UK Inflation Rises to 2.3%, Increasing Pressure to Delay Interest Rate Cut

THE GUARDIAN: Figure is above Bank of England target after energy bills push up prices

Inflation increased to 2.3% in October, heaping pressure on the Bank of England to delay further interest rate cuts until next year.

Figures released by the Office for National Statistics (ONS) on Wednesday showed that a rise in energy bills pushed up the consumer prices index (CPI), reversing a downward trend this year in inflation, which was 1.7% in September.

The figure for the year to October was slightly above the 2.2% City economists had expected. » | Phillip Inman | Wednesday, November 20, 2024

THE TELEGRAPH: Interest rates to ‘stay higher for longer’ after inflation blow: Interest rates risk staying “elevated for longer”, economists have warned, after inflation rose at a faster pace than expected last month. / Policymakers are “unlikely” to cut borrowing costs at its meeting in December, analysts said, after the pace of price rises surged back above the Bank of England’s 2pc target in October. »

Kaffee ist jetzt ein Luxusgut für Reiche

ARGENTINIEN AM ABGRUND
FRANKFURTER ALLGEMEINE ZEITUNG: Der neue argentinische Präsident Javier Milei hat versprochen, die Inflation zu stoppen. Derzeit liegt sie bei mehr als 250 Prozent. Wie hält ein Land diese Geldentwertung aus? Eindrücke aus einer Stadt zwischen Hoffnung und Verzweiflung.

Für Träumereien ist sie zu alt, fürs Aufgeben zu jung. Also hält sie die Stellung in einem Kiosk am Bahnhof Once in Buenos Aires, sitzt stolz auf einem Hocker und wartet darauf, dass jemand stehenbleibt und eine Kleinigkeit kauft. Aber die Menschen hasten auf dem Weg zur Arbeit an ihr vorbei. Nur selten kramt jemand ein Bündel Geldscheine aus der Tasche wie ein Oligarch. Scheine, die lächerlich wenig wert sind.

Argentiniens Gesellschaft taumelt. Die jährliche Inflationsrate liegt bei 254 Prozent, und sie stieg zuletzt in einem Tempo wie bei der Hyperinflation Anfang der Neunzigerjahre. Allein im Januar betrug die Teuerungsrate zwanzig Prozent. Dieser Wert stürzt die Hüterin des Kiosks und zahllose Argentinier in die Verzweiflung. „Alles wird ständig teurer“, klagt Paula. Lebensmittel, Kleidung, Kosmetikartikel, Medikamente. Kaffee, der importiert werden muss, ist inzwischen ein Luxusgut. Die Preise für ein Busticket haben sich verdreifacht. Wenn Paula morgens aufwacht, ist sie wieder ärmer geworden.

Dabei arbeitet Paula, Ende vierzig, täglich zwölf Stunden, nur sonntags hat sie frei. Sie lebt in Moreno, eine gute Stunde mit dem Zug von Buenos Aires entfernt, wo alles günstiger ist als in der Hauptstadt – aber was bedeutet in diesen Zeiten schon günstig? Sie sei traurig, sagt sie, traurig aber auch sehr wütend. Paula geht nicht mehr zum Friseur, sie verzichtet auf Zumba, jede Tüte Milch ist eine Frage der Abwägung. » | Von Melanie Mühl, Buenos Aires | Montag, 19. Februar 2024

Inflationsrate in Argentinien steigt auf mehr als 250 Prozent

SCHWIERIGE WIRTSCHAFTSLAGE
FRANKFURTER ALLGEMEINE ZEITUNG: Fast nirgends auf der Welt steigen die Preise so schnell wie in Argentinien. Das ist das Ergebnis von einer jahrzehntelangen Ausweitung der Staatstätigkeit. Abhilfe soll ein Sparprogramm des neuen Präsidenten Milei schaffen.

Die jährliche Inflationsrate in Argentinien ist auf 254,2 Prozent gestiegen. Im Januar legten die Preise in dem von einer schweren Wirtschaftskrise betroffenen südamerikanischen Land um 20,6 Prozent zu, wie die nationale Statistikbehörde Indec am Mittwoch in Buenos Aires mitteilte. Vor allem die Kosten für Körperpflegeprodukte, Transport und Kommunikation zogen kräftig an. Damit begann das Jahr 2024 in Argentinien mit der höchsten Teuerungsrate seit der Hyperinflation von 1991. » | Quelle: dpa-AFX | Donnerstag, 15. Februar 2024

Daniel Lacalle: Don’t Expect Large Rate Cuts... with This Inflation

Dec 14, 2023

Daniel Lacalle’s website here in English and here in Spanish.

Argentinier ächzen unter der gallopierenden Inflation | DW Nachrichten

Dec 9, 2023 | Kaum hat Argentinien einen neuen Präsidenten, schnellen die Preise nach oben. Obwohl nur 20% Preissteigerung erlaubt wurden, schlagen viele Händler gleich das Doppelte drauf: Bis zu 40 Prozent kostet Brot zum Beispiel jetzt mehr.

Und der frischgewählte ultraliberale Rechtspopulist Chavier Milei will noch weit mehr Preisregulierungen und Subventionen aufheben. Was kommt also auf Argentinien zu, und wie gehen die Menschen damit um?

Sunak Risks Fuelling Inflation with High Taxes and Brexit Red Tape, Retailers Warn

THE GUARDIAN: Shop price inflation eased to 4.3% in November but ministers’ plans could lead to higher prices, BRC says

UK inflation has fallen back before this year’s pivotal Christmas shopping season. Photograph: Carl Court/Getty Images
The UK’s largest retailers have warned Rishi Sunak that his government risks prolonging the cost of living crisis by driving up the cost of doing business on the high street with Brexit red tape and higher taxes.

The British Retail Consortium (BRC) said a number of measures laid out by the chancellor, Jeremy Hunt, in last week’s autumn statement risked adding to inflation next year.

After soaring to a 41-year high last autumn, inflation has fallen back before this year’s pivotal Christmas shopping season. The BRC said its measure of annual shop price inflation eased for the sixth month in a row to 4.3% in November, down from 5.2% in October. The decline does not mean shop prices are going down, only that they are rising less rapidly.

However, the industry trade body warned that retailers were facing headwinds in 2024 from “government-imposed” measures – including tax increases and Brexit red tape – which risked fuelling inflation.

…

The cost of managing post-Brexit import checks and labelling rules, due to come into force next year, are also likely to be passed on to shoppers, it said. » | Richard Partington, Economics correspondent | Tuesday, November 28, 2023

Sunak is superrich; unfortunately, however, he is not supersmart! In today's interconnect world, no one who is supersmart would embrace the silly notion of Brexit! To do so is tantamount to displaying geopolitical ignorance. The pursuit of Brexit, therefore, was, is, and will forever remain a fool's mission! Anyone who thinks that this small, post-imperial nation with a rapidly ageing population can become the economic powerhouse of the world with super high levels of economic growth is deluded, economically illiterate and, quite frankly, foolish. To talk, as Jeremy Hunt did, of turbo-charging economic growth shows us that the Chancellor is given both to bouts of fantasy and to bouts of hallucination, both possibly in equal measure!

There is only one route to economic success for this über-proud nation and that is inside the European Union. No imaginative, magical thinking is going to change this fact; for indeed, a fact it truly is. Indeed, it is not only a fact, but a harsh reality.

Belonging to the European Union is like belonging to the European family of nations, to which we indubitably belong whether we are inside of it or outside of it. The advantages of belonging to the European family from the inside are incalculable, both in economic and political terms. I therefore say to all, my fellow countrymen, and to my brothers and sisters in Europe, here and now: Brexit must be reversed as quickly as possible. Both for the good of this nation and for the good of Europe itself. This nation is stonger in Europe and Europe is stronger when we are in it. Europe needs to be whole, it needs to be free, and it needs to be strong. The stronger and the more united Europe can be, the better. Only when working together, each nation being as helpful and co-operative with the other as is possible — or as the Arabs would say, working as one hand — can Europe ever hope to be geopolitically strong and powerful.

I repeat: Brexit must be reversed as quickly as possible. No ifs, no buts. Der Brexit muß schnellstens rückgängig gemacht werden. Le Brexit doit être annulé le plus rapidement possible. – © Mark Alexander

Autumn Statement: Hunt Does Not Rule Out Income Tax Cuts

Chancellor Jeremy Hunt has not ruled out cutting income tax in Wednesday's Autumn Statement, as he insisted economic growth was his priority.
Read the BBC aricle here.

This man is trying to take credit for bringing inflation down. He shouldn’t. Inflation is still raging. Any decrease in inflation so far has happened because energy prices have come down, prices over which he has no control. There has been little or no decrease in inflation as a result of Hunt’s efforts. He is merely trying to hoodwink the electorate.

The main reason for the sharp drop in inflation as measured by the consumer prices index was that the increase in energy prices in October 2022 was not repeated. Gas prices fell by 7% last month, having risen by almost 37% in the same month a year earlier. [Source: The Guradian]

Further, if Mr Hunt is wise, if there is any room for tax cuts, he should aim those tax cuts not at the superrich, but at the man in the street. And if economic growth is your goal, encourage spending on consumer goods, not superyachts and private jets! If you bring about tax cuts for the wealthy at this time of great hardship for the many, the elctorate will never forgive either you or the Tories.– © Mark Alexander

Russia Raises Interest Rate to 15% after Steep Climb in Inflation

GUARDIAN EUROPE: Two-point rate rise surprises analysts as central bank blames 6.6% inflation on consumer demand

Russia’s central bank has increased interest rates by more than expected, to 15%, after a steep rise in inflation.

The bank blamed the war-torn economy’s limited capacity to respond to an increase in consumer demand for the rise in inflation to 6.6% in October, from 6% in the previous month.

Even with the increase in borrowing costs, inflation is expected to carry on climbing to 7.5% by the end of the year, the central bank said, before falling back to 4% next year. » | Phillip Inman | Friday, October 27, 2023

Les Français sont de plus en plus à renoncer à certains besoins de base

Sep 6, 2023 | C’est ce qu’a révélé ce mercredi une étude du Secours populaire et de l’institut Ipsos. Frappés de plein fouet par l’inflation, près de trois Européens sur dix déclarent devoir renoncer à certains besoins de base, comme manger à leur faim ou chauffer leur logement.

Argentina Devalues Peso, Raises Rates after Shock Primary | The World

Aug 21, 2023 | Inflation has hit 113 percent in Argentina this year, leading to soaring consumer prices and plunging 40 percent of its population below the poverty line. The situation has worsened as the currency fell off the back of a shock primary election result. Madeline Lobooth reports.

Iran Inflation: President Ebrahim Raisi Plans to Revive Economy

Jul 22, 2023 | Pressure is growing on the Iranian government to bring down rising prices. President Ebrahim Raisi has pledged to revive the economy, but people are increasingly falling into poverty. Crippling US sanctions are viewed as the major driver of Iran's skyrocketing food prices. Al Jazeera’s Sinem Koseoglu reports from Tehran, Iran.

In Argentina, Inflation Passes 100% (and the Restaurants Are Packed)

Street-food patrons in an alley hot spot near Chinatown on a chilly May evening in the Belgrano neighborhood of Buenos Aires. | Sarah Pabst for The New York Times
THE NEW YORK TIMES: Argentina’s financial crisis has a surprising side effect: a flourishing dining scene in Buenos Aires, as residents rush to spend pesos before they lose more value.

Wine glasses clinked in an Art Nouveau culinary gem basking in its restored splendor. It was tasting night in the more than century-old coffeehouse turned restaurant at the old Buenos Aires zoo, as beet tartare, pan-seared squid and a perfect rib-eye floated out of the kitchen, chased by a velvety chocolate mousse.

“As you can see, we are betting hard on the opportunity of the food scene in Argentina,” said Pedro Díaz Flores, on a tour of the restaurant, Águila Pabellon, that he co-owns — the 17th food venture he has opened in Buenos Aires in the past 18 months.

In Buenos Aires, Argentina’s cosmopolitan capital, a world-class culinary scene is flourishing. That would not necessarily be news if it were not for the fact that Argentina is in the middle of an extraordinary financial crisis.

Inflation is at more than 114 percent — the fourth highest rate in the world — and the street value of the Argentine peso has crumbled, dropping about 25 percent over a three-week period in April. » | Natalie Alcoba | Photographs by Sarah Pabst, Reporting from Buenos Aires | Monday, June 19, 2023

Leer en español.

Brexit to Blame for Rising Inflation, Says Former Bank of England Governor

THE GUARDIAN: Mark Carney says Bank’s negative predictions about consequences of leaving EU ‘proven to be the case’

Mark Carney said he had no pleasure in being proved right after the Bank’s warnings issued in 2016. Photograph: Reuters
Brexit is to blame for the soaring inflation driving the cost of living crisis in the UK, a former governor of the Bank of England has said.

Mark Carney, who pro-Brexit figures said should have been fired for warning about the economic dangers of leaving the EU prior to the vote, said he took no pleasure in being proven right because the resultant hardship had been placed on the backs of millions of ordinary people.

“We laid out in advance of Brexit that this will be a negative supply shock for a period of time and the consequence of that will be a weaker pound, higher inflation and weaker growth,” Carney said.

“And the central bank will need to lean against that. Now that’s exactly what’s happened. It’s happened in coincidence with other factors, but it is a unique aspect of the economic adjustment that’s going on here,” he told the Daily Telegraph. » | Kevin Rawlinson | Saturday, June 17, 2023

Rishi Sunak Can’t Halve Inflation – GREED Is Driving UK Economy Crisis | Economics | New Statesman

Jun 2, 2023 | Rishi Sunak is failing to control rising inflation. Who is to blame?

Universal Basic Income: The Solution to Inflation in the UK? | Vantage with Palki Sharma

Jun 5, 2023 | Universal Basic Income: The Solution to Inflation in the UK? | Vantage with Palki Sharma A think tank wants to pilot a Universal Basic Income project in the UK. The experiment is a bid to find solutions for the UK's crippling cost-of-living crisis. Currently, the British government is struggling to curb runaway food inflation. Downing Street is heading for confrontation with supermarkets over a proposed voluntary price cap. Will the UK government find a way to address the cost-of-living crisis? Palki Sharma decodes

Related.

Hard-pressed UK shoppers feel food ‘shrinkflation’: Consumers increasingly claim that manufacturers are reducing the size of products, Barclays research finds »

Turkey: Did Erdogan's Unorthodox Approach to Bring Down Inflation Actually Work? | DW Business

Jun 5, 2023 | Turkish inflation has fallen below 40% for the first time in 16 months. We speak to Erdal Yalcin, professor of international economics at Konstanz University of Applied Sciences. We ask him: is this a meaningful figure?

Erdogan's low interest rate policy is in line with Islam. His economic policy is unorthodox only to Western economists; his policy is very orthodox if considered in the light of Islamic economics. Erdogan is, after all, trying to re-Islamize the country. He is out to undo Ataürk's secular legacy. – © Mark Alexander

UK Prepares for Recession amid Rising Interest Rates

May 26, 2023 | Owning a home is getting more expensive as lenders begin putting up mortgage rates, spooked by stubbornly high inflation figures.

Hunt Will Back More Interest Rate Rises Even If It Pushes UK [in]to Recession

THE GUARDIAN: Chancellor to support Bank of England’s decisions because ‘inflation is a source of instability’

Jeremy Hunt said he will back further interest rate rises by the Bank of England, even if it risks plunging the UK into recession, in order to combat soaring inflation.

The chancellor’s comments come after figures this week showed annual inflation in April was higher than expected at 8.7%, raising the prospect of a 13th interest rate rise by the Bank of England. Markets are now predicting that interest rates could climb to 5.5% by the end of the year, up from their current level of 4.5%, putting further pressure on borrowers and the housing market. » | Kalyeena Makortoff | Friday, May 26, 2023

Gefährlicher Umgang mit der Inflation: Die Notenbanken verkleinern ihre Zinsschritte und wecken damit unbegründete Hoffnungen

NEUE ZÜRCHER ZEITUNG: In den USA, im Euro-Raum und in der Schweiz haben die Notenbanken allesamt etwas Tempo aus ihrer Politik steigender Zinsen genommen. Die Verlangsamung bedeutet aber nicht, dass die Währungsbehörden das Problem der hohen Inflation bereits unter Kontrolle haben.

Weniger Güter für mehr Geld: Die Inflation macht sich auch beim Einkauf bemerkbar. | Gaetan Bally / Keystone
KOMMENTAR
Zuerst die gute Nachricht: Im laufenden Jahr haben die grossen Zentralbanken endlich den Ernst der Lage erkannt. Sie haben realisiert, dass die lange Zeit totgeglaubte Inflation noch immer quicklebendig ist. Und sie haben auf das Hochschnellen des Preisniveaus mit einer Straffung ihrer zuvor extrem expansiven Geldpolitik reagiert. So auch diese Woche: Nachdem am Mittwoch die amerikanische Notenbank den Leitzins erhöht hatte, doppelten am Donnerstag die Schweizerische Na¬tionalbank (SNB), die Europäische Zentralbank (EZB) und die Bank of England (BoE) nach.

Grosse Unterschiede zwischen den Währungsräumen

Doch so einheitlich die geballte Ladung an Geldpolitik erscheinen mag, so gross bleiben die Unterschiede zwischen den Währungsräumen: Schon ziemlich weit bei der Zinsnormalisierung sind die USA. Dort hat das Fed nach zögerlichem Beginn die Zügel bereits so stark angezogen, dass nun das Tempo leicht gedrosselt wird. So ist der Leitsatz am Mittwoch nach vier Zinsschritten um je 0,75 Prozentpunkte nur noch um 0,50 Prozentpunkte erhöht worden. Dies auch deshalb, weil Amerikas Geldpolitik bereits bremsend auf die Konjunktur zu wirken beginnt. » | Thomas Fuster | Donnerstag, 15. Dezember 2022

Bank of England Poised to Raise Borrowing Costs to Combat Inflation

THE GUARDIAN: Financial markets expect 0.5 percentage point increase as fears mount that UK is about to enter long recession

The Bank of England is poised to increase the cost of borrowing for households and businesses at its interest meeting today, as fears mount that the UK economy is about to enter a long recession.

Financial markets expect a 0.5 percentage point increase in the central bank’s base rate to 3.5% as the monetary policy committee seeks to combat inflation.

The consumer prices index (CPI) fell back from 11.1% in October to 10.7% last month, according to data released Wednesday, mainly from weaker increases in petrol, clothing and food, but remains well above the BoE’s 2% target.

Jeremy Hunt has indicated he will welcome a tough stance on rates by officials at Threadneedle Street after he said bringing down inflation was his main mission. » | Phillip Inman | Wednesday, December 14, 2022