Aurelia Butler

Global wholesale food prices have been falling but French food retailers and their suppliers agreed a 10% average increase in prices in annual negotiations in March, which both sides said was necessary to cover higher production costs.Le Maire has repeatedly called in recent days on both sides to reopen negotiations to ensure that the fall in wholesale food prices is passed on.”If they don’t do it, we will summon them to the finance ministry and if that is not enough I will use all the powers at my disposal to ensure that the big industrial companies pass on the decrease,” Le Maire said during a visit to a company in northern France.He did not specify what action that could include but the authorities responsible in France for consumer protection and competition answer to Le Maire.Under pressure after forcing through an unpopular increase in the retirement age, President Emmanuel Macron’s government is eager to be seen tackling citizens’ every-day problems, such as surging food prices.In the wake of the retailers and suppliers agreement, food prices rose by a record 15.8% in March from a year earlier, limiting a fall in overall French inflation to 6.6%, which is otherwise being pulled down by lower energy prices.The increase came even though global food prices fell in March for a 12th consecutive month and are down 20.5% from a record high hit a year ago following Russia’s invasion of Ukraine, according to the United Nation’s Food and Agriculture Organization earlier this month.”I don’t see why when prices go up companies pass on the increase immediately, but when the price of wheat falls, the price of pasta takes three months to fall. It’s unacceptable,” Le Maire said. More

China will optimise the development environment for the private sector and will remove institutional barriers that prevent firms from participating in fair market competition, state media quoted a meeting of a committee on deepening reforms, chaired by President Xi Jinping.”It is necessary to fully consider the characteristics of the private economy, improve policy implementation, strengthen policy coordination, promote precise and direct preferential policies and effectively solve actual difficulties for firms,” state media said.China will guide private firms to find the right position in the country’s high-quality economic development, and pursue their own reforms and upgrading, state media said.Private firms, a key driving force behind China’s economic ascent in the past four decades, account for half of the country’s tax revenue, over 60% of output and provide 80% of urban employment. Chinese leaders have pledged to boost confidence, which has been hurt by a three-year crackdown on the tech and property sectors.The party has also passed guidance for strengthening and improving management of the state sector, state media said.China will deepen reforms of state firms, strengthen and improve the management of the state sector to help drive high quality development and maintain national security, state media said.China’s economy grew at a faster-than-expected pace in the first quarter, as the end of strict COVID curbs lifted businesses and consumers out of crippling pandemic disruptions, although headwinds persist and the recovery remains uneven.Private fixed-asset investment grew only 0.6% in the first quarter from a year earlier, dwarfed by a 10% rise in investment by state entities, official data showed. More

(Reuters) -The euro zone economic recovery has unexpectedly gathered pace this month as the bloc’s dominant services industry saw already-buoyant demand rise, more than offsetting a deepening downturn in manufacturing, surveys showed.The strong services performance could mean that wage pressures continue in the region, complicating the European Central Bank’s efforts to tame inflation, some economists noted.HCOB’s flash Composite Purchasing Managers’ Index (PMI), compiled by S&P Global (NYSE:SPGI) and seen as a good gauge of overall economic health, jumped to an 11-month high of 54.4 in April from March’s 53.7, data showed on Friday.That was well above the 50 mark separating growth from contraction and matched the highest forecast in a Reuters poll which had predicted no change from March.”The PMI sheds a positive light on the economic performance in the eurozone, as a pickup in service sector activity is boosting growth,” said Bert Colijn, senior euro zone economist at ING, noting manufacturing weakness remained a concern.Danske Bank’s Piet Haines Christiansen said ECB policy-makers would likely focus on the rise in services PMI “notably due to the close link to the wage dynamics” in a sector where wages represent some of the biggest costs.The ECB is expected to raise rates for a seventh straight meeting on May 4, with policymakers converging on a 25-basis-point hike even if a larger move is not yet off the table, sources with direct knowledge of the discussions have told Reuters.To meet rising demand firms increased headcount at the fastest pace since last May. The employment index bounced to 54.7 in April from 53.3.A PMI covering the services industry soared to 56.6 this month from 55.0, confounding expectations in the Reuters poll for a decline to 54.5.Despite high living costs in the region, demand for services improved as consumers continued to spend. The new business index rose to a one-year high of 55.8 from 54.2.But it was a different story for the bloc’s manufacturers who saw demand decline faster. The sector’s headline PMI fell to 45.5 from 47.3, its lowest since the coronavirus pandemic was cementing its grip on the world three years ago.An index measuring output, which feeds into the composite PMI and had spent two months in positive territory, fell to 48.5 from 50.4.National PMI measures showed that activity in Germany grew for a third straight month in April as a services sector revival offset a contraction in manufacturing activity.In France, business activity expanded at a faster-than-expected pace on continued strong growth in the dominant services sector even as protests against plans to increase the retirement age impacted the already battered manufacturing sector.Further improvements to supply chains in the euro area meant the cost of raw materials fell at the sharpest pace in almost three years, so factories only marginally increased their charges. The output prices index dropped to 51.8 from 53.4, its lowest since late-2020.That will likely be welcomed by ECB policymakers struggling to get inflation anywhere near their 2% target.”The further drop in both the manufacturing and services output price indices was encouraging and suggests that core inflation should start to trend down eventually,” said Franziska Palmas, senior Europe economist.”ECB officials have suggested that while a further rate hike in May is likely, they have yet to decide on its size. The continued strength of the PMIs is clearly a reason for them to opt for a larger hike.” More

British businesses said that economic activity accelerated at the fastest pace in a year this month, while input cost inflation slowed off the back of falling fuel and energy prices, according to a closely watched survey released on Friday. The S&P/Cips global flash UK composite purchasing managers’ index, a measure of private sector activity, rose to 53.9 in April, up from 52.2 in March, beating analysts’ consensus forecast of 52.5.The latest reading marked the third successive month that the index remained above 50, which indicates a majority of businesses reporting a month-on-month expansion. “The key takeaway is that the economy as a whole is not only showing encouraging resilience but has gained growth momentum heading into the second quarter,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. The survey falls in line with other signs of economic recovery. Earlier on Friday, research group GfK reported that its index of consumer confidence, an indicator of how Britons view their personal finances and wider economic prospects, rose by six points to -30 this month.According to the PMI survey, conducted between April 12 and 19, the pick-up in activity was driven by strong growth in the services sector, where the index rose to a 12-month high of 54.9 this month, up from 52.9 in March, as consumers were more willing to spend on travel, leisure and entertainment. “Growth is lopsided, however, with surging demand for services contrasting with an ongoing downturn in demand for goods,” noted Williamson. As more people chose to spend on holidays rather than big ticket purchases, manufacturing activity fell for the second month running and at the fastest pace since January. Reduced customer demand and falling export sales were among the factors that weighed on performance, according to panel members.Meanwhile, the survey data showed that business input costs, while still high, grew at their slowest pace in two years, as lower fuel and energy prices as well as improving supply conditions lifted some of the pressures. However, respondents widely reported that April marked another month of strong wage inflation, which contributed to an increase in the prices they charged. On Wednesday, separate figures by the Office for National Statistics showed the annual rate of UK inflation was 10.1 per cent in March, down only slightly from 10.4 per cent the previous month and still not far below its October peak of 11.1 per cent.

“April’s flash PMIs suggest the economy is still proving resilient to the dual drags of high inflation and high interest rates going into [the second quarter of 2023]”, said Ashley Webb, UK economist at Capital Economics.“That, alongside evidence suggesting that domestic inflationary pressures are easing more slowly, gives us even more confidence in our view that the Bank of England will raise interest rates,” he added. Analysts believe that the central bank is likely to increase interest rates for the 12th consecutive time, beyond the current 4.25 per cent, when the Monetary Policy Committee meets on May 11. More