Category Archives: News

UK economic outlook has “seriously deteriorated”

International Business News  –  The International Monetary Fund (IMF) predicted in the latest World Economic Outlook Report that the UK’s economic growth will slow significantly in the second half of this year, and will become the weakest economy in the G7 next year. Growth forecasts for 3.2% and 0.5%, respectively. The Bank of England, the Bank of England, has warned that the outlook for the UK economy has “significantly deteriorated” and that the UK banking industry needs to prepare for a severe recession.

At present, the inflation level in the UK remains high, and food prices and fuel prices continue to rise. Data from the Office for National Statistics showed that the consumer price index rose 9.4% in June from a year earlier, hitting a 40-year high. Among them, gasoline prices rose by 42% year-on-year, and food prices rose by nearly 10%. Shortages of energy and raw materials have also pushed factory costs up 24% year-on-year, the largest increase since records began in 1985, and ex-factory prices rose 16.5%, the highest in more than 40 years.

Fish and chips are a century-old popular dish in the UK, but now the prices of the raw fish, potatoes, cooking oil and flour used to make the dish are rising. At a London shop called “Fish and Chips”, the price of a regular-sized fish and chips has risen from £9.50 in May to £11.75 now, compared with £7.95 a year ago. In just one year, the price of cod has risen by 75%, the price of sunflower oil has risen by 60%, and the price of flour has risen by 40%, according to Reuters. Crook, chairman of the British Fish and Chips Association, predicted that continued high inflation will lead to the closure of nearly half of the UK’s fish and chip shops in the future.

The high inflation rate increases the living burden of the people. The Bank of England predicts that real disposable income of British households will fall by 1.75% this year. According to a survey, about 16% of British households, or nearly 4.5 million households, are currently facing “serious financial difficulties”. Households in “severe financial hardship” have increased by nearly 60 per cent since October last year. According to the British “Times” report, as of the end of June, the UK’s largest pawnbroker, Harvey-Thompson pawnshop, had a record high demand for mortgage loans, 40% higher than before the outbreak, and the total loan amount increased by 75% year-on-year. A French Ipsos poll found that 45% of British adults believe inflation is one of the most troubling issues facing the country today, the highest level since the agency began surveying in the early 1980s.

A number of economic sentiment indices and confidence indices in the UK have continued to decline recently. In June, the purchasing managers’ indices for the manufacturing and service industries fell by 11.1% and 8.1% year-on-year, respectively. Data from market research firm Gfk showed that consumer confidence in June was negative 41, the lowest level in 48 years. A survey of British corporate treasurers by consulting firm Deloitte showed a 63 percent chance of a recession in the UK next year, with companies surveyed generally speeding up their reserves to prepare for more difficult conditions in the future.

The British “Guardian” pointed out that the government’s subsidy and tax rebate relief plans to cope with the surge in the cost of living of residents are far behind the speed of price increases. The article in the British “Weekly Report” believes that alleviating the increasingly serious labor shortage may be the “most urgent task” facing the British economy. Data show that compared with before the epidemic, the British labor market has decreased by nearly 900,000 people, and about 450,000 employed people over the age of 25 have withdrawn and it is difficult to return to the labor market. “Brexit” has also further weakened the attractiveness of the British market to the labor force of neighboring countries. Since 2019, nearly 200,000 EU citizens have lost their jobs in the UK. The Bank of England has previously warned that the imbalance between supply and demand in the labor market, coupled with high inflation, has pushed up labor costs and the risk of a price spiral.

Martin Wolf, chief economic commentator for the Financial Times, said the root cause of the UK’s current economic woes is the secular stagnation of productivity and real incomes. The British think tank “Resolution Foundation” recently issued a report warning that a long-term and coherent economic strategy is necessary to solve the “dilemma of low growth and uneven development”.

Britons withdraw a record amount of cash

International Business News  –  According to a recent report by the US Consumer News and Business Channel (CNBC) website, as the cost of living continues to rise, the amount of cash withdrawals by Britons has also surged. With inflation in the UK expected to surpass 13% in October, cash is becoming the way Britons manage their spending and spend prudently.

According to the report, the UK Post Office, which also has banking business, handled a total of 801 million pounds of personal cash withdrawals in July, a record high record. Cash deposits and withdrawals totalled more than £3.3bn, a record in the Post Office’s 360-year history.

Laura Suter, treasurer of British investment firm AJ Bell, pointed out that the surge in cash use is related to people using cash as a way to organize their budgets. Cash will also be used more for people who are budget-conscious and want to control spending with cash within their reach, she said.

Martin Kearsley, head of banking at the UK Post Office, also said the latest figures showed the UK was “definitely not a cashless society”. He said: “We’re seeing more and more people relying more on cash to manage their budgets. Whether it’s for a domestic holiday in the UK or to prepare for the financial pressures that may come in autumn, the availability of cash in every community is important.”

Bank of England’s biggest rate hike since 1995

International Business News  –  On the 4th local time, in order to curb inflation, the Bank of England announced a 50 basis point interest rate hike, raising the benchmark interest rate from 1.25% to 1.75%, which is the largest rate hike since 1995.

The market is closely watching the Bank of England’s decision to raise interest rates, before the announcement of the interest rate resolution, the pound rose about 0.3% against the dollar, but after the Bank of England formally announced a 50 basis point rate hike and warned that the economy will be in long-term recession, the pound quickly retracted the gains and turned down, once fell below 1 pound to 1.21 U.S. dollars, down more than 0.6% during the day. For the future trend of the pound, UBS analysts expect that in the fourth quarter of this year, the pound to dollar exchange rate will probably fall to 1 pound to 1.15 U.S. dollars, almost the same as the epidemic outbreak in 2020.

Bank of England warns economy will step into recession in fourth quarter

On Thursday, the Bank of England said that the recent rise in gas prices has led to a significant deterioration in the economic outlook for the United Kingdom and many other European countries. The Bank of England expects that energy prices will rise 75% in October this year compared to the same period last year, thus pushing up the British inflation rate to more than 13% in the fourth quarter of this year, and at the same time, the British economy will probably enter recession from the fourth quarter, and the central bank expects the recession to last for five quarters.

4 major three European stock markets closed slightly higher

Although the Bank of England news hit market sentiment, but because of the latest corporate earnings report provided a positive, boosted by it, Europe’s three major stock markets still collectively closed slightly higher on Thursday, including the smallest increase in London, 0.03%, the French stock market in Paris rose 0.64%, the German stock market in Frankfurt rose 0.55%.

4 U.S. stock market three major stock indexes were mixed energy stocks were generally lower

In the United States, the market is waiting for the heavy economic data to be released this Friday local time, that is, the U.S. non-farm payrolls report in July, investor sentiment is more cautious, the three major stock market indexes in the United States closed the day mixed, but the range are not large. Among them, the Dow and the S&P 500 index fell 0.26% and 0.08%, respectively, while the Nasdaq was up 0.41%.

From the plate, dragged by the lower international oil prices, energy stocks generally fell, with Marathon Oil down more than 6% and Occidental Petroleum down more than 5%.

Most large technology stocks rose, and Chinese stocks also generally rose, with the Nasdaq Golden Dragon China Index closing up 2.3%.

International oil prices fell more than 2% on the 4th

In terms of oil prices, affected by the sharp increase in U.S. crude oil inventories last week from a year earlier, international oil prices continued to move downward on Thursday. By the end of the day, the price of light crude oil futures for September delivery on the New York Mercantile Exchange fell 2.34% to close at $88.54 per barrel; the price of Brent crude oil futures for October delivery in London fell 2.75% to close at $94.12 per barrel.

Saudi Arabia Pushes Crude Premiums to Asia to Record Levels

Although international oil prices have fallen in recent days, Saudi Aramco, the world’s largest energy company, released its latest offer sheet yesterday, raising the price of Arabian light crude for September shipments to Asian refineries by 50 cents a barrel from August, making the overall price $9.80 a barrel higher than the Oman-Dubai benchmark crude, the highest premium on record.

Market analysts say Saudi Aramco’s monthly pricing decisions are seen as a bellwether for the oil market, and this price hike means that even though current oil prices have plummeted, supply and demand for crude in the international market will remain tight in September as Asian demand for crude continues to be strong, while Russian crude supply is constrained and oil-producing countries still dominate on prices.

UK Inflation Hits and public fears same 40-year high

International Business News  –  According to some economists, as more people are returning to the labor market, inflation in the UK will struggle in 2023, leading them to expect the Bank of England to fail to meet its expectation of raising interest rates to 3.0% by the end of 2022 .

The market had expected the Bank of England to announce a rate hike of 50 basis points on August 4, and some economists even hinted that another 50 basis point rate hike may be possible in September.

However, Standard Chartered’s European economist Christopher Graham said tightness in the UK labour market was easing rapidly, making the August jobs report all the more important.

In a research note released this week, he said recent evidence points to a more complex picture of the labor market. There appears to be a turnaround in job openings, a sign that the economy is either starting to play through the supply-demand distortions caused by the pandemic, or that hiring is slowing.

Samuel Tombs, chief UK economist at PantheonMacroeconomics, agrees: “We think labour market growth will continue to grow as the number of migrants picks up, as the pandemic subsides and pressure on living standards raises employment participation. stay above average.”

The company expects job growth in the UK to slow due to fewer job vacancies and an increase in labor supply.

As more and more people compete for the same job, an increasing labor supply and steady vacancy numbers will inevitably put downward pressure on wages. When setting interest rates, the Bank of England takes wages very seriously, as rising wages tend to push up inflation.

PantheonMacroeconomics raised its forecast for Britain’s October CPI inflation peak to nearly 12% from just over 11% previously, after a further surge in wholesale gas and electricity prices.

The agency believes that core CPI inflation in the UK has peaked, while producer output price inflation is “about to run into trouble”.

This was due to a series of commodity price declines over the past two months. In addition, manufacturers now have excess inventory and retailers’ profit margins are shrinking in response to weak demand, which has increased during the pandemic. As a result, inflation in the UK will fall sharply in 2023.

The net result of easing labor market conditions and peaking inflation is that the Bank of England will soon be able to pull back from raising interest rates and may not be required to raise rates by 50 basis points in a row.

Market consensus is that the Bank of England will raise rates by 50 basis points at three meetings in August, September and November, followed by another 25 basis points in December, keeping rates at 3.0% until the end of the year.

Standard Chartered’s Graham said: “The mid-August jobs market report will be crucial and will determine whether a 50 basis rate hike is needed later in the year (as the market expects), or the pace of monetary tightening. will slow to a 25 basis rate hike (as we expected).”

He added: “We believe there is enough economic evidence to support a 50 basis point rate hike at the next monetary policy meeting on August 5, but after that, economic activity slows and the labor market is cooling further. Evidence should support a slower pace of rate hikes (25 basis each in September, November and December).

PantheonMacroeconomics expects the Bank of England to raise interest rates twice by 25 basis points each in August and September, when this cycle of rate hikes will end.

Chris Kay becomes new CEO of Publicis Groupe UK

International Business News  – Former 72andSunny APAC CEO and partner Chris Kay is new CEO of Publicis Groupe UK.

It is reported that Publicis Groupe UK has appointed former BMF managing partner, 72andSunny APAC CEO and partner Chris Kay as the new CEO of the creative practice, overseeing Saatchi & Saatchi, Digitas, Leo Burnett, Publicis·Poke, Octopus, PGOne and Turner Duckworth. Kay will focus on continuing to drive creativity for clients, working closely with Ben Mooge, Chief Operating Officer of Publicis Groupe UK.

UK Ministry of Defence: Ukraine launches counter-offensive!

International Business News  – According to a report by the German news agency London on the 5th, the British Ministry of Defense reported according to information provided by British intelligence agencies that the Ukrainian army launched a counter-offensive in the eastern city of Severo Donetsk.

The British Ministry of Defence said: “In the past 24 hours, the Ukrainian army launched a counter-offensive in Severo Donetsk, where the fighting was fierce in eastern Ukraine.

According to reports, the Russian military’s forces in the region include civilian armed forces from the Luhansk region. The British Ministry of Defence said the personnel lacked heavy equipment used by the Russian military.

Johnson: Ukraine will not join NATO in the near future

International Business News  – British Prime Minister Johnson said that it was never possible for Ukraine to join NATO in the near future.

Johnson told a news conference in Madrid:

“It has never been possible for Ukraine to join NATO in the near future.”

In December 2014, the Verkhovna Rada of Ukraine amended two laws to renounce Ukraine’s non-aligned status. In February 2019, the Ukrainian parliament passed constitutional amendments that established the country’s guidelines for joining the European Union and NATO. Ukraine has become the sixth country to receive a NATO opportunity to enhance its partner status. Officials in Washington have repeatedly said that the possibility of Ukraine joining NATO is not being considered at this stage. At the same time, the US side stressed that NATO will never give up the “open door” policy, and does not rule out the possibility that Kyiv will try to join the organization in the future.

UK PM calls on G7 and NATO to prevent “bad peace” in Ukraine

International Business News  – British Prime Minister Boris Johnson called on the G7 and NATO nations to prevent a “bad peace” in Ukraine, The Guardian reported, meaning Kyiv made territorial concessions.

Johnson spoke on the issue of resolving the situation in Ukraine during his visit to the Rwandan capital Kigali on the 23rd.

“My message to my G7 and NATO colleagues will include mentioning that this is not the time to encourage Ukrainians to agree to a bad peace, and to give up some of their territory in exchange for a ceasefire . It would be a disaster,” Johnson said.

Important update to UKCA requirements in UK Government Bulletin

International Business News  –  On June 20, 2022, the UK government announced changes to regulations to simplify the requirements for manufacturers to place products on the UK market. The main changes proposed by the UK government’s Department for Business, Energy and Industrial Strategy (BEIS) will be: Reducing the re-test fee for UKCA certification to allow manufacturers to use CE marking conformity assessment activities completed before 31 December 2022 as part of UKCA marking certification base. UKCA certificates certified under this process are valid for the certificate validity date or 5 years (31 December 2027), whichever is earlier.

Clarified that retesting is not necessary for existing stock imports (except Northern Ireland)

Clarify that spare parts used in the UK market to repair, replace or maintain goods already on the market have the same entry requirements as goods (except Northern Ireland)

Businesses will continue to be allowed until 31 December 2025 to affix the UKCA mark on accompanying documents or labels to products and to use importer information from EEA countries (eg. Switzerland).

Below is an explanation of how these proposed changes will affect products placed on the UK market and falling within the scope of the Equipment and Protective Systems for Use in Potentially Explosive Atmospheres Regulations 2016:

Products currently certified by the EU CE type inspection certificate

Before 31 December 2027, any product that currently has an EU type examination certificate (often referred to as ATEX certification) in compliance with Directive 2014/34/EU will not be required to comply with the Regulation 2016 for Special Equipment and Protective Systems for Potentially Explosive Atmospheres  (often referred to as UKEX certification) of the British Type Examination Certificate. Products from now until December 31, 2022 to obtain the new EU CE type inspection certificate certification.

Before 31 December 2022, any product that has undergone conformity assessment activities and obtained an EU type examination certificate in compliance with Directive 2014/34/EU, will not be required until 31 December 2027 UK Type Examination Certificate for the Special Equipment and Protective Systems for Potentially Explosive Atmospheres Regulations 2016 .

Products certified by the new CE EU type examination certificate after December 31, 2022

Any newly certified products that pass conformity assessment activities and receive an EU type examination certificate in compliance with Directive 2014/34/EU after the end of 2022 will need to comply with the 2016 Equipment for Use in Potentially Explosive Atmospheres and The Protection Systems Regulations receive a UK Type Examination Certificate.

Renewal of products certified by EU type examination certificate after 31 December 2022

Any product that undergoes conformity assessment activities after the end of 2022 and requires the renewal of the EU type examination certificate under Directive 2014/34/EU  may be subject to the 2016 Regulations for Equipment and Protective Systems for Use in Potentially Explosive Atmospheres  the British Type Examination Certificate. Because the current guidelines state that “a product will be considered a ‘new’ product if it has undergone significant changes, in its original performance, use or type,” and what is considered a substantial change will be subjective, this one point needs further clarification. Any changes that require reassessment and/or retesting by a Notified Body may be identified as substantial, however, further clarification is required on this point. Revised regulations may clarify this.

Manufacturers currently holding a Quality Assurance Notice (QAN) issued by an EU Notified Body

Until the EU QAN expires after 31 December 2022, any manufacturer who currently has a Quality Assurance Notice (QAN) issued by an EU Notified Body for Directive 2014/34/EU (which may be referred to as EU QAN) will not be required to be the UK Approval Body issues a separate Quality Assurance Notice for the Equipment and Protective Systems for Use in Potentially Explosive Atmospheres Regulations 2016 (may be referred to as UK QAN). Therefore, they can use the EU QAN as the basis for their UKCA marking until the EU QAN expires (after 31 December 2022). EU QANs generally have a validity period of 3 years, after which they will be considered expired and will need to be re-evaluated and reissued. Once the EU QAN expires (after 31 December 2022) it can no longer be used as the basis for the UKCA mark and a separate UK QAN is required. If an EU QAN is used as the basis for the UKCA marking, the number of the EU Notified Body responsible for issuing the EU QAN shall be marked on the product until that EU QAN expires. After the EU QAN expires, the UK accreditation body will require the UK accreditation body to provide the UK QAN, and its accreditation body number will replace the EU Notified Body number.

UK Foreign Office announces new round of sanctions against Belarus

International Business News  –  According to Reuters and TASS reports, the British Foreign Office said in a statement on July 4, local time, that a new round of sanctions will be imposed on Belarus, involving the economy, trade and transportation.

The sanctions package includes a ban on exports to Belarus of refined oil products, luxury goods including British art and designer handbags, and advanced technology components for quantum computing. In addition, the British government also announced that it will impose “traffic sanctions” on Belarus.

In addition, the British government announced sanctions against six Russians, saying they were spreading false information.