Economy

Both the rate of unemployment for all Black people and for women specifically are at their lowest levels in more than a year.
January’s drop in Black unemployment was propelled by gains made by Black women.
A tight labor market may be playing a role.

An employee works at the BMW manufacturing plant in Greer, South Carolina, October 19, 2022.
Bob Strong | Reuters

A decrease in the unemployment rate of Black women is heartening, but labor experts warn that the trend shouldn’t create any false notions about equity in the workforce.
The unemployment rate for the entire Black population has avoided ticking up since August, coming in at 5.4% in January, according to seasonally adjusted data released by the Bureau of Labor Statistics on Friday.

January’s drop in Black unemployment was propelled by gains made by Black women, whose unemployment rate excluding teenagers dropped to 4.7% in January from 5.5% in December. Black men, by comparison, saw unemployment tick up to 5.3% in January from 5.1% in December.
Both the rate of unemployment for all Black people and for women specifically are at their lowest levels in more than a year. The last time the Black unemployment rate was below 5.5% was in September 2019, while Black women last had a sub-5% unemployment rate in November 2021.
The unemployment rates of white, Asian and Hispanic/Latino workers all increased from December to January. Still, Black workers have the highest unemployment rate when compared with white, Asian and Hispanic/Latino workers.
“Sometimes when folks see improvement, they see it as positive, but the disparities are still there,” said Kate Bahn, director of labor market policy and chief economist at the Washington Center for Equitable Growth. “Convergence is good, but it’s still not equal.”

Bahn said the relatively higher rate can be attributed specifically to anti-Black racism. She pointed to the discrimination Black people face in hiring and the increased likelihood of layoffs Black workers experience as two examples. While a tight labor market can help mitigate some of these challenges for Black workers, policy changes would be required to create a more just labor field, she said.

Black women had bigger gains in employment-to-population ratios, which show the number of people employed as a share of the broader population. While Black men saw a 0.2 percentage point gain between December and January, Black women added 1.1 percentage points.
Both groups also reported an increase in the total number of active workers.
Valerie Wilson, the director of a program focused on race, ethnicity and the economy at the Economic Policy Institute, said January can be an especially difficult month to draw trends from because population data changes with the new year.
Looking at actual numbers, there are more unemployed Black women, even though the percentage unemployed within the same population is down.
She said the gains in employment could be attributed at least in part to the tightness of the overall labor market. The unemployment rate came in under analysts’ expectations at 3.4% for January, the lowest since May 1969.

“When you get to those really low rates of unemployment, we tend to start seeing more changes among groups that had higher rates of unemployment,” Wilson said. “If you’re still currently unemployed, you’re still looking for a job, then you’re more likely to be a person to fill a new opening.”
And just because Black women, and Black people as a whole, are finding employment at increasing rates, it doesn’t always mean the newly employed are better off. She pointed to the fact that the rate of wage growth is showing signs of slowing. In addition, the hospitality and leisure sector — which Wilson said can typically pay less than other industries — added the most jobs this month.
“It really depends on how you measure or want to define better off or being hurt,” Wilson said. “There are more jobs available for those who want to find employment. That doesn’t necessarily say anything on its own about the quality of those jobs.”
“I don’t think any job is better than no job at all,” she added, “but the fact that you can find employment is at least a marginal improvement over not having employment.”

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German carmaker BMW on Friday said it will invest €800mn to step up electric vehicle production in Mexico, as the Latin American country stands to benefit from its inclusion in US subsidies that have sparked tension with Europe.The investment includes €500mn for the construction of an assembly centre for lithium-ion batteries on the grounds of a BMW car plant in San Luis Potosí. The remaining sum will be used to prepare the plant for EV production. BMW said the investment would create 1,000 jobs. The investment is among the largest in the flurry of clean energy deals in North America to follow passage of the US Inflation Reduction Act climate law last year. At least $34bn has been announced to develop the continent’s EV supply chain since the bill was signed by US President Joe Biden, according to BloombergNEF, underscoring the region’s prime position to cash in on the energy transition and efforts to decouple supply chains away from China. The $369bn in green subsidies have sparked a tense diplomatic row with Europe, which argues they could unfairly draw investment away and breach World Trade Organization rules.BMW said the plant was planned before the IRA and that “production follows the market” for investment considerations. But the German company’s announcement, made days after Brussels unveiled a rival incentive plan, adds fuel to the fire of the bloc’s criticism that the US law is putting European industry at a disadvantage. On top of the proximity to the US market and its consumer tax perks for EVs, BMW said it would also benefit from Mexico’s labour force and its future supply of lithium. “There is an open dialogue with the Mexican authorities for understanding the rules and requirements for the access to these benefits by vehicles manufactured in Mexico,” it added.At a recent summit in Mexico City, the leaders of the US, Mexico and Canada reaffirmed their commitment to making the region of almost 500 million people a clean energy powerhouse.While the IRA excluded European allies from its green subsidies, the bill extended EV final assembly tax credits to Mexico and Canada. Countries with free trade agreements with the US are also eligible for battery subsidies, although companies are still waiting for the US Treasury to announce guidance.Mexico’s lower wages and border with the US helped the auto industry flourish under the North American Free Trade Agreement, which removed most trade restrictions with the US and Canada. Mexico is the largest exporter of auto parts to the US and nearly all major automakers including Ford, Toyota and Volkswagen have long-established operations in the country.A handful of companies have already decided to open new plants or increase EV production in Mexico. Ford is building an electric version of its Mustang in its Cuautitlán plant. General Motors plans to produce two EV models at its Ramos Arizpe plant, which currently produces only internal-combustion vehicles. Volkswagen plans to upgrade its Mexican plants for EVs in the second half of the decade. “We have an opportunity that we haven’t had all century and there is no way we will let it pass us by,” Marcelo Ebrard, Mexico’s foreign minister, said of the factors aligning in the country’s favour.Tesla, the US EV leader, has been scouting sites in Mexico for a new EV plant, though the company has not confirmed any final decision. Tesla did not respond to a request for comment.Top trade and industry leaders say Mexico would attract much more if its energy policies were more investor-friendly.Mexico’s President Andrés Manuel López Obrador has changed electricity market rules to favour the state utility’s higher-carbon electricity production over private, zero-carbon renewables. Neil Herrington, senior vice-president of the Americas at the US Chamber of Commerce, called the country’s energy policy “the single biggest risk” to attract EV and battery investment. “Building batteries is enormously energy-intensive . . . You have to have a lot of energy available and a lot of clean energy available at that,” said a Volkswagen representative. The German company is scouting a location in the US and Canada for its first North American battery cell factory.Louie Diaz of battery recycler Li-Cycle said that clean energy sources were a “key focus” in their site selection process and that the company was prioritising the US and Canada in North America. Foreign direct investment in Mexico has held up under López Obrador, and in 2022 it likely hit its highest level in several years, but business leaders say the country should be seeing a boom.“If the Mexican government adjusted its policies to welcome competition in the energy sector and to fully get on board with the energy transition, the investment the country would receive would be like hitting the jackpot on a Vegas slot machine,” said Amy Glover, director of McLarty Associates and member of the Council on Foreign Relations of Mexico. The US has 10 times the EV assembly capacity of Mexico and outpaces the rest of the continent in battery capacity, according to industry data provider LMC Automotive and Argonne National Laboratory. BloombergNEF tracked $715mn in new EV supply chain investments in Mexico following the passage of the IRA, compared to $32.5bn in the US or unspecified North American locations. Some subsidies in the IRA are limited only to manufacturing in the US. José Guillermo Zozaya Délano, executive president AMIA, of Mexico’s auto industry body, said that Mexico should issue its own set of incentives to attract investment south of the border.“The fact that we’re neighbours, friends and partners doesn’t mean we aren’t also competing,” said Zozaya Délano said.Additional reporting by Patricia Nilsson in Frankfurt More

The January jobs report showed nonfarm payrolls increased by 517,000, far higher than the 187,000 market estimate.
The unemployment rate fell to 3.4% versus the estimate for 3.6%. That is the lowest jobless level since May 1969.
Leisure and hospitality added 128,000 jobs to lead all sectors. Other significant gainers were professional and business services (82,000), government (74,000) and health care (58,000).

The employment picture started off 2023 on a stunningly strong note, with nonfarm payrolls posting their biggest gain since July 2022.
Nonfarm payrolls increased by 517,000 for January, above the Dow Jones estimate of 187,000 and December’s gain of 260,000, according to a Labor Department report Friday.

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“It was a phenomenal report,” said Michelle Meyer, chief U.S. economist at the Mastercard Economics Institute. “This brings into question how we’re able to see that level of job growth despite some of the other rumblings in the economy. The reality is it shows there’s still a lot of pent-up demand for workers were companies have really struggled to staff appropriately.”
The unemployment rate fell to 3.4% versus the estimate for 3.6%. That is the lowest jobless level since May 1969. The labor force participation rate edged higher to 62.4%.
A broader measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons also edged higher to 6.6%. The household survey, which the Labor Department uses to compute the unemployment rate, showed an even bigger increase of 894,000.
“Today’s jobs report is almost too good to be true,” wrote Julia Pollak, chief economist at ZipRecruiter. “Like $20 bills on the sidewalk and free lunches, falling inflation paired with falling unemployment is the stuff of economics fiction.”
Markets, however, dropped following the report, though the major averages were mixed around midday.

Growth across a multitude of sectors helped propel the massive beat against the estimate.
Leisure and hospitality added 128,000 jobs to lead all sectors. Other significant gainers were professional and business services (82,000), government (74,000) and health care (58,000). Retail was up 30,000 and construction added 25,000.
Wages also posted solid gains for the month. Average hourly earnings increased 0.3%, in line with the estimate, and 4.4% from a year ago, 0.1 percentage point higher than expectations though a bit below the December gain of 4.6%.
The unemployment rate for Blacks fell to 5.4%, while the rate for women was 3.1%.

“When you look at this, it’s pretty hard to shoot any holes in this report,” said Dan North, senior economist at Allianz Trade North America.
The surge in job creation comes despite the Federal Reserve’s efforts to slow the economy and bring down inflation from its highest level since the early 1980s. The Fed has raised its benchmark interest rate eight times since March 2022.
In its latest assessment of the jobs picture, the Fed on Wednesday dropped previous language saying gains have been “robust” and noted only that the “unemployment rate has remained low.”
However, Chairman Jerome Powell, in his post-meeting news conference, noted the labor market “remains extremely tight” and is still “out of balance.” As of December, there were about 11 million job openings, or just shy of two for every available worker.
“Today’s report is an echo of 2022’s surprisingly resilient job market, beating back recession fears,” said Daniel Zhao, lead economist for job review site Glassdoor. “The Fed has a New Year’s resolution to cool down the labor market, and so far, the labor market is pushing back.”
Though Fed officials have expressed their intention to keep rates elevated for as long as it takes to bring down inflation, markets are betting the central bank starts cutting before the end of 2023.
Traders increased their bets that the Fed would approve a quarter percentage point interest rate hike at its March meeting, with the probability rising to 94.5%, according to CME Group data. They also now expect another increase in May or June that would bring the central bank’s benchmark funds rate to a target range of 5%-5.25%.
The Fed is hoping to engineer a “soft landing” for an economy that is pressured by inflation and geopolitical factors that held back growth in 2022.
Most economists still expect this year to see at least a shallow recession, though the labor market’s resilience could cause some rethinking of that.
“Our base case is still recession likely toward the latter part of the year,” said Andrew Patterson, senior economist at Vanguard. “One report is not indicative of a trend, but certainly if we continue to see upside surprises, our baseline is up for discussion. This does increase the marginal probability of a soft landing.”
Gross domestic product grew at a 2.9% pace in the fourth quarter of 2022. The Atlanta Fed’s GDPNow tracker is pointing toward a 0.7% increase for the first quarter of 2023, though that’s off an incomplete data set.

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Interest rates on five-year fixed mortgages are set to drop below 4 per cent after the Bank of England suggested inflation may come under control sooner than expected, according to brokers. The central bank on Thursday raised its benchmark interest rate by half a percentage point to 4 per cent, in response to high inflation. After 10 upward moves since December 2021, the BoE suggested rates may have peaked.Lenders, who set prices for their fixed mortgage deals using financial market expectations about future base rate movements, had already priced in the latest tightening of monetary policy.But after the BoE’s meeting on Thursday, market expectations of future rate increases dropped further. Traders anticipate one quarter-point rate rise in March, and that the BoE will then begin loosening monetary policy by the end of the year.The change in expectations in the overnight index swap market, which follows BoE decisions, suggests the average central bank rate over the coming two years will be 3.75 per cent, down from 4.34 per cent at the start of January. The average BoE rate over the coming five years is now 3.21 per cent, down from 3.93 per cent in January.Ray Boulger, manager at broker John Charcol, said he expected lenders to move quickly to improve their five-year fixed deals, where the lowest rates are currently around 4.2 per cent. “There’s a clear ability in the market now to offer a five-year fixed rate at sub-4 per cent and the first lenders to do that will get some good marketing from it,” he added. Demand for fixed deals is also likely to grow as interest charges on variable-rate mortgages rise in response to monetary tightening by the BoE. After the market turmoil that followed the then prime minister Liz Truss’s “mini” Budget in September, rates on many fixed deals soared above 6 per cent. It made variable rate loans a viable alternative for borrowers. However, fixed deals have dropped in price in recent weeks as stability returned to markets. As rates on variable deals rise, brokers said more borrowers would return to the certainty of a fixed monthly payment on their mortgages. The average rate on two-year fixed deals has dropped to 5.43 per cent, from 5.77 per cent at the start of the year, according to finance website Moneyfacts. Simon Gammon, managing partner at broker Knight Frank Finance, said borrowers would welcome a significant drop in the cost of two-year fixed mortgages.He added the decision on whether to take out a five-year fix had become more challenging as mortgage rates fall. “At the moment, five-year fixed rates are cheaper than two-year fixed rates,” said Gammon. “But a lot of people with uncertainty and those who don’t quite know when to fix are actually more interested in the shorter term deals.”Rising mortgage expenses are a major concern for homeowners in the cost of living crisis, and experts have warned of an impending “payment shock” as borrowers who took out fixed deals in the era of ultra-low interest rates face refinancing at much higher interest charges. More than 1.4mn households face higher charges this year as their fixed deals come to an end, according to data last month from the Office for National Statistics. More

Parsing central bank communications is a hit and miss exercise. Sometimes the chosen language is a deliberate attempt to guide markets, at other times it is just a slip of the tongue. Clues for when interest rates will peak, and even start falling, are now key for investment and mortgage decisions. With inflation seemingly past its peak, this week the Federal Reserve, European Central Bank and Bank of England indicated that the end of their historic tightening cycle is in sight. They are now at a defining moment: stop rises too late and deepen this year’s economic slowdown, or too soon and high prices could become entrenched. The risk of a mistake is high — and right now, their words are being examined closely.Although headline inflation is falling, central bankers are still trying to square a number of circles before ending their rate rises. The improved global growth outlook, pushed up in part by China’s reopening, will bring some price pressures. In Europe, the fall in natural gas prices will alleviate a major inflationary force, but it could facilitate more spending. Job markets remain tight too, adding to wage pressures. Central bankers also need to assess how much prior rate rises are impacting the economy. Pulling together a convincing narrative of how everything plays out, and hence what terminal rate is appropriate is tricky — as mixed messages from central bank meetings this week conveyed.The Fed slowed the pace of its rate rises to 25 basis points, noting that “ongoing increases” would be necessary to hit its inflation target. But Fed chair Jay Powell struck a more positive tone at the subsequent press conference. He said the “disinflationary process” was under way and did not push back against markets, which had priced in a lower peak in interest rates and even cuts later in the year. Indeed, although the Fed’s preferred measure of underlying price pressures eased further, job numbers rose unexpectedly on Friday, leading to a sell off in markets.The eurozone is further behind in its inflation battle. The ECB raised rates by another 50 bps and committed to increasing by the same amount in March. President Christine Lagarde doubled down, saying “we have ground to cover”. After all, annual core inflation growth — which excludes food and energy — remains stubbornly high. Yet the bank’s statement contained softeners, conveying “more balanced” risks to the inflation outlook and ambiguity on what happens after March.The BoE also raised rates by 50 bps, ditching language that it would need to act “forcefully”, and forecast inflation to drop below target in 2024. This points to an imminent end to its rate rises. Yet the meeting minutes noted inflation risks are “skewed significantly to the upside”. Amid the nuances, markets were not convinced about central bankers’ plans. Despite the rate rises, and scope for more ahead, investors chose to hear a dovish message and initially scaled back expectations of further central bank rises. In the direct aftermath, equities and bonds soared, building on a rally over easing price pressures since the start of the year. This has loosened financial conditions, which is itself inflationary — further complicating central banks’ task. If inflation proves more persistent, and rates need to go higher, investors will be in for a nasty repricing. Central banks’ recent slowing of rate rises makes sense to better calibrate the peak rate as new data comes in. A sustained easing in core inflation and wage pressure may next persuade them to stop decisively. Clearer communication will also be more important, just as rate setting becomes ever more delicate in this rate cycle’s final stretch. But this will be challenging until central bankers can pierce through the uncertainty with more convincing forecasts. More

Today’s jobs data was dynamite. Not only did the US add a forecast-smashing 517,000 jobs in January, December’s figure was revised up, the unemployment rate fell to 3.4 per cent — the lowest since 1969 — and earnings are growing at a 4.4 per cent annual pace.Revisions are probably coming. As Oxford Economics’ Ryan Sweet notes:The surge in job growth in January overstates the strength in the job market as employment growth in January frequently surprises to the upside and doesn’t warrant any change to the change to the baseline forecast.It’s also likely that 2Q22 payrolls grew slower than initially reported, as Barclays pointed out this week. Still, today’s report basically paints a picture of a US economy still humming nicely along. Which is odd, because a lot of people said that the US was facing a recession last year, or was already in one. The Heritage Foundation even dubbed it “Biden’s Recession”.The US’s GDP did decline for two consecutive quarters last year, the traditional definition of a recession. But even if the jobs market was weaker than initially reported in 2022, the latest data shows that weakness was shortlived. And the National Bureau of Economic Research hasn’t made an official recession call. Last year, on the other hand, recession vibes were almost off the charts. Here are Google searches for “recession” exploding, surpassing even the Covid-induced peaks of 2020 and the global financial crisis in 2008.The media, as is its wont, did not help:Household confidence, naturally, slid through the year (although inflation may have been a bigger factor here):

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Even CEOs seem to buy into the recession narrative. Here are mentions of “recession” in earnings calls, which spiked in early 2021 and remained remarkably common through that year and 2022. Are we jinxing things? Quite possibly, and if the (highly visible) tech sector is anything to go by, some companies are beginning to find way to cut back — even if that isn’t translating into the headline figures.It’s certainly too early to call a ‘soft landing’. What’s sauce for Joe Biden is . . . not sauce for Jay Powell and the Fed, who must be worrying about the inflationary threats from a tight jobs market.All this week, FTAV’s inbox has been stuffed with commentary about central banks finally turning a corner on tightening. But what lies beyond is unknown. More

The writer is a former permanent secretary at the UK TreasuryThe IMF has held a totemic place in British discourse ever since 1976, when the country lost the confidence of the markets and had to apply for an emergency loan. So when the Fund predicts, as it did this week, that the UK will grow slower than any other advanced economy, it needs to be taken seriously. Add to the mix a level of industrial unrest not seen in decades, the Bank of England revising down to 1 per cent its view of the economy’s trend rate of growth, a rate not experienced since the 1970s, and the general gloom around the third anniversary of Brexit — and it’s tempting to ask whether Britain has regained its status as the “sick man of Europe”. Forecasting is a mug’s game. Britain’s economy may or may not grow this year. Germany and France may grow faster. But none of the big European economies are predicted to grow by more than 1 per cent. This is a world of small numbers in which no country will be satisfied with its performance. Gross domestic product statistics are notoriously unreliable in the short run, which is why, when I was at the Treasury, I preferred to focus on revenues. These rarely lied. They may be flattered by inflation at present but they still indicate that the economy has been stronger than many had feared. Falling energy prices will provide further support. Britain still has a lot going for it. It has strong university cities, not least London, a thriving research base, great creative industries and an irrepressible financial sector. Unlike in the 1970s it has a dynamic labour market. We should not get too downhearted. But there is no denying that Britain has a problem. First, Rishi Sunak, the prime minister, and Jeremy Hunt, the chancellor, are still picking up the pieces from their disastrous inheritance. To regain credibility, they have had to pursue a much more restrictive policy than would have been the case had Liz Truss never become premier. At the same time, the Bank of England will have to keep interest rates higher for longer, having kept policy too loose in 2021. Macroeconomic policy will hold back growth in the short run. But that’s a price worth paying for restoring stability. Second, there was a perfectly respectable political case for Brexit. And many of Britain’s problems predate its departure from the EU. But the evidence that Brexit is a drag on economic performance is compelling. Britain’s trade is growing more slowly than it did in the past. Inward investment is lower now that the UK is no longer a gateway to the single market. In a protectionist world dominated by large trading blocs Britain finds itself isolated. The tide of competition, which was a central driver of British productivity growth in the 1990s and 2000s, has receded. Third, the UK has an inefficient and underpaid public sector. The government’s solution has been to use inflation to impose the biggest cuts in real wages in generations. History suggest this policy is unsustainable. Finally, the economy is suffering from chronic under-investment, both in the private and public sectors. Infrastructure policy has been driven by prestige projects rather than a hard-headed focus on which ones might yield the biggest economic return. Lack of house building and poor land use remain major barriers to growth. Every government promises planning reform; every government backs off. But all is not lost. The pendulum has begun to swing. The Sunak government is showing signs of wanting to tackle problems rather than to deny their existence, notably by making the NHS one of its “five priorities”. A re-energised Labour party is waiting in the wings. Positive noises are also emerging from the negotiations on the Northern Ireland Protocol. If the government can finally get Brexit done, it can begin to focus on how Britain co-operates with the EU. This will be a slow process. But the country will find a new equilibrium consistent with the wishes of the electorate to make it easier to do business with our main trading partner. Next, it needs to create an environment that encourages investment and innovation. Macroeconomic stability should help, as would a supportive tax regime. Public investment needs to be focused on maximising returns. At some point, a government will create a better planning system and more efficient taxes on property. But above all ministers need to prioritise skills, now that we no longer rely on the central European taxpayer to train our workforce. Sooner rather than later the government needs to accept that it can’t cut wages in the public sector year after year. But the quid pro quo needs to be a renewed focus on reform and productivity. The obvious starting point is the NHS. The country needs an honest conversation about what an ageing population and a more dangerous world means for taxation. Simply raising the age of eligibility for the state pension is not enough. Sunak missed a trick when he repealed the health and social care levy. He should resist backbench Tory calls for pre-election tax cuts the country can’t afford. For much of the last 40 years, the British economy outperformed those of our near neighbours. If the nation grasps the nettle of sensible structural reform, there is every reason it can do so again.  More

This article is the latest part of the FT’s Financial Literacy and Inclusion CampaignHow people manage money with their other halves is something I find fascinating, particularly because so few of us ever talk about it — sometimes, even within our own relationships. It’s possible to read the financial compatibility runes before your very first date. Will it be a swanky restaurant, street food or double espresso? And will they insist on paying, go Dutch or bring along a discount voucher? (Martin Lewis once said the latter was a sure-fire sign your date was marriage material — you may disagree). It could be a while before you disclose your property ownership status or how much you both earn. I know a surprising number of couples who have no idea what their other half makes. Normally, it’s not until you start living under the same roof that questions about joint accounts and how you might divide and mingle your money come up — and this is the point at which things can take a sinister turn. One in six women has experienced financial abuse from a current or former partner, according to research by the charity Surviving Economic Abuse and it really can happen to anyone — including financial experts. On Money Clinic podcast this week, I spoke to Sarah Coles, a senior personal finance analyst with Hargreaves Lansdown, who was trapped in a financially abusive relationship for years. She likens the experience to “slowly boiling a frog”. As the abuse builds up so gradually over time, “you just adapt, and then it becomes this impossible situation”. It’s all about control — and when an abuser controls your finances, they can control everything you do. At first, her ex-partner would sulk if she spent her own money on things she needed, but over time his reactions became more extreme, evolving into rules about what she could and could not spend money on. If she tried to push back, the restrictions would tighten. Sarah ended up working three jobs to support the family, while he quit his job and spent money like water. Financially and emotionally drained, victims of abuse feel powerless to leave, and our secrecy about money as a society plays into the hands of abusers. Charities say many abusers are using the cost of living crisis as a tool, providing a convenient cover story if they take away a victim’s car or stop them from socialising with friends. Sarah’s friends and family had no idea what was going on until one day, she was caught off guard by a question about why her clothes didn’t fit, and admitted she wasn’t allowed to buy new ones. As she tells me on the podcast, after that conversation, she could clearly see that she needed to get out. “You’re just so busy coping with it that you don’t really take a step back and think about the full picture of what’s happening to you.” After her ex passed away, Sarah chose to speak out about her experiences to raise awareness of how common a problem this is: “Personally, I don’t feel at all ashamed — I think anyone can fall victim to abuse.”

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Nor is this problem exclusive to women, or indeed heterosexual relationships. Arguments about spending too much money are part and parcel of everyday life as bills soar, but is your partner prepared to compromise, or will they wield control? I have a friend who left her (female) partner after years of being financially bullied via the unlikely medium of an Excel spreadsheet. The lower earner by some margin, she would feel nervous if her girlfriend suggested they went to a fancy restaurant. If they had any kind of disagreement over the meal, her partner would coolly add “make sure you put your half of this on the budget spreadsheet” knowing this would wipe out her ability to socialise for the rest of the month. Having children can also be a catalyst for abuse if one partner becomes a full-time carer and loses their earnings power (we hear from another survivor on the podcast who experienced this). The loss of earnings power is tricky to navigate in non-abusive relationships. After years of being financially independent, feeling like you have to beg your partner for money is deeply uncomfortable. And while leaving all the “money stuff” to your husband might have been the norm in previous generations, this could cost you in more ways than one. Wealth managers say it’s often a huge struggle for widows to take the financial reins later in life (it’s also a challenge for an industry geared towards supporting the needs of male clients). For younger generations, there are different issues. The high cost of renting a home on your own — let alone buying one — adds to the pressure to couple up swiftly, and could also make it much harder to leave a bad relationship. Your Juno, a financial education app aimed at Gen-Z women, introduced specific modules about financial abuse after a poll of its users found that 26 per cent had already experienced it. The importance of building up a “Fuck Off Fund” (a phrase immortalised by a Billfold article by the US financial journalist Paulette Perhach) is by far the most downloaded lesson in the app, says co-founder Margot De Broglie. “A lot of community members have shared that they leave any financial talk until it becomes absolutely necessary, so quite late into a new relationship,” she adds, making it harder to spot warning signs.

A separate module on how to bring up the topic of finances when dating is also incredibly popular, offering a range of questions to test the waters in the early stages of a relationship (“Are you saving up for anything fun?”) building up to when things get more serious (“What financial decisions do you think should be made as a couple?” or “If I spent £100 on something and didn’t tell you, would you be upset with me?”)Users are also urged to watch out for potential signs of financial manipulation, including their partner being secretive about money, having a lifestyle that’s at odds with their income or asking to borrow money. Surviving Economic Abuse has found that 60 per cent of people who experience financial abuse will also be coerced into debt by their partner, making it even harder to leave and rebuild their lives. “Creditors can be fantastic, and in many cases can write off the debt completely,” says Nicola Sharp-Jeffs, the charity’s founder, noting that banks are now doing more to help victims (TSB and HSBC offer “safe spaces” in branches and, increasingly, employers have policies around domestic abuse). Slowly, the financial industry is waking up to the scale of this problem. But the hidden nature of financial abuse partly rests on the taboo nature of discussing how we manage money in relationships and getting a sense check about what is normal, and what is not. I definitely think it’s something we should all try to talk about. Claer Barrett is the FT’s consumer editor and the author of ‘What They Don’t Teach You About Money’. [email protected] More