Energy Prices Could Push UK Inflation to 22%, a Near Post-war Record

Inflation in the UK could top 22% next year, close to the post-war record set in 1975, if wholesale energy prices remain at current high levels, Goldman Sachs has warned. Highlighting the pressure on households and businesses, the US investment bank said inflation could peak at 22.4% next year if wholesale gas and electricity prices continue to spiral over the winter.

In a scenario where prices “remain elevated at current levels”, economists at the bank said the Ofgem energy price cap for household bills could rise by more than 80% in January. This would “imply headline inflation peaking at 22.4%”.

Inflation rose above 10% for the first time since the early 80s in July, fuelled by surging wholesale energy prices and the rising cost of basic essentials. Inflation hit a post-war record of 24.5% in August 1975. » | Richard Partington, Economics correspondent | Tuesday, August 30, 2022

‘People Are Tired of Being Ignored While the Rich Get Richer’: Bernie Sanders on Anger and Hope in the US and UK

‘Why, with all this new tech, are we not seeing an improved standard of living?’ … Bernie Sanders at a unionisation rally in Richmond, Virginia. Photograph: Julia Rendleman/Reuters
THE GUARDIAN: The Vermont senator rose from the political margins to become hugely influential within the American left. As he prepares to speak at a London rally, he explains why unions on both sides of the Atlantic must reassert their power

Both are unlikely political sensations who were long consigned to the fringes: Bernie Sanders, an octogenarian US senator who inspired an army of voters far younger than himself; and Mick Lynch, a former blacklisted construction worker and child of Irish immigrants who, as the leader of the Rail, Maritime and Transport Workers union (RMT), shot to national prominence when he humbled hostile but underinformed broadcast journalists. “I think Lynch is touching a nerve,” Sanders says.

The de facto leader of the US left has swung his considerable political heft behind a new campaign – Enough Is Enough – launched to fight Britain’s mounting cost of living crisis, which was founded in part by Lynch and the RMT. It has certainly touched a nerve: at a recent rally in Clapham, south London, many of those who had queued around the block were turned away for lack of space. “‘Enough is enough’, funnily enough, is an expression we use a lot here,” Sanders says. “People are sick and tired of often working longer hours for low wages; sick and tired of their kids having a lower standard of living than them; and they’re sick and tired of billionaires getting richer and richer while they fall behind.

“Why, with all this new tech out there, are they not seeing an improved standard of living? Why not more equality, rather than less equality? Why are living standards deteriorating, not improving? Lynch is asking that, Enough Is Enough is asking that – and it’s hitting a nerve, because people are tired of being ignored while the rich get richer.” » | Owen Jones | Tuesday, August 30, 2022

What's behind Turkey's Ballooning Trade Deficit | DW Business

Aug 29, 2022 As Russia's invasion of Ukraine grinds on, its impact continues to be felt far beyond Ukraine's borders. In Turkey, the war has cast a shadow over President Recep Tayyip Erdogan's economic ambitions.

Turkey's trade deficit has ballooned over the last seven months on the back of rising commodity prices. In July, the monthly gap reached almost 11 billion dollars, which is a record level. The imbalance between imports and exports from January through July was 144 percent higher than a year earlier, according to Turkey’s state statistics agency. Add to that the rapid depreciation of the lira, and Turkey's problems don't look set to end soon.

Stocks Plunge after Fed Chair Warns of ‘Pain’ from Inflation Fight

THE NEW YORK TIMES: The S&P 500 fell 3.4 percent, its worst daily showing since mid-June, after the Federal Reserve chair spoke about the path ahead for monetary policy.

Wall Street recoiled on Friday, after the head of the Federal Reserve delivered a stern warning that the central bank’s campaign to lower inflation by raising interest rates is “unconditional” even if it leads to pain for households, businesses and in turn stock prices.

The S&P 500 fell 3.4 percent, its worst daily showing since mid-June, taking its losses for the week to 4 percent. The slump was broad, with every sector of the index lower.

Bond investors also quickly adjusted for more rate increases from the Fed, with the two-year Treasury yield, which is sensitive to rising interest rates, moving close to its highest level of the year at 3.44 percent, before easing back to 3.38 percent.

“While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Jerome Powell, the Fed chair, said during a speech at the Kansas City Fed’s annual conference in Wyoming. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.” » | Joe Rennison | Friday, August 26, 2022

Daily Business Briefing.

Martin Lewis Issues a Stark Warning as He Calls for the Government to Help with Energy Price Hikes | Good Morning Britain

Aug 26, 2022 Martin Lewis explains what the rise in the energy price cap means. Broadcast on 26/08/22

La faiblesse de l’euro, symbole d’une économie en plein ralentissement

LE MONDE : Alors que la monnaie unique est passée sous la parité avec le dollar, le 22 août, pour la première fois depuis 2002, une récession apparaît probable.

Pour la troisième journée consécutive, l’euro est resté sous la parité avec le dollar, mercredi 24 août. A 99 centimes de dollar pour 1 euro, la monnaie unique est à son plus bas niveau depuis 2002. Au-delà du symbole, il s’agit d’un recul de 13 % depuis le début de l’année. Cela tombe au plus mauvais moment. La majorité du pétrole et du gaz s’échange en dollars. Le recul de l’euro renchérit d’autant les importations d’énergie, dont les prix flambent depuis l’invasion de l’Ukraine par la Russie, le 24 février.

Comme toujours, la reculade de la monnaie unique est largement une histoire de banques centrales. La Banque centrale européenne (BCE) vient seulement de commencer à relever son taux d’intérêt, alors que la Fed américaine a débuté dès mars. L’écart entre le taux directeur des deux régions est passé d’un demi-point au début de l’année à deux points au 25 août. » | Par Eric Albert(Londres, correspondance) | jeudi 25 août 2022

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Article réservé aux abonnés

UK Inflation Will Hit 18% in Early 2023, Says Leading Bank Citi

THE GUARDIAN: Forecasts updated after 25% and 7% rally in gas and electricity prices respectively last week

Inflation in the UK will hit 18% early next year as consumers count the cost of the deepening energy crisis, one of the world’s biggest banks has predicted.

Forecasters at the US financial services group Citi said it expects the consumer prices index to breach 18% in the first quarter of 2023, while the retail prices index inflation rate will soar to 21%.

The prediction outstrips previous modelling of the impact of rising costs. Earlier this month the Bank of England said it expected inflation to reach 13% by the end of the year as it raised interest rates for a sixth successive time.

Separately, the Resolution Foundation thinktank has forecast inflation could reach as high as 15% by early 2023.

However, on Monday Citi said the inflation rate was likely to be even higher next year with a peak of more than 18% in January. » | Alex Lawson, Energy correspondent | Monday, August 22, 2022

Truss Poised to Plunge UK Economy into ‘Inflation Spiral’, Says Sunak

THE GUARDIAN: Truss cannot deliver £50bn tax cuts and support packages without pushing public debt to dangerous levels, says Tory leader contender

Liz Truss will plunge the economy into an “inflation spiral” if she does not choose between her unfunded £50bn tax cuts and providing cost of living support, her Conservative party leadership opponent, Rishi Sunak, has claimed.

Sunak’s leadership campaign said Truss would increase borrowing to “historic and dangerous levels” and place public finances into “serious jeopardy” if she attempted to do both.

The comments came after Truss, the frontrunner to be the next prime minister, signalled another U-turn with direct support for companies and households with soaring energy bills this winter.

In a statement, Sunak’s campaign said: “Following weeks of rejecting direct support payments as ‘handouts’, Truss supporters have slowly woken up to the reality of what winter brings. They now say that they will provide people with help – but what help, for who, when and how it will be paid for remains a mystery. » | Tobi Thomas | Monday, August 22, 2022

«Einbahnstrasse Euro - Franken»: Der Euro fällt auf ein Rekordtief

NEUE ZÜRCHER ZEITUNG: Der Euro setzt seine Talfahrt gegenüber dem Franken und dem Dollar fort. Das schwindende Vertrauen der Investoren in die Euro-Zone gilt als einer der Hauptgründe.

Das Image der europäischen Gemeinschaftswährung Euro erleidet immer mehr Kratzer. | Lennart Preiss / AP
Der Euro wird zum Franken immer schwächer. Diese Woche war ein Euro zeitweise nur noch 0.9605 Franken wert. Damit ist die europäische Gemeinschaftswährung gegenüber dem Franken auf ein Rekordtief gefallen. Ulrich Leuchtmann, Ökonom bei der Commerzbank, schrieb diesbezüglich in einem Kommentar von der «Einbahnstrasse Euro - Franken» – für die Gemeinschaftswährung führt sie nach unten. Mitte September vergangenen Jahres wurden für einen Euro noch 1.0932 Franken bezahlt.

Auch gegenüber dem Dollar setzt der Euro seine monatelange Talfahrt fort. In letzter Zeit nahm die Gemeinschaftswährung dabei Kurs auf die Parität, am Freitag wurden für einen Euro noch 1.0047 Dollar bezahlt. Anfang September vergangenen Jahres waren es noch 1.1880 Dollar. Seit Jahresbeginn hat der Euro gemäss Daten von Bloomberg gegenüber dem Franken um 7,9 Prozent und gegenüber dem Dollar um 13 Prozent an Wert verloren. » | Michael Ferber | Samstag, 20. August 20, 2022

‘Nobody Is In Charge’: Tory Peer Hits Out at Ministers over Inflation

THE GUARDIAN: As rate reaches double digits, Stuart Rose calls lack of government action to shield households ‘horrifying’

The veteran retailer Stuart Rose has urged the government to do more to shield the poorest from double-digit inflation, describing the lack of action as “horrifying”, with a prime minister “on shore leave” leaving a situation where “nobody is in charge”.

Responding to July’s 10.1% headline rate, the Conservative peer and Asda chair said: “We have been very, very slow in recognising this train coming down the tunnel and it’s run quite a lot of people over and we now have to deal with the aftermath.”

Attacking a lack of leadership while Boris Johnson is away on holiday, he said: “We’ve got to have some action. The captain of the ship is on shore leave, right, nobody’s in charge at the moment.”

Lord Rose, who is a former boss of Marks & Spencer, said action was needed to kill “pernicious” inflation, which he said “erodes wealth over time”. He dismissed claims by the Tory leadership candidate Liz Truss’s camp that it would be possible for the UK to grow its way out of the crisis. » | Joanna Partridge | Wednesday, August 17, 2022

Das Leben nach der EU – Brexit-Verlierer und Gewinner | Reupload | DW Doku Deutsch

Jul 29, 2022 Niemand hätte 2016 wohl gedacht, dass die Briten für den Brexit stimmen - jetzt tritt er in Kraft. Das britische Referendum hat die Politik in Großbritannien und der EU auf den Kopf gestellt. Vieles ändert sich jetzt - auf beiden Seiten.

Mit dem Austritt aus der Europäischen Union fallen für die Briten viele ungeliebte Einschränkungen und Pflichten, aber auch Vorteile weg, die daraus resultierten, Teil eines größeren Ganzen zu sein. Innerhalb der EU-Staaten ist der ungehinderte Verkehr von Personen, Waren und Dienstleistungen garantiert, aber auch Hunderte gemeinsame Regeln von Menschenrechten bis hin zu Glühbirnenspezifikationen. Die Korrespondenten Birgit Maass in London und Georg Matthes in Brüssel haben den Brexit-Prozess von Anfang an hautnah miterlebt. Sie haben von unzähligen Gipfeltreffen und Verhandlungen berichtet, sind durch Großbritannien und Europa gereist und sogar darüber hinaus. Sie haben Menschen getroffen, deren Leben vom Brexit betroffen sein wird - auf vorhersehbare und nicht vorhersehbarer Weise.

Jetzt blicken Birgit und Georg in die Zukunft und stellen uns Menschen vor, deren Schicksale zeigen, wie bitter der Konkurrenzkampf in der Brexit-Welt sein wird: Fischergemeinschaften, die von verschiedenen Küsten aus in See stechen und in denselben Gewässern ihre Netze auswerfen. Britische Landwirte, deren Einkommen gekürzt wird, je nachdem, wie groß ihre Betriebe sind. Menschen, die ihr Leben in Großbritannien aufgebaut haben, aber nicht mehr willkommen sind. Und natürlich die Menschen auf beiden Seiten der Grenze zwischen Nordirland und der Republik Irland. Unsere beiden DW-Korrespondenten räumen mit dem jahrelangen absichtlichen und unabsichtlichen Chaos auf und stellen Ihnen sechs Brexit-Verlierer vor - und einige Gewinner.

Dokumentation von 2020

Bank of England under Fire over £23m Bonus Payouts

THE OBSERVER: Anger as thousands of Bank staff enjoy ‘performance awards’ after governor urged other British workers not to demand big rises

The Bank of England, which has been criticised for underestimating the threat of rising inflation, last year paid out bonuses to its staff amounting to more than £23m, the Observer can reveal.

This bonus pot was at its highest level for at least two years, with more than 4,260 employees receiving performance awards. Andrew Bailey, the bank’s governor, was widely criticised earlier this year after telling Britain’s workers that they should not be asking for big pay rises because inflation had to be kept under control.

The bank is tasked by the government with hitting an inflation target of 2%, but the current rate stands at 9.4%. Lord Sikka, emeritus professor of accounting at Sheffield University, said: “Bonuses should only be paid for extraordinary performance, but there is no evidence the bank has delivered even an ordinary performance. They are unjustified.” » Jon Ungoed-Thomas | Sarurday, August 13, 2022

UK Energy Bills 'to Top £5,000 in January'

Aug 11, 2022 British households face average energy bills surging above £5,000 next year, according to the latest forecast by the energy consultancy Auxilione.

The warning follows a steep rise in wholesale gas prices - and came as the Prime Minister attended a meeting with the electricity sector in Downing Street. That meeting failed to produce any immediate concrete help for struggling households.


This USELESS government needs to be kicked out of office as soon as possible. Brexit has been a disaster. BoJo has been a disaster. Liz Truss will/would be a disaster. As will/would Rishi Sunak. This country is falling apart. – © Mark

Worst Economic Prediction for a Generation - as UK Heads for Recession

Lebanon: An Economic Crisis and the Aftermath of the Beirut Port Explosion | DW Documentary

Aug 4, 2022 Lebanon is now going through the worst economic crisis in its history. 80 per cent of the population lives below the poverty line. In one year, food prices have jumped 500 per cent due to galloping inflation.

Lebanon was long regarded as the Switzerland of the Middle East. But those days are gone. A series of crises have plunged the nation into the abyss. And its people are suffering.

For Riad, who runs a grocery store in the suburbs of Beirut, business has become hellish. Every morning, calculator in hand, he changes the labels of his products according to the day’s exchange rate. An operation made all the more complex by the fact that his store is plunged into darkness, due to a lack of electricity. The Lebanese government no longer provides more than two hours of electricity per day in the country. It is impossible for the population to heat, light or use their refrigerators. Taking advantage of the situation, a network of private generators has emerged.

The Lebanese pound, the local currency, has lost 90 per cent of its value. The only people unaffected are those paid in dollars. The greenback, which can be exchanged for a small fortune against the local currency, has created a new privileged social class in the country. A salesman in an international pharmaceutical company, Joseph lives like a king in a ruined Lebanon. Thanks to his new purchasing power, he repaid his mortgage in two months, instead of... twenty years!

In a bankrupt state, plagued by corruption, six out of ten Lebanese now dream of leaving the country. In Tripoli, in northern Lebanon, Mohammed and his son set out for Germany by sea. Even though the trip was cut short off the Turkish coast, the young father is still ready to take all possible risks to reach the European Eldorado.

Bank of England Raises Interest Rates to 1.75% in Biggest Hike in 27 Years

THE GUARDIAN: Policymakers increase base rate by 0.5 percentage points, the sixth rise in a row as the cost of living soars

The Bank of England has raised interest rates by 0.5 percentage points to tackle the soaring cost of living, despite concerns that the economy is heading for a recession. » | Phillip Inman | Thursday, August 4, 2022

WARNING FROM THE BANK OF ENGLAND:

Bank of England warns the UK will fall into recession this year: The Bank of England has warned that the UK will fall into recession this year as it raised interest rates from 1.25% 1.75% in a bid to curb soaring prices. »


Bank of England hikes interest rates and says inflation will hit 13%: Base rate raised by 0.5 percentage points to 1.75%, as Bank predicts prolonged recession starting later this year »

UK Inflation Will Soar to ‘Astronomical’ Levels over Next Year, Thinktank Warns

THE GUARDIAN: The rise will force the Bank of England to hike interest rates higher and for longer than previously expected, says NIESR

Inflation will soar to “astronomical” levels over the next year forcing the Bank of England to raise interest rates higher and for longer than previously expected, according to a leading thinktank.

The National Institute of Economic and Social Research also forecast a long recession that would last into next year and hit millions of the most vulnerable households, especially in the worst-off parts of the country.

NIESR said gas price rises and the escalating cost of food would send inflation to 11% before the end of the year while the retail prices index (RPI), which is used to set rail fares and student loans repayments, is expected to hit 17.7%.

Stephen Millard, the institute’s deputy director, said the economy would contract for three consecutive quarters, shrinking the 1% by the spring of next year.

He added there will be “no respite” for British households and businesses from “astronomical inflation” in the short term and “we will need interest rates up at the 3% mark if we are to bring it down”. » | Philip Inman | Wednesday, August 3, 2022

UK Businesses Slash Investments due to Soaring Prices and Brexit

THE GUARDIAN: As many firms are now planning to cut investment as to increase it, latest polls find

UK business leaders are slashing investment plans as soaring prices, Brexit trading difficulties and political uncertainty all leave bosses pessimistic about the economic outlook.

As many firms are now planning to cut investment as to increase it, according to the Institute of Directors’ latest poll of business chiefs. That is the weakest reading since October 2020, as nervous firms rein in spending.

UK businesses’ investment intentions have been falling steadily since the start of the year, as input costs have soared and the economy has slowed, undermining efforts to lift productivity.

Business leaders are also less upbeat about their own prospects, with over half saying economic conditions in the UK are having a negative impact on their organisation, along with soaring energy costs and skills shortages. » | Graeme Wearden | Monday, August 1, 2022

Brexit is the poison that keeps on poisoning! Brexit is going to turn this once prosperous country into a basket case. I hate to say that ‘I told you so’; but I actually did.

We will now get all the pain and suffering we will deserve. No patriot would have walked away from a single market of 500,000,000 plus consumers. Who can call himself an economist who advocates such a stupid move?

Fact is, we Brits have been led up the primrose path by a bunch of ideologues, by a bunch of people who are nostalgic for our once glorious past and who refuse to come to terms with present-day reality.

The Conservative Party was once the party favorable to business and commerce; it no longer deserves that reputation.

The stark reality is that Brexiteers have been stupid in their pursuit of independence. From the very start, Brexit was a dream that could never come true with a favorable outcome. Fact is, we live in an increasingly interconnected world. It is stupid to think otherwise. Brexiteers have thought otherwise. They were stupid to think so. And as Americans often say: You can’t fix stupid! – © Mark Alexander