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Today’s top stories
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European Central Bank President Christine Lagarde warned that falling inflation in the euro zone could still recover and that it would take more than “the next few quarters” for the ECB to start cutting interest rates.
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Israeli Prime Minister Benjamin Netanyahu admitted that the war against Hamas in the Gaza Strip was taking longer than expected as the country came under increasing pressure due to the rising Palestinian death toll and the ultimate objectives of the military operation. Israel-Hamas War: Complete Coverage
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Joe Biden will press Xi Jinping on the need to revive communications between the two powers’ militaries when the US and Chinese presidents hold a summit next week ahead of the Asia-Pacific Economic Cooperation Forum.
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New data showing the UK economy is stagnating and productivity is “alarmingly high” underlines the challenge Chancellor Jeremy Hunt faces as he tries to restore growth in his upcoming autumn statement.
Gross domestic product was flat in the three months to September, compared with growth of 0.2 percent in the previous three months, slightly better than economists expected and in line with Bank of England forecasts. The 0.2 percent monthly increase was also better than expected, easing some concerns that high interest rates would push the economy into recession.
The figures show the UK is at the bottom of the league table of major economies compared to pre-pandemic levels.
Hunt said his November 22 statement would focus on “how we get the economy back to healthy growth by unlocking investment, getting people back to work and reforming our public services so we can deliver the growth that needs to be achieved.” our country needs.” He is under pressure from some Tory colleagues to announce tax cuts, but others have warned him not to fund them through cuts to benefits for the poorest.
The scale of the struggle Hunt faces was underlined yesterday by official data showing that UK productivity, which is the main driver of longer-term increases in living standards, has been essentially stagnant since the financial crisis.
Trade is unlikely to provide relief as serious economists agree on the damage caused by Brexit, even if, as Peter Foster points out in his latest Britain after Brexit newsletter (Premium subscribers only), ministers try to deny its effects. Many SMEs have simply given up trading with the EU because it is too complicated, he writes.
The Bank of England assesses the prospects rather bleakly. Gov. Andrew Bailey warned last week that there was still a long way to go before policymakers can ease inflation and reiterated Wednesday that it was too early to talk about rate cuts. Last week it left the interest rate at 5.25 percent, the highest level since the financial crisis.
Higher borrowing costs have had a huge impact on activity in sectors such as construction, which survey data showed this week contracted in October after an 11th straight monthly decline in housing construction.
Pressure on the cost of living also continues to weigh on consumers. For example, drivers did not benefit from falling fuel costs due to weak competition from gas stations. And many of those who can afford to put money away are likely to face a tax bill for the first time this year, as higher interest rates on savings accounts push their earnings beyond the tax-free threshold. On a positive note, sector data this week showed food inflation slowing to single digits for the first time in 16 months.
However, the overall picture from today’s data is “still one of a stagnating economy”, said Thomas Pugh of consultancy group RSM UK. “We doubt that growth will pick up significantly by the end of next year, meaning the specter of recession will hang over the UK economy for a long time.”
Things to know: Economics in Great Britain and Europe
The Bank of England asked 53 major financial institutions to model the impact of a sharp rise in government and corporate bond yields worldwide as part of a stress test.
A “massive” new government package of tax subsidies for German industry A project worth up to 28 billion euros by 2028 will help manufacturers cope with high energy costs and is likely to be met with criticism in Brussels.
Ukraine warned that the political dispute between EU capitals over €50 billion in support for Kiev threatens the country’s “macro-financial stability” and heightens concerns about future funding from the US.
Yesterday the European Parliament voted against major cuts Gasoline engine emissions a new setback for Brussels’ green agenda. However, it agreed to regulate the amount of microplastics leaking from tires and brakes for the first time.
The needs of the Russian army and its weapons factories are putting a painful strain on the civilian sector Labor shortage and destabilize the overall economy. Russia has increased its budget by at least 3.4 trillion rupees ($37 billion) this year, further exacerbating inflation risks.
Interesting facts: global economy
Head of the US Federal Reserve Jay Powell echoed his ECB counterparts, warning against being “misled” by good price data and saying the goal of getting inflation back to the 2 percent target was still “a long way to go.”
Falling Pork prices pulled China back into deflation as the consumer price index fell 0.2 percent annually in October. China’s CPI remained unchanged in September.
Kim Jong Un is back. A new Big Read details how the North Korean dictator built alliances with Russia and China and continued to develop nuclear weapons. “He survived [Donald] “Trump, he survived the sanctions and he survived the pandemic,” one scientist said. “Who wouldn’t feel triumphant in their position?”
Fun fact: business
ICBC, China’s largest bank, is trying to minimize losses after a Ransomware attack disrupted the U.S. Treasury bond market by forcing ICBC’s customers to redirect trades. The UK-based law firm Allen & Overy also fell victim to a ransomware hack. Columnist Gillian Tett says criminals are increasingly targeting U.S. companies, but the White House wants them to stop paying.
Apple suffered a setback in its €14.3 billion tax dispute with Brussels after an adviser to the EU’s top court said a previous ruling on its business in Ireland should be put on hold. The iPhone maker is also in trouble for allegedly favoring immigrants over U.S. citizens and green card holders.
That of Switzerland RichemontOwner of jewelry brand Cartier, it became the latest luxury group to signal a market slowdown by reporting a first-half profit of 1.51 billion euros, below the 2.17 billion euros forecast.
The story of how Carlsberg lost Balticaits Russia deal, is a return to the 1990s in several ways: The Kremlin’s moves to reward loyalists with confiscated Western assets could represent the biggest wealth transfer since the birth of the oligarchy in the early days of Russian capitalism.
Summary of science
The European Earth observation agency Copernicus said Earth is on the right track hottest year ever after a record-breaking October. The world is now moving closer to meeting the 2015 Paris Agreement goal of limiting the rise in average temperatures since the industrial era to ideally 1.5°C or well below 2°C.
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US beef prices reached record levels as droughts in the South and West turn green pastures into fields of dust and drive up feed costs. Scientists say the US is facing its worst drought in 1,200 years.
An unprecedented drought in the Amazon rainforest Region, caused by a combination of the El Niño weather event and an unusually warm patch of water in the Atlantic Ocean, is having extreme impacts on the planet’s climate. As extreme heat and water shortages kill trees and trigger fires, the forest releases carbon dioxide, fueling the global warming process that was initially a key factor in the drought.
France, Germany and Italy agreed to pump an additional 340 million euros annually into the crisis Ariane 6 heavy-lift rocket program in an attempt to secure Europe’s future in space.
Wegos, Novo Nordisks Anti-obesity drug, has a direct competitor for the first time: Eli Lilly’s injectable tirzepatide. In the UK it is already sold under the name Mounjaro to treat diabetes, but in the US it is sold as Zepbound for weight loss. AstraZeneca is also launching an oral anti-obesity drug.
A British minister has called for the dismantling of an equality, diversity and inclusion advisory committee at the leading research funding agency over some members’ views on the war in Gaza. Commentator Anjana Ahuja says now we need to keep a cool head to prevent science from becoming a new front in a harmful environment Culture war.
Some good news
Despite political obstacles and the seemingly unstoppable rise in temperatures (see above), economic commentator Chris Giles offers some reasons to be cheerful. Progress towards Decarbonization In his view, development is still progressing rapidly, supported by continued strong reductions in costs to curb global warming.
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