Aurelia Butler

Even before the £700 rise in annual energy costs for UK households landed this week, 36-year-old Leigh Sopaj was struggling to pay her bills.At the start of each week Sopaj loads £30 on to a prepaid electricity meter, but her credit is dwindling faster and faster. “I used to have £20 left around the middle of the week,” she said, “but now it’s already down to £11. The bills are just getting harder and harder to pay.”Sopaj, who lives in a suburb of Leamington Spa, Warwickshire, ranked among the 20 per cent most deprived areas of the UK, is among the 6.3mn households facing “fuel stress” according to the Resolution Foundation, a think-tank — after the number of homes affected tripled overnight.And with the UK’s energy price cap predicted to jump by another £600-£800 in October, alongside increases in council tax, inflation heading towards 8 per cent and petrol prices rising by 50p a litre since January, families are confronting the sharpest drop in living standards since records began in 1956.

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As a result, local authorities and voluntary organisations are looking for innovative ways to address a cost of living crisis that will ensnare families who would not ordinarily use emergency services such as food banks.One such scheme is the Lillington Community Pantry in Warwickshire in England’s West Midlands. “Subscribers” pay £5 to select food items from shelves stocked with surplus supermarket goods. The aim is to help householders like Sopaj stretch budgets that are being rapidly eroded.The pantry, which is run by a charity, Feed the Hungry, on behalf of Warwickshire county council, consciously differs from a traditional food bank where recipients are simply handed pre-packed bags of food. It aims to provide a “shopping experience” and a host of other preventive services from debt counselling to health advice and cookery classes, that the council hopes will help stabilise families teetering on the edge of a poverty precipice.“For a lot of people it’s a slow decline, a spiral downwards, so what we’re trying to do is catch them before they hit the bottom,” says Heather Timms, a Conservative member of the council, which has invested nearly £350,000 in the pantry.The scheme, which blends government seed money with charity knowhow and the work of volunteers, is being held up as a model of how local governments can look to harness “community power” to bolster already-stretched services. Pantry users can seek expert advice from on-site groups such as Citizens Advice, whose representative Paul Carter is available for on-the-spot consultations. “Something as simple as tips on budget planning for foreseeable financial events like birthdays and Christmas — and not promising your child what you can’t afford — can help people live within their means,” he says.The idea of expanding community involvement in delivering public services is supported by central government and was included by the levelling up secretary Michael Gove in a white paper in February, which set out the government’s prospectus for reducing inequality across the UK.The paper included a promise to try out “community covenants” in which councils, public bodies and local groups make formal agreements to “empower communities to shape the regeneration of their areas and improve public services”.Critics of the government, including Angela Rayner, deputy leader of the opposition Labour party, have said such schemes are no substitute for proper funding of local government services, which have been hit with 30 per cent budget cuts during the past decade.At a recent conference on community empowerment, Rayner, while welcoming the concept, accused the government of failing to really strengthen communities, instead favouring a “bit of money in a pot here, a little project there”. But promoters of grassroots engagement argue the sheer scale of the cost of living crisis, combined with the revival of volunteering during the Covid-19 pandemic, has created a moment to reassess the role of community in delivering services.Adam Lent, chief executive of the think-tank and local government network New Local, said the policy debate had moved on from the ideas of the “Big Society” proposed by David Cameron, former prime minister and Conservative leader.“Cameron’s ‘Big Society’ idea was that the state would take a step back and the voluntary sector would step up. This is a different concept: it says that the state is an important catalyst for change and community power,” he said.As an example, New Local cites the Wigan Deal where Wigan council in Greater Manchester has mobilised volunteers and schools to improve local parks and recycling, staff libraries and create friendship groups.Danny Kruger, a Conservative MP who was asked by the prime minister Boris Johnson to report on how to capitalise on the volunteering spirit ignited during the pandemic, believes necessity will prove the mother of invention.“We now have much more of a ‘burning platform’ than in that era of ‘Big Society’,” he said. “There is a growing understanding that we need a stronger society because the resources of the state are simply insufficient to meet the need.”Back in Lillington, the aim is that seed money that has been invested in the pantry will replicate the success of a similar scheme in neighbouring Coventry, which has more than 130 participating families.Charles Barlow, head of six “community power” projects for Warwickshire county council, including an orchard and a scheme to help the elderly remain in their own homes longer, believes demand will increase as cost pressures on families mount.Charles Barlow is looking for community buy-in to make the projects self-sustaining © Andrew Fox/FT“If it works and we get the volume of community buy-in we’re looking for, then the hope is that the project becomes self-sustaining,” Barlow said. Faye Abbott, who runs the Lillington pantry, said the hope was to create a hub around which people can coalesce in hard times, with cooking classes and activities for children with few treats in their lives.In its second week of opening, she recalled how one small boy came running in and immediately picked up a packet of Angel Delight pudding mix.

A customer, left, talking to Faye Abbott of the Lillington pantry © Andrew Fox/FT

“It was a small thing, but clearly so important to him,” she said. “This is not just about helping people on means-tested benefits. There are people working who still cannot afford to pay the bills, and that group is getting larger and larger.”For Sopaj, who cannot afford swimming lessons for her two-year-old son, Hudson, the pantry will enable her to pick up about £30 worth of food for a £5 fee. This will help her get through weekends when her teenage children come to stay. “They just eat so much,” she says. “The pantry will help to get me through.” More

(Reuters) – Federal Reserve Chair Jerome Powell worked through the weekend after Russia’s Feb. 24 invasion of Ukraine, meeting with staff on both Saturday and Sunday for the first time since May 2020 when the central bank was deep into its pandemic crisis response. Powell had two 45-minute meetings with staff on Feb. 26, including one that started at 8 p.m., and also attended an hourlong meeting at the Treasury, his monthly schedule published Friday shows. On Feb. 27 he met with staff from 10 a.m. to 2 p.m., and then again at 8 p.m.; on the Monday, the day Treasury put sanctions on Russia’s central bank and threatened more action if the war continued, Powell held another 45-minute 8 p.m. staff meeting.Though the Fed chair calendars never detail the contents of notated meetings, the flurry of work suggests the pressure on Powell to figure out the fallout for the U.S. economy from what Russia calls a “special operation” designed to destroy its southern neighbor’s military capabilities and capture what it regards as dangerous nationalists. The invasion sent world energy prices soaring just as the Fed was getting ready to begin a round of interest rates hikes to fight 40-year-high inflation. A few days after that weekend of work, Powell told lawmakers on Capitol Hill that the near-term effects of the invasion, the war, the sanctions, and of events to still to come “remain highly uncertain,” but he signaled the Fed’s rate increases would go ahead as expected. More

WASHINGTON (Reuters) – U.S. employers maintained a brisk pace of hiring in March, driving the unemployment rate to a new two-year low of 3.6% while also boosting wages, resulting in a further tightening of labor market conditions and opening the door to a hefty 50 basis points interest rate hike from the Federal Reserve in May.The Labor Department’s closely watched employment report on Friday also showed more people joining the workforce, likely attracted by the higher wages. Employment in professional and business services, financial activities and retail sectors is now above pre-pandemic levels. The 11th straight month of job gains in excess of 400,000 underscored the economy’s resilience even as growth appears to have slowed considerably in the first quarter under the weight of high inflation amid snarled supply chains.”Despite concerns about inflation and the Russia-Ukraine war, American businesses are still hiring at full throttle, while more people are returning to the labor force,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto.”That’s great news for the economy. However, the labor market is only getting tighter and wages are on a clear upward track, fanning the inflation flames. The Fed has every reason to go big or go home on May 4.”The survey of establishments showed that nonfarm payrolls increased by 431,000 jobs last month. The economy created 95,000 more jobs in January and February than initially estimated. Nonfarm payrolls https://graphics.reuters.com/USA-STOCKS/movanbdwmpa/nfpr.pngOverall employment is now 1.6 million jobs below its pre-pandemic level, with many economists predicting all the jobs lost will be recouped by July. Economists polled by Reuters had forecast payrolls increasing 490,000 in March. Estimates ranged from as low as 200,000 to as high as 700,000.Worker demand is being driven by a sharp decline in COVID-19 infections, which has resulted in restrictions being lifted across the country. There is no sign yet that the Russia-Ukraine war, which has pushed gasoline prices above $4 per gallon, has impacted the labor market.President Joe Biden welcomed the upbeat report saying more people working could help to ease the pressure on supply chains.”That’s good news for fighting inflation,” Biden said. “It is good news for our economy, and it means that our economy has gone from being on the mend to being on the move.” The broad increase in payrolls was led by the leisure and hospitality industry, which added 112,000 jobs. Professional and business services payrolls increased by 102,000 jobs, hoisting employment in the sector 723,000 above its pre-pandemic level.Retailers added 49,000, pushing the level of employment 278,000 higher than in February 2020.Jobs by industry Jobs by industry https://graphics.reuters.com/USA-FED/INDUSTRY/qmypmdoolvr/chart.pngFinancial activities employment grew by 16,000 and is now 41,000 above its pre-pandemic level. Manufacturing payrolls increased by 38,000 jobs and is yet to recoup all the jobs lost during the pandemic. Construction employment is now back at its pre-pandemic level, with 19,000 jobs added in March.Stocks on Wall Street were lower. The dollar gained versus a basket of currencies. U.S. Treasury yields rose, with the closely watched yield curve between two-year and 10-year notes inverting for the third time this week amid concerns that tight monetary policy could tip the economy into recession.The Fed last month raised its policy interest rate by 25 basis points, the first hike in more than three years. Policymakers have been ratcheting up their hawkish rhetoric, with Fed Chair Jerome Powell saying the U.S. central bank must move “expeditiously” to hike rates and possibly “more aggressively” to keep high inflation from becoming entrenched.RECORD JOB OPENINGSWith a near record 11.3 million job openings on the last day of February, payrolls growth could remain strong this year.Job gains averaged 562,000 per month in the first quarter. But inflation is eating into growth, with gross domestic product estimates for the January-March quarter mostly below a 1.0% annualized rate, a sharp slowdown from the fourth quarter’s brisk 6.9% pace.Annual inflation rose in February by the most in 40 years. Despite the anxiety in the bond market, economists expect the expansion to continue. Many viewed the Fed’s massive holdings of Treasuries and mortgage-backed securities as distorting the yield curve moves.Some noted that real yields remained negative, while others argued that the two-year/five-year Treasury yield curve was a better indicator of a future recession. This segment has not inverted.”The amazingly strong job gains this year point to a solid economy,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania. “What we are likely seeing is a deceleration back toward more normal levels of growth after having posted clearly unsustainable robust numbers.”  The labor pool continued to steadily expand in March.The household survey, from which the unemployment rate is derived, showed 418,000 entered the labor force last month. About 249,000 women, 20 years of age and older, joined the workforce. That was more than offset by a 736,000 surge in household employment. As result, the unemployment rate dropped two-tenths of a percentage point to 3.6%, the lowest since February 2020.Unemployment declined for all race groups, with a large decline among Blacks. The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose to a two-year high of 62.4% from 62.3% in February. The participation rate for the prime age group also rose to a two-year high of 82.5% from 82.2% in February.Labor market participation https://graphics.reuters.com/USA-STOCKS/xmvjoqenmpr/participation.pngAccording to a report from global outplacement firm Challenger, Gray & Christmas on Thursday, the skyrocketing cost of living was “causing workers who were depending on savings or investments to seek out paid employment.”There was a significant reduction in those experiencing long spells of unemployment as well as those being unable to work because of the pandemic. With workers still scarce, average hourly earnings increased 0.4% after edging up 0.1% in February. That lifted the annual increase to 5.6% from 5.2% in February. But the workweek shortened to 34.6 hours from 34.7 hours in February. More

The Biden administration has insisted western sanctions against Russia are working despite a rebound in the value of the rouble against the US dollar.Speaking to reporters, a senior US Treasury official said the administration believed the real value of the rouble was deeply impaired, citing Russia’s skyrocketing inflation and the depreciated exchange rate for the currency on the black market.The rouble on Friday was trading at roughly 86 to the US dollar in the interbank market after plunging to as much as 150 to the dollar in early March. Its current value against the dollar is not far from the level on February 23, the day before Vladimir Putin, Russia’s president, launched the invasion of Ukraine.However, the rouble is not functioning as a convertible currency, after sanctions resulted in a collapse in goods and services imports with businesses and consumers largely unable to buy products on international markets or travel outside of the country. Economists have attributed the rebound on interbank markets to Moscow’s stringent currency controls, which have prevented Russians from moving money to foreign bank accounts or taking significant amounts of cash out of the country. Moscow has also temporarily banned banks and brokers from operating cash-based foreign exchanges for dollars and euros.The Treasury official noted inflation in Russia had jumped 6 per cent over the past three weeks, while western central bank sanctions had prevented the country from accessing half of its foreign currency reserves, cutting off access to a cushion it had been building to lessen the blow of punitive measures. Karl Schamotta, chief market strategist at Corpay, said: “The information content in the exchange rate right now is not the same as it is in any other major economy. The fact is that we have created a one-way valve: money is flowing into Russia but not out. And that is going to force the exchange rate up over time,” he said.“The black market is quoting anywhere between 110 and 140 on dollar/rouble transactions. So citizens who are looking to purchase dollars or euro are paying a much higher cost than we’re seeing on the interbank market.”Schamotta added: “Clearly the sanctions that have been applied have been taking a toll on the real economy, on the non-energy, non-commodity economy and are imposing enormous costs on households.”In the call with reporters, the Treasury official said the US believed it still had the ability to expand sanctions in the future, as the EU continued to reduce its reliance on Russian energy imports and other raw materials. The official said the US had designed the sanctions to maximise the disruption to Russia’s military invasion of Ukraine, while simultaneously trying to minimise the negative impact on the global supply chains and the EU in particular.As such it was more important for the US, EU and UK to be united on sanctions, making it harder for Russia to circumvent the restrictions, rather than Washington imposing the harshest measures possible, the official said. More

DMYTRIVKA, Ukraine (Reuters) – Wisps of smoke still rising from the smouldering wrecks of tanks, business executive Leonid Vereshchagin wends his way past the charred corpses of Russian troops in this Ukrainian hamlet after what he calls a living hell.    For a month, he and his wife sought refuge in a friend’s basement in Dmytrivka, about 22 miles (35 km) west of Kyiv, as Russian troops advanced and occupied the area and took over the homes of some of his neighbours.Most of the 300 residents left, but around a third remained, co-existing with the Russians as their tanks patrolled day and night.”They went to our houses. Those houses that were closed, they opened them, they just broke the windows and they tried to open the doors,” he said, returning to his village on Friday. “We were with them when they were visiting houses, they were trying to open cupboards.”    “I have a very brave wife, she was watching them, making clear that they should not take anything,” he added, sitting in the same basement he had hunkered down in. Several mattresses lay on the floor, and to the side, shelves with provisions.   Three days ago, while the Russians were patrolling the area, Ukrainian troops arrived. When the Russians returned, unaware, there was a fierce battle. Vereshchagin and his wife escaped in a car through the woods during a brief break in the fighting.    Some houses in the smart residential area were completely destroyed. In the garden of one cowered a doe, badly injured from shelling, raw flesh exposed where patches of fur had burned.    “The Hell started in the evening on the (March) 29th,” Vereshchagin said. “From one side we were hearing the tanks shooting at us, and from the area of Bucha was a massive mortar shelling,” he added, referring to a town to the north.    “It’s something like you having a casque (helmet) and someone is hitting by hammer from above.”The pungent smell of dank vegetation sits heavy in the air. A mist envelops the rural area, a patchwork of fields and forest land.Reuters correspondents saw the remains of eight Russian soldiers next to destroyed tanks on the road running through the hamlet.     One had been decapitated by a blast. His naked body lay nearby, his feet blown off and a blackened arm still extended upward as if frozen in time.    “You see that enemy overestimates its potential around Kyiv at least. And we keep going forward liberating our cities and evacuating our people,” said Deputy Interior Minister Yevhen Yenin. “The first task is to restore public order to provide supplies of water, food, electricity, communication,” he added.   To the north, near the Belarus border, lies the nuclear disaster site Chernobyl.”According to our reconnaissance, Russians have left Chernobyl but we should be aware of any unpleasant surprise that could be hidden there,” Yenin said.    Vereshchagin dismisses Russian President Vladimir Putin’s rationale for the invasion – clearing neo-Nazis and protecting Russians in Ukraine. While born in Ukraine, his mother tongue is Russian.    “I’ve never ever experienced any problems in Ukraine being a Russian-speaking Ukrainian,” he said.    “Definitely neither I nor any of my Russian speaking friends were waiting for any salvation army, which was completely fake and paranoia.” More