation has been soaring in the UK, with people being hit by higher prices for everyday essentials, but cost of living pressures are finally starting to ease.

The latest inflation rate for the 12 months to November 2023 means that goods and services cost 3.9% more than they did a year ago – in most cases, surpassing any pay rises workers can expect to receive.

Continue reading...

‘Prison or bullet’: new Argentina government promises harsh response to protest

Posted on by

President Javier Milei and his allies are preparing new security guidelines in anticipation of protests against currency devaluation

Human rights activists in Argentina have expressed consternation over new security guidelines to crack down on an anticipated wave of protests after the incoming government of libertarian president Javier Milei devalued the country’s currency by more than 50%.

Protesting individuals and organizations will be identified with “video, digital or manual means” – and then billed for the cost of sending security forces to police their demonstrations, said Milei’s security minister, Patricia Bullrich, as she announced the new protocol on Thursday.

“The state is not going to pay for the use of the security forces; organizations that have legal status will have to pay or individuals will have to bear the cost,” Bullrich said.

Continue reading...

Bank of England keeps interest rates on hold as concern about economy grows

Posted on by

Interest rates will need to stay high for sufficiently long to return inflation to 2% target

The Bank of England has said Britain is facing a tougher job to crush persistently high inflation than other advanced nations, as it kept interest rates on hold at the highest level since the 2008 financial crisis.

Pushing back against expectations in financial markets for a deep round of interest rate cuts next year, the central bank said there was still a long way to go before it could declare victory on inflation, despite a worsening outlook for the UK’s stagnant economy.

Continue reading...

Falling UK inflation will ease pressure for high pay awards, says thinktank

Posted on by

Strong growth in earnings has been driven by increases in cost of living, says Resolution Foundation

Bank of England concerns over the high level of pay awards are likely to be eased in the coming months as wage settlements fall in response to a tumbling annual inflation rate, a thinktank has said.

The Resolution Foundation said recent strong growth in earnings was primarily caused by a sharp increase in the cost of living, with workers trying to prevent their living standards being eroded.

Continue reading...

UK employers limit hiring permanent staff amid economic stresses

Posted on by

Vacancies declining as growth falters, recruiters’ body tells Bank of England

Britain’s largest recruiters have warned the Bank of England that demand for permanent hiring among UK businesses has plunged at the second fastest rate since the pandemic, amid worsening headwinds for the UK economy.

Ahead of the central bank’s decision on interest rates on 14 December, the Recruitment and Employment Confederation (REC) trade body said lingering economic uncertainty and hesitancy to commit to new hires had weighed on activity in November.

Continue reading...

Bracket creep is cooling Australia’s economy – it’s good news for interest rates but not for household budgets

Posted on by

The weak economy probably means the next RBA rates move – short of an inflation surprise next month – will be a cut

Philip Lowe used his final speech as Reserve Bank governor to call on fiscal policy to “provide a stronger helping hand” in managing inflation so the central bank didn’t have to carry most of the load – and the ire.

“Raising interest rates and tightening policy can make you very unpopular, as I know all too well,” Lowe said on 7 September, 10 days before many battling borrowers cheered him out the door.

Continue reading...

Iceland boss hits out at parent ‘exploitation’ in baby milk market

Posted on by

Richard Walker calls for price cap on infant formula as competition watchdog finds evidence of greedflation

The boss of Iceland has hit out at “exploitation” of new parents and joined calls for a price cap on baby formula after the competition watchdog found evidence of greedflation by leading manufacturers.

The Competition and Markets Authority (CMA) on Wednesday revealed manufacturers had increased prices by more than their costs during the inflation crisis, fattening profit margins and imposing an average 25% increase on shoppers in two years. It warned competition could be hampered because the market is dominated by two companies, Danone and Nestlé, which between them account for 85% of sales.

Continue reading...

US economy grew faster than expected as businesses invested – business live

Posted on by

Rolling coverage of business as US revises up GDP growth in third quarter to fastest pace of 2023

At lunchtime in the UK and western Europe markets are fairly flat all around.

The UK’s benchmark FTSE 100 has barely moved, although grocery delivery company Ocado is the top gainer, up 4.8%. (An Ocado director buying shares may have helped.) Trainer retailer JD Sports was the second biggest, up 4.5%.

These allegations are false, not true, incorrect, are not accurate. And it’s an attempt to undermine the work of the COP28 presidency,

I promise you, never ever did I see these talking points that they refer to or that I ever even used such talking points in my discussions.

Continue reading...

Central banks ‘risk tipping UK and other developed countries into recession’

Posted on by

Stance on inflation poses threat to ‘soft landing’ forecast for global economy, says OECD

Continued tough action by central banks to tackle stubborn inflation risks tipping Britain and other developed countries into recession next year, the west’s leading economic thinktank has warned.

The Organisation for Economic Co-operation and Development (OECD) said the chances of policymakers getting it wrong were “pretty high” and posed a threat to its central “soft landing” forecast for the global economy.

Continue reading...

Climate crisis adds average £605 a year to UK household food bills, study finds

Posted on by

Report quantifies UK food inflation caused by extreme weather reducing global crop yields since end of 2021

Food bills in the UK have risen by £605 a year for the average household because of the effects of climate breakdown, according to research.

Floods and droughts, which scientists have said were probably exacerbated by global heating, have reduced crop yields over the past two years, said the Energy and Climate Intelligence Unit (ECIU), a nonprofit organisation.

Continue reading...

Man found dead after statewide search – as it happened

Posted on by

This blog is now closed.

Hostage release essential if truce to last, Paterson says

Rewinding to Liberal MP James Paterson’s appearance on RN Breakfast this morning, wheN he said more needs to be done to free the hostages Hamas is holding in Gaza.

We don’t know how many of them are still alive, and their continued release would be essential for any continuing ceasefire because otherwise Israel continues to have a legitimate military objective.

Continue reading...

OBR halves UK growth forecast and warns inflation will exceed 2% target until 2025

Posted on by

Despite £27bn windfall for the autumn statement, government forecaster warns of generally more difficult outlook until 2028

The government’s official forecaster has slashed its predictions for economic growth over the next two years, and warned that inflation could take until 2025 to come back to the official 2% target.

In an updated financial health check to accompany the autumn statement, the Office for Budget Responsibility (OBR) said a more resilient economy this year had handed the chancellor a £27bn budget windfall, but it warned of a more difficult outlook up to 2028 than previously forecast at the time of the budget in March.

Continue reading...

UK borrows less than expected this year as Hunt lines up giveaways

Posted on by

Chancellor says bringing down inflation remains one of his main aims as he prepares autumn statement

The UK government borrowed less than expected in the first seven months of the financial year as Jeremy Hunt puts the last-minute touches to a series of pre-election giveaways in his autumn statement on Wednesday.

Public sector borrowing between April and October was just above £98bn, according to the Office for National Statistics (ONS), and while this was £22bn higher than in the same period last year, it was almost £17bn less than the Office for Budget Responsibility (OBR) forecast in March.

Continue reading...

Autumn statement will avoid tax cuts that promote inflation, pledges Hunt

Posted on by

Chancellor seeks to promote growth ahead of autumn statement that could spark a rebellion among Tory backbenchers defending marginal seats

Jeremy Hunt has played down the prospect of immediate income tax cuts, pledging not to do anything in this week’s autumn statement that will fuel inflation.

Although some Conservative backbenchers are eager for measures that would be quickly felt by households, the chancellor on Sunday sought to emphasise the need to promote growth and indicated that tax cuts were “not going to happen overnight”.

Continue reading...

Charities urge government not to ‘fiddle’ benefits increase after inflation hits two-year low – as it happened

Posted on by

Cost of living campaigners say government should use September’s inflation rate to set benefits, not October’s, after CPI falls to 4.6% from 6.7%

Falling energy bills, and the economic drag caused by higher interest rates, should get the credit for the drop in inflation.

That’s the view of Suren Thiru, economics director at ICAEW (The Institute of Chartered Accountants in England and Wales).

“This dramatic drop suggests that the UK has turned the corner in its battle against soaring inflation, particularly given the fall in core inflation, which indicates that underlying price pressures are also easing.

“While the Prime Minister has achieved his target to halve inflation this year, this owes more to the downward pressure on prices from falling energy costs and rising interest rates than any government action.

“The fall in inflation will come as some relief for families struggling with the cost of living.

“But now is not the time for Conservative ministers to be popping champagne corks and patting themselves on the back.

Continue reading...

Scrap stage-three tax cuts to fight inflation rather than cut infrastructure funding, Queensland says

Posted on by

Deputy premier Steven Miles says it’s ‘too late’ to cancel projects and any effect on demand is likely to be years away

The Queensland deputy premier has demanded that federal Labor explain why it is cutting infrastructure spending to fight inflation rather than revisiting controversial tax cuts for high income earners.

Steven Miles has upped the pressure on the Albanese government over looming infrastructure cuts in an opinion piece in the Courier-Mail, arguing it is “too late” to cut projects to fight inflation and urging it to reconsider stage-three tax cuts instead.

Sign up for Guardian Australia’s free morning and afternoon email newsletters for your daily news roundup

Continue reading...