Latest News And Breaking Headlines

Gloomy CBI comments cap miserable week for UK economy

This article is an on-site version of our Disrupted Times newsletter. Register here to receive the newsletter directly in your inbox three times a week

good evening

The UK is facing a deeper and longer downturn than many expected, lowering living standards for at least two years.

That is the view of new CBI chief Brian McBride, who in his first interview since taking over Britain’s largest employers’ group tells the FT that the country’s businesses must face an uphill battle to protect consumers. against a cost of living crisis that could be as damaging to the economy as the pandemic.

McBride’s comments cap a week of dire news about the state of the UK economy.

On Wednesday, Bank of England Governor Andrew Bailey told central bankers’ rally that inflation in the UK — which hit 9.1 in May and is projected to exceed 11 percent by the BoE in the fall — would remain higher than that for longer. in other comparable economies thanks to unique pressures such as the government’s energy price cap and the country’s tight labor market, a situation exacerbated by Brexit.

The effect of the EU’s withdrawal was also highlighted in yesterday’s trade data, which showed Britain’s first-quarter performance fell to its worst level ever, on the back of weak export performance and a surge in imports.

Exports have been declining since 2021, when the UK left the EU’s single market and new border regulations were introduced. Brussels (unsurprisingly) repeats the point, but Downing Street remains reluctant to order an economic impact assessment of the withdrawal.

The tearing up of post-Brexit trade arrangements for Northern Ireland has also raised concerns. This is “a time for economics, not politics,” McBride responded. You can read more here from political editor George Parker and economics editor Chris Giles on how the true extent of Brexit’s damage is becoming clearer as the effects of the pandemic unravel.

The Read PMI UK manufacturing, meanwhile, was confirmed today at a two-year low of 52.8 in June, down from 54.6 in May, where 50 marks the gap between expansion and contraction.

The tightness in the cost of living was also highlighted today by new data showing UK mortgage rates have risen the fastest in a decade and figures from yesterday showing record numbers of workers paying higher income taxes following the government’s decision to lift the thresholds for freeze for four years.

Some workers, like Barclays’s, have been offered pay rises to help them cope, while others are turning to union action to secure pay rises to keep up with rising prices.

“The cost of people [and] living standards are definitely going to decline in the next two years, no doubt,” said McBride of the CBI. “We are facing a difficult time for individuals and for companies.”

The FT investigates cost of living tightness – how are you coping with higher prices? For more, click here

Latest news

For current news updates, visit our live blog

Need to know: the economy

Eurozone inflation rose more than expected in June to a new all-time high of 8.6 percent, compared to 8.1 percent in May, when food prices (up 42 percent) and energy prices shot up. Excluding these two volatile items, core inflation slowed slightly from 3.8 percent to 3.7 percent.

Latest for UK and Europe

Employment agencies responded to the UK government’s plans to allow outside workers to replace strikers as the summer of discontent continued. Employees of BT, the UK’s largest telecoms group, became the last to signal strike action – the first such move in 35 years. Conversations to prevent further rail strikes would be “constructive”.

The withdrawal of Russian troops from snake island in the Black Sea could open a path to ship grain from Ukraine. The UN is leading four-way talks with Turkey to end the blockade of ports that has closed export routes and threatens famine in Middle East and African countries dependent on Ukrainian wheat and corn.

Worldwide last

Our Big Read explores the future of Hong-Kong on the day Chinese President Xi Jinping visited the city to mark 25 years since the handover of the UK. Xi said the area is sticking to its “capitalist system” but must be ruled by patriots, as he swore to new leader John Lee.

Israel faces the fifth election in less than four years after the collapse of the governing coalition, paralyzed by a series of defections. The November poll could see the return of former Prime Minister Benjamin Netanyahu, even as he battles charges of fraud and taking bribes.

CPI in Sri Lankan capital Colombo passed 54 percent in June, slipping into the realm of hyperinflation (defined as over 50 percent), as the island nation grappled with a currency crisis that has sparked protests and fuel shortages. Food prices have risen by more than 80 percent.

Line chart of Colombo headline CPI (% change, year-over-year) showing that prices in Sri Lanka's capital have entered hyperinflationary territory

Need to know: business

US stocks have recorded their worst first half in more than 50 years following the Federal Reserve’s efforts to contain inflation and concerns about global growth. The S&P 500 fell 0.9 percent yesterday, pushing the blue chip index down 20.6 percent in the first six months of 2022. Business Fundraising has also cooled down quite a bit. Chinese stocks on the other hand, were set for their biggest monthly gain in nearly two years

Bar chart of price returns to date for S&P 500 sectors (%) with broad decline for US equities in the first half of 2022

Into a wave mega deals meant that global M&A volumes reached $2 trillion in the first half of this year, despite high inflation, rising interest rates and the war in Ukraine. 25 deals worth more than $10 billion have been closed, up 12 percent from last year, although total deal volume fell by a fifth.

Vladimir Putin ordered the transfer of all rights to the Sakhalin-2 natural gas project to a Russian entity, the first time the Kremlin has nationalized a company since multinationals announced plans to withdraw from the country. The move could force foreign investors, including Shell, Mitsubishi and Mitsui, to abandon the project.

Shares in Gazprom, the Russian state-backed gas group, fell 25 percent yesterday after its dividend was blocked by investors. The company has stopped supplying gas to European customers, including Germany Uniperwho was forced to issue a profit warning and to enter into talks with the government about a bailout.

Citigroep talks to Russian buyers about selling its local operations, making it the first major foreign bank to leave the country since Russia’s invasion of Ukraine. A UK parliamentary report spoke of the government’s “unwillingness” to do something about it Russian money laundering

The EU reached a landmark agreement to end trade in crypto assets to curb the “wild west” of the financial markets. FT reporters analyze the global measures taken to ensure crypto massacres do not infect mainstream finances.

Oxford BioMedica agreed a new three-year contract with AstraZeneca to produce Covid-19 vaccines if the British drugmaker continues to mass-produce the shot.

Finish science

New Omicron variants according to new data today, a 34 percent increase in Covid infections in England in a week. The virus is spreading quickly, but existing immunity protects most people from developing serious infections, and the number of people requiring intensive care remains low.

You see a snapshot of an interactive image. This is most likely due to you being offline or having JavaScript disabled in your browser.


How concerned should we be about this new variants† FT science editor Clive Cookson and global pharma correspondent Hannah Kuchler answered your questions about rising cases and vaccine efficiency.

US government advisers advised changing the design of Covid-19 vaccines to reduce the Omicron variantwhich is expected to lead to an increase in infections in the autumn.

A new study found that taking a break from immune suppression treatments would improve response to Covid jabs for millions of people.

BioNTech/Pfizer said new data had shown that the Omicron-targeted shots elicited a strong immune response and were a significant improvement over their previous vaccine.

science commentator Anjana Ahuja draws parallels between the fight against monkey pox and the second-rate status afforded to the global south in the quest for Covid vaccines.

Covid cases and vaccinations

Total number of cases: 540.7mn

Total Doses Administered: 12.1 billion euros

Get the latest global photo with our vaccine tracker

And finally…

Have you ever felt guilty about the air miles accumulated by the food at your weekly shop? look at the climate footprint of the items in your shopping cart with our new interactive tool

the work — Discover the big ideas shaping today’s workplaces with a weekly newsletter from work and career editor Isabel Berwick. Sign Up here

FT Asset Management — The inside story on the movers and shakers behind a multi-billion dollar industry. Sign Up here

Thanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here receive future numbers. And share your feedback with us at disruptedtimes@ft.com. Thank you

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More