Economy

A group of UK pub chains has warned that soaring energy prices could lead to a swath of closures and urged the government to provide a package of support.In an open letter published on Tuesday, six breweries called for “immediate government intervention” to help with energy bills that are expected to rise beyond already record high levels in the winter.The pub chains are Greene King, Admiral Taverns, JW Lees, Carlsberg Marston’s, Drake & Morgan and St Austell Brewery.In the letter, the companies said some price rises were “upwards of 300 per cent on pre-pandemic energy bills, with the current average increase around 150 per cent” across the sector.The increases were “putting jobs and businesses at risk. As more fixed price contracts come up for renewal this is only worsening. The time to act is now,” the letter said.“Without swift and substantial intervention from government . . . we will witness a huge number of pubs close their doors for good, leaving individuals without jobs during a cost of living crisis and communities without [their] social heartbeat.”Ofgem, the UK energy regulator, on Friday said that the price cap on household bills would rise 80 per cent in October to almost £3,600 per year as the war in Ukraine drives up gas prices. There is no energy price cap for businesses.Chris Jowsey, chief executive of Admiral Taverns, said that tenanted pubs now paid more for their energy bills than they did in rent.“The challenge is huge. There will be serious risk to licensees and the communities they serve. We urgently need a small business energy cap.” Although Jowsey said Admiral, which has 1,600 pubs, had invested in energy-saving measures, the higher energy costs were “of such a scale” that the chains “desperately need the government to intervene”.Jowsey criticised the government for failing to implement support measures until after the Conservative party elects a leader next Monday.“I raised this issue personally with ministers more than six months ago, and I find it incredible that we need to wait for one person to be elected before we get some decisions and some policy,” he said.Nadhim Zahawi, UK chancellor, on Tuesday said that more government measures to help businesses and households with their energy bills were on the way.Zahawi said he was “preparing options for the incoming prime minister to do even more” to assist with energy bills. “We know we need to do more because . . . into next year, those bills will probably go up further. We are working up all the options. Nothing is off the table.” More

Hiding a thousand feet below the earth’s surface in this patch of northern Minnesota wetlands are ancient mineral deposits that some view as critical to fueling America’s clean energy future.Tim Gruber for The New York TimesA company called Talon Metals is drilling here around the clock, extracting samples of rock rich with nickel in a bid to become the country’s sole source of a material used to power zero-emission vehicles.But some locals are fighting the mine, for fear it could pollute their environment. The pushback hints at how difficult it may be to build an all-American supply chain that powers the country’s transition to electric vehicles.This Remote Mine Could Foretell the Future of America’s Electric Car IndustryTAMARACK, Minn. — In this isolated town of about 100 people, dozens of employees are at work for Talon Metals, drawing long cylinders of rock from deep in the earth and analyzing their contents. They liken their work to a game of Battleship — each hole drilled allows them to better map out where a massive and long-hidden mineral deposit is lurking below.The company is proposing to build an underground mine near Tamarack that would produce nickel, a highly sought-after mineral that is used to power electric vehicles. It would be a profitable venture for Talon, which has a contract to supply nickel for Tesla’s car batteries, and a step forward in the country’s race to develop domestic supply chains to feed the growing demand for electric vehicles.But mines that extract metal from sulfide ore, as this one would, have a poor environmental record in the United States, and an even more checkered footprint globally. While some in the area argue the mine could bring good jobs to a sparsely populated region, others are deeply fearful that it could spoil local lakes and streams that feed into the Mississippi River. There is also concern that it could endanger the livelihoods and culture of Ojibwe tribes whose members live just over a mile from Talon’s land and have gathered wild rice here for generations.Talon says it will invest heavily to design the world’s greenest and most responsible mine yet, one that they say “Joe Biden can love.” But some people in the community remain skeptical, including about the company’s promises to respect Indigenous rights, like the tribes’ authority over lands where their members hunt and gather food. Part of that mistrust stems from the fact that Talon’s minority partner, Rio Tinto, provoked outrage in 2020 by blowing up a 46,000-year-old system of Aboriginal caves in Australia in a search for iron ore.Kelly Applegate, the commissioner of natural resources for the Mille Lacs Band of Ojibwe, said he was “very concerned” about how the mine might damage the environment. “This again is an assault on Native culture, a disturbance of our way of being, another trauma that could potentially happen to our people,” he said.He described it as a “huge environmental justice issue” to mine local resources for electric cars that the tribe’s members would be unable to afford. Except for some wealthy homeowners who spend their summers around the lakes, the area is one of the poorest parts of Minnesota. Native Americans in Minnesota experience poverty at higher rates than any other racial or ethnic group in the state. Locals say the only Tesla for miles is Talon’s company car.“Talon and Rio Tinto will come and go — greatly enriched by their mining operation. But we, and the remnants of the Tamarack mine, will be here forever,” Mr. Applegate said.The project, which lies 50 miles west of Lake Superior, highlights some of the challenges that are emerging as the Biden administration tries to transition America to electric vehicles. The administration has said it wants to make the supply chains for batteries more resilient by sourcing minerals inside North America. But that desire could bring its own potential for environmental damage and infringement of the rights of Indigenous Americans. Much of the nation’s supply of battery materials is near tribal land.The world urgently needs to switch to cleaner cars to limit the global damage from climate change, many climate activists say. Last week, California approved a plan to ban the sale of new gas-powered cars by 2035.But current supply chains for electric vehicle batteries — and the batteries that would be needed for the electric grid that would charge that fleet of vehicles — rely on some adversarial and heavily polluting foreign nations. Much of the nickel that goes into car batteries is produced by strip mines that have decimated rainforests in Indonesia and the Philippines, releasing vast amounts of carbon dioxide before being refined in Chinese factories powered by coal.Read More on Electric VehiclesBanning Gasoline Cars: California is leading the way in the push to electrify the nation’s car fleet with a plan to ban sales of new internal-combustion vehicles by 2035, but the rule will face several challenges.Inflation Reduction Act: The law extends tax incentives in an effort to steer more U.S. consumers toward electric cars. But new rules complicate the qualification process.Plug-In Hybrids: After falling behind all-electric cars, U.S. sales of plug-in hybrids have been surging. The high cost of electric cars and gasoline have given them an opening.Car Crashes: Tesla and other automakers capture data from their vehicles to operate their products. Experts say the collected information could also improve road safety.Another source of nickel is a massive mining operation north of the Arctic Circle in Norilsk, Russia, which has produced so much sulfur dioxide that a plume of the toxic gas is big enough to be seen from space. Other minerals used in electric vehicle batteries, such as lithium and cobalt, appear to have been mined or refined with the use of child or forced labor.With global demand for electric vehicles projected to grow sixfold by 2030, the dirty origins of this otherwise promising green industry have become a looming crisis. The Democrats’ new tax and climate bill devotes nearly $400 billion to clean energy initiatives over the next decade, including electric vehicle tax credits and financing for companies that manufacture clean cars in the United States.New domestic high-tech mines and factories could make this supply chain more secure, and potentially less damaging to the global environment. But skeptics say those facilities may still pose a risk to the air, soil and water that surrounds them, and spark a fierce debate about which communities might bear those costs.The project is near lakes and streams that feed into the Mississippi River, and where Ojibwe tribes have gathered wild rice for generations.The potential risks to plants and wildlife come from the sulfide ores; the ores, in which materials like copper and nickel are lodged, can leach out sulfuric acid and heavy metals. More than a dozen former copper mines in the United States are now Superfund sites, contaminated locations where taxpayers can end up on the hook for cleanup.In January, the Biden administration canceled leases for another copper-nickel mine near a Minnesota wilderness area, saying the Trump administration had improperly renewed them.Talon Metals insists that it will have no such problems. “We can produce the battery materials that are necessary for the energy transition and also protect the environment,” said Todd Malan, the company’s chief external affairs officer and head of climate strategy. “It’s not a choice.”The company is using high-tech equipment to map underground flows of water in the area and create a 3-D model of the ore, so it can mine “surgically” while leaving other parts of the earth undisturbed, Mr. Malan said. Talon is also promising to use technology that will safely store the mine’s toxic byproducts and do its mining far underground, in deep bedrock where groundwater doesn’t typically penetrate.Talon has teamed up with the United Steelworkers union on work force development. And Rio Tinto has won a $2.2 million Department of Energy grant to explore capturing carbon near the site, which may allow the mine to market its products as zero emission.“We can produce the battery materials that are necessary for the energy transition and also protect the environment,” said Todd Malan, the chief external affairs officer and head of climate strategy at Talon.In a statement, Talon said it was committed to “meaningful consultations with tribal sovereign governments and tribal people” and producing a mine plan that addressed their concerns, as well as working with tribal governments interested in economic benefit sharing.The company has held several informational meetings with tribal staff and members, but some tribal members say they still need far more details from Talon about its plans.If the mine comes online in 2026 as scheduled, it will be positioned to feed a hungry market. The United States currently has one operating nickel mine, in Michigan, but its resources will be exhausted by 2026.In Washington, a bipartisan consensus is growing that the country should reduce its reliance on risky overseas minerals. To limit global warming to the levels that advanced countries have agreed on, the International Energy Agency estimates, the world will need roughly 20 times as much nickel and cobalt by 2040 as it had in 2020 and 40 times as much lithium.Recycling could play a bigger role in supplying these materials by the end of the decade, and some new car batteries do not use any nickel. Yet nickel is still highly sought after for electric trucks and higher-end cars, because it increases a vehicle’s range.The infrastructure law passed last year devoted $7 billion to developing the domestic supply chain for critical minerals. The climate and tax law also sets ambitious thresholds for ensuring that electric vehicles that receive tax incentives are partly U.S.-made.Elisabeth Kachinske logged core samples containing nickel at Talon’s offices in Tamarack, Minn.Talon’s proposed mine could help Tesla meet those thresholds. Tesla gets its nickel from China, Australia, New Caledonia and Canada, and its chief executive, Elon Musk, has begged miners to produce more.Some environmental and left-leaning groups that have long been skeptical of domestic mining are adjusting those positions, arguing that resources are needed for the energy transition.Collin O’Mara, the chief executive of the National Wildlife Federation, said that there was a growing need for battery materials that were mined responsibly, and that Talon was promising to use state-of-the-art techniques to minimize the mine’s footprint.But he acknowledged that for local residents it would still take a leap of faith in new technologies and Talon’s ability to apply them. “There still isn’t an example of an existing mine that has had no impacts,” he said.The economic potential — and the environmental risks — may go far beyond a single mine. The entire region is home to deposits of nickel, copper and cobalt, which were formed 1.1 billion years ago from a volcano that spewed out miles of liquid magma.Talon has leased 31,000 acres of land in the area, covering an 11-mile geological feature deep under the swamp. The company has zealously drilled and examined the underground resources along one of those 11 miles, and discovered several other potential satellite deposits.Elizabeth Skinaway, a member of the Sandy Lake Band of Minnesota Chippewa, is especially concerned about damage to the wild rice, which she has gathered in lakes near the proposed mine for 43 years.In August, the company announced that it had also acquired land in Michigan’s Upper Peninsula to explore for more nickel.Talon will start Minnesota’s environmental review process within a few months, and the company says it anticipates a straightforward review. But legal challenges for proposed mines can regularly stretch to a decade or more, and some living near the project say they will do what they can to fight the mine.Elizabeth Skinaway and her sister, Jean Skinaway-Lawrence, members of the Sandy Lake Band of Minnesota Chippewa, are especially concerned about damage to the wild rice, which Ms. Skinaway has been gathering in lakes several miles from the proposed mine for 43 years.Ms. Skinaway acknowledges the need to combat climate change, which also threatens the rice. But she sees little justice in using the same kind of profit-driven, extractive industry that she said had long plundered native lands and damaged the global environment.“The wild rice, the gift from the creator, that’s going to be gone, from the sulfide that’s going to leach into the river and the lakes,” she said. “It’s just a really scary thought.”“We were here first,” said her sister. “We should be heard.”The Talon drill site near Tamarack. More

Liberals and more moderate Democrats are arguing over the impact on inflation, the federal budget deficit and high earners.WASHINGTON — President Biden’s plan to forgive some student debt has sharply divided liberal economists and pitted the White House economic team against both independent analysts and veterans of past Democratic administrations.The areas of disagreement include how much the package of debt relief and other changes to student loans will cost taxpayers and whether the plan is “paid for” in budgetary terms. The plan’s impact on inflation, which is rising at a rapid clip, and the degree to which it will help those most in need are also matters of contention.The plan, announced last week, includes forgiving up to $10,000 in loans for individuals earning $125,000 or less and an additional $10,000 for borrowers from low-income backgrounds who received Pell Grants in college. Mr. Biden also proposed changes to loan repayment plans going forward that will reduce monthly costs and eliminate interest accumulation for potentially millions of lower-earning borrowers who maintain payments.White House officials have offered partial estimates of who will benefit most from those moves, and how much they might reduce federal revenue. The officials have made a case for why the package will not add to inflation. And they have claimed it will be “paid for,” though not in any way that budget experts agree fits that term.Conservative economists have attacked the plan, claiming it would stoke higher inflation and burden taxpayers with hundreds of billions of dollars in new debt. Some liberal economists have defended it as a lifeline for graduates who have been harmed by the soaring costs of higher education.What to Know About Student Loan Debt ReliefCard 1 of 5What to Know About Student Loan Debt ReliefMany will benefit. More

The success of a “significant reorganisation” of Russian forces in Ukraine will be “key” in deciding the outcome of Kyiv’s drive to push them from the area around Kherson, the UK’s defence ministry has said.The Ministry of Defence issued its latest intelligence update on Twitter on Tuesday after Ukraine on Monday claimed to have launched a counterattack to retake Kherson, which Russia captured early in its renewed attack on Ukraine in February.The MoD acknowledged Kyiv’s move, saying “several brigades” of Ukraine’s armed forces had increased artillery fire in sectors across the south of the country. But it was “not yet possible” to confirm the extent of their advances, the ministry said.It noted, however, that since the start of August Russia had made “significant efforts” to strengthen its troops on the western bank of the River Dnipro around Kherson. Most Russian forces are east of the river.Latest Defence Intelligence update on the situation in Ukraine – 30 August 2022Find out more about the UK government’s response: https://t.co/q3wYzVuyKz🇺🇦 #StandWithUkraine 🇺🇦 pic.twitter.com/gG1qJfkkwS— Ministry of Defence 🇬🇧 (@DefenceHQ) August 30, 2022“The Southern Military District’s 49th Combined Arms Army has highly likely been augmented with components of the Eastern Military District’s 35th Combined Arms Army,” the ministry wrote.Most of the units around Kherson were probably understaffed and reliant upon fragile supply lines, the ministry added.“This integration of [the two district] units suggests a significant reorganisation of Russia’s force in Ukraine,” the ministry wrote.There was a “realistic possibility” Russia had “moved to rationalise” the command structure that contributed to its poor performance early in the invasion, the MoD added.The success of that reorganisation would be critical to the outcome of Ukraine’s offensive, the department concluded.“If Ukraine succeeds in undertaking sustained offensive operations, the cohesion of this untested structure will likely be a key factor in the sustainability of Russian defences in the south,” the department wrote. More

Daniel only moved to Tel Aviv from Australia two years ago. But fed up with the soaring cost of life in Israel’s hedonistic coastal metropolis, he is already preparing to leave.The 36-year-old web entrepreneur was drawn to the beach city by its laid-back reputation. But now, he and his fiancée have decided to seek somewhere more affordable, rather than continue to shell out Shk9,500 ($2,900) a month for a 75 sq m apartment. “[The cost of living] kind of put me against the wall . . . I would rather buy my own property and pay my own mortgage than be a stupid idiot and pay an arm and a leg just to say I am living in Tel Aviv,” he said. “Everything — even a coffee — every single thing you touch, it’s overpriced.” Daniel and his fiancée are not alone in their frustration at Israel’s high cost of living. Inflation — at 5.2 per cent — is lower than in much of Europe or the US. But prices for many goods are already high and are now rising at their fastest rate since 2008. Last year, the Economist Intelligence Unit ranked Tel Aviv the most expensive city in the world and opinion polls suggest that the cost of living will be a critical issue in November’s general election.Tel Aviv is particularly exposed to these pressures. Israel’s tech capital has profited hugely from the sector’s boom, which has drawn in both start-ups and investors. Last year, Israeli tech groups raised $25.4bn in funding, while the likes of Blackstone and SoftBank decided to open offices in the city. Sleek glass-and-steel towers have sprung up to house expanding tech groups, while expensive restaurants and boutiques cater to their well-paid workers, who make up roughly a tenth of Israel’s workforce.But the city has also had to contend with rising inequality, with surging rents and high prices for everyday staples displacing working-class citizens. The city was the centre of cost of living protests in 2011 that remain the biggest in Israel’s history and residents complain that, for the less well-off, life is increasingly unaffordable.Prices for many goods are rising at their fastest rate since 2008 © Corinna Kern/Reuters“It’s always been an expensive place to live . . . but it really feels like in the last year it has reached the point of ridiculousness,” said Emma, a life coach from Jaffa, a rapidly gentrifying district around the historic port once best known for its citrus exports. “For me it’s the supermarket. I’m single and I live alone, and sometimes it just doesn’t make sense for me to go to the supermarket because it is just as expensive as ordering a takeaway,” said Emma.Even comparatively well-paid residents are not immune to the pressures. “I’m 35 and I’ve got friends around my age, and we’ve all got decent jobs,” said Julia, a tech sector worker who moved to the city seven years ago. “But I don’t think that many of them have been able to save much — except the ones who were lucky and managed to get options in their company.”Economists say Israel’s high prices stem from several factors. The retail and import sectors are dominated by a small number of players, as is the food business — where kosher certification adds an extra layer of costs. In sectors such as agriculture, import restrictions protect local producers. “In general, we have insufficient competition,” said Karnit Flug, vice-president of the Israel Democracy Institute and former head of the Bank of Israel.This has been compounded by surging property prices. House prices rose 11.6 per cent in real terms in the year to March, according to data from the Bank for International Settlements. Rents have followed suit, particularly in big cities such as Tel Aviv and Jerusalem. In Tel Aviv, an app called “Rent WTF”, which shows users pictures of apartments and then lets them guess — and rage at — the rent, recently went viral.Flug said a combination of rapid population growth — Israel’s, at 1.6 per cent per year, is among the quickest in high-income economies — insufficient releases of building land by successive governments, and low interest rates had contributed to the surge in real estate prices.

But in Tel Aviv, the phenomenon has also been turbocharged by the success of Israel’s tech scene, where the average gross monthly wage of Shk26,878 a month is more than double the national average of Shk11,753.“In downtown Tel Aviv at the moment you can see rent increases of 7 to 10 per cent. And I don’t see prices dropping in the near term. There is just so much demand,” said Julian Nathan, managing director at Hold Real Estate.“Whatever comes on to the market from a sales or rental perspective gets moved on very quickly. You have queues of people waiting to look at apartments,” Nathan said.Israel’s central bank last week stepped up its efforts to contain accelerating prices, raising interest rates for its fourth meeting in a row. Activists have also called for reforms to protect tenants against excessive rent increases, as well as a boost to the amount of social housing, which has declined steadily over the past five decades. But Tel-Aviv dwellers such as Emma, the life coach, are not optimistic that the situation will improve.“Everyone likes to complain here [about the cost of living], but no one is really doing anything about it, so I guess we are all to blame,” she said.“If you see an apartment and it costs X and you say, ‘No, I don’t want to pay that’, someone else will. So it just perpetuates itself, and I can’t see there being any change.”Are you facing difficulties managing your finances as the cost of living rises? Our consumer editor Claer Barrett and finance educator Tiffany ‘The Budgetnista’ Aliche discussed tips on the best ways to save and budget as prices across the globe increase in our latest IG Live. Watch it here. More

Eurozone inflation will hit a double-digit rate in the autumn and remain higher for longer as a result of the surge in gas prices, economists have warned.The higher inflation expectations are adding pressure on the European Central Bank to consider a bigger rise in interest rates despite many economists forecasting an increasingly deeper recession as soaring energy prices hit business and consumer activity.ECB policymakers warned at last weekend’s gathering of central bankers at Jackson Hole, Wyoming, that greater sacrifices in terms of lost growth and jobs will be needed to bring inflation back under control. The European gas price last week hit a record of €343 per megawatt hour, more than double the figure at the end of July and seven times the price in the same period last year. Reduced flows of Russian gas have increased fears of shortages, with the EU preparing emergency measures to curb soaring prices. Many economists, who have also revised up their inflation forecast for next year, now predict that the annual change in consumer prices will accelerate from July’s record level of 8.9 per cent to above 10 per cent in October. They expect August’s inflation figure, to be released on Wednesday, to reach 9 per cent. A flash estimate released on Tuesday showed Spanish inflation had fallen to 10.4 per cent in the year to August as a result of a fall in fuel prices, even as the cost of other consumer goods and services continued rising.The figure was slightly higher than expected by economists polled by Reuters, but it marked a retreat from 10.8 per cent in July, which was the fastest price growth recorded in Spain since 1985.“The surge in gas prices deals a new severe blow to the European economies,” said Holger Schmieding, chief economist at financial company Berenberg. “Higher prices for consumers and higher costs for companies will deepen the recession and worsen the inflation outlook.”Economists surveyed by Consensus Economics this month revised up their eurozone inflation forecasts for 2023 to an average of more than 4 per cent, double the ECB’s 2 per cent target and nearly a percentage point higher than the average forecast in June. That month the ECB predicted that inflation would fall to 3.5 per cent next year; it will update its forecast at the next meeting on September 8.The economists’ consensus forecast for eurozone gross domestic product in 2023 has become increasingly gloomy, with growth expectations halved from June to less than 1 per cent. Many are more pessimistic. Schmieding revised down Berenberg’s forecast for 2023 eurozone GDP to a 1.5 per cent contraction, while raising inflation expectations for that period to 6.1 per cent, from 5 per cent. “A full pass-through” of wholesale gas prices of about €200 per MWh would add 7 to 8 percentage points to German inflation, Schmieding said. But the additional pressure would be diluted by long-term gas contracts, delays in higher prices passing through the production process, businesses absorbing some of the costs and government mitigation measures, he added.After countries were boosted by a resurgence in tourism this summer, the eurozone’s GDP “will likely contract significantly until spring 2023 as private consumption, business investment and exports fall”, Schmieding said.The impact of surging gas prices on eurozone growth could be long-lasting, warned Andrew Kenningham, chief Europe economist at Capital Economics. “The eurozone is less likely to regain its pre-pandemic trend growth rate because there will be some permanent loss of competitiveness which will lead to some loss of activity, especially in sectors such as metals and chemicals,” he said.The five-year inflation swaps rate, a market indication of where inflation will be in five years’ time, has been rising in the eurozone in the past few weeks. Giada Giani, economist at Citi, expects eurozone inflation to peak at 10.3 per cent in the autumn with higher energy costs and the euro’s fall to below parity with the dollar contributing to higher consumer prices. She noted that “more importantly, the whole inflation trajectory for 2023 has shifted higher”, with Citi’s 2023 average now at 6.2 per cent, up from 4.8 per cent in July with higher prices for items such as food and energy-intensive services embedded into the new projections.While the largest upward revisions in inflation were forecast for Germany, the Netherlands and Spain, many economists noted that the policy response will be vital to managing energy price growth. Germany, for example, is planning an extra gas levy from October, although the impact on households will be partly offset by a cut in VAT on gas sales. But several other temporary measures by governments to cushion the blow of high prices, such as Germany’s €9 monthly train ticket that expires on September 1, are due to end soon, which could push inflation even higher.Additional reporting by Martin Arnold in Frankfurt More

Workers are leaving pension schemes or cutting their contributions, trade unions say, as the cost of living crisis prompts desperate measures that will reduce their retirement funds.The warning comes as UK inflation is predicted to hit 18.6 per cent, the highest rate among larger western economies, and as real wages fall at the fastest rate for at least two decades.The Trades Union Congress, the UK’s main movement for organised labour, said a growing number of its members in the private and public sectors were leaving their pension schemes.“In the face of falling pay and rising bills, it’s understandable workers feel under pressure,” said TUC deputy general secretary Paul Nowak, who called on employers to do more to support staff, including increasing pay.The BTU, an independent union that represents employees of Lloyds Banking Group, told the FT it had seen similar actions by bank staff.“We’ve been contacted by Lloyds members who are reducing their pension contributions because of the cost of living crisis,” said Mark Brown, general secretary of the BTU.One employee, a customer services assistant earning close to £23,000, said she had decided to reduce her contributions from 3 per cent to 2 per cent.However, lower paid staff have to contribute 6 per cent to their pension pot to receive the maximum 15 per cent company contribution compared with the 3 per cent required for senior bankers, including chief executive Charlie Nunn. While the discrepancy between pay bands has narrowed after a change in policy in 2020, it remains higher than high street rivals such as HSBC, Barclays and NatWest.“It’s very unfair and divisive to employ higher earners on different pension terms to their wider workforce and unlikely to create a positive and supportive working environment or corporate culture,” said Luke Hildyard, director of the High Pay Centre think-tank. Lloyds did not immediately respond to a request for comment.Peter Tutton, head of policy at debt advice charity StepChange, warned that such action by employees could severely impact their financial stability in future.

“It’s important that people are aware that cutting their pension contributions can affect long-term financial health, may mean they fall out of workplace auto-enrolment schemes and could lose their employer’s pension contributions,” he said.Meanwhile, employers are being encouraged to look at what more they can do to assist employees under financial pressure who are looking to quit their pension plan.Mark Futcher, a partner at actuarial consultancy Barnett Waddingham, said he had held discussions with companies about the “potential” for more supportive policies on pension opt-outs.“We have not seen many [opt-outs] at the moment but we do expect to see more,” he said. “Where employers offer generous contribution structures above the automatic enrolment minimum, 3 per cent of pensionable pay, the employer could allow employees to temporarily pause their employee contribution for a period of three to six months to ease the cost of living.”Are you facing difficulties managing your finances as the cost of living rises? Our consumer editor Claer Barrett and finance educator Tiffany ‘The Budgetnista’ Aliche discussed tips on the best ways to save and budget as prices across the globe increase in our latest IG Live. Watch it here. More

The U.S. economy is going to fall into a recession next year, according to Steve Hanke, a professor of applied economics at Johns Hopkins University, and that’s not necessarily because of higher interest rates.
“We will have a recession because we’ve had five months of zero M2 growth, money supply growth, and the Fed isn’t even looking at it,” he told CNBC’s “Street Signs Asia” on Monday.
Meanwhile, inflation is going to remain high because of “unprecedented growth” in money supply in the United States, Hanke said.

The U.S. economy is going to fall into a recession next year, according to Steve Hanke, a professor of applied economics at Johns Hopkins University, and that’s not necessarily because of higher interest rates.
“We will have a recession because we’ve had five months of zero M2 growth, money supply growth, and the Fed isn’t even looking at it,” he told CNBC’s “Street Signs Asia” on Monday.

Market watchers use the broad M2 measure as an indicator of total money supply and future inflation. M2 includes cash, checking and savings deposits and money market securities.
In recent months, money supply has stagnated and that’s likely to lead to an economic slowdown, Hanke warned.
“We’re going to have one whopper of a recession in 2023,” he said.
Meanwhile, inflation is going to remain high because of “unprecedented growth” in money supply in the United States, Hanke said.
Historically, there has never been “sustained inflation” that isn’t the result of excess growth in money supply, and pointed out that money supply in the U.S. saw “unprecedented growth” when Covid began two years ago, he said.

“That is why we are having inflation now, and that’s why, by the way, we will continue to have inflation through 2023 going into probably 2024,” he added.
In 2020, CNBC reported that the growth in money supply could lead to high inflation.
“The bottom line is we’re going to have stagflation — we’re going to have the inflation because of this excess that’s now coming into the system,” he added.
“The problem we have is that the [Fed Chair Jerome Powell] does not understand, even at this point, what the causes of inflation are and were,” Hanke said.
“He’s still going on about supply-side glitches,” he said, adding that “he has failed to tell us that inflation is always caused by excess growth in the money supply, turning the printing presses on.”
Powell, in his policy speech at the annual Jackson Hole economic symposium on Friday, said he views the high inflation in the U.S. as a “product of strong demand and constrained supply, and that the Fed’s tools work principally on aggregate demand.”
CNBC has reached out to the Federal Reserve for comment.

‘Sacrificial lamb’

David Rosenberg, president of Rosenberg Research, also expressed skepticism over the Fed’s direction, but in other respects. He said the Fed is now “more than happy” to overtighten to get inflation down quickly.

“Overtighten means that if the economy slips into a recession, you know — so be it,” he told CNBC’s “Squawk Box Asia” on Monday, adding that Powell said this is short-term pain for long-term gain.
He said he’s “a little disappointed” that the central bank is chasing lagging indicators like the unemployment rate and inflation, but that the Fed is “not going to take any chances” after being “thoroughly embarrassed” for calling inflation transitory.
“[Powell] basically said the economy will be, near term, a sacrificial lamb,” Rosenberg said.
“I think this Fed, after being on the wrong side of the call for the past say 12 to 15 months, are going to need to see probably at least six months of intense disinflation in the price data before they call it quits,” he added.

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