Aurelia Butler

The writer is director of policy, research and impact at the Trussell Trust, a charity that supports food banks and campaigns to end the need for them across the UK If you were to imagine a cost of living crisis that inflicts maximum damage on those least able to bear it, it would look very much like the current economic situation in the UK. Why? First, because today’s crisis has been driven primarily by sharp rises in food and energy prices, costs that account for a far larger proportion of the budgets of people on low incomes than those who are better off. Recently, the Office for National Statistics found that inflation for low-income households was 10.1 per cent, while for high-income households it was only 8.7 per cent. The real-life impacts of this imbalance are especially devastating because prices have risen most in the areas of expenditure where cutting back causes real hardship — people cannot afford to eat, they sit in the cold and dark and are scared to turn on the washing machine or oven. The latest inflation figures from this week showed that food inflation remains high, even as other cost pressures start to ease. There are particularly eye-watering rises in the cost of staples, which are the building blocks of affordable meals — milk is up by 33 per cent, potatoes and bread by 28 per cent, eggs by 37 per cent. In the Trussell Trust’s research with people on universal credit, one parent described their daily struggles to keep her family fed and clean. They told the charity: “The children are fed but my husband and I rarely are. I’ve not paid my water bill but by the end of the month I’m going to have to stop paying another bill as food prices are rising fast.” The family would worry about gas and electricity, which were on key meters, running out: “Then that’s it until Monday, even with no lights on and tech kept to a minimum. I’m handwashing everything outside in buckets to save money.”The damage this current crisis is inflicting is exacerbated because it comes hot on the heels of disproportionate impacts of the pandemic on people who were already struggling. Workers in poverty bore the brunt of Covid-related job losses and falls in income. During the pandemic, people on high incomes tended to maintain their salaries and even build up savings, while people on low incomes were forced to take on more debt to cover costs that rose as their incomes fell. The vulnerability of these individuals to first the pandemic and then the cost of living crisis was even greater because of the longer-term trend of rising levels of deep poverty. Research by the Joseph Rowntree Foundation found that between 2017 and 2019, destitution in the UK rose by 54 per cent. Amid all of this, support is being stretched beyond breaking point. Last August, NHS bosses wrote to the chancellor warning that the cost of living crisis was about to become an NHS crisis, because of the impact of poverty on people’s health. This additional pressure on an already strained health service is likely to have grown even further over the past year. One shocking culmination of all this was the revelation that food banks in the Trussell Trust network had provided almost 3mn parcels in the past year, with a million of these for children. This was a 37 per cent increase on the number of emergency parcels distributed the previous year — reflecting a record level of need seen in every part of the UK. But our figures (backed up by other research into deep poverty and hardship) show that this is not a sudden emergency: it’s the latest chapter in a longer-term crisis, with need more than doubling over the past five years.Volunteers and staff at food banks have risen to every challenge and met every wave of need. They will keep doing that, but they are tired. Many are weary to the bone. One food bank leader described it as a “pressure-cooker situation”. Another, reflecting on the “peaks and troughs of demand” in the monthly data, said of this year: “Sadly, we’ve reached a new level that we never wanted to reach.”Every day it becomes clearer to all of us that food banks and charitable support are not the solution. Food inflation is predicted to fall, after reductions in the cost of inputs such as energy and commodities, but that will not end this crisis. Millions of people will still find themselves unable to afford essentials, trapped in appalling situations, until we deliver real, sustainable solutions, starting with reforming universal credit. It seems incredible that the level of this benefit isn’t set with reference to the actual essentials of life, but that’s the situation. The result is that the current rate has fallen significantly below the costs of food, clothing and basic household items such as cleaning products. We have calculated that a single adult needs £120 a week to cover these expenses, but universal credit provides only £85. Charities simply can’t address the root causes of this unacceptable hardship on their own — we will never be able to do enough to turn back the tide of hunger. More

WASHINGTON (Reuters) -Democratic President Joe Biden and a lead Republican negotiator said on Friday they were hopeful that a deal was near to raise the U.S. government’s $31.4 trillion debt ceiling after the Treasury Department warned that a June 5 default loomed without action.”Things are looking good,” Biden told reporters, adding that he was hopeful a deal would come by midnight (0400 GMT). “It’s very close and I’m optimistic.”The two sides have been negotiating for weeks on an agreement to raise the federal government’s self-imposed borrowing limit, with Republicans also pushing for sharp spending cuts. Without a deal, the United States could face a calamitous default.Republican Representative Patrick McHenry said he concurred with Biden’s comments, while cautioning that negotiations had not yet concluded.”I’m hopeful,” said McHenry, one of House of Representatives Speaker Kevin McCarthy’s lead negotiators with the White House. “But we have to make sure we have a line on tax, we have a line on agreement – there’s significant challenges ahead.”The two spoke, separately, shortly after U.S. Treasury Secretary Janet Yellen said the government would run short of money to pay its bills on June 5. Yellen had previously said that date could come as soon as June 1, meaning that the new forecast allowed for more time but a harder final deadline.Negotiators earlier appeared to be nearing a deal to lift the limit for two years, but remain at odds over whether to stiffen work requirements for some anti-poverty programs.Any agreement would have to win approval in the Republican-controlled House and the Democratic-led Senate before Biden could sign it into law – a process that could take more than a week.Negotiators have tentatively reached an agreement that would cap spending on many government programs next year, according to a U.S. official.WORK REQUIREMENTS IN DISPUTEThe safety-net programs remained a sticking point. Lead Republican negotiator Garret Graves said his party would not drop its demand that they require more participants to hold a job. “Hell no. Not a chance,” Graves told reporters. Biden and his fellow Democrats have resisted a Republican push to require childless adults under age 56 to show they are working or looking for work in order to qualify for the Medicaid health plan and the SNAP food-assistance program. The Republican proposal would require more participants in those programs to show they are working or looking for work. That would save $120 billion over 10 years but also force more than a million Americans out of those programs, according to the nonpartisan Congressional Budget Office.Democrats have said the proposal would only create more red tape that would exclude people who would otherwise qualify.Medicaid and SNAP have scaled back in recent months after expanding dramatically during the COVID-19 pandemic. Biden in particular has resisted the work requirements for Medicaid, which covered 85 million Americans as of January. The deal under consideration would increase funding for the military and veterans care while essentially holding non-defense discretionary spending at current-year levels, according to the official, who spoke on condition of anonymity. The deal might also scale back funding for the Internal Revenue Service, which got an extra $80 billion last year, in part to bolster enforcement and bring in more tax revenue. Republicans have sought to revoke that funding.The White House is working on a way to preserve its effort to target wealthy taxpayers, the official said.The Treasury Department had previously warned that it could be unable to cover all its obligations as soon as June 1.Several credit-rating agencies have said they have put the United States on review for a possible downgrade, which would push up borrowing costs and undercut its standing as the backbone of the global financial system.A similar 2011 standoff led Standard & Poor’s to downgrade its rating on U.S. debt.Even if they reach a deal, leaders from both parties will have to work hard to round up enough votes for approval in Congress. Right-wing Republicans have insisted that any deal must include steep spending cuts, while Democrats have resisted the new work requirements for benefits programs.Most lawmakers have left Washington for the Memorial Day holiday, but congressional leaders have told them to be ready to return for votes when a deal is struck. House leaders have said lawmakers will get three days to ponder the deal before a vote. Any single lawmaker in the Senate has the power to tie up action for days. At least one, Republican Mike Lee, has threatened to do so. More

The layoffs will affect employees across the bank’s main businesses — consumer, commercial banking, asset and wealth management — as well as technology and operations, the source said. JPMorgan (NYSE:JPM) is the largest U.S. lender.There are more than 13,000 current job openings at the bank, the source added.JPMorgan declined to comment.On Thursday, a JPMorgan source said the lender was laying off nearly 1,000 First Republic Bank (OTC:FRCB) employees after acquiring the failed bank earlier this month.First Republic became the largest U.S. lender to fail since 2008 after it was seized by regulators and sold to JPMorgan in early May.JPMorgan’s workforce stood at 296,877 at the end of the first quarter, up 8% from a year earlier, according to a filing.CNBC was the first to report on the job cuts. More

LONDON (Reuters) -A top-level meeting in Paris next month will lay out a $100 billion plan to drive more money into climate and development finance in poorer countries by providing currency guarantees to investors, according to a document seen by Reuters.The plan, which has not previously been reported, was sent to the world’s governments ahead of the “Summit for a New Global Financing Pact” in Paris in June by the Bridgetown Initiative spearheaded by Barbados leader Mia Mottley.The idea, in a consultation document dated April 2023, would rely on the firepower of the International Monetary Fund (IMF) and other multilateral development banks (MDBs), and forms part of growing efforts to reform the international financial system.It would see the IMF and other MDBs “cut the excessive macro-risk premia on developing countries with $100 billion per year of foreign exchange guarantees”, for financing in more volatile domestic currencies rather than the dollar or euro.The guarantees would be for “just green transition investments”, which one source involved in the plans said could include “green” bonds focused on environmentally friendly projects as a well as others such as ocean-focused “blue” bonds and sustainability-linked bonds.Their benefit is that the MDBs would step in and compensate international buyers of those bonds if the country involved devalued its currency and effectively cut the dollar-value of its bond payments. By removing that risk for investors, it should significantly reduce the rates of interest the governments have to pay. For some it could even be the boost needed to regain access to global capital markets lost during the COVID pandemic. A report released at the COP27 climate talks suggested developing countries would need $1 trillion a year in public and private money annually by 2030 to tackle global warming, yet to-date capital flows are just a fraction of what is needed.A report by the World Bank and other big multilateral lenders said they gave $51 billion in 2021 alongside $13 billion from private finance. The Paris summit, hosted by French President Emmanuel Macron on June 22-23, will be attended by a number of world leaders and representatives from flagship global institutions such as the IMF and United Nations.Outlines of the proposals have been sent to the key groups preparing the discussions over the last couple of weeks. CALL TO ARMSAs well as the currency idea, the document also gives more detail on the main objectives of Version 2.0 of the Bridgetown Initiative, which has become a heavyweight voice over the last 18 months in global climate and sustainability discussions.”This is a call to arms” the source said, referring to the document and its intention to galvanise more concrete action from the IMF and multilateral lenders.     After a slow start, the idea that fundamental change is needed to help more money flow to developing countries in the fight against climate change has picked up steam in the last year and was a key focus of global climate talks in November.    Since then, the World Bank has appointed a new President, former Mastercard (NYSE:MA) CEO Ajay Banga, and released a reform plan that would boost lending by $5 billion a year, although Mottley and others want the system to go much further.    The proposals put forward in the April document, which also include redistributing other IMF money, are likely to form a key part of the negotiating position of developing countries at the next round of annual climate talks in Dubai later this year. More