Aurelia Butler

UK consumer confidence improved in November despite surging inflation, easing some economists’ concerns about the spending recovery in the run-up to Black Friday and Christmas.The UK consumer confidence index, a closely watched measure of how people view the state of their personal finances and wider economic prospects, rose 3 points to minus 14 in November, according to research company GfK.The reading is the average net balance between people who are optimistic and pessimistic in five aspects of the economy.It is based on data collected between November 1 and 12 and was stronger than a slight fall to minus 18 forecast by economists polled by Reuters. It improves expectations for consumer spending for Black Friday, the American-inspired retail discount tradition that this year falls on November 26, and Christmas.Joe Staton, client strategy director at GfK, said a seven-point jump on the sub-index tracking whether people thought this was the right time to make big purchases was particularly promising. He noted it could be a sign that “shoppers are ready to bounce back after last year’s cancelled family gatherings, with a Christmas splurge in coming weeks.”The improvement came despite a sharp increase in inflation over the past few months.Official data released on Wednesday showed that surging energy prices pushed consumer inflation in October to the highest level in a decade, increasing households’ cost of living and hitting their spending power. The jump in prices also increased the likelihood of the Bank of England raising interest rates at its December meeting.“We do see as one of the downside risks the possibility that higher inflation, coupled with a higher tax burden and rising interest rates, will see consumer spending moderating over the coming months,” said Yael Selfin, chief economist at advisory firm KPMG UK.However, people’s views on the general economic situation improved markedly and there was also a small rise in people’s perception of their personal financial situation for the year ahead, possibly reflecting a buoyant jobs market with record-high vacancy rates.Other non-standard measures of spending have also showed resilience. In the week to November 14, the value of UK bank transactions rose to 12 per cent above the same week in 2019, the highest reading this year, according to Fable Data, a company that tracks bank transactions. Avinash Srinivasan, analyst at Fable Data, noted “increasing spend ahead of the holiday season” in clothing stores, with improvements for department stores, health and beauty shops. The rise tallies with a 4 percentage point increase in the Bank of England tracker of credit and debit card purchases over the same period.The number of seated diners was also well above 2019 levels in the second week of November, while transaction volumes at the sandwich chain Pret A Manger continued their upward trajectory — reflecting more people returning to the office, according to data published on Thursday by the Office for National Statistics.Consumer perceptions and their likelihood to spend matter because household consumption has been the driver of the UK’s economic rebound from the hit of the pandemic. In the third quarter, it contributed to 1.2 percentage points of the 1.3 per cent economic growth. More

US president Joe Biden said he was considering a diplomatic boycott of the 2022 Beijing Winter Olympics, in a move that would inject fresh tension into the US-China relationship just days after his first meeting with the Chinese leader Xi Jinping.Speaking in the Oval Office on Thursday alongside Justin Trudeau, Canada’s prime minister, Biden said a diplomatic boycott was “something we are considering” when asked whether he was contemplating the move. Earlier this year, the Biden administration issued several strong statements about China’s persecution of Uyghurs. Antony Blinken, secretary of state, has accused Beijing of committing “genocide” in Xinjiang, where the regime has detained more than 1m Muslim Uyghurs and other minority ethnic groups. Biden’s statement came after several months during which his administration had been less vocal about Xinjiang, sparking concern from human rights groups that the US president was muting his criticism ahead of last Monday’s virtual meeting with his Chinese counterpart.Do you think the Biden should pose a diplomatic boycott of the Beijing Games? Email me at [email protected] and let me know your thoughts. Thanks for reading FirstFT Asia — Emily Five more stories in the news1. Turkey defies warnings and cuts interest rates Turkey slashed interest rates yesterday, sending the lira tumbling as much as 6 per cent to a new record low and heightening concerns that President Recep Tayyip Erdogan’s fixation on low borrowing costs will worsen already acute inflation.2. Alibaba warns of consumer spending slowdown Alibaba’s US-listed shares fell more than 10 per cent after the ecommerce group cut its sales forecasts sharply, citing slower growth in Chinese consumer spending. In quarterly results, Alibaba said it now expected 20-23 per cent sales growth in 2022 compared with an earlier forecast of 30 per cent growth.3. US states investigate Instagram’s targeting of younger users At least nine states are examining whether Facebook violated state consumer protection laws and “put the public at risk” by promoting Instagram to children and young adults, “despite knowing that such use is associated with physical and mental health harms”, according to Maura Healey, Massachusetts attorney-general.4. ‘Course correction’ needed in Asia, says US trade rep America needs to make a “course correction” in the Asia-Pacific region, Katherine Tai said in an exclusive FT interview, as Washington attempts to re-establish its economic superpower credentials following its withdrawal from a trade pact under Donald Trump.5. Paytm shares fall 27% on trading debut Shares in Indian financial technology company Paytm fell by more than a quarter on its stock market debut, wiping $5bn off its valuation in a rout that underscored investor unease about India’s largest ever IPO. More markets news: Emerging market equities were under pressure for the second consecutive session as concerns over elevated global inflation added to nerves about a Chinese slowdown and tighter financing conditions rippling out from the US.Coronavirus digestThe FT goes inside Gloucestershire Hospitals NHS Trust to see how the UK health service learnt to work in new ways during the pandemic.The number of new coronavirus infections in the UK is falling but a leading scientist has predicted the effects of the disease will last another five years.Germany is one of several European countries that are introducing new restrictions to battle a fourth wave of infections.Two studies showing high levels of Covid-19 infection among wild deer in the US have renewed concerns about the virus spreading through animal populations.

Read today’s Delivering Healthcare special report on how the coronavirus pandemic has overturned the world’s health systems, including a video on how hospitals learned to work in new ways. The days aheadJapanese economic package unveiled Prime minister Fumio Kishida is preparing a direct cash distribution of ¥100,000 ($872) to households with children younger than 18 as part of a huge economic package to be unveiled today.Frankfurt European Banking Congress 2021 European Central Bank president Christine Lagarde addresses the 31st Frankfurt Banking Conference today. Chile general election Voters will go to the polls on Sunday to decide the nation’s new leader. In the final pre-election opinion poll conservative candidate Jose Antonio Kast remains the frontrunner, followed by leftwing candidate Gabriel Boric. (Reuters) Join us December 7-9 at the Global Boardroom, for discussions on the challenge of building sustainable growth in a world transformed by crisis. Hear from over 100 influential leaders including Faryar Shirzad, chief policy officer of Coinbase. Register free here today.What else we’re readingOpen-source investigators seek justice in Myanmar Since the military coup, social media has filled up with images of people who have been beaten or fatally shot. In response, online outlets are using pioneering digital forensics to assemble criminal evidence, laying the groundwork for future crimes-against-humanity trials.

Protesters use Molotov cocktails and slingshots to defend themselves against security forces © Myay Ni Gone/Sacca/Redux/eyevine

How the valuation chasm in markets can be bridged To understand why there is a divergence in views on how market participants view young growth-driven companies, it is instructive to look at what they have in common, writes Aswath Damodaran, professor at the Stern School of Business at New York University.How empty boxes worsened stress on the US supply chain A chronic shortage of truck drivers is bedevilling US supply chains, leaving businesses struggling to secure the products they need. But there is another factor in the nation’s goods delivery problems: empty shipping containers. Boris Johnson’s Christmas truce The UK prime minister wants a quiet festive season this year. Economic and political difficulties at home have led his government to pull back from a trade confrontation with Brussels over the so-called Northern Ireland protocol. But does this mark a shift in approach?Can guilt help bankers change for the better? Should financiers feel guilt? If they did, would that make the world of money safer? These questions and many others have cropped up in the years since the 2008 Financial Crisis, and now the New York Federal Reserve is exploring the issue in a forward-facing — and geeky — way.House & home Enterprising buyers from across Asia are employing local architects and building companies to construct homes in Niseko, Japan’s most popular international ski resort. They join a growing pool of permanent residents working in the ski industry for whom building provides a cheaper, more suitable home than buying one second hand.

A wood frame house can be built in nine months, costing $2,000-$3,500 per sq m; high-spec concrete homes, favoured by affluent buyers, cost $5,000-$7,000 per sq m ©  Scott Barclay/Alamy More

Joe Biden met with the leaders of Canada and Mexico at the White House on Thursday, after Ottawa urged US lawmakers to reject protectionist policies amid a row over electric vehicle subsidies.The first trilateral meeting between the three heads of state since 2016 comes as Mexican and Canadian officials have complained that Biden’s plan to offer tax credits on US-made EVs, part of his $1.75tn spending package, breaks international trade rules.The Canadian prime minister’s office said that Justin Trudeau had spoken to lawmakers on Capitol Hill on Wednesday to “impress upon these key legislators the importance of bilateral co-operation”.Biden tried to smooth tensions, calling relations with Canada “one of the easiest relationships that we have”, in remarks at his meeting with Trudeau.The US president has said he is aiming to strengthen diplomatic relations across North America as officials seek to co-ordinate with allies to bolster critical supply chains and navigate the global crunch.Before his meeting with Mexican president Andrés Manuel López Obrador, Biden said the two countries were working on controlling the coronavirus pandemic, an inclusive economic recovery, and addressing migration.Migration, mostly by Central Americans, through Mexico to the southern US border has been a core issue between the two countries. “There is a plan by the US government to assist Central America, which we very much celebrate,” López Obrador said on Thursday.

US officials said the three leaders planned to launch a supply-chain working group in a bid to “minimise future disruptions”, while other issues up for discussion included climate co-operation, health security and migration.“North America is a platform that is critical to both our domestic economic success and as well as a partnership that can play a really critical role in resolving regional and global challenges,” an official said.Washington has been pushing to secure the supply chains of critical industries such as semiconductors, pharmaceuticals and electric vehicle batteries to reduce over-reliance on countries such as China.Canada in particular is a rich source of minerals critical to the manufacturing of electric vehicles, such as lithium, nickel, cobalt and graphite.On Covid-19, the three leaders are expected to reach an agreement that Canada and Mexico will share some of the vaccines donated to them by the US with other countries in Latin America and the Caribbean, a senior US official said. The official added that public health experts would determine the timing and number of doses.Meanwhile, the US has expressed concerns about Mexican energy reforms, which sector experts say would make electricity more expensive and dirty.López Obrador said if the issue were to come up at Thursday’s summit, he was prepared to urge to his counterparts to help stop what he called abuses by foreign energy companies, which he believed benefited unfairly from contracts offered by the previous administration.“Do you think it’ll be hard for me to say this to president Biden or prime minister Trudeau? No, I doubt they are in favour of protecting the corrupt,” he said in a morning news conference on Wednesday.A US official said the Biden administration “closely tracks” Mexico’s proposed energy reforms and was “prepared for the two presidents to discuss it”. More