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France unveiled a colour-coded system for travel, with EU members classed as ‘green’, the UK and the US as ‘orange’, and those with severe outbreaks such as India and South Africa as ‘red’
Canada recorded job losses for the second month in a row as the country locked down against a third wave of coronavirus
The UK approved the use of the BioNTech/Pfizer vaccine for children aged 12-15 as infections involving the Delta variation of coronavirus increased
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How do you measure the effect of rising prices when normal consumption patterns have been completely upended by a global pandemic? That’s today’s theme in the latest instalment of our series: Inflation: a new era?
Statistical authorities typically use a basket of goods and services to monitor the amount spent on everyday goods but also on items such as restaurant visits and flights — consumption that has been massively reduced by the pandemic restrictions.
How these items are weighted can seriously distort the reading. In the eurozone for example, weightings are updated each January, so this year’s calculation will give less importance to items such as petrol, hotels and restaurants that were hit by lockdowns last year. This means that even if consumers revert to pre-pandemic spending patterns, official statistics will underestimate spending in these areas.
This lack of clarity makes policy targeting even harder for central bankers, already suffering from a breakdown in consensus over the best ways to encourage low and stable price growth.
Other indicators are increasingly being considered. The used car market for example is being closely watched by the US Federal Reserve.
And those convinced that this new era of inflation is already upon us have plenty of ammunition. Yesterday’s UN data for example showed global food prices surging 40 per cent in May — the biggest monthly jump since 2011.
Global economy
Some of the 47 Japanese companies that have together paid more than $3bn to back the Tokyo Olympics — the most heavily sponsored sporting event ever — are worried they will get less bang for their buck unless the games are postponed to allow more spectators to attend. The Japanese population meanwhile has turned cool on the spectacle against a backdrop of continuing coronavirus infections and a sluggish vaccination programme.
Today’s closely watched non-farms payroll data showed the US added a fewer than expected 559,000 jobs in May and the unemployment rate falling to 5.8 per cent. Separate data yesterday showed new unemployment claims falling to a pandemic-era low.
EU trade chief Valdis Dombrovskis told the FT he wanted to see vaccine production increased rather than support US-backed proposals for waiving patents, ahead of a crucial World Trade Organization meeting on June 8-9. Brussels wants to remove export restrictions and use existing WTO rules on intellectual property to facilitate licensing. The US yesterday unveiled details of plans to donate millions of spare doses as part of its attempt to become “the world’s arsenal of vaccines”.
Business
A sausage roll from “hip national treasure” Greggs or a crayfish and avocado salad from Pret? Leisure industries reporter Alice Hancock looks at the UK battle for lunch between the big two food-to-go chains against a backdrop of changing high streets and commuter habits.
Thanks to a successful US vaccination programme, “World of Concrete 2021” marks the return of trade shows to Las Vegas, where the $11.5bn convention business is crucial to a city hit hard by the pandemic. Events companies across the country are enthusiastic about the return of physical shows, or as one industry executive put it: “Virtual exhibitions are honestly not yielding the kind of value our customers are looking for.”
Can readers be tempted back to bookshops now lockdowns are coming to an end? Columnist John Gapper reports on the tale of an Englishman attempting to lure Americans away from Amazon and back to Barnes & Noble.
Markets
US equities rose as the smaller than expected increase in US jobs helped ease investor concerns that the economy was overheating and that the Fed would start withdrawing its stimulus measures. In Europe, the regional Stoxx 600 index remained close to record highs recorded earlier in the week.
The US Federal Reserve is to start selling the corporate bonds and fixed income funds it bought last year as part of its emergency programme to help companies borrow more cheaply. Although take-up of the Secondary Market Corporate Credit Facility, or SMCCF, was low, the Fed said simply pledging its support helped markets to begin functioning again after the initial pandemic panic.
Foreign investors bought record levels of UK government debt over the past year, according to new Bank of England figures, helping fund a massive increase in borrowing to fund pandemic measures. The UK assets are relatively high-yielding in comparison with economies such as the eurozone or Japan where government debt trades at sub-zero yields.
Have your say
Keine Lust comments on Reopening hospitality in England fails to boost retail footfall in May:
The obvious point is that shopping as a leisure activity has not recovered. Whether that should be caveated with a “yet” is so far unclear. A structural shift among some demographics that hadn’t shopped online a lot pre-pandemic towards much more widespread adoption could mean it never comes back to where it was. The link between retail footfall and eating out relies on that leisurely day out shopping and walk-in custom for the restaurant chains. Targeted shopping with high conversion rates is a different thing. And the eating out side is a specific (and planned) trip in itself after so long without being able to do it and the need to book a specific time, with much more of a focus on local pubs and restaurants rather than town centres, where eating out is typically in the middle or at the end of a shopping trip for leisure.
So none of this is a surprise to me. Very few of the best food-oriented pubs, especially those with outdoor space, which a lot of people will still feel more comfortable with, are in or close to main shopping destinations.
Final thought
The Hong Kong real estate market is the most expensive in the world yet some prime properties are lying derelict. The reason? A combination of superstition, mystery and skulduggery has led many to believe they’re haunted . . .
Source: Economy - ft.com
