Former Bank of England chief economist warns of ‘further pain’ in rising mortgage costs and falling real wages – Business Live | Business

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M&S boss calls post-Brexit plans ‘baffling’ and ‘arrogant’

The Marks & Spencer chairman has become the latest business leader to criticize the government’s economic policy, calling its plans for post-Brexit trade “baffling” and “overbearing”.

Archie Norman, a former Conservative MP, said plans to resolve the confrontation in the Northern Ireland Protocol would push prices higher and give EU companies a competitive edge over their UK counterparts. His comments on planned labeling changes for retailers came in a letter to the foreign secretary, excerpts of which have been seen by The Daily Telegraph.

Last week, billionaire businessman Sir James Dyson accused the government of a “short-sighted” and “stupid” economic approach while the director general of the Confederation of British Industry questioned the lack of a “strategy”.

Norman said:

The prohibitive costs of the label system will drive up prices and reduce choice for consumers, hurt UK growers and suppliers and affect the competitiveness of UK retailers in other international markets.

The simple fact is that retailers are already working in digital information in real time – day or night, with the click of a button we can locate our products whether it is in a warehouse, in transit or in a store.

In the digital age, when a single click of a mobile phone can register a customer’s arrival in a store and locate their order in less than 60 seconds, it is baffling that the government and the EU have set back four decades to discuss an expensive ‘solution’ involving labeling and labeling. .

Using different labels for products could theoretically ease the need for customs checks at the border, but the M&S chief argues in his letter that it would lead to increased costs for producers and thus higher prices for customers.

An expensive labeling solution will mean that customers will be hurt by lower ranges, higher prices – at a time of massive inflation and when the economy in Northern Ireland is already at a disadvantage – and worsening availability.

This proposal adds cost, labor and complexity at a time when the supply base is not really needed and is struggling to stay afloat for EU producers.

Marks and Spencer branch in Altrincham. Photo: Phil Noble/Reuters

Updated at 08.53 GMT

National Grid asks coal plants to heat up just in case they need it Jasper Jolly

The national grid has asked coal plants to turn on heating if they are needed today, amid continuing cold weather across the UK.

Two coal units at Drax in Yorkshire and one at West Burton in Nottinghamshire were told to fire just before midnight yesterday. The West Burton unit was shut down at 5:13 a.m., but Drax units continued to heat up, according to notifications sent to the industry.

The National Grid has been active in balancing the UK’s power supply in recent days as it adapts to colder, windier weather which increases energy use and leads to lower wind power generation.

It was the third time in the past week that the National Grid Electricity Supply Operator (ESO) has asked coal plants for heat in case it is needed.

National Grid also ran its elasticity of demand service for the first time this month outside of trials. The service pays households with smart meters to reduce energy, which helps reduce peak demand and means they have less need to rely on more polluting energy sources when energy use picks up in the evening. Some companies have already been pushed to reduce energy use.

Drax Power Station in Selby, England. Photo: Christopher Furlong/Getty

Updated at 08.46 GMT

Donald Trump let Facebook and Instagram back in

Former US President Donald Trump will be allowed to return to Facebook and Instagram, as the company behind the social media platforms, Meta, said it would end a two-year suspension of his accounts. His Twitter ban has already been lifted by the company’s new owner, Elon Musk.

Meta said the suspension would expire “in the coming weeks”.

META’s head of global affairs, Nick Clegg (former UK deputy prime minister), said the review found Trump no longer posed a serious risk to public safety. Clegg said that the public “should be able to hear what the politicians have to say”.

Trump’s accounts were suspended when, in January 2021, the then President of the United States encouraged his supporters, through his social media accounts, to storm the Capitol and disrupt the presidential election certification process, after Joe Biden won the election.

Responding to Meta’s decision, Trump posted on his social media company, Truth Social, yesterday, saying that Facebook has “lost billions” after banning “your favorite president, me.” He wrote: “Such a thing should not happen again to a sitting president, or to anyone else who does not deserve retribution!”

Meta’s decision was met with outrage and indignation among civil rights and Internet safety advocates.

Updated at 08.47 GMT

Haldane explained why the British economy was doing worse than others:

We’ve seen many companies teetering on that have only managed to weather Covid and the cost of living but are vulnerable to any shock that might come.

Think of it as a weakened community immune system, that we have weakened our defenses and that makes us especially badly vulnerable.

It seems like the recent shocks we’ve had, which have been global, from covid to the cost of living but the UK always seems to deal disproportionately with the after-effects in terms of blows to income and lives and that’s because we haven’t invested enough in our systems whether it’s That in health, education or charities.

Introduction: The former chief economist of the Bank of England warns of “further pain” in rising mortgage costs and falling real wages

Good morning, and welcome to our renewed coverage of business, financial markets, and the global economy.

Andy Haldane, former chief economist at the Bank of England, now chief executive of the Royal Society of Arts and a government advisor on raising the bar, has predicted that real wages will fall again this year as mortgage costs continue to rise. He also warned that the recent political chaos has contributed to the UK’s poor economic performance. But he also said that with inflation peaking, central banks could raise interest rates more slowly, and he saw “flashes of life in the economy.”

Speaking on BBC Radio 4’s Today programme, Haldane said the UK economy has been less resilient in the face of economic crises due to lack of investment and poor coordination between the public, private and charitable sectors.

The terrible double whammy of first Covid and then the cost of living crisis has caused enormous financial strain to many businesses, many families and of course many charities.

We’ve lost a decade and a half in terms of rising wages in terms of the rate of inflation. Last year we saw a real decline in wages, and it is very likely that we will see the same thing happen again, and that puts severe financial and in fact psychological pressures on a large number of families, and this is one of the consequences of the absence of growth, or certainly the anemic growth that we are facing. ‘We’ve seen.

When asked if political instability had contributed to the UK’s poor economic performance recently, he said:

When you have a ministerial merry-go-round, it increases the likelihood that action won’t be followed by programs that don’t work at scale. We’re still a little bit far from having that mid-term plan for growth in this country that we can commit to whatever government and whatever minister there is.

When asked if he had any regrets, as the Bank of England raised interest rates at the same time as the huge spike in energy prices and inflation:

It’s painful and I’m afraid there will be more pain as the mortgage rates that have gone up from last year start hitting people’s bank accounts over the course of this year. I would have preferred that the Bank and other central banks start raising interest rates soon. That would have helped a little bit in nipping inflation in the bud, and would have meant that we wouldn’t have had those rapid price hikes at the same time that the economy was hitting the protective margins. But overall, this global shock would always have caused a great deal of pain including through higher rates.

My hope is that with general inflation now peaking, there’s a good chance that central banks will go a little bit slower over the course of this year and not become as much of a drag on the recovery as the early signs were. Some flashes of life in the economy.

The Bank of Canada said yesterday that it will pause after its eighth rate hike to 4.5%, and there is some speculation that the US Federal Reserve may do the same.

The focus in the markets today is on the US GDP data for the fourth quarter, which is expected to show a slowdown in economic growth to 2.6% from 3.2% in the previous quarter.

Asian shares hit a new seven-month high, as MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9% for its fifth day of gains, after falling again. However, trading was thin as Australia closed for a holiday and some parts of Asia, including China, are still celebrating the Lunar New Year. European markets are expected to open higher ahead of the US GDP.

agenda

9 am GMT: Italian Business and Consumer Confidence for January

11am GMT: CBI UK retail sales survey for January

1.30pm GMT: US Q4 GDP (expected: 2.6%, previous: 3.2%)

1.30pm GMT: US durable goods orders for December

1.30pm GMT: Weekly unemployment claims in the US

Updated at 08.09 GMT

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