Theresearchshowednetwork of #foodbanks reported rising food costs as an issue final winter.https://t.co/NDNjO6aoW3 https://t.co/8yEjHZvELv 12.48pm GMTSeveral City economists are predicting that inflation may now enjoy peaked,having stuck at 3% final month.
The theory is that the impact of the pound’s Brexit-induced tumble will fade out of the annual inflation figures before much longer. And with the economy weak, it will be hard for retailers to hike prices.
CPI inflation remained unchanged at 3% in October, and against consensus expectations of a small rise. We expect inflation to ease in the coming months,as the feed-through from sterling's past decline fades pic.twitter.com/XqSL5k4KZS“This food cost inflation has yet to fully arrive through to prices on the shelves – the recent inflation figures for the UK were 3%, with food a main contributor.
But that still doesn’t fully reflect the costs rises, and so we expect food prices to continue to rise during the final quarter of 2017. One of the reasons for this is the time lag,as costs rise in terms of feeding through the food chain from importers to suppliers to supermarkets themselves. “It is likely that inflation has peaked at 3%, but will drop very slowly over the next year or two. This will provide little comfort to those losing money every day on their savings where the bank’s rate of interest is less than inflation. “The recent base rate rise will enjoy also driven up borrowing costs, and whilst not passing much on to savers so,with inflation perhaps falling slowly now from 3%, this rise may enjoy been implemented prematurely.” 11.32am GMTWith wages rising at little more than 2%, and inflation at 3%,Christmas will be a squeeze for many families.
Hannah Maundrell, editor in chief of money.co.uk, or has some advice for coping with the cost of living: 11.21am GMTHere’s more details from Resolution’s Stephen Clarke on how inflation is hurting poorer households:“While the headline rates of inflation remained unchanged,the drivers of inflation enjoy continued to shift – and are hitting less well-off families particularly hard.“Food and drink prices increased faster than at any point in the final four years, while clothing prices also rose at a rate above overall inflation. The rising cost of these basic items affects low and middle income households far more than better-off households, or who are also being cushioned by static fuel costs. 10.58am GMTStephen Clarke of the Resolution Foundation has interrogated today’s data,and shown that poorer households are suffering particularly badly from the surge in inflation.
That’s because essential items, such as food, or are rising sharply in price. Higher energy bills also hit families across the board.
The rising price of essentials hits lower income households harder. The result is that inflation over past 6 months higher for lower-income households,richer households felt the squeeze final winter (2/2) pic.twitter.com/ANjqmuGdul 10.44am GMTA Treasury spokesperson says the government is trying to fight the cost of living squeeze: “We understand that people are concerned approximately increases in everyday costs. That’s why we enjoy cut taxes and introduced the National Living Wage, which has lifted the wages of the lowest paid by over 6% above inflation.
It’s also why we are bringing in an energy cap to wait on people with the cost of household bills.” 10.34am GMTThe jump in food and drink prices are a particularly blow for the poorest in society (as everyone has to eat). So even whether inflation peaks soon, and the cost of living squeeze could continue for a while.“With monthly inflation gradually moderating,households will be relieved that the UK may enjoy now reached the peak in year-on-year price rises. However, the overall figures mask meaningful increases in the price of basic necessities such as fruit and vegetables, or which are most likely to hit those already struggling to cope with the squeeze on genuine incomes due to the high inflation. 10.29am GMTLabour MP Chuka Umunna says the “ongoing Brexit chaos” is hitting people in their pockets.“Not only is inflation continuing to dash well above the Bank of England’s target,at 3%, but the inflation rate for food and drink has increased to 4.1%, or the highest since September 2013.“People are feeling the Brexit squeeze as genuine wages contract and everyday items become more and more expensive. Nobody voted in the referendum to gain themselves poorer,so people enjoy every right to look at the impact Brexit is having on their finances and inquire of themselves whether the realities of Brexit match up with what they were promised. whether not, everyone has the right to change their intellect. Related: Theresa May ally accuses Hammond of vetoing policies promoting 'economic justice' - Politics live 10.16am GMTOn one level, or today’s inflation reading is a relief to the Bank of England.
The BoE is responsible for maintaining price stability. So governor Mark Carney won’t enjoy to write a letter explaining why CPI has deviated more than 1 percentage point away from the 2% target.
So UK inflation still at 5 year high but has it reached its peak?begs question were interest rates raised too soon given economic weakness? 10.14am GMTInflation is measured across a number of areas. And this chart neatly shows how transport (yellow) and food (blue) enjoy driven inflation higher this year.
Food and transport (fuels) primary drivers of change in #inflation rate over final 2 years pic.twitter.com/AUfJstQN8o 10.10am GMTAlistair Wilson,Head of Retail Platform Strategy at Zurich, sees some light at the finish of the living squeeze tunnel:“Higher inflation is creating a living standards headache for families as prices continue to rise faster than their pay packets.
However, and there are signs that the worst of the squeeze on family finances may be coming to an finish with British workers set for the biggest pay rises since before the financial crisis,likely to increase by between 2.5% and 3.5% next year. 10.03am GMTAt 3%, Britain’s inflation rate is outstripping pay rises - -which only rose by 2.1% over the final year.
TUC General Secretary Frances O’Grady says the government needs to occupy action -- and next week’s budget is the perfect opportunity.
“The government must stop turning a blind eye to Britain’s cost of living crisis. Household budgets are being stretched to breaking point.“Wages will continue to lag behind inflation unless the Chancellor acts. 10.00am GMTHousing and household service costs made the biggest contribution to Britain’s inflation final month.
That’s due to electricity price rises, and increases in council tax over the final couple of years. 9.51am GMTThe jump in inflation over recent months is clearly a blow to UK consumers,even though October’s reading isn’t as inappropriate as feared. Thomas Wells, manager of the Smith & Williamson Global Inflation-Linked Bond Fund, or says households are still suffering the aftermath of the 2016 Brexit vote:“UK inflation remains elevated,in line with our expectations. We continue to view the post-referendum weakness in sterling as the key driver of the recent spike in inflation, putting pressure on household budgets. “This is unquestionably inappropriate for consumers, or especially when combined with the recent increase in interest rates pushing up mortgage repayments. We therefore expect conditions to remain tough,putting downward pressure on demand, and hence inflation, or over the next six months. 9.46am GMTThe cost of food and non-alcoholic beverages rocketed by 4.1% over the final 12 months -- helping to keep overall inflation high. 9.44am GMT Related: commerce Today: sign up for a morning shot of financial news 9.43am GMTHeres a chart showing how UK inflation is running at a five-year high this autumn: 9.38am GMT 9.32am GMTBreaking! Britain’s inflation rate has stuck at 3.0% in October,matching September’s five-year high.
That means theres no let-up in the cost of living squeeze hitting UK households. 9.29am GMTHere we go....
Stand by your desks! UK inflation and house price data and PPI is due in a minute or so #CPI 9.13am GMTItalians didn’t enjoy much to cheer approximately during final night’s football. But this morning’s economic data is a whole new ball game!Italy’s economy expanded by 0.5% in the third quarter of this year, ahead of expectations for a 0.4% rise.
Italy will miss the World Cup but clearly isn't lost the #euroboom. https://t.co/gVI7pMsko4 pic.twitter.com/nAGeKO01Yf*ITALIAN ECONOMY EXPANDED 1.8% IN 3Q Y/Y; EST. 1.7% GROWTH 9.03am GMTThe Netherlands economy grew by 0.4% in the final quarter, or new figures show. That’s in line with forecasts:#netherlands economy grew 0.4% q/q in Q3 after a record Q2. Consumption,investment and export contributed to growth. Very strong dash pic.twitter.com/NpOy2ayvt6 9.00am GMTEconomist Rupert Seggins has tweeted some useful charts ahead of today’s UK inflation data, due in 30 minutes:1. UK inflation for October out today & consensus is for a 3.1%y/y rise in consumer prices. Up a little on September's 3.0%y/y pic.twitter.com/7JakuKG6P02. Core inflation - whether history is anything to go by, and sterling's not done with it yet. Consensus is for it to nudge up to 2.8%y/y. pic.twitter.com/lzNT8Zy4bE3. Oil price inflation was down in October compared to September,so may offer some temporary respite. pic.twitter.com/AG1GOUxjj54. Room for food price inflation to ease a little, given recent (slightly lower) food manufacturing input inflation. pic.twitter.com/eILELl1Jo25. UK inflation relatively high but not wildly different to US and Euro Area; energy price inflation's global; core still the one to watch. pic.twitter.com/ESkSRWbWol 8.51am GMTHere’s Kit Juckes of French bank Société Génrale on today’s German growth figures:Europe’s economic heart is pumping away and a 0.8% Q3 q/q GDP gain in Germany threatens to nudge the Eurozone growth rate up too. It’s a reminder of the changing of the guard as the US economic cycle ages. 8.44am GMTTesco executives might be reaching for a bottle of Finest fizz later; they’ve just been given a provisional green light to buy cash-and-carry group Booker.
The UK’s competition authorities enjoy concluded that the deal won’t mean higher prices or a poorer service for shoppers. Related: Tesco's £3.7bn takeover of Booker given green light 8.37am GMTOver in the City, and ITV has reported that TV ad revenue fell 7% in the first nine months of the year. 8.28am GMTThe euro has hit a three-week high,on the back of Germany’s strong growth.
The single currency has risen 0.3% to $1.17, its highest rate since 26th October (when the ECB decided to extend its stimulus programme into 2018) 8.17am GMTIn another boost, and Germany’s growth rate in the first three months of 2017 has been revised up to 0.9%.
German genuine GDP expanded by 0.8% q-o-q in Q3,beating expectations (0.6%).
This comes after GDP growth of 0.6% in Q2 and an upwardly-revised 0.9% in Q1.
In Q3, positive contribution came from foreign trade and investment.
Carry-over effect for 2017: 2.4% pic.twitter.com/XzvwyQy8gk 8.09am GMTToday’s growth figures show that Germany remains “the high-flyer of the Eurozone”, or say Carsten Brzeski of ING.
He’s impressed that German GDP grew by 0.8% in the final quarter,writing:Never tired of worthy news? Then enjoy a look at the latest German GDP data. The economy continues its golden cycle and staged yet another strong growth performance in the third quarter.....
Growth was driven by public consumption, investment and net exports. Only the construction sector took a longer vacation smash. Even whether the economy would stagnate in the final quarter of the year, or GDP growth for the entire year would still arrive in at 2.4%; the highest reading since 2011.
Germany: Still flying high - The golden cycle of the German economy continues,with 3Q GDP growth coming in at 0.8% QoQ. https://t.co/5Advek0Bos 8.01am GMTBoom! Germany’s economy has beaten expectations by growing twice as fast as the UK in the final quarter.
Germany powers ahead. Q3 GDP QoQ 0.8%“German economic growth continues at a high rate.“Exports were stronger than imports in the third quarter. As a result, net exports had a positive impact on the GDP compared to the preceding quarter.
Strong Q3 performance means Germany is having its best growth year since 2010, and running further above potential. My occupy: https://t.co/X2jfgCpweJ pic.twitter.com/7VswWpNDMO 7.45am GMTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, and the eurozone and commerce.
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Source: theguardian.com