#rachel reeves gdp

[bewithus4u]

Rachel Reeves: The Vanguard of UK's Economic Diplomacy with China

Rachel Reeves, the UK Finance Minister, is set to embark on a significant diplomatic mission to China in January 2024. This visit is poised to revive regular economic talks between the two nations and strengthen bilateral relations. With the Bank of England Governor joining her on this key visit, the trip is expected to have far-reaching implications for the UK’s economic strategy and…

[rodgermalcolmmitchell]

More proof that the Internation Monetary Fund is a group of fools and con men

No sooner do I publish, “Historical BULLSHIT Claims the Federal Debt Is a ‘Ticking Time Bomb’” than this IMF article pops up: World’s $100 Trillion Fiscal TIMEBOMB Keeps Ticking Story by Craig Stirling (Bloomberg) — Even before global finance chiefs fly into Washington over the next few days, they’ve been urged in advance by the International Monetary Fund to tighten their belts. Two weeks ahead…

[creativemedianews]

The UK economy has failed to grow for the second month in a row

The UK economy has failed to grow for the second month in a row #GDP #growth #Julystagnation #Labourgovernment #ONS

[probablyasocialecologist]

While there is a putative difference between Jeremy Hunt and Rachel Reeves, with the latter saying she would borrow to spend on capital investment, Labour’s commitment to reducing the national debt as a percentage of GDP over a parliament (like the Tories) means any difference is negligible. By extension, this means there is no real difference between the two main parties on the role of the state. Forget Bidenism redux, the strategy for whatever remains of British social democracy is to hope growth will magically return and that distributional conflicts will evaporate. Under conditions of low to no growth (which has now been normal in British politics for 15 years), we essentially have a one-party state which supports austerity and certainly doesn’t believe in Keynesianism. Any points of difference now consist in how Labour and the Tories would spend the proceeds of growth.   Emblematic here is Labour’s green prosperity fund. Initially, the party had committed to spending £28bn a year, every year, as part of a massive program of green investment. Now, however, the aim is to instead “ramp up” spending so it hits £28bn in the final year of Labour’s first term.  Remember that for Labour, just like the Tories, national debt needs to fall as a percentage of GDP after five years. In other words, resources available to the fund will have to come almost entirely from economic growth. And the basis of such growth that will fund a government programme which is, comparatively speaking, arguably bigger than Biden’s Inflation Reduction Act? Reforms to planning regulations. Does anyone seriously think that some new Barrett Estates on the green belt, however welcome, will generate £28bn in extra tax receipts by 2029? Even the most plucky Foxtons estate agent would struggle to sell that. Already the bare minimum for Starmer as a remotely progressive PM look implausible – forget about a programme of social home construction or interventions to reduce child poverty, let alone massive state-led investment in green energy.

[influencermagazineuk]

Revised figures confirm the UK economy recorded zero growth between July and September, adding to a string of concerning economic indicators. Recent data revealed inflation surging at its fastest rate in eight months, coupled with an unexpected economic contraction in October. The Confederation of British Industry (CBI), one of the country's foremost business groups, warned of worsening conditions, stating the economy faces "the worst of all worlds." Chancellor Rachel Reeves acknowledged the significant challenges ahead, emphasizing the need to rebuild the economy after "15 years of neglect." Shadow Chancellor Mel Stride criticized the figures, asserting that "growth has stagnated under Labour's watch." Government Under Pressure The revised data is a setback for the government, which has prioritized economic growth. Labour has pledged to achieve the highest sustained economic growth among the G7 nations, but businesses are raising alarms over potential fallout from the October Budget. Key measures, including higher employer national insurance contributions (NICs) and an increased minimum wage, will take effect in April. Critics warn these policies could lead to job cuts and higher prices, with Stride cautioning that the economy's pre-Budget performance signals "warning lights" for 2025. Chancellor Reeves defended the government's approach, promising "sustainable, long-term growth" through increased investment and reforms. Meanwhile, Liberal Democrat treasury spokesperson Daisy Cooper called for reversing the NIC tax hike and scrapping the current business rates system to support small businesses. Business Outlook Dims A CBI survey of 899 firms conducted from November to December revealed bleak expectations, with businesses anticipating a "steep decline in activity" in early 2025. Interim deputy chief economist Alpesh Paleja noted that sentiment is at its lowest point in over two years. Retailers also face challenges, as the British Retail Consortium (BRC) highlighted dwindling public confidence in the economy. Chief executive Helen Dickinson warned of a "January spending squeeze," which could force retailers to cut costs by closing stores and freezing recruitment. Interest Rates and GDP Revisions The Bank of England recently held interest rates steady, citing worse-than-expected economic performance and stagnation in the final quarter of 2024. The Office for National Statistics (ONS) also revised GDP growth for April to June down to 0.4% from 0.5%, attributing the slowdown to weaker performance in hospitality, legal, and advertising sectors. As the UK grapples with stagnant growth and economic uncertainty, businesses and policymakers face mounting pressure to navigate a challenging path forward. Read the full article

[accapitalmarket]

US producer inflation gauge trends higher, GBPUSD rebounds

UK stocks ended higher on Thursday as investors poured over a big batch of corporate results, while the pound at one stage dropped to its lowest level against the dollar for over four months as the US currency continued the relentless rise made since Donald Trump's landslide presidential election victory, although those falls had been pared back by the stock market close.

On Wall Street, US stocks retreated following more news on US inflation, with the risk-on rally in the wake of Donald Trump’s election victory appearing to be cooling. After Wednesday’s in-line US consumer prices index (CPI) reading, the latest US wholesale inflation number proved mixed.

US30 Daily

The producer prices index (PPI) was up 0.2% on the month in October, accelerating from an upwardly-adjusted 0.1% in September but in line with forecasts. However, on an annualised basis PPI rose by 2.4%, up from 1.9% in September and above economists' estimates of 2.3%. The core PPI reading was up 0.3% month-on-month, in line with estimates, while year-on-year it rose by 3.1%, compared to expectations of 3.0%.

Meanwhile, other US data saw the latest US initial jobless claims drop by 4,000 to a seasonally adjusted 217,000 for the week ended November 9, below forecasts for 223,000 claims.

Investors were also awaiting an address by Federal Reserve chair Jerome Powell, to be made after the London markets close, for more clues on future US monetary policy.

Thursday’s UK data saw the latest Royal Institution of Chartered Surveyors report show signs of improvement in the housing market. A net balance of 16% of property professionals reported house prices rising in October, and a 12% balance saw fresh buyer inquiries rising. However, demand appears to be outweighing supply in the rental market.

Investors also had an eye on the latest UK GDP data out tomorrow, where 0.2% growth is expected, and on finance minister Rachel Reeves' first Mansion House speech to leaders of the City. Bank of England Governor Andrew Bailey was also scheduled to deliver a speech tonight that could affect expectations for the UK central bank's rate cut path.

GBPUSD H1

On currency markets, sterling was down 0.03% versus the greenback at 1.2703 having recovered from an earlier 0.6% drop to 1.2632, its lowest level since July 2. The pound also edged lower against the euro, down 0.01% at 1.2028.

At the stock market close in London, the FTSE 100 index was up 0.5pc at 8,071, while the FTSE 250 index also ended 0.8pc higher at 20,522.

A big batch of results provided the main fuel for the rise of the UK indexes. Burberry was the standout performer, jumping 18.7% even as the firm reported a big first half loss, with its new boss unveiling a big cost-cutting programme as part of his turnaround plan for the FTSE 250-listed luxury goods group.

UK100 H1

B&M was the top FTSE 100 gainer, taking on 5.0% as the discount retailer posted improved first-half figures as cost pressures continued to drive demand, with group sales up 3.7pc. Meanwhile, Aviva added 4.6% after strong third-quarter results, with the insurer and pension provider remaining confident of achieving its previous full-year guidance.

Back on the FTSE 250 index, Kier Group rose 8.4pc as the construction firm said it had made a good start to the new trading year. And Firstgroup gained 6.1% as the buses and trains operator unveiled a new £50mln share buyback alongside an upgrade to its full-year forecast.

But Keller dropped 9.8% after a trading update in which the ground engineer cited challenging conditions in many markets, although it still confirmed it is on track to meet full-year expectations. And WH Smith shed 3.2% after the retailer reported a fall in full-year pretax profit even as its revenue grew.

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[onlywaynews]

Государственный долг Великобритании впервые в новейшей истории достиг 100% от ВВП страны, а в прошлом месяце наблюдался еще один крупный дефицит бюджета, что усугубило проблемы министра финансов Рэйчел Ривз, которая готовит свои планы по налогам и расходам. UK debt hits 100% of GDP, adding to Rachel Reeves' headache

[head-post]

UK receives $10.5bn investment from Amazon to boost growth

The UK confirmed an £8 billion ($10.45 billion) investment from Amazon Web Services (AWS) to build, operate, and maintain data centres.

The Treasury reported on Wednesday that the investment would create 14,000 jobs annually and contribute £14 billion ($18.3 billion) to UK GDP over the next five years.

Chancellor of the Exchequer Rachel Reeves welcomed the investment as a significant step towards economic recovery and part of the government’s long-term plan to boost British economic growth.

Reeves emphasised that the government’s mission had only just begun and that economic challenges were still ahead. However, Parliament is in turmoil amid discussions to cut winter fuel payments for UK pensioners.

According to AWS, this contribution will drive innovation, increase productivity, and support the transformation of the UK digital economy.

Read more HERE

[systemtek]

UK Chancellor announces £8 billion Amazon Web Services investment, as she vows to make every part of Britain better off

The Chancellor Rachel Reeves has today confirmed an £8 billion investment from Amazon Web Services which is estimated to support thousands of jobs across the UK. The Chancellor secured the planned five-year investment last week at a meeting with Amazon Web Services. The investment is estimated to support around 14,000 jobs per year at local businesses, including those across the company’s data centre supply chain such as construction, facility maintenance, engineering and telecommunications, as well as well as other jobs within the broader local economy. AWS estimates that these investments in the UK will contribute £14 billion to the UK’s total Gross Domestic Product (GDP) from 2024 to 2028. Rachel Reeves will welcome the announcement as part of the government’s long-term mission to boost growth, unlock investment and make every part of Britain better off. Speaking from a University Technical College in Silverstone today, which works with Amazon Web Services to introduce students to the skills required to enter the digital infrastructure industry, the Chancellor will warn that ‘change cannot happen overnight’ and ‘two quarters of positive economic growth will not make up for fourteen years of stagnation under the previous government.’ Chancellor of the Exchequer, Rachel Reeves said:  I am under no illusion to the scale of the challenge facing our economy and I will be honest with the British people that change will not happen overnight. Two quarters of positive economic growth does not make up for fourteen years of stagnation under the previous government. However, this £8 billion investment marks the start of the economic revival and shows Britain is a place to do business. I am determined to go further so we can deliver on our mandate to create jobs, unlock investment and make every part of Britain better off. The hard work to fix the foundations of our economy has only just begun. Amazon Web Services Vice President and Managing Director, Europe, Middle East & Africa (EMEA), Tanuja Randery said: The next few years could be among the most pivotal for the UK’s digital and economic future, as organisations of all sizes across the country increasingly embrace technologies like cloud computing and AI to help them accelerate innovation, increase productivity, and compete on the global stage. AWS is proud to announce our plans to invest £8 billion in digital and AI infrastructure over the next five years to help meet the growing needs of our customers and partners, and support the transformation of the UK’s digital economy. Today’s investment announcement comes ahead of this year’s UK International Investment Summit on 14 October, where the UK will bring together the world’s most important companies and investors, demonstrating how the UK’s offer is the best in the world, with political and economic stability, a strategic government partnering with businesses, a proper trade strategy, and policies designed to enable growth. Read the full article

[enterprisewired]

Britain’s Economy Rebounds Strongly in Q1 2024

Source – Yahoo Finance

A Resurgent Economy

Britain’s economy has demonstrated remarkable resilience in the first quarter of 2024, marking the most substantial growth in nearly three years. According to the Office for National Statistics (ONS), gross domestic product (GDP) expanded by 0.6% in the three months to March, effectively ending the shallow recession that gripped the nation in the latter half of the previous year. This surge in economic activity provides a timely boost to Prime Minister Rishi Sunak ahead of an upcoming election.

Surpassing Expectations

The robust first-quarter growth surpassed expectations, exceeding all forecasts in a Reuters poll of economists. Economists had anticipated a 0.4% expansion, but Britain’s economy exceeded projections, buoyed by strong performance across various sectors. The remarkable growth contrasts sharply with the 0.3% contraction witnessed in the final quarter of 2023, signaling a decisive turnaround in economic fortunes.

Mixed Reactions

While Prime Minister Sunak hailed the GDP figures as evidence that the economy has “turned a corner,” the opposition Labour Party remains skeptical. Labour’s Rachel Reeves criticized Sunak and Finance Minister Jeremy Hunt for celebrating prematurely, arguing that the British people are still grappling with the aftermath of economic challenges. Despite differing perspectives, the data underscores a pivotal moment in Britain’s economy recovery journey post-pandemic.

Bank of England’s Projections

The Bank of England, which maintained interest rates at a 16-year high, had forecasted a 0.4% growth for the first quarter of 2024. The actual performance exceeded the central bank’s projections, instilling confidence in the economy’s resilience. Moreover, the Bank of England’s forecast for a 0.2% rise in the second quarter indicates cautious optimism amid lingering uncertainties.

Market Response and Sectoral Strength

Following the release of the ONS figures, sterling witnessed a surge against the U.S. dollar, reflecting positive market sentiment. In March alone, the economy expanded by 0.4%, outpacing economists’ expectations. The robust monthly growth was fueled by strength in retail, public transport, haulage, and healthcare sectors. Notably, reduced disruptions from public-sector strikes contributed to the buoyancy observed in these sectors, underscoring the economy’s adaptability and resilience.

As Britain navigates the complexities of post-pandemic recovery, the first-quarter GDP data provides a glimmer of hope for sustained economic revival. Despite lingering uncertainties, the nation’s ability to rebound strongly underscores its resilience in the face of adversity. As stakeholders across the political spectrum interpret and respond to the latest economic indicators, the trajectory of Britain’s recovery journey remains a focal point in shaping its future economic landscape.

[newstfionline]

Saturday, February 17, 2024

Judge orders Trump to pay more than $350 million in N.Y. civil fraud trial (Washington Post) New York Supreme Court Justice Arthur Engoron on Friday ordered former president Donald Trump to pay more than $350 million in penalties, handing down a hefty penalty following a months-long civil trial in which Trump and others were accused of financial fraud by New York Attorney General Letitia James. Engoron also said Trump could not serve as an officer or a director for any New York company for three years. Trump has denied all wrongdoing and assailed the case. Attorneys for Trump sharply criticized the ruling, with one calling it “manifest injustice" and saying they hoped it would be overturned on appeal. With this decision, Trump now owes more than $440 million in fines and damages across multiple civil trials.

Hang Out (The Atlantic) The average amount of time that American men spent socializing face to face has fallen 30 percent from 2003 to 2022, and among teenagers that’s fallen over 45 percent. That’s happened at the same time that people of all ages are citing increased levels of loneliness and other symptoms of anxiety and depression.

Mexico will likely elect a woman as its next president (AP) Mexico is almost certain to elect its first female president in June—both leading candidates are women—but it’s almost equally as certain that she won’t have much room to act independently of outgoing President Andrés Manuel López Obrador. The populist president has continued proposing new, expensive projects in the closing months of his administration, before he leaves office on Sept. 30. He will also leave a lot of big-ticket projects unfinished. That will probably leave his successor with her hands tied for much of her six-year term. “The next administration will inherit a country with a financial hole that will limit the maneuvering room throughout the next term,” said Moody’s Analytics Director Alfredo Coutiño.

Centuries-Old Border Dispute in Central America (NYT) The boat edged its way past the mangrove swamps, a tangled maze of thorn-covered branches sheltering jaguars and shrieking howler monkeys. We were in Belize, our GPS signals showed, the English-speaking Central American country where British pirates put down stakes centuries ago. But then members of Guatemala’s military, clad in camouflage and berets, spotted us. Pulling up in their own boat, they grasped rifles, index fingers close to the triggers. “You’ve just entered Guatemalan waters!” one shouted in Spanish when they were just a few feet away. “We request that you steer toward the nearest Guatemalan command post.” Wil Maheia, the leader of the Belizean group we were embedded with, yelled back: “No, you’re trespassing in Belizean waters! If you take us into custody that will be kidnapping!” The episode laid bare a simmering political dispute in one of the most volatile corners of Central America, in which Belize, Central America’s least populous country with only about half a million people, is pitted against Guatemala, the region’s giant with a population of 18 million. The unresolved territorial feud—one of the oldest in the Americas—has tensions flaring, raising fears over greater instability in a region already marked by drug wars and the exodus of migrants to the United States.

The UK tips into recession (Guardian) According to new data released by the Office for National Statistics, the U.K.’s economy fell into a recession at the end of last year. The data shows that gross domestic product (GDP) dropped by 0.3% in the last three months of 2023 thanks to a weak holiday retail showing and a general decline in all sectors of the national economy. The recession is another blow for Rishi Sunak’s government, which is already struggling ahead of national elections slated for later this year. “This is Rishi Sunak’s recession, and the news will be deeply worrying for families and business across Britain,” said Rachel Reeves, the second-most senior leader of the Labour Party. The ONS projects that economic growth was just 0.1% in 2023, making it the country’s weakest year since 2009 (excluding the Covid pandemic years). The economic stagnation has brought soaring consumer prices, higher cost of living, and a spike in borrowing costs to the British population.

Sarkozy’s Prison Sentence Halved to 6 Months (NYT) A Paris appeals court upheld on Wednesday the 2021 conviction of former President Nicolas Sarkozy for illegal financing an election campaign but cut his sentence from one year to six months with a further six months suspended. Mr. Sarkozy’s lawyer, Vincent Desry, immediately said that Mr. Sarkozy would appeal to France’s highest court. The appeal could take years to be resolved, ensuring that Mr. Sarkozy remains free for the foreseeable future. Whether he will ever serve time in prison remains an open question. Although his legal travails are many and various, Mr. Sarkozy has remained an important political figure, with some influence over President Emmanuel Macron, who often turns to Mr. Sarkozy’s center-right Republicans party for support in Parliament.

Alexei Navalny, who galvanized Russia’s political opposition, died in prison. (WSJ) The cause of his death was still being established, authorities said. One of Russian President Vladimir Putin’s most vocal critics, Navalny lost consciousness and couldn’t be revived after taking a walk. The Kremlin denied responsibility. The 47-year-old activist had been in jail since 2021, serving 30-plus years on charges he and his supporters said were fabricated.

Russia’s Wounded Soldiers (NYT) A shell slammed into the ground just feet from where the Russian soldier was deployed, and the explosion tossed him into the air. “I felt my arm fall off, then a blow to my leg, everything slowed down, just a frozen picture in my eyes—no sounds, no other sensations,” said the soldier, Andrei, a 29-year-old former convict recruited into the Wagner private military company. Drifting in and out of consciousness, he was convinced that death loomed. As shells exploded on all sides in the fighting near the Ukrainian city of Bakhmut, fellow soldiers dragged him to an evacuation point. He eventually spent more than a year in hospitals, with the remnants of his left arm amputated and one leg still at risk. Cases like Andrei’s do not receive much publicity in Russia, where—as in Ukraine—the total number of war wounded is not disclosed. But, according to American and Ukrainian officials and numerous military analysts, the number is staggering, perhaps in the hundreds of thousands. And one senior Russian official estimated that amputees represented more than half of the seriously wounded.

Russian sanctions (NYT) After Russia invaded Ukraine in 2022, Western nations imposed the most extensive sanctions and trade restrictions in history on Moscow. Today, Russia appears to be doing OK. Its economy is growing steadily. Russia can’t buy much from the West but has found new providers for drones, surveillance gear, computer chips and other gear. Its oil and gas sales are still strong, despite attempts to stop them. Russian officials say they have plenty of money to pay for their war. Moscow’s continued strength is a humbling result for the U.S. and its allies. These nations make up more than half of the global economy, and they tried to weaponize their influence over trade and finance to weaken Russia. They hoped to make President Vladimir Putin a pariah and maybe even stop the war. Those efforts have fallen short. “The instruments and the policies of the United States are ineffective,” Putin bragged during an interview last week. He is surely not the only leader to notice the U.S. failure to cripple Russia. When China wants to menace Taiwan or India wants to assassinate perceived enemies on foreign soil, they will know that Washington couldn’t turn Russia into a pariah when it broke the rules. Sanctions in Russia have exposed the limits of U.S. power.

As Israel corners Rafah, Netanyahu defies the world (Washington Post) The chorus of warnings is hard to ignore. International organizations, rights group advocates and even a growing number of Western leaders are all urging Israel to refrain from launching a full-scale ground offensive on Rafah, the overwhelmed city on Gaza’s southern border with Egypt. Close to a million and a half displaced Palestinians are crammed in makeshift encampments there, the majority having fled other parts of Gaza already ravaged by the Israeli military campaign that followed the Oct. 7 terrorist attack by Hamas. In a Wednesday phone call with Israeli Prime Minister Benjamin Netanyahu, French President Emmanuel Macron said Israel risked a “humanitarian disaster of a new magnitude.” A joint statement from the leaders of Australia, Canada and New Zealand said “a military operation into Rafah would be catastrophic” and called on Israel to “listen to its friends.” The prime ministers of Spain and Ireland wrote to authorities in Brussels, suggesting Israel may be in breach of its association agreement with the European Union and demanding an “urgent review.” “We will fight until complete victory, and this includes a powerful action also in Rafah after we allow the civilian population to leave the battle zones,” Netanyahu said Wednesday.

Family grieves after American teenager shot dead in West Bank (Washington Post) A 17-year-old Palestinian American was killed in the West Bank on Saturday, a family member told The Washington Post, making him the second known U.S. citizen killed there since the start of the Israel-Gaza war. Mohammad Ahmad Alkhdour was shot twice in the head near the town of Biddu, northwest of Jerusalem, before he was rushed to a hospital, his aunt Sana’a Ayesha Alkhdour said. He was pronounced dead Saturday night. Israeli forces were allegedly behind the shooting, according to the human rights group Defense for Children International—Palestine and Sana’a Ayesha Alkhdour. Mohammad Ahmad Alkhdour’s death comes just weeks after the killing of Tawfic Abdel Jabbar, another 17-year-old American, in the West Bank. While the toll of Israel’s war in Gaza has captured global attention, Israel has also stepped up its military activity in the West Bank. Settler violence in the area has risen at an unprecedented rate since Hamas’s Oct. 7 attack on Israel. At least 388 Palestinians have been killed in the West Bank since then, according to the United Nations.

A small business in war-time Gaza sews padded cloth diapers, creating jobs and helping weary parents (AP) Their scissors move quickly, shearing pieces of white cloth to be stitched together with cotton pads and taken to market in battered cardboard boxes. Before the day is done, the Palestinian seamstresses will have sewn 500 diapers and distributed them to war-weary parents in Gaza for about $4 per package of eight, half of what mass-produced disposable diapers cost in the besieged enclave. Maysaa Qatati, the manager of the sewing workshop, knows the output will barely make a dent in the huge demand—but the little business is thriving and creating jobs. “People were looking for pampers and could not find them,” she said from the whirring workshop in Rafah, the southernmost city in Gaza. “They would stand in line at the merchant and buy it at a very high price.” In some cases, parents say they have resorted to easily soiled cloth diapers. But cleaning those is difficult when water is so scarce. The disposable diapers made in Qatati’s sewing workshop are an improvement because of the cotton pads.

UN envoy says Libya will slide into ‘disintegration’ if politicians don’t move toward elections (AP) The U.N. special envoy for Libya warned the country’s feuding political actors Thursday that if they don’t urgently form a unified government and move toward elections the oil-rich North African nation will slide into “disintegration.” Abdoulaye Bathily told the U.N. Security Council there are numerous alarming signs of such a slide and urged all political leaders to put aside “their self-interests” and come together to negotiate and reach a compromise “to restore the dignity of their motherland.” Libya plunged into chaos after a NATO-backed uprising toppled and killed longtime dictator Moammar Gadhafi in 2011. In the chaos that followed, the country split, with rival administrations in the east and west backed by rogue militias and foreign governments.

[olko71]

New Post has been published on All about business online

New Post has been published on https://yaroreviews.info/2023/11/uk-economy-flatlines-as-higher-interest-rates-bite

UK economy flatlines as higher interest rates bite

Getty Images

By Nick Edser & Faisal Islam

BBC News

The UK economy failed to grow between July and September, figures show, after a succession of interest rate rises.

The chancellor said higher rates were hitting growth, but added that the economy had performed better than expected this year.

Forecasters suggest the economy is set to be stagnant for several months yet.

Last week, the Bank of England said the UK was likely to see zero growth until 2025, although it is expected to avoid a recession.

Up until September, the Bank of England had raised interest rates 14 times in a row to try to tame soaring price rises.

However, while raising rates can reduce inflation – the pace at which prices rise – it also affects economic growth by making it more expensive for consumers and businesses to borrow money.

Interest rates are at a 15-year high of 5.25%, and are expected to remain high for some time. Bank governor Andrew Bailey said last week it was “much too early” to be considering rate cuts.

Paul Dales, the chief UK economist at Capital Economics, said the latest data suggested “the drag from higher interest rates is growing”, but he does not expect the Bank to start cutting rates until late next year.

What is GDP and how does it affect me?

Bank warns it’s too early to cut interest rates

The Office for National Statistics (ONS) said the latest growth figures showed a subdued picture across all sectors of the economy.

The services sector saw a small decline over the three-month period, while manufacturing and the construction sector recorded marginal growth.

The Chancellor, Jeremy Hunt, told the BBC: “Naturally interest rates do have an impact and the judgement of the Treasury is that the main reason growth has slowed is because of that.

“What is perhaps a surprise to many people is that the economy has been much stronger than people thought,” he said.

“Most people thought it was going to contract this year. It’s actually grown, and that gives us an excellent foundation for the future.”

Asked if he would be looking to reduce taxes in the Autumn Statement on 22 November, Mr Hunt said he wanted to bring the tax burden down, but that business tax cuts would take priority over personal taxes. “I’ve always been clear that low taxes are part of a dynamic, successful, entrepreneurial economy, but what I’ve said is my priority is growth, so cutting business taxes is the most important thing at this stage,” he said.

Labour’s shadow chancellor Rachel Reeves said the latest figures were “further evidence that the economy is not working”, while Liberal Democrat Treasury spokesperson Sarah Olney said the Conservatives had “delivered a hammer blow to our economy leading us down a no-growth path”.

Although the rate rises from the Bank are flattening growth, the government may feel a small amount of relief that the risk of a formal technical recession – defined as two consecutive three-month periods of the economy shrinking – has been lowered.

But Prime Minister Rishi Sunak’s vow to “grow the economy” is very much in the balance. Even between July and September, there was a tiny contraction in the economy, though it rounded down to 0.0%.

The growth forecast for the final three months of the year is between 0% and 0.1%, in line with other major European countries, which are also weighed down by rising rates.

The Bank of England may feel that it has started to engineer a softish landing from last year’s excessive inflation.

The government too will point to next week’s likely significant fall in the headline rate of inflation, when the figure is forecast to slow from 6.7% to around 4.8% for October.

It may declare victory on that target on Wednesday, even as its growth target is now under question.

This may change the backdrop to the Autumn Statement later this month and, if it continues, for the general election too as it challenges the clear desire of Downing Street to paint a “turnaround” picture.

As the inflation problem eases, the growth problem could become more prominent.

Dominic Boon, finance director of gift supplier Fizz Creations in Lancing, West Sussex, says it has been a particularly tough year.

The company is coming into the key Christmas period where it makes the most of its money, and Mr Boon has noticed consumer confidence dropping.

“People are struggling with interest rates on their mortgages, on their cars, the cost of living, heating, gas, electricity. Everything is costing more – they have less money in their pockets.”

Down the road is Lucy Lago, who runs her cafe inside Lancing Business Park. “I see people have definitely stopped eating breakfast,” she says, “and their spend per head is obviously going slightly lower. People are being very careful what they buy.”

Gross Domestic Product (GDP) figures show the health of the UK economy. It is a measure – or an attempt to measure – all the activity of companies, governments and individuals in a country.

If the figure is increasing, it means the economy is growing and people are doing more work and usually getting a little bit richer, on average. But if GDP is falling then the economy is shrinking, which can be bad news for businesses.

The zero growth in GDP in the July-to-September period follows 0.2% expansion in the previous three months.

The ONS data also showed the economy grew by 0.2% in September alone compared with the previous month, which was stronger than expected.

Darren Morgan of the ONS told the BBC’s Today programme that while the latest data showed a “very flat picture” overall, there were signs of improvement.

“For example, more than half of businesses were not considering raising their prices in November 2023 – that’s the highest proportion of businesses to tell us this since we first introduced that question in April 2022,” he said.

Six expert tips for finding work

1. Search beyond a 40-mile radius – Remote, hybrid and flexible working open up opportunities further away.

2. Use key words in your searches – Online algorithms will pick up on daily searches and send you more of the same.

3.Don’t wait for a job to be advertised – Contact a manager at a business that you like the look of as you never know what opportunities might be coming up.

4. Sell your skills – Use social media sites like Linkedin which showcase your skills and experience. Other platforms like Twitter and Instagram can prove useful when touting yourself out to potential employers as well.

5. Get learning – While you’re on the hunt for a job see if there are way to fill gaps in your CV with free courses, volunteering or shadowing.

6. Celebrate the small wins – set personal targets, like a tracker of the number of jobs to apply for in a week or a certain number of cold emails and acknowledge the little wins along the way to keep your spirits up.

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[2whatcom-blog]

Economists warn over influence of customs union Brexit

A Brexit involving staying within the customs union would depart the UK PS80bn worse off a 12 months than if it had remained within the EU, a report says. The Nationwide Institute of Financial and Social Analysis (Niesr) stated authorities revenue would additionally fall by PS13bn a 12 months. The analysis was commissioned by the Folks's Vote marketing campaign for an additional EU referendum. The professional-Brexit Economists for Free Commerce group has predicted financial progress in the long run after Brexit. If the UK agreed to stay in a customs union with the EU after leaving, the 2 sides wouldn't put import taxes - tariffs - on items they commerce with one another. As well as, they might agree to use the identical set of tariffs to items coming into their market from non-EU international locations. The Niesr examine checked out what would occur to the UK financial system if it stayed within the customs union however left the only market, which ensures the free motion of products, providers, capital and other people. It discovered this is able to lead to a 3.1% discount in GDP 10 years after leaving the EU, in comparison with if the UK had remained a member. Niesr stated remaining in a customs union wouldn't offset the unfavorable influence of commerce frictions the UK would face outdoors the only market, significantly on the service sector. Labour plans to stay in a everlasting customs union with the EU after Brexit, a requirement it has been making in cross-party talks with the federal government. The occasion says that is the one approach to preserve commerce flowing freely and shield jobs, and assist keep away from the necessity for a tough border in Northern Eire. Labour MP and Folks's Vote supporter Rachel Reeves stated a customs union exit wouldn't be as damaging as a no-deal exit or the PM's present deal. "But it is a mistake to regard it as a soft option, let alone a fix-all for a political crisis that has its roots in promises that can't be met," she added. In a report final November, the Economists for Free Commerce group stated the UK had "nothing to fear" from a "clean break" from the EU, leaving each the only market and the customs union. It argued that utilizing World Commerce Organisation guidelines may give an PS80bn enhance to the tax base and minimize costs by 8%. Read the full article

[influencermagazineuk]

UK Economy Surpasses Expectations with Robust Growth in May

The UK economy experienced a stronger-than-expected growth in May, driven by robust performances in the retail and construction sectors. According to the Office for National Statistics (ONS), the economy expanded by 0.4%, recovering from stagnant growth in April, which had been affected by wet weather that discouraged shopping and hindered construction projects. In May, the construction sector saw its fastest growth in nearly a year, spurred by house building and infrastructure projects. Liz McKeown of the ONS noted that many retailers and wholesalers had a successful month, rebounding from a weaker performance in April. The services sector, which includes businesses such as hairdressers and hospitality and is a major component of the UK economy, grew by 0.3% in May. The construction sector saw an even more significant increase, jumping by 1.9%. Addressing economic growth was a key issue in the recent general election. The new Labour government has introduced several measures aimed at boosting growth. Chancellor Rachel Reeves announced the reintroduction of housebuilding targets, an overhaul of planning restrictions, and an end to the effective ban on onshore wind farms in England. Additionally, a new National Wealth Fund has been established to attract investment in infrastructure and green industries. Economists caution against placing too much emphasis on month-to-month changes in economic activity, as factors like weather can significantly influence these shifts. In the three months leading up to May 2024, the UK's gross domestic product (GDP) grew by 0.9% compared to the previous three months. This marked the fastest growth rate in over two years, driven largely by strong performance in the services sector, according to the Office for National Statistics (ONS). Analysts suggest that this stronger-than-expected growth may reduce the likelihood of the Bank of England cutting interest rates at its next meeting in August. Previously, there had been hopes for a rate cut from the 16-year high of 5.25%. Interest rates were initially raised to curb inflation, which has now fallen back to the Bank's target of 2%. Despite the positive inflation figures, two members of the Bank's Monetary Policy Committee (MPC) have expressed concerns about ongoing inflationary pressures. Rob Wood, chief UK economist at Pantheon Macroeconomics, noted that the UK economy is recovering well from last year's minor recession. He mentioned that rate-setters are eager to ease policy and were unconcerned about stronger-than-expected growth, as indicated in the minutes of their June meeting. Nevertheless, Wood believes the MPC will likely wait until September to reduce the Bank Rate. Read the full article

[accapitalmarket]

Big tax increases spook markets, UK100 and GBP lower

UK stocks ended mixed on Wednesday, together with the pound, while gilt prices were volatile as investors assessed the new Labour government’s first Budget.

Chancellor Rachel Reeves announced the biggest UK tax increases in almost half a century, totaling £40bn, and also paved the way for higher borrowing for long-term investment to speed up Britain's sluggish economy.

But initial reactions to her lengthy speech suggested investors were largely unfazed by the Labour Party's first economic program since it won a landslide election victory in July.

UK government bond prices rose as Reeves addressed parliament, but then fell back on further reflection later in the day.

GBPUSD H1

On the foreign exchanges, sterling slipped 0.08% versus the US dollar to 1.3004 after US data showed GDP third quarter annualised growth was 2.8%, slightly down from the previous quarter. And against the euro, the pound shed 0.47% at 1.1974.

At the stock market close in London, the FTSE 100 index was 0.7% lower at 8,159, but the more domestically focused FTSE 250 index ended 0.4% higher at 20,694 as the Budget measures proved no worse than expected for UK investors.

Betting firm Entain was the top blue chip gainers, ahead 8.6%, cheered by the Budget news that there will be no increase in gambling duty.

Away from the Budget, another wave of corporate news and results provided a major focus. Drugs giant AstraZeneca shed 2.8% on news that the president of its China business is co-operating with an investigation by the country’s regulatory authorities.

Pharma peer GSK fell 3.1% after warning in its third quarter results that vaccine sales will drop this year, dealing a blow to chief executive Emma Walmsley’s turnaround plan.

But Standard Chartered was a blue-chip gainer after results, up 4.1% as the Asia-focused lender upgraded its income guidance for the current financial year on the back of record quarterly growth from its Wealth Solutions and Global Markets segments.

Clothing and homewares retailer Next was also in the black, ahead 1.1% as it boosted its guidance for both the crucial fourth quarter and the full year after a recent cold snap caused sales to surge.

UK100 H1

Miner Glencore added 1.2% after a mixed production performance for the first three quarters of the year, with copper, cobalt, zinc, and nickel output generally lower year-on-year, while steelmaking coal saw a significant increase.

But diversified miner Anglo American shed 3.9% amid reports that its former suitor BHP has moved on and is intending to focus on other growth opportunities.

And defence firm BAE Systems shed 0.8% in reaction to news of a major fire at its Barrow-in-Furness shipyard that builds Britain's nuclear submarines.

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[chrissterry]

Brexit: Customs union deal discussed by May and Corbyn will make people £800 worse off, economists warn | The Independent

Brexit: Customs union deal discussed by May and Corbyn will make people £800 worse off, economists warn | The Independent

The compromise Brexit deal being discussed by Theresa May and Jeremy Corbyn– with the UK staying in a customs union – would deliver an £80bn hit to the economy after 10 years, economists have said.

People would be an average of £800 worse off, GDP would shrink by 3 per cent and there would be £13bn less a year to spend on public services, compared with EU membership, the analysis found.

“It would…