UK economy more resilient than expected

In the present day’s high tales

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The UK economic system carried out barely higher than anticipated within the first half of the yr and grew a little bit within the newest quarter, however the information seems unlikely to vary the present miserly outlook for progress.

Gross home product was 0.2 per cent higher in the second quarter in contrast with the earlier three months and 0.4 per cent larger than a yr earlier, in accordance with at this time’s information, however stays beneath pre-pandemic ranges.

The most recent figures had been extra optimistic than economists had anticipated. The Financial institution of England stated final week that it not anticipated a recession however that the economic system would stay close to stagnation for the subsequent two years.

Huw Capsule, its chief economist, talking the day after the BoE had raised rates of interest to a fresh 15-year high of 5.25 per cent, stated its programme of coverage tightening was succeeding in getting inflation down, some extent echoed this morning by Jeremy Hunt, the chancellor. Meals costs look to be an exception: Capsule warned on Monday they might nonetheless be rising a lot quicker on the finish of the yr than general inflation.

Shopper spending gave the impression to be extra resilient than anticipated within the face of fee rises; the automotive trade helped carry manufacturing and heat climate gave a lift to the companies sector. Industrial motion had a smaller impression than in earlier months though strikes by junior doctors are ongoing.

The pound rose in response to the data as traders elevated their bets that the BoE had not but completed its cycle of fee rises. Subsequent week’s inflation and wage progress information will assist decide its subsequent transfer.

Some analysts assume that the pick-up in progress might show shortlived as a lot of the impact of upper rates of interest has but to feed via to households. James Smith, of the Decision Basis think-tank, stated: “The massive image is that the UK economic system has expanded by simply 0.4 per cent for the reason that begin of 2022 — the weakest progress in 65 years exterior of a full-blown recession.”

Zooming out from at this time’s information, the UK economic system’s long-term downside is that it’s too London-centric, argues chief information reporter John Burn-Murdoch. London is the one one of many 10 areas in England and Wales to have grown in each quarter for the reason that depths of the pandemic in 2020, whereas three others — together with the South East — have dipped into regional recessions up to now 12 months.

Eradicating the capital’s output and headcount would shave 14 per cent off British dwelling requirements, he writes. To place this into a world context, the UK can be poorer than any single state within the US.

Have to know: UK and Europe economic system

This week’s large surge in European gasoline costs highlights how the area’s success in weaning itself off Russian vitality has left it more vulnerable to volatile global markets. Australian producers of liquefied pure gasoline are in talks to avert a strike that threatens to disrupt LNG supplies and precipitated gasoline costs to jump almost 40 per cent on Wednesday.

Russia’s concentrating on of Ukrainian grain provides and Ukraine’s drone strikes on Russian vessels have increased concerns about world food security. The UN stated: “A single mis-step by both celebration may have disastrous penalties just because there isn’t any speedy substitute for all of the grain exported by Russia and Ukraine from the Black Sea.”

Ukraine’s authorities bonds, nonetheless, have surged in value over the previous two months as investors grow more optimistic about how a lot of their cash they may get again when the nation is ultimately rebuilt.

French statistical authorities put paid to the idea {that a} 331-metre-long cruise ship was answerable for better than expected third-quarter GDP data.

Have to know: world economic system

US inflation, as measured by the patron value index, edged up from 3 per cent to 3.2 per cent in July, the slowest tempo of progress since March 2021, bolstering the case for the Federal Reserve to maintain rates of interest regular at its subsequent assembly in September. The core measure, stripping out unstable gadgets similar to meals and vitality, hit an annual 4.7 per cent, the bottom stage since October 2021. Nonetheless, US producer costs rose more than expected.

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Fernando Villavicencio, a presidential candidate in Ecuador, was shot dead at a campaign event. The politician and former journalist had spoken out towards organised crime and corruption. Six Colombians are being held in reference to the assassination.

India handed a controversial and long-delayed data protection bill to control the web and sharing of on-line information. Civil liberties teams say it offers the federal government too many carve-outs, permitting it to entry customers’ info.

Have to know: enterprise

The White Home unveiled a ban on US investment in Chinese language tech linked to navy use — specializing in quantum computing, superior chips and synthetic intelligence. The EU stated it might issue its own proposals by the top of the yr, whereas the UK is considering whether to follow suit.

Forward of the US announcement, Chinese language web giants Baidu, ByteDance, Tencent and Alibaba had been rushing to buy high-performance Nvidia chips important for constructing generative AI methods. Alibaba introduced a return to strong sales growth, boosting its shares in New York, however its cloud unit might but take successful from the US controls.

China is making an attempt to dominate the trading of lithium carbonate, a mineral used within the manufacturing of electrical automobile batteries, by wresting benchmark contracts for minerals away from the west.

Beijing yesterday lifted pandemic-era restrictions on abroad journey, boosting tourism-related stocks in Japan and South Korea, the erstwhile favorite locations of Chinese language vacationers.

The US Supreme Courtroom placed on maintain Purdue Pharma’s $6bn chapter settlement that might protect members of the Sackler household, the corporate’s house owners, from future lawsuits linked to the opioid crisis.

Tapestry, proprietor of style manufacturers Coach, Kate Spade and Stuart Weitzman, agreed to buy Capri Holdings, house to luxurious labels Versace, Jimmy Choo and Michael Kors, for $8.5bn. The mixed income of the six manufacturers is greater than $12bn.

Driverless taxis have been approved in San Francisco, the primary US metropolis the place they’re free to roam the roads and carry paying passengers with out restrictions.

Science round-up

July was formally the hottest month ever recorded. The European Earth remark company stated the common world temperature was about 1.5C hotter than that of the pre-industrial interval of 1850 to 1900 earlier than human-induced local weather change started to take impact. A 3rd of England’s healthcare services will probably be at risk from heatwaves by 2050.

An FT Big Read seems on the sudden warming of the oceans the place lacking ice and bleached coral are simply a few of the seen indicators of local weather change regarding researchers.

A UK-commissioned report confirmed Antarctica is dealing with a catastrophic cascade of extreme environmental events as world warming will increase, which is able to have an effect on local weather internationally.

New analysis suggests early people had been worn out in Europe by “glacial cooling” greater than 1,000,000 years in the past, difficult the concept people have continuously lived in the region since first arriving.

Hopes that Cambridge may change into the “science capital of Europe” have taken a knock as locals object to constructing plans and the shortage of water and transport infrastructure. Staying out of the EU’s Horizon research programme would additionally do nice injury, says the FT editorial board.

On a extra optimistic word, high scientists stated the UK can be higher ready for the subsequent pandemic with a new vaccines centre that goals to develop a jab for any new potential killer pathogen inside 100 days.

AstraZeneca signed a take care of Chinese language pharma firm CanSino Biologics to develop messenger RNA vaccines for infectious diseases, constructing on the success of the know-how to find a jab for Covid-19.

The US is investing $1.2bn in tasks aiming to strip carbon dioxide out of the atmosphere with hopes that the know-how might play a giant position in attaining its web zero objectives.

The largest information of the week additionally got here from the US, the place scientists achieved web vitality acquire in a fusion response for the second time, an accomplishment described by US vitality secretary Jennifer Granholm as “one of many most impressive science feats of the 21st century”. Here’s a reminder of how it works.

One thing for the weekend

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Some excellent news

Plastic waste recycling is gaining momentum. The most recent growth comes from US researchers who’ve discovered a manner of turning containers into soap.