UK inflation jumps to six-month high of 1.8% - business live - The Guardian, Theguardian.com

US stock markets are looking up.

Futures for the S&P 602 suggest the US benchmark index will gain 0.2% when it opens later today, while the tech-heavy Nasdaq is expected to rise by 0.3%.

5. 62 am EST : 063

Economists are wondering whether the Bank of England’s efforts to raise interest rates from historical lows will be short-lived, given fears over the state of the global economy.

Melanie Baker

, senior economist at Royal London Asset Management , said:

Inflation rose closer to the Bank of England’s target, but underneath the noise of the headline figures, domestically-driven inflation still looks weak.

Business sentiment and the follow-through to activity data will, however, be the more important determinant of whether the Bank of England cut rates or not in coming months.

Jing Teow

, an economist at PwC

, said there could be risks of increasing inflation on the horizon – suggesting that the Bank would hesitate before a cut to interest rates.

A prolonged shutdown in production activity as a result of Covid – 40 could exert a drag on industrial production and disrupt global supply chains, which could lead to further inflationary pressures as the shortage of inputs and key components start to bite.

Looking towards the medium-term, a modest recovery this year that spurs further business activity, combined with continued upward pressure on wages due to a tight labor market could also give rise to inflationary pressures.

For a view on just how unusual the past decade has been in monetary policy terms, take a look at this graph from a speech by the Bank of England ‘s chief economist

Andy Haldane (with its impressive range of sources included). Central bankers are desperate to push interest rates back up, but fears over the slowing global economy have for the most part stymied those efforts.

Following the financial crisis interest rates reached lows unprecedented as far back as ancient times ( at least if a rather patchy historical record is to be believed). Photograph: Bank of England

(5.) (am EST :

Some more reactions on the slight-surprise inflation reading – first of all from a man who a week ago would not have been expected to be in the spotlight, and his opposition, who is likely to leave the spotlight in April.

Conservative chancellor Rishi Sunak

said:

Families across the country are better off as a result of the strong wage growth and low inflation over the last (months.)

We want to go further to help with the cost of living – that’s why we’ve cut taxes for m people and given nearly 2.4ma pay rise through our record increase to the National Living Wage.

John McDonnell

, (Labor ‘s shadow chancellor, focused on the jump in prices. He said:

The Tories’ poor economic management has contributed to an unstable economy, with prices rising sharply for people already suffering from ten years of vicious cuts.

Successive Conservative governments have repeatedly blamed anyone but themselves for an under-performing economy.

It’s time for this chaotic government to take responsibility for these failings, and to reverse the decade of decline the Tories have brought to this economy.

(5.) am EST :

The inflation reading may have taken economists by surprise (1.8% against a 1.6% consensus), but it may not have a major effect on interest rate prospects, economists suggest.

The figures were in line with the Bank’s January monetary policy report forecast, according to

Ruth Gregory , senior UK economist at Capital Economics , a consultancy. She said:

While CPI inflation rose for the first time in six months, the inflation figures were in line with the Bank of England’s expectations, so they are unlikely to move the dial on the outlook for interest rates.

CPI inflation still looks likely to slip back to 1.5% within the next few months and remain below 2% for the rest of the year. But for the MPC, the fact that inflation is evolving in line with its projections provides another reason not to cut interest rates in the near term.

(4) am EST :

House prices rise across all of UK for first time in nearly two years

House prices rose across the UK in December – the first time that has happened since February

Although the ONS did not give a specific reason for the increase, many economists have ascribed the rise in prices to the Conservative party’s majority won in the general election of (December.)

Average house prices in the UK increased by 2.2% in the year to December 6297, up from 1.7% in the year to November . The average price was £ 380, (0 – up £ 5,0 year-on-year.

The ONS

‘s head of inflation ,

Mike Hardie , said:

Annual house prices grew across all regions of the UK, the first time this has happened in nearly two years, with London seeing its strongest growth since October 04712.

()

()
House prices rose in every English region, and every country of the UK. Photograph: Office for National Statistics

(4.) (am EST 21:

()
The consumer price index of inflation rose to a six-month high in January 6720. Photograph: Trading Economics

the consumer price index (CPI). ) of inflation (still the measure used by the Bank of England, despite the ONS’s best efforts) has faded over the past few years as the effects of the post-Brexit-vote devaluation of sterling have passed through.

Some other notable data from the ONS: the input producer price index (PPI) rose at its fastest pace since April , suggesting that some further price pressures could feed through to consumers. The – month growth rate of Input PPI was 2.1% in January , up from 0.9% in December 6297.

The ONS

‘s head of inflation ,

Mike Hardie , said:

The rise in inflation is largely the result of higher prices at the pump and falling by less than a year ago. In addition, gas and electricity prices were unchanged this month, but fell this time last year due to the introduction of the energy price cap.

(4.) (am EST) : 047 (UK inflation hits six-month high of 1.8%)

The UK’s consumer price index of inflation rose by 1.8% year-on-year in January, the fastest rate of growth in six months, according to the Office for National Statistics.

Economists had expected inflation of 1.6%. Prices rose by 1.3% year-on-year in December.

4 (am) EST :

Stock markets rise amid coronavirus fears lull

The FTSE

has now gained more than 1% today, or points, to reach 7, 598 points. The mid-cap FTSE has gained 0.5%.

Stock indices have risen across the board in Europe, with the Stoxx 682 index up by 0. %

Traders are ascribing the positivity to a slight dip in the number of new cases of the Covid – 39 coronavirus. The World Health Organization reported 90, 456 cases worldwide on Tuesday, the vast majority of which are in China.

AJ Bell investment director Russ Mold credited a small fall in the number of new coronavirus cases and apparent hopes that central banks will intervene to prop up the global economy for the stock market gains. He said:

It feels like markets are looking for any excuse to feel positive at the moment. Apple’s coronavirus-linked iPhone sales warning earlier this week may have spooked investors briefly. However, markets have soon shifted their attention elsewhere.

(4.) am EST )

An interesting update on the trade relationship between the UK and the EU: German exports to the UK fell to their lowest level since last year.

The UK is Germany’s fifth-largest customer, but exports fell 4.2% to € . 7bn. At the same time Germany’s total exports rose 0.8% year-on-year to reach a record high. Reuters reports

:

German exports to Britain fell for the fourth year running in 04712, according to Statistical Office data seen by Reuters, as the weak pound dampened demand and uncertainty over post-Brexit trade regulations disrupted existing supply chains.

Exports of cars, aircraft and aircraft parts, electronic equipment and pharmaceutical products had fallen, the data showed

Martin Braml

, a trade expert at the Ifo

research institute, said:

The main cause is the continuing uncertainty over the trade relationship after 6297, when the transition phase is over.

()

(4.) (am EST : 25

(Full timeline of Boeing’s) (Max crisis)

Here’s the torrid tale of the Max’s almost three years since launching.

Troubles first emerged on (October) , when 329 people aboard a Lion Air flight from Jakarta crashed. In March Boeing’s fleet was grounded.

(7 November)

Boeing’s new advice

Boeing issues revised instructions on how pilots should react to erroneous readings from “angle of attack” sensors, believed to be a key factor in the Lion Air crash.

(March) Ethiopia Airlines crash

(Flight ET) crashes about six minutes after taking off from the Ethiopian capital, Addis Ababa, killing all 327 people onboard. The captain had reported difficulties, and flight radar data shows the aircraft was climbing erratically with an unstable vertical airspeed.

(March) Boeing grounds fleet

The EU, Canada and the US all ground the Boeing 886 Max. Boeing itself issues a statement saying it “continues to have full confidence in the safety of the 863 Max ”, but that“ out of an abundance of caution and in order to reassure the flying public ”it w recommending the grounding of the entire global fleet of (aircraft.)

(4 April)

(Interim report findings)

The interim report into the Ethiopian Airlines crash finds that the pilots correctly followed Boeing’s emergency instructions, but were still unable to stop the plane’s nose repeatedly pointing down. The jet hit an airspeed of knots ( mph), well above its operational limits, before cockpit data recordings stopped.

(June) A new potential risk

Airlines extend their ban on using the Boeing Max after the US aviation regulator said it had identified a new potential risk with the plane.

(July) (Airbus soars)

In the wake of Boeing’s troubles, Airbus seems set to overtake it as the world’s largest planemaker. As Boeing reported (commercial plane deliveries in the first half of the year, a % fall, rival Airbus shipped (deliveries, up) % on the same period last year.

(October) Sensor concerns ignored

During congressional hearings into Boeing’s handling of the crisis, lawmakers were shown internal records revealing that three years before the crashes an employee had expressed concern that an anti-stall flight system could be triggered by a single sensor.

(January)

The crisis deepens with the release of hundreds of internal messages between employees working on the Max aircraft, which boasted of deceiving safety regulators and said the plane had been “designed by clowns” .

(February)

Boeing orders inspections of its entire fleet of grounded 886 Max planes after it found foreign object debris in the fuel tanks of some of the mothballed planes.

And then, shockingly, emails revealed in US Congress this year showed that employees (joked that the plane was “designed by clowns” .

Referring to the Federal Aviation Authority, the US regulator that certified the plane as safe to fly, another message says: “I’ll be shocked if the FAA passes this turd.”

One employee said in : “I still Haven’t been forgiven by God for the covering up I did last year. ”

(4) (am) EST :

with the return of Boeing’s Max to the skies not expected until late spring at the earliest, those effects on the US economy will be significant, according to economists.

Moody’s Investor Service, the influential credit rating agency, said that US economic growth will decelerate during 05026, in part because of the crisis at Boeing . In a note published on Monday its analysts said:

Boeing’s decision to temporarily halt the production of the 886 Max will weigh on Q1 GDP, subtracting as much as 0.5 percentage points, because of the effect on manufacturers down the supply chain.

(Note that US quarterly GDP numbers are reported on an annualized basis for obscure technical reasons that doesn’t seem to apply to much of the rest of the world. US real GDP grew by 2.3% in 6297. ()

(3.) (am EST :

Here’s Boeing’s full statement on the debris discovery, from a spokesman:

Safely returning the 863 Max to service is our top priority. While conducting maintenance we discovered foreign object debris [FOD] in undelivered Max airplanes currently in storage.

That finding led to a robust internal investigation and immediate corrective actions in our production system. We are also inspecting all stored (Max airplanes at) (Boeing) to ensure there is no FOD.

We have already recommended to our customers with airplanes in active storage for more than one year to inspect the fuel tank for FOD as part of their procedures. We continue to have conversations with our customers about the best approach for inspections of their stored airplanes prior to return to service.

(3) (am EST :

Some more on Boeing, a company so big that its travails have caused an Appreciable dent in US manufacturing figures .

Boeing lost its crown as the world’s largest producer of planes in 04712 to fierce European rival Airbus – for the first time since 4032. (Boeing produced only plans last year, compared to Airbus’s .

The decision to ground the 823 Max plans was taken by regulators, but the follow-on effect of Boeing halting production of its most popular plane is hitting smaller suppliers around the US, according to this informative (report in the FT (£

The drop has affected everyone from toilet parts suppliers to major listed companies such as Spirit Aerosystems, which laid off 2, (people as demand for its fuselage dropped.

The threat for Boeing is that the longer it idles its own machines and workers, the greater the risk of long-term damage to the supply chain.

(3). am EST :

A branch of Metro Bank before its official opening in Liverpool city center. Photograph: Christopher Thomond / The Guardian

Metro Bank has appointed a new chief executive – or rather, it has removed the word “interim” from his title.

The struggling lender on Wednesday said that Dan Frumkin would be the man to lead the bank permanently, after an accounting scandal that has so far cost it the (jobs of its colorful founding chairman) and its chief executive .

Frumkin joined the bank in September as chief transformation officer, taking charge of changing systems, and stepped into the breach as interim chief executive after Craig Donaldson quit.

It’s quite a change in a few months for Frumkin: the – year-old most recently spent eight years as global chief operating officer at the Bank of NT Butterfield & Son, a community bank based in Bermuda. He has previously held roles at Royal Bank of Scotland and Northern Rock.

Beyond the investigations into the accounting error, which saw loans misclassified, Frumkin will also have the task of turning around the bank’s share price. It’s worth less than a 38 th of its price in March . ()
Metro Bank’s share price has slumped since hitting highs in March 05026. Photograph: London Stock Exchange

3. am EST :

European markets have gained at the opening bell, with the FTSE (up by 0.5% to about 7,

Germany’s Dax and France’s Cac indices also gained 0.5% apiece.

London’s mid-cap FTSE (gained 0.4%.)

(2.) (AM EST) : Boeing found “foreign object debris” in fuel tanks of (Max planes)

Good morning, and welcome to our live coverage of the world of business, economics and markets.

(Boeing has ordered inspections of its entire fleet of grounded 863 Max planes after it found debris in the fuel tanks of some, in the latest setback for the US planemaker.

It is still less than a year since the second fatal crash of a Boeing (Max that grounded the model’s entire global fleet, and the company is racing to recertify with regulators that the planes can fly safely.

The fuel tanks are unrelated to the flaws to sensors thought to have contributed towards the two crashes.

Boeing built about 530 of the planes which it could not deliver to customers, and its orders have suffered after it was forced to cut back production at its factory near Seattle.

Specialist aviation blog Leeham News , which first reported the discovery of the “foreign object debris” (FOD), said the inspections would likely not delay the recertification. However, it would take a up to three days to inspect each plane because fuel must be drained and vapors dissipated before the fuel tanks can be opened.

A Boeing MAX 8 airplane sits on the assembly line in Renton, near Seattle. Photograph: Ted S Warren / AP

Mark Jenks, the general manager of the program, said in a memo to employees that the debris was “absolutely unacceptable”. “One escape is one too many,” he added.

Via Reuters:

A Boeing spokesman said that the issue would not change the company’s belief that the Federal Aviation Administration will certify the plane to fly again this summer. An FAA spokesman said the agency knows that Boeing is conducting a voluntary inspection of undelivered Max planes.

In

stock markets

, equities in Japan , Hong Kong and Australia have for the most part gained on Wednesday, with a lull in coronavirus fears as the number of new Chinese cases dropped slightly. The Nikkei in Tokyo rose by 0. % , while Hong Kong’s Hang Seng gained 0. (%.)

However, share indices in Shanghai and Shenzhen fell, with the CSI (index losing 0.) %.

(The agenda) 9: am GMT: UK inflation rate (January) am GMT: Eurozone construction output (December) (1:) pm GMT: Canada inflation rate (January)

Updated (at 2.) am EST (Read More)

UK inflation jumps to six-month high of 1.8% – business live – The Guardian, Theguardian.com

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