UK supply chain crisis hurts confidence; Nobel Prize in Economics awarded – Business live | Companies
Good morning and welcome to our ongoing coverage of the global economy, financial markets, UK supply chain crisis and business.
The UK supply chain crisis hits business and consumer confidence as concerns about inflation, the energy crisis and the shortage of truck drivers mount.
UK firms’ output growth slowed for the fifth straight month in September, reached its lowest level since the lockdown in March, according to the auditing and management consultancy company BDO LLP.
BDOs The latest business trends report shows that supply chain disruptions and staff shortages are undermining prospects for economic recovery, with both manufacturing and service companies reporting a slowdown.
And a worrying sign for households was that BDO’s consumer inflation index climbed to a 10-year high in September, driven by rising energy and fuel prices. This suggests that consumers will face rising prices in the months ahead as companies pass the costs on to customers.
Kaley Crossthwaite, Partner at BDO LLP, says the UK’s acute labor shortage and supply chain disruption is putting a heavy strain on productivity:
Ultimately, it could result in consumers paying more for less this winter.
Many companies are caught between a rock and a tough place. Long-term planning for a post-pandemic and post-Brexit economy is vital, but the significant challenges on their doorstep make it increasingly difficult to focus beyond these short-term issues. The Chancellor’s autumn budget will be closely watched later this month to see if the government steps in to restore the confidence felt over the summer. “
Consumer confidence has fallen to its lowest point this year, PwC reported this morning.
PwC’s latest sentiment test found that rising inflation and concerns over supply chains and inventory levels drove optimism down over the past month.
Sentiment fell in almost all age categories, regions, and populations, showing that people are starting to feel uncomfortable about their financial security.
This brought the index back to pre-pandemic levels (at +3, slightly more respondents thought they would be better off than worse off in the next 12 months).
PwC Consumer Confidence Index Photo: PwC
The majority of respondents said they saw empty shelves in supermarkets and they expect the inventory shortage to worsen by Christmas.
The survey also found a decline in spending intentions on expensive products such as furniture and appliances, with the number of people looking to spend less outnumbering those looking to spend more by 3 to 1 – another sign that consumers are the Optimism has waned.
Lisa Hooker, Hypermarkets contribute PwCShe warned that the next few weeks will be “make or break”:
The inflationary factors that caused the sentiment decline are unlikely to weaken in the short term, particularly in food, utilities and gasoline. Combined with the current issues these industries are facing in terms of supply, we are beginning to see this affect the daily lives of consumers and, with it, sentiment and demand.
“The timing couldn’t be worse for both retail and leisure. After last year’s disappointment, retailers and restaurants urgently need a strong lead-up to Christmas. Even without lockdowns, they have to convince consumers to part with the savings in order to have any hope of rebounding to pre-pandemic levels.
For many, the coming weeks will be decisive: Can the driver shortage be remedied and the pressure in the supply chain reduced? When will the crisis at the pumps be resolved? And will higher energy prices lead to more widespread inflationary pressures and consumer reluctance to spend? “
Yesterday, the Treasury Department reprimanded Economy Minister Kwasi Kwarteng after proposing to consult Chancellor Rishi Sunak about helping companies grappling with rising energy prices.
Representatives from companies in key industries such as steel and paper reportedly told Kwarteng at a meeting on Friday that many “days” are away from halting production because of rising costs. A source said the business secretary asked his team to help work on an agreed list of proposals that could be forwarded to the Treasury Department over the next few days.
Treasury sources, however, denied that despite Kwarteng’s claims to broadcasters on Sunday morning, the department had received suggestions or even discussions about helping troubled key industries.
The Nobel Prize in Economics will also be awarded today. the AFP news agency say macroeconomics, health, and labor markets are some of the issues that could be rewarded, with some women having the chance to win the traditionally male-dominated prize:
One possible winner is the American Anne Krueger, formerly number two and briefly managing director of the International Monetary Fund (IMF) and former Vice President for Economics and Research of the World Bank.
Her compatriot Claudia Goldin, whose research focuses on inequality and the female labor force, is another favorite to receive the award as the third woman.
Other potential winners include the American Janet Currie, known for her work on the impact of government poverty reduction programs on children, Belgian labor economist Marianne Bertrand and American microeconomist Susan Athey, who became the first woman to lead the renowned John Bates Clark. won medal in 2007.
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