Tue. Dec 7th, 2021

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Today’s news that US consumer prices in October at the fastest rate since 1990 is the latest sign of inflationary pressures facing the world’s major economies as they try to bounce back from the pandemic.

The consumer price index rose by 6.2 percent from a year ago, a sharp rise from September’s 5.4 percent, reinforcing the view that inflation appears to be more persistent than originally expected.

Line chart of annual% change in CPI showing US inflation at 31-year high

Short-Term US Government Bonds sell to the news on expectations that the U.S. Federal Reserve may need to act more quickly to contain the threat. The Fed has already announced that it will begin reducing its pandemic emergency measures this month, although chairman Jay Powell said last week that it was too early to start. to raise interest rates.

U.S. President Joe Biden highlighted rising energy costs as one of the main drivers of inflation, saying it was a “top priority” to reverse the trend. He urged Congress to pass its spending bill, which he said would ease the pressure.

Inflation is also a serious problem for global businesses. New data published today showed that Chinese factory gate prices – the cost at which wholesalers buy materials from producers – are at their fastest pace in 26 years in October, an increase of 13.5 percent compared to last year.

Chinese consumer prices are also rising at a faster pace: CPI was 1.5 percent higher than the same time last year and 0.7 percent higher in September. The cost of fresh vegetables increased by 16.6 percent, contributing to concerns that the rising production costs carried through to essential goods.

The potential for rising inflation – which reached a 28-year high of 4.6 percent in October – to stifle economic recovery in Germany has been highlighted by the country’s Council of Economic Experts today, which has increased its inflation forecasts for this year and next.

Katharina Utermöhl, economist at Allianz, said rising inflation would also reduce disposable income for households. “Consumption remains our last hope for growth in the winter months, but the negative risks for it are increasing,” she said.

Latest news

  • The World Health Organization says coronavirus deaths have risen by 10 percent in Europe over the past week, making it the only world region where both Covid-19 cases and deaths are gradually increasing (AP)

  • US consumers last month saw the biggest jump in their energy bills in more than a decade, with costs for electricity, natural gas and fuel oil (Bloomberg)

  • Unemployment claims in the US dropped to a new pandemic era low for the fifth consecutive week

For the latest news updates, visit us live blog

Must know: the economy

Russia’s Gazprom opened the taps to start refill European gas storage facilities but not enough to ward off supply fears. Moscow has rejected allegations that Gazprom is exacerbating the gas crisis by limiting export volumes to speed up regulatory approval of the controversial Nord Stream 2 pipeline.

The FT Editors Lead Fed Chairman Jay Powell should get a second term to give business and investors at least one source of stability in a time of great economic uncertainty.

Latest for UK and Europe

Early Christmas shopping, more theater trips and bigger overseas trips boosted UK retail sales and consumer spending in October, according to the British Retail Consortium. Sales were 1.3 percent higher than the same month last year – and 6.3 percent above retail spending in October 2019, before the pandemic hit.

Line graph of% change compared to the same month two years earlier showing cinemas and travel has boosted UK consumer spending

New survey data provides mixed signals about the rate of recovery in Germany, the eurozone’s largest economy. Ifo said the country’s retailers would still face supply chain problems until well into next summer, but Zew’s monthly survey has investors in more confident mood.

Worldwide latest

The global supply chain pressure is brought home to shoppers in the form of record numbers of “out of stock” messages, according to data from Adobe Analytics. But while delivery times for the world’s manufacturers may have dropped to new lows, there is a tendency for the fact that there is also a dramatic increase in demand for durable consumer goods, says our Trade Secrets newsletter.

Line chart of rolling 12-month average, million TEUs shipped per month, showing global shipping container volumes rising

The impact of last week’s surprise decision by the Bank of England to hold interest rates has reverberated far beyond the UK, highlighting how a group of smaller central banks found themselves dictate movements around the world bond markets

Those of Argentina clash with IMF over $ 57 billion bailout is a test of the fund’s ability to help key emerging market economies out of pandemic crisis, such as today’s Great reading explain. The country’s left-wing government desperately needs the money, but insists on big concessions as it prepares for Sunday’s midterm elections.

Asian countries such as Singapore, Japan, South Korea and Thailand take a third way approach to to reopen their economies, rejects the “freedom day” tone of the US and Europe as well as the isolationist approach of China and Hong Kong. “These countries are now turning away from the zero-covid approach to a preventative approach that emphasizes vaccinations and other measures, such as wearing masks and hand washing,” said a director at the advisory group Bower Group Asia. “The approach may delay recovery initially, but it is certainly better than restraints, and the pace should accelerate if high vaccination levels keep hospitalization and mortality rates low.”

Must know: business

Marks and Spencer shares shot up this morning after the British retail bell raised its profit forecasts. Half year profit expectations beat, which reached £ 187 million, 18 per cent more than the same period in 2019/20. Last year, the group made a loss of £ 87 million. Online sales are now 34 percent of the total, reflecting the shift to e-commerce during the pandemic.

The global travel boom has boosted revenue Emirate by 86 percent which helped the Dubai-based airline reduce its half-year losses to $ 1.6 billion. British airports called on the government to bring back rules that were waived during the pandemic, forcing airlines to use or lose them valuable takeoff and landing slots.

Quarterly profits have almost doubled on Infineon, Europe’s largest chipmaker, thanks to global increase in demand for semiconductors. Earnings at the Munich-based company, which relies on the car industry for more than 40 percent of its revenue, came in at a record € 464m, up from € 245m in the previous quarter.

Shares in BioNTech shot up yesterday after the German company, which launched the first Covid-19 vaccine with the American pharmaceutical giant Pfizer, has lifted its revenue forecasts for the sample to € 17 billion this year, € 1 billion higher than previously estimated. AstraZeneca, which has suffered setbacks with its Covid sting – yet to be approved by US regulators – has announced that it will set up a division dedicated to vaccines and antibody therapies.

Real estate agents such as Savills and homebuilders like Persimmon strong sales figures recorded amid a vibrant UK housing market, where the average property price exceeded £ 270 000 for the first time last month. Demand is also strong in many other countries where low interest rates have pushed down the cost of mortgages, but can house prices start to plummet as soon as interest rates rise?

Bar graph of Number of countries showing Real house prices rising in most countries

The World of Work

Trusting your staff to take as much time off as they need to rest after the trauma of the pandemic is a worthy goal, but how would it actually be? The new edition of us Working It podcast discuss a radical unlimited holiday experiment.

Columnist Sarah O’Connor explores why more older people started it leaving the workforce since the outbreak of the pandemic, which has counteracted the trend of the past two decades, which has gradually increased the proportion of older people still participating in the labor market.

Covid cases and vaccinations

Total global cases: 250.3m

Get the latest global picture with us vaccine tracker

And finally …

. . . Or rather not yet. From the quest for immortality to the treatment of age-related diseases, our new collection shows the latest developments in the quest for a live longer (and healthier).

© Celina Pereira

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