Aurelia Butler

LONDON (Reuters) – Britain’s economy is losing steam as households face a tightening cost-of-living squeeze, according to data published on Friday which showed sliding retail sales and consumer confidence approaching all-time lows.The pound slid by more than a cent to fall below $1.29 for the first time since November 2020 after official data and surveys of consumers and businesses pointed a sharp growth slowdown, or worse, in the coming months.A closely watched gauge of business activity from S&P Global (NYSE:SPGI) showed growth slowed by more than expected this month as companies grappled with surging costs and became much gloomier about the outlook.Official data showed retail sales volumes slid by 1.4% in March from February, a worse reading than any economist forecast in a Reuters poll.Earlier on Friday, market research firm GfK said consumer confidence slumped this month to close to its lowest level since records began nearly 50 years ago. (Graphic: UK consumer confidence nears all-time low in April: GfK, https://fingfx.thomsonreuters.com/gfx/polling/lgpdwgkbevo/Pasted%20image%201650549064224.png) Overall, the data underscored growing concern at the Bank of England about the opposing challenges of weakening demand and inflation at a 30-year high of 7% and likely to rise further beyond the central bank’s 2% target.Governor Andrew Bailey said on Thursday the BoE was walking a tight line between tackling inflation and avoiding recession, a challenge facing other major central banks around the world.”Whether the UK heads into a recession is still an open question,” said ING economist James Smith, who highlighted the potential for savings that many households built up during the coronavirus pandemic to continue driving growth.”The jury’s out, but we think the Bank of England is more likely to hike interest rates once or twice more, before pressing the pause button over the summer.”RETAIL SALES FALLThe S&P Global Composite Purchasing Managers’ Index fell in April 57.6 from 60.9. While still comfortably above the 50 threshold for growth, economists polled by Reuters had mostly expected a smaller fall to 59.0.Consumer-facing businesses will likely face a tough time in the months ahead, with GfK’s gauge of households’ confidence about their finances in the future slumping to a record low.The Office for National Statistics said food and petrol sales fell sharply last month and it cited rising prices as possible explanations for the falls. Online retail sales also declined.Retail sales volumes are 2.2% above their level in February 2020 but they are a long way behind where they would have been if growth had continued along its pre-pandemic trend, Keith Church, an economist from risk consultancy 4most, said.Earlier this month, Tesco (OTC:TSCDY), Britain’s biggest retailer, warned of a drop in profits as high inflation squeezes the supermarket group and its customers. More

The contracts, for licence areas in the northeast, are for 35 years and give De Beers the rights to explore and mine, through two new joint ventures with Angola’s state diamond company Endiama. De Beers will hold 90% of the new joint ventures and Endiama will hold 10% initially but can increase its equity share over time, Angola’s oil and natural resources minister Diamantino Azevedo said at a ceremony in the capital, Luanda. “De Beers’ return to Angola marks an important moment for the country and for the global mining sector,” Azevedo said. De Beers previously explored for diamonds in Angola between 2005 and 2012 but concluded that a stand-alone deposit in the area was not economic and relinquished its concession.Angola was the seventh biggest producer of rough diamonds in the world in 2020, according to Kimberley Process statistics. Western sanctions on the world’s biggest diamond producer, Russia, could boost demand for alternative sources of diamonds.De Beers expects to start exploration activities in the licences this year, pending regulatory approvals. The company announced in December last year that it had applied to conduct exploration activities in the country.”Angola has worked hard in recent years to create a stable and attractive investment environment and we are pleased to be returning to active exploration in the country,” De Beers CEO Bruce Cleaver said in a statement. In a sign of commitment to greater transparency, earlier this month Angola applied to join the Extractive Industries Transparency Initiative, a body through which countries report publicly on government revenues from mining and oil. More

Wang Chunying, spokesperson of the State Administration of Foreign Exchange (SAFE), cited a range of factors for her upbeat assessment, including the strength in the Chinese economy, an expected current account surplus, continued foreign investment and an optimized foreign debt structure. “Of course, the foreign exchange regulator will also… closely monitor the pace of the monetary policy changes by the U.S. Fed and their spillover impact, evaluate the operations of our country’s foreign exchange market in real time and effectively maintain market stability,” said Wang. A more hawkish U.S. Federal Reserve, the vanishing Chinese yield advantage and rising concerns over domestic economic growth have dragged the yuan, or renminbi, to seven-month lows, with analysts expecting more downward pressure on the currency in coming months.However, Wang expects the yuan to stay basically stable at reasonably balanced levels, adding that the recent volatility was mostly due to impact from global market fluctuations and changes in supply and demand.”China has been able to implement a normal monetary policy and its financial system is relatively stable and independent. Uncertainties from abroad would have a smaller impact on the yuan exchange rate,” Wang added.She also expects foreign investment in Chinese securities to stabilize. Chinese stocks have been hovering at their lowest level in two years, as strict COVID-19 lockdowns paralysed economic activity in many big cities, even as authorities vowed to provide more help to hard-hit firms. More

Dozens of cities in China are in full or partial lockdown in response to the spread of Covid-19 cases, meaning that a population roughly the size of the US has been stuck at home for several weeks, often with limited access to food and medical care.Among those cities in lockdown, Shanghai has received the most attention. Deservedly so. Although the city relaxed quarantine rules somewhat this week, about 4.5mn people remain confined to their homes and roughly 7.9mn are permitted to leave their homes but must remain within their neighbourhoods.Food distribution has broken down in some parts of the city, leaving some residents to go hungry as piles of rotting produce are left in the street. The anguish of many people cooped up in their apartments and getting by on scant rations has been caught in videos shared widely on social media.But the crisis in Shanghai and other cities is not only humanitarian. It is most starkly an economic problem and, to an extent, a political issue too. The IMF has cut its GDP growth forecast from 4.8 per cent to 4.4 per cent for the full year — a particularly sharp contraction from the 8.1 per cent posted last year, hurting both China and the global economy.The crunch looks set to be particularly pronounced in April. Ting Lu, China chief economist at Nomura, predicts that GDP growth in the second quarter of this year will slump to 1.8 per cent, down from the actual 4.8 per cent seen in the first quarter.The reasons behind the slump reveal deeper faultlines. One source of weakness is the severe contraction in the country’s huge property market, which has relinquished a longstanding role as a dynamo for broader prosperity. Enough real estate to house an estimated 90mn people now stands empty.Nevertheless, the biggest drag on GDP growth is political. Beijing is steadfastly sticking to its zero-Covid policy. The full and partial lockdowns in cities across the country are playing havoc with demand for housing, durable consumer items and capital goods as incomes fall and uncertainties rise. The sheer logistical challenge of getting goods from A to B is acting as a big drag.As China’s population of 1.4bn people contends with their third year of Covid, many have drained their savings to a level at which they are obliged to reduce spending.All of this throws an unsparing light on to Beijing’s Covid strategy. National pride has prevented China from approving foreign mRNA vaccines for use among its people, leaving them to take the less effective vaccines developed by domestic companies. This has meant that despite an impressive vaccination rate (88 per cent of people have had two jabs), the elderly in particular are still thought to be at real risk from coronavirus.It is true that Beijing has been urging the development of homegrown mRNA vaccines — two of which have now entered clinical trials — but China needs to act now with dispatch. It should swallow its pride and approve mass imports of foreign mRNA vaccines immediately, thus allowing it to chart a way out of its draconian zero-Covid policy and relax lockdowns that are imposing an enormous economic and psychological toll.The urgency of this task cannot be underestimated. China’s zero-Covid policy had largely kept the virus’s spread in check until the highly infectious Omicron variant emerged. Beijing now has a stark choice: start a mass vaccination programme using foreign mRNA vaccines or sustain the ruinous economic and social costs of continued lockdowns. More

The unions, which included the likes of the CGT, CFDT and FO (Force Ouvriere), added they would not hesitate to use “all means necessary” to exert pressure on company executives to come up with a better pay offer.Rising inflation has eroded wage increases for many workers across the world. More