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The chancellor, Jeremy Hunt, has warned that the government will need to take “difficult decisions” in next month’s autumn statement after a sharp worsening of the public finances over the past six months.
Hunt said state borrowing was on course to be £20bn to £30bn higher than predicted at the time of the budget in March – wiping out what little room he had to cut taxes.
He has ruled out fresh tax rises in next month’s autumn statement and hopes to cut spending in a way that minimises the risks pushing an already flatlining UK economy into recession.
Hunt’s gloomy message from the annual meeting of the International Monetary Fund in Marrakech was accompanied by a warning from the governor of the Bank of England, Andrew Bailey, that interest rates were likely to stay high for some time.
The chancellor said: “The fiscal position has worsened since the spring and I will have to take difficult decisions in the autumn statement.
“The main reason things are more challenging is because interest rate projections for all economies have gone up. The UK is not immune to those changes. We are likely to see an increase in debt interest payments of £20bn-30bn and that’s a huge challenge.”
At the time of the budget, the Office for Budget Responsibility (OBR), said the chancellor had only a £6.5bn buffer to meet his fiscal rule of having debt as a share of national income falling at the end of five years. Higher borrowing in response to the Covid 19 pandemic has pushed the national debt above £2tn.
Hunt is braced for the OBR to cut its future growth forecasts for the UK economy – which would pile additional pressure on the public finances. “The OBR has been one of the most optimistic about the long-term growth rate among forecasters,” the chancellor said.
Hunt added that he was not prepared to borrow more to finance the tax cuts being demanded by some Conservative MPs and would instead seek to make savings to pave the way for a more generous budget next spring.
“I have to make sure the UK is resilient to shocks going forward,” Hunt said. “Increasing borrowing would be reckless and the wrong thing to do”.
Bailey said it would be a mistake to get too carried away with the fall in inflation – which is down from a peak of 11.1% to 6.7% – saying there was “an awful lot left to do”.
He added: “The last mile is going to be the hardest to get us back to target. Policy is acting in a restrictive manner, and it needs to do so. That does have an impact on the outlook for the economy, which is pretty subdued.”
Hunt made it clear tax rises to fill any black hole in the public finances were not being considered.
Taxes as a share of national income are already on course to rise to their highest in 70 years later this decade, and the chancellor said he was unwilling to add to the “burden”.
“I will do everything I can to prevent tax rises and also show how I can reduce the tax burden over time. But I have to be honest – there are no short cuts. Borrowing to finance tax cuts is no tax cut at all. It just passes on the cost to a future generation.”
Hunt said his aim was to boost Britain’s long-term growth prospects, and the autumn statement will include measures to improve public sector productivity and increase business investment.
“All western economies have found themselves in a low-growth trap,” the chancellor said. “The autumn statement will show how we can get out of it.”
Hunt said there was a consensus among “many economists and the Labour party” that taxes would inevitably continue rising as a share of national income. “I don’t believe it does,” he added.
“The big picture is that we need to move from a paradigm where growth is 1-2% back to the 2-3% it used to be. That’s the long-term challenge.”
Bailey said the Bank’s decisions on interest rates would continue to be tight affairs, after the 5-4 split on its monetary policy committee to keep borrowing costs on hold at 5.25%.
Speaking at an Institute of International Finance meeting, the governor said it was now clear that the 14 interest rate increases since December 2021 were weighing down on growth. “If we don’t get back to (the 2% inflation) target sustainably the outlook will be worse.” | United Kingdom Business & Economics |
How To Use UPI Lite On Gpay, Paytm And PhonePe: Step By Step Method
UPI Lite is a feature of the Unified Payments Interface (UPI) that allows users to make low-value transactions without UPI PIN.
The Reserve Bank of India (RBI), in September 2022 introduced a new payment system called UPI Lite which is a simplified version of the original UPI payment system. This allows users to initiate small-value transactions every day without facing payment failure issues in case of problems in bank processing and more.
What is UPI Lite
UPI Lite is a feature of the Unified Payments Interface (UPI) that allows users to make low-value transactions without the need for a UPI PIN. It is designed to make UPI more accessible to users who do not have a smartphone or who are not comfortable using a PIN. UPI Lite transactions are limited to Rs. 200 per transaction and Rs. 4,000 per day. Users can add money to their UPI Lite balance up to Rs. 2,000 twice a day.
To use UPI Lite, users need to download a UPI Lite-enabled app, such as Google Pay, PhonePe, Paytm. Once the app is installed, users can create a UPI Lite ID and add money to their balance. To make a payment, users simply need to enter the recipient's UPI ID and the amount of money they want to send.
How to use UPI Lite on GPay
Here are the steps on how to use UPI Lite on GPay:
Open the Google Pay app.
Tap on your profile picture at the top right corner of the screen.
Tap on "Pay Pin Free UPI Lite".
Follow the on-screen instructions to add money to your UPI Lite balance. You can add up to Rs. 2,000.
Once you have added money to your UPI Lite balance, you can make payments without a PIN. To do this, simply scan the merchant's QR code or enter their UPI ID. Enter the amount you want to pay and tap on "Pay".
How to use UPI Lite on PhonePe
Here are the steps on how to use UPI Lite on PhonePe:
Open the PhonePe app.
Tap on your profile picture at the top right corner of the screen.
Tap on "UPI Lite".
Follow the on-screen instructions to add money to your UPI Lite balance. You can add up to Rs. 2,000.
Once you have added money to your UPI Lite balance, you can make payments without a PIN. To do this, simply scan the merchant's QR code or enter their UPI ID. Enter the amount you want to pay and tap on "Pay".
How to use UPI Lite on Paytm
Here are the steps on how to use UPI Lite on Paytm:
Open the Paytm app.
Tap on the "Pay" tab.
Select the "UPI Lite" option.
Enter the recipient's UPI ID or scan their QR code.
Enter the amount you want to send.
Tap on "Pay". | India Business & Economics |
Ambulance staff morale is at "rock bottom," a striking paramedic has said.
Dawn Turner, based in Goole, East Yorkshire, said she and her colleagues were "saving lives all for £13.83 an hour", leaving some unable to pay their bills and reliant on food banks.
Ms Turner, a paramedic for six years, was among hundreds of ambulance staff who joined picket lines across the country on Monday in a row over pay.
The government has said the unions' pay demands were unaffordable.
Ms Turner, who is also an official in the GMB union, said the dispute was not just about the government's 4% pay offer.
"Obviously the pay, but [it's] mainly about patient safety and the level of care patients are getting at the moment," she said.
"We're queuing in hospitals sometimes for 10 to 12 hours at a time, entire shifts we are unable to get out there and deal with patients out in the community, therefore it's impacting on care."
She said the blame for the walk-out lay with Health Secretary Steve Barclay and not the management of Yorkshire Ambulance Service.
She claimed staff were leaving to work in supermarkets and fast food restaurants "for a better life-work balance and often for a lot more pay".
"They're saving lives, they're going to save your child's life, your grandma's life, they're delivering babies, they are going to multiple-car RTCs, all for £13.83 an hour," she said.
"Many are using food banks; I've had people coming to me crying because they can't manage, they can't pay their bills."
Ambulance staff in Yorkshire have been joined by nurses for the biggest ever day of industrial action in the NHS.
Some strikers outside Goole Ambulance Station had left the picket line to respond to emergency calls.
Newly-qualified paramedic Shannon Rooke said she was being paid around £13 an hour after 18 months in the job and had £60,000 of student debt.
"I'm starting a 12-hour shift and we don't know when we are going to be finished," she said.
"I can't arrange any child care and the amount of time I'm missing from home I can't put my son to bed."
Mr Barclay said ministers had met the recommendations of the independent NHS Pay Review Body.
"The Governor of the Bank of England warned if we try to beat inflation with high pay rises, it will only get worse and people would not be better off," he said.
"I have held constructive talks with the trade unions on pay and affordability and continue to urge them to call off the strikes. It is time for the trade unions to look forward and engage in a constructive dialogue about the Pay Review Body Process for the coming year." | Workforce / Labor |
Rachel Reeves has pledged to introduce a “Covid corruption commissioner” in government aimed at recouping billions of pounds of taxpayers’ money that has been lost to fraud and flawed contracts during the pandemic.
The shadow chancellor is set to announce today that the body will chase at least £2.6 billion of “lost” public funds.
In total, an estimated £7.2 billion was lost in fraud from Covid support schemes including from business loans and grants, furlough and then-chancellor Rishi Sunak’s “eat out to help out” programme.
In her conference speech in Liverpool, as reported by the Guardian newspaper, Reeves will announce that Labour would review sentencing on fraud and corruption conducted against UK public services, as well as reform public procurement rules to include a strong “debarment and exclusion” regime for those complicit in fraud against the state.
“The cost to the taxpayer of Covid fraud is estimated at £7.2 billion with every one of those cheques signed by Rishi Sunak as chancellor and yet just 2 per cent of fraudulent Covid grants have been recovered”, Reeves will add.
“We will appoint a Covid corruption commissioner equipped with the powers they need and the mandate to do what it takes to chase those who have ripped off the taxpayer, taking them to court and clawing back every penny of taxpayers’ money that they can.
“That money belongs in our NHS, it belongs in our schools, it belongs in our police and conference – we want that money back.”
In her speech today, Reeves will also announce that a Labour government would accelerate the planning process for critical national infrastructure.
The proposals include updating all national policy statements, some of which have not been revised for over a decade, within the first six months of Labour entering office.
Reeves will also address criticism of Labour that it has been too focused on providing reassurance to voters, and not giving them enough to inspire them.
The Guardian reports that the £28 billion green investment plan will be key to this.
The shadow chancellor will say: “Labour’s task is to restore hope to our politics. … The hope that lets us face the future with confidence, with a new era of economic security because there is no hope without security.
“You cannot dream big if you cannot sleep in peace at night. The peace that comes from knowing you have enough to put aside for a rainy day and the knowledge that, when you need them, strong public services will be there for you and your family.
“The strength that allows a society to withstand global shocks because it is from those strong foundations of security that hope can spring.”
Speaking this morning, Reeves said a Labour government would be prepared to borrow but only within its fiscal rules.
The shadow chancellor told Times Radio she had set out fiscal rules and would stick to them with “iron discipline”.
They include paying for day-to-day expenditure through tax receipts, getting debt down as a share of the economy “and then only subject to that will we invest in things that are going to grow our economy”.
She added: “We will only borrow if it is consistent with those fiscal rules”, citing the key rule which commits the party in government to have “debt coming down by the end of the parliament”.
Meanwhile, Rishi Sunak has been accused of “desperate stuff” over his plans to hold an event and take part in a broadcast interview during Labour conference.
An unwritten agreement between the two main parties usually means Labour and the Tories don’t hijack each other’s annual conferences.
However, Sunak will hold a “PM connect” Q&A event this morning and do a Radio 2 interview with Jeremy Vine which is set to clash with Reeves’ speech.
It is an apparent bid to the shadow chancellor out of the headlines.
A Labour source told the Politico website the move was a “bit below the belt and a bit naff”.
Another said it was “desperate stuff and shows they’re rattled by a changed Labour Party and our plans to change Britain.”
Politics.co.uk is the UK’s leading digital-only political website, providing comprehensive coverage of UK politics. Subscribe to our daily newsletter here. | United Kingdom Business & Economics |
Peter Thiel paid staff an extra $1,000 a month if they lived near the office, a former worker said.
The billionaire investor offered it so staff "were more likely to stay late," Michael Gibson wrote.
Gibson made the claim in his book "Paper Belt on Fire: The Fight for Progress in an Age of Ashes."
Peter Thiel offered his staff a monthly bonus of $1,000 if they lived close to the office, according to a former employee of the billionaire investor.
Michael Gibson, a VC investor who worked for Thiel for five years, said in his book "Paper Belt on Fire: The Fight for Progress in an Age of Ashes" that Thiel "lived about 400 yards from the office" in San Francisco and encouraged his employees to live locally too.
Thiel gave workers the bonus so "they were more likely to stay late" and could be around for "a surprise meeting on the weekends," Gibson wrote.
"Employees were granted an extra $1,000 per month in rent if they lived within a half-mile radius of the office," per the title, published by Encounter Books last year.
"It had the added effect that we would all show up to the same watering holes after work to knock off a few drinks and gossip, tell war stories, argue over the jukebox, and have a few laughs. As far as employee benefits go, I always thought this was a wise one."
Gibson co-founded the venture capital fund 1517, which aims to back college dropouts and those who did not study at university.
Similar subsidy schemes were in place at the software company Palantir Technologies, which Thiel co-founded, as well as at Salesforce subsidiary SalesforceIQ, according to reporting by The Guardian.
Thiel is in 217th place on the Bloomberg Billionaires Index with a net worth of $10 billion.
Meta also had deep pockets when it came to offering workers incentives to live near its office. It historically paid "at least $10,000" to Facebook staff if they lived within 10 miles of its headquarters in Menlo Park, Silicon Valley, per The Guardian. It also offered employees with families a one-off payment of at least $15,000 for housing.
While some companies are bringing back such relocation benefits schemes in a bid to get workers to return to the office after the pandemic, others are taking a different approach .
Recent data from ZipRecruiter showed there were 3.8 million job listings that refer to relocation assistance, up from 2 million posts that mentioned the term in 2020, the Journal reported in April.
ARC Relocation, a firm that helps companies relocate workers, told Insider's Aaron Mok that it's seen a "significant rise" in business since companies started to enforce return-to-office policies.
Thiel and Meta didn't immediately respond to requests for comment from Insider, made outside normal working hours.
Read the original article on Business Insider | Workforce / Labor |
One of the occasional oddities of modern supermarket shopping is being asked by a fellow customer – not a checkout assistant – whether one has a Clubcard, Nectar card or whatever. The cardless shopper understandably wants the lower prices that usually come with tapping the relevant piece of plastic. Since the card-equipped shopper can gain a few loyalty points for free, a mutually beneficial arrangement is easily agreed. But the process feels silly. Why are supermarkets creating these hassles?
Welcome, of course, to the age of retail-data collection. The punishment for not having a loyalty card that will record your shopping habits can be a meaningfully higher price at the till. Loyalty schemes aren’t new, but substantially stiffer prices are. Tesco has more than 8,000 products that are cheaper for holders of its Clubcard and Sainsbury’s has about 6,000 items in its Nectar scheme.
Is this fair? The Competition and Markets Authority will face the usual accusation of meddling in minor matters, but its review of loyalty card price cuts is welcome. It is not only data refuseniks, the lazy and the disorganised who are at risk of losing out under a two-tier pricing system. You have to be 18 and a UK resident to join Tesco’s Clubcard scheme. If the biggest player in food retailing thinks children and foreign visitors are fair game for fleecing, that has happened without public debate.
Another issue raised by Which? is whether the “discounts” for cardholders are genuine, or just reductions from a cunning and briefly charged higher price. Good question. It wouldn’t be the first instance of retailers seeking to baffle the customers with complexity.
The case for the defence is that personalised marketing and supplier-sponsored advertising, which is what the data collection enables, is standard stuff these days. Amazon’s algorithms ceaselessly spit out “recommended for you” emails, and the big supermarkets are just taking things a step further. The food retailing market is competitive, as the CMA concluded in its last inquiry (the latest concerns over baby formula and other products relate to manufacturers), so any gains for the retailers may be recycled into prices eventually. Since the vast bulk of shoppers have at least one of these cards, where’s the problem?
Well, it’s still the degree of the two-tier pricing system at the till. Old-style schemes solely based on redeemable points dealt, in effect, in small percentage savings that accumulated over time. At Tesco yesterday a pack of the same Pampers nappies – an essential item for some – was selling for £6 for cardholders and £10 for non-cardholders.
Fruit and veg are increasingly being incorporated into these schemes, which must, incidentally, present a challenge for the Office for National Statistics in measuring the true level of inflation.
The CMA – who knows? – may eventually conclude that innovation in marketing is part of a competitive market; that rewarding loyalty is legitimate; and that consumers aren’t idiots and know to play the game, even when (as above) they haven’t got a card. But an inquiry is in order: two-tier pricing has happened by stealth and plainly doesn’t benefit all. | Consumer & Retail |
Jim Cramer, the host of CNBC's Mad Money, has reversed his opinion on Bitcoin and is now urging investors to reconsider their positions as the cryptocurrency reaches its highest value in a year and a half. Previously, Cramer had advised against investing in Bitcoin but now acknowledges that his earlier assessment was premature.
Bitcoin has seen a significant surge in value, surpassing $38,000 for the first time in 18 months. Over the past month, the cryptocurrency has shown a steady increase of 10%, while Ethereum has also experienced a spike of 17%, reaching its own 18-month peak.
This positive momentum is largely attributed to industry optimism surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). If approved, the ETF would allow traditional financial institutions to gain exposure to Bitcoin without directly holding the cryptocurrency. Analysts believe that such approval could result in a substantial $1 trillion boost for Bitcoin and other digital assets.
Despite previously dismissing cryptocurrencies due to the crypto market collapse in May 2022 and the closure of crypto exchange FTX, Cramer now claims that he has always supported those who have long-term faith in Bitcoin. He encourages individuals to consider purchasing Bitcoin if they believe in its potential.
Cramer's changing stance on investments has faced criticism from the crypto and finance communities, with some suggesting that going against his advice could be a prudent financial strategy. An inverse Cramer ETF was launched to provide returns opposite of his stock picks.
Let us know what you loved about this article, what could be improved, or share any other feedback by filling out this short form. | Crypto Trading & Speculation |
"Written off" and "ashamed" - this is how one woman described the experience of being on long-term sick leave.
Emma - not her real name - from north Wales, said she wanted to return to work but had lost her self-esteem and confidence.
It comes as official data shows those not working due to long-term sickness remain at record levels in the UK.
The Welsh government said it was working to help people with ill-health back into employment.
Emma has been away from her healthcare role since contracting Covid and said she felt ashamed about not being able to return to her job.
She said: "I feel written off. I feel a lot of it was blamed on mental health."I was told that I should be mindful and getting out in the fresh air, which felt very patronising."
Emma said she believed that if her employer were to make some changes, she would be able to return to her role.
"I was told I'd need to complete a high number of hours on my first week of return - not all illnesses can accommodate strict policy," she said.
"I always had the plan that I would return to work when my son was in school full-time, but that didn't happen," she said.
"I felt completely lost, I was grieving my life."
Nicola had worked in London for many years as an assistant buyer for a popular high street clothes shop.
After about eight years out of work, Nicola was recently offered a part-time employment opportunity through a friend's company.
She said: "My previous career was demanding so I was nervous, but they were clear they wanted me, as me - and they understood my conditions.
"I even told them I was frightened, because I didn't want to let them down, or myself down."
The support Nicola is given means she can manage her health as and when she needs to.
She said she felt more confident as a result.
"Long-term sick doesn't mean we don't want to work, we do - we're just unfortunately not being given the opportunities that work with our illnesses," she said.
About 2.5 million people in the UK are not working due to health problems, the Office for National Statistics said.
It said an increase in mental health issues and people suffering back pain, possibly due to home working, were the main causes of the rise.
Typically, for every 13 people currently working, one person is long-term sick.
"Figures had started going up before the pandemic but that trend continued into the pandemic and accelerated in 2021 to reach a record high," said David Freeman, head of labour markets and household at the Office of National Statistics.Â
He said there had been a change in types of illnesses - including post-viral fatigue "which could be linked to long-Covid". He also described rising cases of people affected by back and mental health issues.
Head of Wales at Federation of Small Businesses, Ben Cottam, said: "Illness costs businesses financially across the UK £5 billion a year, so there is a definite economic impact, which is why we'd like to see government-targeted intervention."
In a statement, the Welsh government said:Â "We are working to help people suffering with ill-health back into work. Our plan for employability and skills prioritises people most in need of help.
"This includes supporting people to stay in work and those further away from the labour market to find employment.
"Furthermore, in February 2023, we announced the Out of Work Service to support 10,500 people recovering from mental ill-health and/ or substance misuse into education, training or work by March 2025."
The Department for Work and Pensions said: "We know for many people there are significant benefits to being in work, including for their wellbeing. We're investing £3.5 billion to help millions, including those with long-term illness, to start, stay and succeed in work.Â
"Our plan is working - inactivity in Wales has fallen since last quarter - but for those who can't return to work yet, employers can choose to pay more occupational sick pay for longer, while Universal Credit provides a strong financial safety net for those needing extra support."Â | Unemployment |
KEIR Starmer has been panned as he has once again backtracked on a key Labour commitment to introduce clean air zones.
According to reports, the Labour leader has U-turned on the commitment following the party’s failure to win the Uxbridge and South Ruislip by-election.
The loss was largely blamed on London mayor Sadiq Khan vowing to press ahead with the plans to expand on his ultra-low emissions zone (Ulez) project.
The scheme charges drivers money based on their vehicle’s emissions, with numerous demonstrations taking place in protest.
Rolling out clean air zones featured among Labour’s transport pledges in an 86-page draft policy handbook which was debated at the party’s National Policy Forum last month.
The original document stated: “Labour supports the principle of clean air zones and recognises the huge damage to human health caused by air pollution and the damages to our climate caused by carbon emissions from polluting vehicles.
“However, they must be phased in carefully, mindful of the impacts on small businesses and low-paid workers and should be accompanied with a just transition plan to enable people to switch affordably to low-emission vehicles.”
However, The Telegraph now reports that the paragraph was scrapped during the forum, with a Labour source telling the newspaper: “Clean air zones are Conservative government policy. The Tories are the ones who have pushed councils to introduce them.
“Labour is not in favour of extra burdens on drivers during a Tory-made cost of living crisis.
“Labour’s priority is growing the economy to improve living standards and tackle the cost of living crisis, not pushing up costs for hard-working families.
“We are committed to tackling air pollution and we will introduce a Clean Air Act, but we will always look at options for reducing air pollution which do not put the burden on hard-working families.”
The forum took place just days after Labour failed to win the by-election which has divided people in London since it was first introduced in April 2019.
Starmer has faced criticism for his U-turn, including from Scotland’s Net Zero Secretary Màiri McAllan (below) who said: “Air pollution disproportionately harms the most vulnerable in society – the very young, older people, those with underlying health conditions.
“As ScotGov pursues the cleanest air in Europe, it’s incredible that Labour appear willing to harm people and planet for power.”
Elsewhere, SNP MSP James Dornan said: “Would it not make sense for Starmer to simply say ‘we’ll change nothing but we’ll be a bit nicer and less cruel than the Tories’?
“It would be more honest and less confusing.”
Khan has not commented on the policy change but the move has left Labour divided.
Rachael Maskell, the Labour MP for York Central and former shadow environment secretary, told The Telegraph: “I think Sadiq Khan called it right when he said we wouldn’t accept dirty water, so why accept dirty air?
“I would say it’s absolutely essential that we make those interventions that make a difference.”
She added: “A Ulez cannot be introduced without proper mitigation – we know that the cost of electric cars is prohibitive. But we’ve got to address the practical reality and that’s by putting green alternatives forward.
“We’ve got to remember it is people living in the most deprived areas that are most affected by poor air quality. This goes to an essential value of Labour and we’ve got to seriously look at this before coming to office, because the consequences of not doing so will mean people could die unnecessarily.”
Labour’s unsuccessful candidate Danny Beales told the NPF that Ulez had “cut us off at the knees” while Starmer said it was important to “face up” to the electoral damage.
Starmer said: “In an election, policy matters. And we are doing something very wrong if policies put forward by the Labour Party end up on each and every Tory leaflet.” | United Kingdom Business & Economics |
(Bloomberg) -- It was the week that bond markets finally seemed to grasp what central bankers have been warning all year: higher interest rates are here to stay.
Most Read from Bloomberg
From the US to Germany to Japan, yields that were almost unthinkable at the start of 2023 are now within reach. The selloff has been so extreme it’s forced bullish investors to capitulate and Wall Street banks to tear up their forecasts.
Yields on 10-year German debt are close to 3%, a level not reached since 2011. Their US equivalent are back in line with the average from before the Global Financial Crisis and within striking distance of 5%.
The question now is how much higher they can go, with no real top in sight after key levels were broken. While some argue the moves have already gone too far, others are calling it the new normal, a return to the world that prevailed before the era of central bank easy money distorted markets with trillions of dollars of bond buying.
The implications stretch far beyond markets to the rates paid on mortgages, student loans and credit cards, and to the growth of the global economy itself.
At the heart of the selloff were the world’s longest-dated government securities, those most exposed to the ever growing list of headwinds. Oil prices are rising, the US government is piling on more debt and flirted with a shutdown, and tensions with China are on the rise. For anyone who doubted the tough inflation-fighting talk of Jerome Powell and Christine Lagarde against this backdrop, the read-across is not pretty.
“What happened over the last few months was basically markets were wrong because they thought inflation would come down quickly and central banks would be very dovish,” said Frederic Dodard, head of asset allocation at State Street Global Advisors. “Everything will depend about how inflation lands over the medium to long run, but it’s fair to say that we have changed from the ultra low-yield regime.”
Some of the world’s most prominent investors, including BlackRock Inc.’s Larry Fink and Pershing Square Capital’s Bill Ackman, are among those saying the current trend may not be done.
Already, the milestones have been coming thick and fast. Germany’s 10-year yield just had its biggest monthly jump this year. Japan’s government bonds saw their worst quarterly selloff in a quarter century and the US 30-year yield posted its largest quarterly jump since 2009.
Even the risk of a US government shutdown didn’t spur a sustained bid for Treasuries, the world’s defacto haven asset. Over the weekend, Congress passed compromise legislation to keep the government running until Nov. 17.
Amid the rout, few corners of the market escaped damage. Austria’s century bond, a poster-child for long-dated debt issued during the low-rate era, took a fresh drubbing, falling to 35 cents on the euro.
Meanwhile, central bankers continued to try to give the market a clear message.
Federal Reserve officials led by Powell mainly stuck to their mantra of higher-for-longer rates. In Europe, European Central Bank President Lagarde is pushing back strongly against the idea of imminent relief. She told the European Parliament at the start of the week that the ECB would keep rates at sufficiently restrictive levels for as long as necessary to cool inflation.
Some chastened bond bulls such as T.Rowe Price got ahead of September’s rout, flipping long bets on Treasuries to shorts. Big block trades this week in Treasury futures targeted a steeper curve and higher long-dated yields.
Until now, the aggressive rate hikes unleashed by central banks had taken the greatest toll on shorter maturities, driving yields up and resulting in deeply inverted curves. Expectations of recessions, along with rate cuts in response, had kept longer-end yields pinned down.
But in the US at least, that recession never showed up, forcing investors to price out monetary loosening. European economies have proved less resilient, but the ECB — which has a single mandate of price stability — has reiterated time and again that it’s too soon to talk about easing with inflation still well above its 2% target.
Exacerbating the bond moves is a rise in the compensation investors demand for holding longer-dated debt. In Europe, that so-called “term premium” could add 50 basis points to 10-year rates, according to Societe Generale.
“Rebuilding term premium can only feed long-end steepening forces,” said Adam Kurpiel, a rates strategists at the French bank. “It looks like the pain trade of even higher yields could continue until something breaks.”
What Bloomberg’s Strategists Say...
“The secular picture for bonds remains inhospitable. Rising inflation expectations, mounting supply and bonds’ diminishing hedging utility (these are all sides of the same coin), mean that any rally in bonds would be considered a trade, not an investment.”
— Simon White, Macro strategist
Click here for the full report
To be sure, there’s a view from some that the selloff has already gone too far. Take Jack McIntyre, a portfolio manager at Brandywine Global Investment Management, who has been overweight Treasuries for much of the year and now senses a long-looked-for turning point.
“I think we are in the fear stage for Treasuries, and that won’t last,” he said. “In our mind, inflation is settling and growth will slow. We will get there in six months.”
Notable too was a revised forecast from Goldman Sachs Group Inc. strategists, who now see 10-year Treasuries ending the year at 4.30%. While that’s some 40 basis points higher than their previous target, it’s below current levels.
At Candriam, global head of multi-asset Nadège Dufossé says the current market trend may not have much more to run, and she’s is considering gradually shifting into longer maturities.
“We believe we are at the end of this movement, with signs of decelerating inflation and economies weakening in Europe,” she said. “We need to endure this overshoot phase in long rates and take advantage of it.”
Even if the pressure on the long end starts to ease, another major test lies ahead as the Bank of Japan — the laggard among central banks globally — edges toward normalizing policy. Yields have already crept to multi-year highs ongoing despite efforts by policymakers to stymie the moves.
“Japan we do think is a live issue and there’s a debate to be had about what impact that should have on the global market,” said Martin Harvey, a portfolio manager at the Hartford World Bond Fund. “It’s a potential catalyst for further steepening and one that we need to monitor.”
As the week drew to a close, one piece of data offered the Fed some hope that it’s getting on top of the inflation battle. Its preferred measure of underlying price growth rose at the slowest monthly pace since late 2020.
But even if the inflation picture continues to soften in the US and elsewhere, it’s clear markets are in a new world.
“We’re just maybe reverting back to what the world looked like before 2008,” said Rob Robis, chief global fixed income strategist at BCA Research. “That period post-Lehman, pre-Covid, was one of inflation struggling to stay at 2%, growth being kind of choppy and central banks having to keep rates very low for longer.”
--With assistance from Anchalee Worrachate, Ye Xie, James Hirai, Sujata Rao and Dayana Mustak.
(Updates to show US government shutdown avoided)
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Interest Rates |
Social Security is on track to cut benefits to retirees in 2033, when its trust fund reserves are forecast to be depleted. The reduction could be substantial, according to a new analysis.
Unless the program is shored up before 2033, the typical newly retired, dual-earner couple will see their Social Security checks reduced by $17,400 annually, or $1,450 per month, according to the report from the nonpartisan Committee for a Responsible Federal Budget.
A newly retired couple with one earner would see a cut of $13,100, the report said. The analysis, which is based on current dollars, doesn't forecast the impact on newly retired single earners, but the Social Security Administration has estimated that benefits will be cut by 23% in 2033 unless the program is strengthened.
Those cuts could prove devastating to roughly 50 million older Americans who receive Social Security checks, with the Committee for a Responsible Federal Budget forecasting that "senior poverty would rise significantly upon insolvency." Still, there are plenty of proposals to fix Social Security's looming funding shortfall, either by raising taxes or increasing the retirement age, or a combination of the two.
The current average monthly benefit check for single earners is about $1,800, according to the Social Security Administration.
"Smash the cap"
Some Democratic lawmakers and left-leaning policy experts say there's a simple fix: "," which refers to the Social Security tax cap.
That cap, a feature of the program since its start in the 1930s following the Great Depression, means that any income over that level isn't subject to the Social Security payroll tax, which is 6.2% for workers and an additional 6.2% for employers. In 2023, the tax cap stands at $160,200, which means any income above that amount is exempt from the payroll tax.
But critics say this places the burden of funding Social Security on low- and middle-income earners, while higher-income Americans get a break. For instance, a middle-income worker earning less than the $160,200 cap in 2023 will pay an effective tax rate that is six times higher than that of a millionaire.
Eliminating the cap would subject higher earnings to payroll tax, generating additional revenue for Social Security and helping to stabilize its finances, proponents say.
Raise the retirement age
Some Republican lawmakers and right-leaning experts are opposed to higher taxes, however, and instead have proposed raising the retirement age.
Last year, some Republican lawmakers floated the idea of lifting the— from its current age of 66 to 67, depending on one's birth year — citing the "miracle" of longer life expectancies.
Yet critics point out that many people can't work until they are 70, due to health issues or other reasons. And even if an older worker could remain in the labor force until they were 70, it still would amount to a benefits cut because they would be losing between three to four years of Social Security checks as a result.
for more features. | Inflation |
As food banks across the country call out for donations, runners have been loading up their backpacks to take goods to local drop offs. Why are they doing it and who are they helping?
Food Bank Run is a national movement that started in Hampshire and during February it wanted as many running clubs as possible across the UK to take part.
Runners take donations to their local food bank as part of their activity.
Figures show the number of people using food banks has reached 2.1m in the UK, up from 1.6m five years ago.
Since the Food Bank Run started in September more than 500 clubs, groups and Parkruns have got involved.
They said about 25 people take part in each food bank run, donating about 100kg of supplies.
Organisers said they made a big push for clubs to take part in February as it is a "key time of the year where families are hardest hit".
A spokesman said they'd been "astonished" by the level of support the running community had offered.
"From Falmouth in Cornwall, to Aberdeen up in Scotland, we've seen runners carrying supplies to support those in need and we know there are even more planned over the coming days and weeks," he said.
More than 2,500 runners from the Milton Keynes area donated five carloads of items to the MK Food Bank.
Redway Runners, said to be one of the largest running clubs in the UK, collected donations from all 147 of its February runs.
Club chairman Martin Lawrence said they wanted to take part in the Food Bank Run to do "something to help the people of Milton Keynes".
"Our runners took to it well," he said.
"We also involved the three local Parkruns in Milton Keynes and the cross country league we are part of."
'We are very grateful'
MK Food Bank said in 2022 it gave out 26,000 food parcels, 40% more than in 2021 and almost double the amount distributed in 2019 with demand still increasing.
It said the runners' donations of more than 1,050 items was "amazing".
"When a community-minded running group decide to support a charity they really mean business, thank you to our super supporters at Redway Runners," it added.
Almost 20 members of Felixstowe Roads Runners set off on a 5km (3.1-mile) loop around the Suffolk town with rucksacks full of donations for the Salvation Army food bank.
Head coach Ian Duggan said further donations were also made by car as the club collected too much to be carried by the runners alone.
He said: "As runners we are usually focused on running for training or racing so it was lovely to be in a group with the shared purpose of supporting a great cause.
"I'm very proud of the club for joining the Food Bank Run project and members have already asked when we can do it again."
Captain Paul Williams, from the Salvation Army, said they were "very grateful" for the donations.
He wrote to the club, saying: "We couldn't do what we do without the support of people such as yourselves."
In recent weeks he said the food bank there had seen an increase in demand with about 40 families approaching for help in January.
"We recognise that the energy price hikes in April will also have an impact so we try to be ready," he added.
'It makes us all proud'
In Essex, more than 250 meals for people in need have been provided by members of a running and triathlon club.
Tracy Stratford from Harlow Running and Tri Club were determined to take part in the scheme even though their local food bank is located on "dark, windy country lanes".
So instead of members jogging there with their goods, Ms Stratford used club swimming, strength and running sessions to collect donations.
She said at least a bag was collected at each session.
Ms Stratford said the club had donated 107kg of products to Harlow Food Bank which she was told would provide 253 meals for people in need.
"It was particularly hitting to see a packing list for a family of five, which my family is, and seeing how little they'd be given, it's so sad.
"So to think that our club, along with the support of Harlow Parkrun, could donate so much to help local families, it makes us all proud," she said.
'Great idea and inspiration'
The movement has even been taken abroad.
Some 80 runners braved "gruelling conditions in ice-cold, rain-snowy weather" in Berlin on Saturday to join the group of Food Bank Run finishers.
Juliane Weymann said a diverse and inclusive group of members from various Berlin running clubs set off from four locations to the Berliner Tafel e.V. Berlin Food Bank Logistics Centre.
She said the amount of food and sanitary items dropped off was just "incredible" and runners had already requested to do it again.
She thanked the Food Bank Run team and the clubs that have taken part so far "for the great idea and inspiration".
"The UK absolutely inspired us," she said. | Nonprofit, Charities, & Fundraising |
The week of the Conservative Party conference began with a grim warning about taxes.
Now at their highest level since records began 70 years ago, taxes are also unlikely to come down anytime soon, according to the Institute for Fiscal Studies.
Where does this leave the Conservatives, the party which preaches lower taxes but has presided over a record rise since 2019?
This party conference is, in the words of one former minister I spoke to, "the survival conference" - a year on from Liz Truss announcing a series of unfunded tax cuts which saw the bond markets tank and her premiership unravel.
Accordingly, Rishi Sunak has staunchly refused to commit to any tax cuts at this stage, saying the best tax cut he can give people is getting inflation under control.
The chancellor has gone further, telling a newspaper it will be "virtually impossible" to deliver tax cuts until the economic outlook improves.
But this is where economic realities collide with politics - an election year in which the Conservatives are well behind and the party restive for a positive message.
Michael Gove expressed the views of many when he told Sunday Morning with Trevor Phillips that he hoped for tax cuts before the general election.
Senior figures on the right went further, with Sir Jacob Rees-Mogg telling Sky News the time for signalling was over, calling for action in the autumn statement in November.
"We don't need signals, we need action," he said. "I think the autumn statement is a time to say, this is what we are doing on this particular tax. I would be in favour of reversing the increasing corporation tax, as Liz Truss is.
"I'd be in favour of abolishing death duties, which I think is eminently affordable. But we need to do things, not promise them."
Read more:
Will just the rich benefit from inheritance tax cut?
Inheritance tax 'punitive and unfair'- minister
Speculation has been rife that the prime minister is planning a pre-election giveaway on inheritance tax.
Tory sources point out it is widely unpopular even though only 4% of estates are liable for it.
There are also spending cuts under consideration, with the High Speed 2 rail line, winter fuel payments for richer pensioners and some benefits being looked at for potential savings.
But after a decade of austerity, and the realities of an ageing populations and pressures on the health service, savings will not be easy or popular.
Jeremy Hunt will today insist sunlit uplands are within reach, saying the British economy has grown faster since 2010 than others in Europe.
The party will also confirm it will accept recommendations to raise the national living wage to at least £11 an hour in 2024 - meeting a manifesto commitment to raise the wages of the lowest paid to two-thirds of the median earnings.
Whether this will make up for increases in rent, energy bills, food and childcare costs will be one of the questions voters weigh up at the next election.
Ms Truss will be appearing in Manchester, at a rally for economic growth in which she will call for corporation tax to be cut back - an aim Mr Hunt used to strongly support. How much support she receives there from activists will be closely watched.
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Tories know from recent experience the perils of promising tax cuts which don't add up.
They also have a party desperate for a voter-friendly message to end the gloom - and fear the chancellor's speech later may not provide it. | United Kingdom Business & Economics |
Cedar Fair and Six Flags will merge to create a playtime powerhouse in North America
Cedar Fair and Six Flags Entertainment Corp. are merging, creating an expansive amusement park operator with operations spread across 17 U.S. states and three countries
Cedar Fair and Six Flags are merging, creating an expansive amusement park operator with operations spread across 17 U.S. states and three countries.
The combined company will boast 27 amusement parks, 15 water parks and nine resort properties in the U.S., Canada, and Mexico.
Amusement parks have not bounced back from the pandemic as quickly as other entertainment industries and a tie-up between two huge players is expected to at least lower costs.
Six Flags and Cedar Fair, which have little geographical overlap, anticipate $120 million in cost savings within two years of closing the deal.
Under the agreement announced Thursday, Cedar Fair unitholders will receive one share of common stock in the combined company for each unit owned, while Six Flags shareholders will receive 0.5800 shares of stock in the combined company for each share owned.
The company's newly formed board will include six directors from Cedar Fair and six directors from Six Flags.
The new, combined company will be headquartered in Charlotte, North Carolina, and will keep significant finance and administrative operations in Sandusky, Ohio, where Cedar Fair is based.
Six Flags is now based in Arlington, Texas.
Once the deal closes, the combined company will operate under the name Six Flags and trade under the ticker symbol “FUN” on the New York Stock Exchange.
The transaction is targeted to close in the first half of next year. It still needs approval from Six Flags shareholders.
Shares of Six Flags Entertainment Corp. and Cedar Fair LP were essentially flat before the opening bell Thursday, but both are up more than 9% this week after rumors of a deal began to spread. | Consumer & Retail |
Baby boomers’ wealth is being undertaxed, while younger workers’ income is squeezed by an “unnecessarily complex and opaque” system, a leading think tank has claimed.
A generational wealth divide means that young people today have less wealth on average than their parents did at the same age, the Institute for Fiscal Studies said.
Those born in the 1940s, 50s and 60s enjoyed regular pay rises during their careers, were more likely to have generous defined benefit pensions and had more affordable housing, the think tank wrote.
Meanwhile, those born in the 1980s or later have suffered from weak earnings growth since the mid 2000s, have less appealing pensions and are worse off because of low interest rates, which have made both housing and saving for retirement less affordable, it said.
In a wide ranging report on tax reform, the IFS argued there were problems with how returns generated by wealth were taxed. “Large capital gains – many of them the result of luck – have been at the core of the rise in net household wealth and the growing intergenerational divide,” it said.
The IFS added there was a “strong case” for taxing housing capital gains, and that pensions gave “overly generous” subsidies to wealthy groups who were not in danger of penury in old age.
For example, it pointed to lump sum rules, which allow people to withdraw a quarter of their pension, up to a limit of £268,275, free of income tax. “Given that there is also income tax relief on contributions, this means that a significant portion of pension wealth…is never subject to income tax. The design of this feature means that the tax break is largest for those with the most pension wealth,” it said.
Meanwhile, the think tank found workers’ income is taxed in a way that is “unnecessarily complex and opaque”, with rising effective tax rates threatening to disincentivise work.
“Many people are likely unaware, for instance, that each additional £1 paid by an employer to an employee earning £25,000 a year will ultimately be taxed at an overall rate of 40pc,” it said.
The number of earners paying the top rate of tax is expected to double this year, according to official figures. Chancellor Jeremy Hunt’s decision to lower the additional rate threshold down from £150,00 to £125,140 earlier this year will mean 862,000 earners will pay the 45p rate in this tax year, up from 433,000 in 2020/21.
The freeze on tax thresholds will also mean the number of over 65s paying the tax grows from 7.73m last year to 8.5m in 2023/24 – double the number paying income tax in 2004/05.
The IFS noted that inheritance tax was also in need of reform, describing it as “flawed” and “easy to avoid for the very largest estates”.
Thousands of families are hit each year by the divisive death duty, which is levied at a rate of 40pc on estates typically worth more than £1m.
But this is forecast to surge over the coming years, as frozen thresholds and a historic boom in house prices mean even the moderately wealthy are being dragged into paying the tax.
Meanwhile, the biggest estates are able to dodge paying the tax at all, the IFS said. The report authors wrote: “This can be achieved by transferring significant portions of wealth more than seven years from death (straightforward for the very wealthy but more difficult for those whose main wealth is tied up in their home) or through the use of reliefs, notably including those for agricultural land and unquoted business assets.”
The news comes as The Telegraph is calling on the Prime Minister and Chancellor to abolish inheritance tax.
The number of families paying inheritance tax has almost doubled over a decade of Tory rule. Around 27,000 estates paid the duty in the 2020/21 tax year, with the average bill hitting £214,000. This was up from 15,000 families in 2009/10.
This is expected to rise to 47,000 by 2028, according to the Office for Budget Responsibility, because of the “fiscal drag” effect. Internal forecasts at HMRC suggest that it could be even higher, at 49,400.
Individuals can currently pass on up to £500,000 to their relatives tax free, made up of a basic allowance of £325,000 plus an extra £175,000 for their main residence if it is passed to children or grandchildren. Spouses can share their allowances.
The Treasury was approached for comment. | Inflation |
- Target said it has struck a long-term deal with Kendra Scott to carry exclusive collections of earrings, necklaces and more.
- The jewelry will debut online and at about 150 stores as Target gears up for the holidays.
- The cheap chic retailer has struggled with slower sales and public backlash in recent months.
Target said Tuesday that it has struck a deal with jeweler Kendra Scott to carry exclusive collections of earrings, bracelets and more, as it looks to get its sparkle back ahead of the key holiday season.
The cheap chic retailer has established a reputation for launching its own brands and dedicating parts of its stores to merchandise from well-recognized national names, such as Levi Strauss, Disney and Apple. It has mini Ulta Beauty shops inside of a growing number of its stores, too.
With the new deal, colorful jewelry designed by Kendra Scott for Target will be available online and at about 150 stores. The first collection of more than 200 items, which range from $15 to $60, will hit on October 22 — just as customers are putting holiday shopping lists together and snagging early gifts. Most items cost less than $40, Target said.
The big-box retailer declined to share the deal's financial terms, but described it as "a long-term strategic partnership."
The past year and a half has brought a sharp dose of reality for Target, which thrived and gained market share during the pandemic. The retailer dealt with the fallout of having the wrong merchandise last year as shoppers went out and about again.
In more recent quarters, Target shoppers have pulled back on buying clothing, home decor and other discretionary items while they spend more on experiences and pay higher grocery bills because of inflation. The company also faced public backlash over its Pride merchandise collection, which dinged sales in the most recent quarter. It has also pointed to organized retail theft as a challenge weighing on profits.
Target cut its forecast in August. It said it now expects comparable sales to drop by around mid single digits, and earnings per share to range from $7 to $8 for the full fiscal year.
Shares of Target have fallen nearly 18% this year, far behind the 17% gains of the S&P 500. The company's stock hit a 52-week low in late August.
On an call with reporters last month, CEO Brian Cornell said Target expects consumers will feel pressured in the coming months because of the return of student loan payments, rising interest rates, and the still higher cost of necessities.
Yet Target has had luck getting shoppers to add some discretionary items to their baskets: makeup and other beauty items.
Sales at its mini Ulta shops in the fiscal second quarter more than doubled, and sales of other beauty items posted double-digit gains compared with a year ago, Target's Chief Growth Officer Christina Hennington said last month.
That's a formula it wants to replicate in other categories like jewelry. | Consumer & Retail |
New York real estate developers slammed the judge who stripped Donald Trump of his business empire for allegedly inflating the prices of his properties — with some predicting the decision will be overturned on appeal.
Justice Arthur Engoron issued a summary judgment last month calling for a receiver and the canceling of the Trump Organization’s business certificates after state Attorney General Letitia James filed a $250 million civil fraud lawsuit against the former president.
His ruling was temporarily paused by an appeals court at the start of trial, which continued this week.
“I don’t think Trump will lose his properties or his business licenses because of one eccentric judge making a decision on his own. I think [the decision] will be reversed on appeal, but I could be wrong,” one major real estate player said.
Top developers interviewed by The Post — including those who love Trump and those who loathe him — admit there has always been a bit of embellishment when dealing with banks about their properties.
“The Real Estate Board of New York’s annual party — the equivalent of Vanity Fair’s Oscar party — is even dubbed ‘The Liar’s Ball,'” one developer noted.
However, the ramifications of possibly losing their properties is no joking matter, and Engoron’s decision — whether it is an overreach or not — has sent a chill through the industry.
“Canceling business certificates is carte blanche to go after anyone for anything,” one concerned developer said. “I’m not defending Trump. But now they have another tool in their toolbox. Where does it end? It’s a little scary.”
Trump’s former lawyer and longtime fixer Michael Cohen spent two days on the stand this week testifying that he “reverse engineered” Trump Organization asset values based on whatever number Trump chose.
The former president’s defense has been, essentially, that every developer lies and that there was no victim because the bank loans were paid back and that everyone made money.
The onus falls on banks to do their due diligence before issuing any loans, one legal expert told The Post.
“No one lost money. No one got hurt. Everyone got paid in full — even overpaid since the assets were inflated,” real estate lawyer Adam Leitman Bailey said.
The argument carried weight with many developers, including one who has clashed with Trump in the past.
“So Trump is a fraud. We all know it. He always has been. He’s the world’s best con man. The question is, if everybody knows you are a fraud, who are you defrauding?” the developer said.
But another legal expert dismissed the notion that Trump committed a victimless crime.
Business litigation attorney David Slarskey said the Trump Organization’s extreme lies and falsifications go way beyond developers’ standard “fudge factor” — what developers themselves call “puffery” and “aggressive interpretation” of truth.
“The victims of the fraud are not the banks but the integrity of the system itself,” Slarskey said.
“It is not a question of whether a bank makes a profit but what role does this organization play in the ecosystem and does that need to be addressed.”
He added that the Trump Organization’s outright lies and falsifications of square footage at Trump’s Fifth Avenue penthouse, for example, are so “grossly out of line with anything anyone could imagine that it becomes a regulatory issue, that this is the kind of organization that shouldn’t be allowed to operate in New York.”
Trump is known to have embellished almost everything about Trump Tower.
He said it was 68 stories tall when it was really 58 stories.
He said his penthouse triplex was 30,000 square feet instead of 10,000.
He hired undocumented Polish works, promised to pay them and then didn’t — until they sued.
He promised to save Art Deco pillars that were on site, part of the former Bonwit Teller building, but he didn’t.
“I remember being in his penthouse decades ago,” one developer said. “Donald was looking for an appraisal and told someone in the room it was 30,000 square feet. Then he looked at me and winked.” | Real Estate & Housing |
Keir Starmer has accused the government of having “lost control of immigration”, as Labour announced a plan to change the post-Brexit migration system to boost skills and wages.
In a prime minister’s questions a day before new annual net migration statistics are expected to show a record number of arrivals, Starmer said Rishi Sunak had broken the Conservatives’ manifesto promise to reduce immigration.
In an announcement made as Starmer spoke, Labour said it would scrap a rule under which overseas staff brought into the UK to fill vacancies on the shortage occupation list, including health, IT and engineering workers, could be paid up to 20% less than the equivalent domestic wage.
The party said it would also seek to change the apprenticeship levy, whereby large organisations set aside 0.5% of their payroll for apprenticeships, but which has been criticised for the limited range of available training, meaning much of the money is never used.
Condemning what he called “the low-wage Tory economy”, Starmer used all of his PMQs questions to tackle Sunak on immigration, an issue on that Labour have traditionally been seen as politically vulnerable.
“How many work visas were issued to foreign nationals last year?” the Labour leader began, with Sunak pre-empting the expected rise in net migration by citing what he called “a set of unique circumstances”, including humanitarian arrivals from Ukraine and Hong Kong
Starmer went on: “The figures are out – it’s a quarter of a million work visas issued last year. He knows that answer, he just doesn’t want to give it, and the new numbers tomorrow are expected to be even higher.
“The prime minister stood on three Tory manifestos. Each one promised to reduce immigration – each promise broken.”
An often noisy session, in which the Conservative MP Paul Bristow was ejected form the Commons by the speaker, Lindsay Hoyle, Starmer also mocked Sunak over claims Suella Braverman, the home secretary, sought to enlist civil servants to help her with the aftermath of a speeding fine.
“Why does he think his home secretary seems to have such a problem coping with points-based systems?” Starmer asked at one point, adding: “The home secretary may need a speed awareness course – he needs a reality check.”
Sunak defended the government’s record, pointing to the announcement earlier in the week of a curb on the ability of overseas students in the UK to bring family members with them.
“Just this week we announced the biggest ever single measure to tackle illegal migration,” he said.
Starmer replied: “If anyone wants to see what uncontrolled immigration looks like, all they got to do is wake up tomorrow morning and listen to the headlines.
“The reason they are issuing so many visas is labour and skills shortages. And the reason there are shortages is the low-wage Tory economy. Under his government’s rules, businesses in IT, engineering, healthcare architecture and welding can pay foreign workers 20% less than British workers for years and years on end. Does he think his policy is encouraging businesses to train people here or hire from abroad?
“They’ve lost control of the economy. They’ve lost control of public services, and now they’ve lost control of immigration.”
Labour would, Starmer told MPs, “fix the apprenticeship levy, fill the skills gap and stop businesses from recruiting from abroad if they don’t pay properly.”
A subsequent Labour press release said the scrapping of the 20% wage rule would be part of an attempt to “put skills and fairness at the heart of a properly managed and controlled immigration system”.
The ability to pay a lower wage for overseas recruits in the long-term removed the incentive for firms to train UK workers, the party argued. | United Kingdom Business & Economics |
Inflation has been hard, but the meme about the $16 McDonald’s meal was misleading
It even caused a problem for the White House.
Sometimes, there are images that perfectly encapsulate a moment in time. In December 2022, a viral TikTok video featuring a burger meal at McDonald's that cost a whopping $16.10 went viral, and to many Americans struggling through inflation, the image rang true.
Topher Olive posted the TikTok video on December 10, 2022, showing a burger, large fries, and a large Coke that cost $16.10.
The price of a value meal at McDonald’s is something that every American understands. The Economist even uses the Big Mac sandwich as a tongue-in-cheek way of measuring the purchasing power between countries.
Surely, if a McDonald’s burger meal was becoming too expensive for the average American to eat for lunch every day, then the country must be headed in a disastrous direction. The image was the perfect weapon for those looking to blame President Biden for his handling of the economy in the aftermath of the COVID-19 pandemic.
However, the TikTok video posted by Olive was a bit misleading, and some major media outlets didn't provide proper context during their coverage.
@topherolive
#prices #inflation #laborshortage #fastfood
The item pictured in the meal was a limited-edition “smoky” double quarter pounder BLT. The “smoky” quarter pounder BLT is known as the “most expensive” single patty burger on the McDonald’s menu, and this guy ordered a double.
According to McDonald's, the “smoky” double quarter pounder BLT is two slices of melty American cheese, thick-cut Applewood Smoked bacon, fresh Roma tomatoes, shredded lettuce, smoky sauce—and two quarter-pound patties all served on a toasted sesame seed bun. It sounds tasty, but it also sounds a bit more expensive and ingredient-heavy than a Big Mac, which currently costs the average American $5.15.
The image was so influential that it was flagged by the White House Office of Digital Strategy, and it had no idea how to push back against the viral story. “What are we supposed to do, tell the president or Chuck Schumer to send a tweet saying, ‘Hey, most Big Macs aren’t that expensive?’ It would look ridiculous,” an anonymous Democratic official told The Washington Post.
The McDonald’s story further proves that it is nearly impossible to create a coherent national narrative when misleading information spreads faster than facts. As the country dives headfirst into the 2024 election cycle, the story is an excellent reminder for all of us to be skeptical of what we see being passed around online or to at least look a little closer at the receipts when provided.
Even though the McDonald’s story was misleading, it doesn’t mean that it will be easy for the Biden White House to paint a rosy picture of the economy for the average American. According to J.P. Morgan, the economy is performing "better than expected," consumer spending is "resilient," interest rates are stabilizing, inflation is improving and the unemployment rate is low.
But those abstract ideas are complex to communicate when the average American spends about $700 more monthly than they did 2 years ago. | Inflation |
About 3% of families in the UK - at least 2.1 million people - used a food bank in the year to March 2022, according to official figures.
That rose to about one in nine (11%) for families receiving state income-related benefits.
Those in the north of England and Scotland were most likely to have used a food bank in the previous 12 months compared to the rest of the UK.
These are the first Department for Work and Pensions figures on food bank use.
The data was collected between April 2021 and March 2022, with people asked if they had been to a food bank in the last 12 months and last 30 days. So the figures cover some of the pandemic but miss most of the energy price crisis, which hit in April 2022.
It comes amid the continuing cost-of-living crisis, with prices rising more than expected, according to new inflation figures released this week.
Asked if they had used a food bank within the last 30 days, about 1% of families (at least 600,000 people) said yes - rising to about 3% for families on benefits.
Some 4% of families in Scotland and the north of England had used a food bank within the 12-month period, while 3% had in Wales, the West Midlands and south-east of England.
The figure fell to 2% for Northern Ireland, the East of England, east Midlands and south-west of England.
Some 10% of households where the head of the household was aged 16 to 24 had used a food bank in the last 12 months of being surveyed. No other age bracket saw a figure of more than 4%.
While the official figures only show food bank use up to early last year, statistics from food poverty charity the Trussell Trust have shown an increase in usage between April 2022 and September 2022, up to just above the levels seen at the start of the pandemic.
Between 1 April 2022 and 30 September 2022, food banks in the charity's UK-wide network distributed almost 1.3 million food parcels - a rise of 52% compared to the same period to September 2019.
Heather Buckingham, director of policy and research at the Trussell Trust, told BBC News the figures were "deeply concerning" but "sadly not surprising".
She called on politicians to guarantee that the basic rate of Universal Credit was calculated so that it would always at least cover the cost of essentials.
"At the moment, a single person in receipt of Universal Credit falls £35 short a week at least of the amount we think is needed to afford those very basic essentials that we all need to get by," she said.
Households where there were people with disabilities and single-parent families were overrepresented among those needing to use food banks, she said.
Other figures published by the DWP showed the number of people living in poverty in the UK has almost returned to pre-pandemic levels.
In total, 14.4 million people were estimated to be in relative low-income households - with below 60% of average household income - in the year to March 2022, up from the 13.4 million in March 2021 and close to the 14.5 million the year before, as the Covid pandemic hit.
Some 4.2 million children were estimated to be living in poverty in the year to March 2022, a rise from 3.9 million the previous year and just below the 4.3 million in March 2020.
Becca Lyon, head of child poverty at Save the Children UK, said the "grim figures" proved families were "still very much in the depths of a crisis".
"Growing up in poverty means growing up too fast - with kids exposed to concerns about money and bills," she said. "This can leave lasting scars. Families need a proper benefits system that protects them from hardship, and means children can grow up without having to know what the inside of a food bank looks like."
The charity Action for Children accused ministers of knowing how to help, due to the action taken during the pandemic, but "choosing not to do it".
Its director of policy and campaigns, Imran Hussain, called for the child element of Universal Credit to be increased and the benefit cap to be scrapped.
"There is so much more this government can do in these tough times to stop those with the least from suffering the most," he said.
A government spokeswoman said it was committed to "eradicating poverty and supporting those in need", adding there are nearly two million fewer people in absolute poverty than there were in 2009/10.
"These latest figures reflect the country coming out of the pandemic and accompanying rising prices, which we have since helped to address with record levels of support via cost of living payments to over eight million households, and plans to provide up to £1,350 of direct payments for the most vulnerable over this year and next," she said.
Does your family use a food bank? How are you coping with the rising cost of living? Share your experiences by emailing [email protected].
Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways: | United Kingdom Business & Economics |
We follow our American friends in many trends, albeit lagging a decade or two behind. Obesity is no exception. Two in three British adults are now overweight or obese. Walk down any high street in the country and the scale of the problem is staring you in the face. There is no greater indictment of the state of Britain’s health than spending fifteen minutes people-watching.
Let me make this abundantly clear – for a small number of people, losing weight is impossible or incredibly difficult because of genuine medical reasons. For many however, that is simply not the case.
Some have come to think that obesity should be ignored to avoid hurting feelings or causing embarrassment. Fat shaming even seems to have become an equality issue. This is an extremely dangerous attitude. Obesity kills – we need to admit that clearly. Patients deserve to know the health consequences of bad lifestyle choices. Overweight people are more likely to develop cancers, to have heart attacks, to develop diabetes. They are more likely to need hip and knee replacements and develop more complications following surgery. The cost to the NHS is massive. But more important than that, the cost to their happiness and wellbeing is devastating.
Patronising commentators remove all sense of control from the individual by pushing the responsibility onto the state. Why is it up to governments to regulate what people and their families eat? A calorie tax is just so unfair to many poorer families struggling with the cost-of-living crisis. Suggesting that anyone carrying a few extra pounds is a helpless slave to the processed food industry inevitably turns it into a self-fulfilling prophecy. Bans, restrictions, and taxes will achieve nothing apart from making the poor poorer. Without an individual wanting change, nothing positive will happen.
We need to turn the conversation on its head. Inspire and enable people to drag themselves out of obesity – through better awareness, increased activity, and improved diet. The ridiculous Covid lockdown measures cost billions of pounds. Spending a fraction of that on parks, gyms, pools and pitches in every town in Britain could save many thousands of lives in the long run. Run proper, well-funded food education courses in every school, teaching children about what they are eating and how to prepare it. Genuine life skills. We must prevent Fat Britain from becoming a disaster zone.
And of course, Covid affected the obese far more seriously than those who were fit and healthy. The pandemic was a once-in-a-lifetime opportunity to change how we approach health in this country. We knew the severe increased risk that obese patients faced from the virus, so what did we do? Placed the country under house arrest and made exercise more difficult. People stayed home, they cooked banana bread and millions put on serious weight.
Obesity does kill, let’s not pretend that it’s in any way healthy. People should be comfortable in their own skin, but they should also be aware of the risk behind their choices. And for many it is that – a choice. Dragging yourself out for a short run or politely declining an extra biscuit is not easy, but it is achievable for most. If you’re up to date with the latest TV series, then you have 30 minutes in your day to exercise.
Politically correct marketing campaigns glamourising obesity and avoiding size zero are partly responsible. It may sell fancy clothes, but it will cost lives. This is not an incurable problem with no proven solutions. We know for sure that it’s one of the biggest avoidable risk factors for developing cancer. Being told you’ve got cancer is a life-changing moment and I've been involved in thousands of those conversations. Anything you can do to reduce your risk is to be encouraged.
It’s not about running marathons every weekend or overhauling your entire diet by going vegan. It’s about finding a sustainable balance that will last the rest of your life, and perhaps even lengthen it. If the Government really wants to tackle the obesity crisis it needs to focus on enabling individuals to deliver positive change to themselves. My advice to you? Take responsibility for your own health because nobody else is going to.
Professor Karol Sikora has been a consultant oncologist for 44 years and was a past director of the WHO Cancer Programme | United Kingdom Business & Economics |
Apples and pears could be the next food shortage in the UK, after it emerged that British growers are planting just a third of the number of trees needed to maintain orchards, saying their returns from selling to supermarkets are unsustainable.
Ali Capper, head of the British Apples & Pears trade association which represents about 80% of the industry in the UK, said 1m new trees would have to be planted each year to maintain the UK’s 5,500 hectares (13,590 acres) of production.
This year farmers had planned to order just 480,000 apple and pear trees but that has been slashed to 330,000. Capper said the key reason for the lack of investment was “supermarket returns that are unsustainable”.
She said fruit growers’ costs had increased by about 23% as the cost of picking, energy, haulage and packaging had risen but that was being met by a less than 1% increase in returns. “The majority of growers are losing money.”
Some are planning to quit the industry and others have effectively mothballed their orchards or are grubbing them up as the returns dwindle. “This is a very serious situation,” said Capper. “The future of apple and pear growing in the UK is seriously in doubt.”
Britain is already facing shortages of multiple fresh food items, prompting Tesco, Asda, Aldi and Morrisons this week to limit purchases of certain lines including tomatoes, cucumbers and peppers.
The shortages have been triggered by cold weather in Spain and north Africa hitting crops there and by big cutbacks by British and Dutch growers, who plant salads under glass at this time of year, as growers say supermarkets were not prepared to cover the increased cost of heating.
Some importers say Brexit has also meant the UK is at the back of the queue behind the EU when competing to buy scarce fresh produce, because of the increased costs and bureaucracy associated with shipments over the channel.
It comes as nearly a fifth (18%) of UK adults said they had experienced shortages of essential food items in the past two weeks according to the Office for National Statistics, up from 13% a year ago, as food importers say Britain’s exit from the EU continues to mean higher costs and potential holdups because of the weight of bureaucracy.
Thérèse Coffey, the environment minister, said on Thursday she expected the shortages of some fresh food items to last for up to a month, but some British growers say the shortages could last until May.
Coffey suggested in the same session in parliament that British households might “cherish” British turnips instead of unseasonal crops from abroad. By Friday morning Tesco’s website had sold out of turnips, offering shoppers the option of a swede instead.
British field crops including leeks, carrots and kale have also been affected by frosts before Christmas that reduced harvests this year as farmers struggle with rising costs and volatile weather partly caused by climate change.
Tim Casey, the chairman of the Leek Growers’ Association, said that British leeks might be difficult to find for St David’s Day this year: “Leek farmers are facing their most difficult season ever due to the challenging weather conditions,” he said.
“Our members are seeing yields down by between 15% and 30%. We are predicting that the supply of homegrown leeks will be exhausted by April, with no British leeks available in the shops during May and June, with consumers having to rely on imported crops.”
Clive Baxter, whose family has been growing apples for 80 years in Kent, said he planned to hand back 24 hectares (60 acres) of apples, pears, cherries and plums on leasehold land to his landlord next year – meaning the trees were likely to be grubbed up – and was leaving another 3.6 hectares (nine acres) of his own orchards to go fallow.
“We haven’t seen quite such dramatic change to the fruit industry in this country since the 1987 hurricane when a huge amount of fruit came out of the ground because of the damage from the storm,” he said.
Baxter has diversified into vineyards as the price is more protected as supermarkets are offering him less money for his apples and pears while costs have risen, largely thanks to soaring fertiliser, energy and labour costs in the wake of Brexit which slowed the flow of workers from Europe. “We are already losing money,” he said.
Nearby farmer Richard Budd at Stevens Farm in Hawkhurst told the BBC’s South East news programme that he is taking out 20 hectares (50 acres) of orchards.
Another farmer told the British Growers Association survey of British Apples & Pears growers: “We have decided to quit apple growing in two years’ time after 40 years of growing fruit.”
Capper said if fruit trees disappeared it would not only put food security at risk but affect biodiversity which had been fostered in many orchards. | United Kingdom Business & Economics |
WeWork, the SoftBank Group-backed startup whose meteoric rise and fall reshaped the office sector globally, sought US bankruptcy protection on Monday, after its bets on companies using more of its office-sharing space soured.
The move represents an admission by SoftBank, the Japanese technology group that owns about 60% of WeWork and has invested billions of dollars in its turnaround, that the company cannot survive unless it renegotiates its pricey leases in bankruptcy.
Profitability has remained elusive as WeWork grapples with its expensive leases and corporate clients canceling because some employees work from home. Paying for space consumed 74% of WeWork’s revenue in the second quarter of 2023.
The company reported estimated assets and liabilities ranging from $10 billion to $50 billion, according to a bankruptcy filing.
“WeWork could use provisions of the U.S. bankruptcy code to rid itself of onerous leases,” law firm Cadwalader, Wickersham & Taft LLP said in a note to landlords on its website in August. Some landlords are bracing for a significant impact.
Under its founder Adam Neumann, WeWork grew to be the most valuable US startup, worth $47 billion.
It attracted investments from bluechip investors, including SoftBank and venture capital firm Benchmark, as well as the backing of major Wall Street Banks, including JPMorgan Chase.
Neumann’s pursuit of breakneck growth at the expense of profits, and revelations about his eccentric behavior, led to his ouster and the derailment of an initial public offering in 2019.
SoftBank was forced to double down on its investment in WeWork, and tapped real estate veteran Sandeep Mathrani as the startup’s CEO. In 2021, SoftBank cut a deal to take WeWork public through a merger with a blank-check acquisition company at an $8 billion valuation.
WeWork managed to amend 590 leases, saving about $12.7 billion in fixed lease payments.
But this was not enough to compensate for the fallout from the COVID-19 pandemic, which kept office workers at home.
Many of its landlords, who were also feeling the squeeze, had little incentive to give WeWork a break on the terms of their leases.
While WeWork had some success in signing up large conglomerates as clients, many of its customers were startups and smaller businesses, which cut their spending as inflation soared and economic prospects soured.
Adding to WeWork’s woes was competition from its own landlords.
Commercial property companies that traditionally only entered into long-term rent agreements started offering short and flexible leases to cope with the downturn in the office sector.
Mathrani was succeeded as WeWork CEO this year by former investment banker and private equity executive David Tolley, who as chief executive of Intelsat helped the debt-stricken satellite communications provider emerge from bankruptcy in 2022.
WeWork engaged in debt restructurings, yet this was not enough to stave off its bankruptcy.
The company last week secured a seven-day extension from its creditors on an interest payment, to win more time to negotiate with them. | Real Estate & Housing |
Student loanafter a three-year pandemic-era pause and the Supreme Court this summer dashed hopes for relief by blocking to erase up to $20,000 in debt for eligible borrowers.
With the resumption of payments proving a financial hardship for many Americans, some people are turning to other means to find the money: asking for handouts.
Through October, the number of crowdfunding campaigns on GoFundMe tied to college loans has surged nearly 40% over the last 12 months, with those seeking to raise money coming from diverse backgrounds and across all age brackets, according to data the platform shared with CBS MoneyWatch.
"GoFundMe is often a reflection of real-time needs because it is a resource people turn to when they find themselves with unexpected expenses," Margaret Richardson, GoFundMe's chief corporate affairs officer told CBS MoneyWatch.
Similarly, GoFundMe saw a five-fold increase in fundraisers by schools trying to raise money when an emergency federal program offering free school meals ended in 2022.
More than half of federal student loan borrowers said say they would have to choose between making loan payments when the pandemic forbearance ended and covering necessities like rent and groceries, an August survey from Credit Karma found. Food banks also report an increase in since student loan payments resumed.
"As people realize they have obligations and are already at or beyond their budgets, GoFundMe is often a place people will turn for support from their families and communities to meet their needs in ways they otherwise can't between their income and savings," Richardson said.
Among the student-loan related GoFundMe campaigns is a plea for help from Jevaughn Edwards, a Drexel University senior studying economics. Edwards wrote that his grandparents, the cosigners on his student loans, recently passed away.
"As I embark on the last year of my studies, I am seeking any sort of support, aid, etc. that may be available to me. I am currently unregistered for the upcoming quarter due to a financial hold on my account amidst my situations," Edwards said, adding that he has "no other resources to tap into."
Edwards is trying to raise $40,000, which reflects his current outstanding student loan balance as well as what he would owe were he to recommence his studies. To date more than 50 people have donated a total of just over $3,000.
Another college student, Michael Paddleford, started a campaign two weeks ago to pay off his remaining tuition balance in order to receive a bachelor's degree in criminal justice and human services.
"Unfortunately, I was recently notified of a remaining balance on my account that will prevent me from receiving my degree until it is paid off," he wrote. "I have maxed out my student loans, and Financial Aid covered all but $5000 of my tuition costs."
Five donors have contributed $270 against his $5,000 goal.
for more features. | Personal Finance & Financial Education |
Women in their 30s are on average £4,000 a year worse off than they were in 2010, new figures show.
Data from the Office for National Statistics (ONS) shows the median full-time salary for those aged 30 to 39 has dropped from £37,899 in April 2010 to £33,740 in April 2023 - leaving them, on average, £4,159 a year and £350 a month worse off in real terms.
The calculation was made using the Consumer Price Index measure of inflation, which tracks the average change in prices paid by consumers over a period of time for a basket of goods and services.
The Labour Party blamed the figures on "stagnant wages, low growth and a lack of interest in supporting women staying in, or re-entering, the workforce".
Shadow women and equalities secretary Anneliese Dodds said: "The Conservatives crashed the economy and lumped working women with the bill."
She added: "Many women in their 30s are trying to get on the property ladder, get on at work and raise young children.
"But for too many the reality is a struggle to make ends meet, often worrying about the next bill, unable to work because of extortionate childcare or jobs that are too inflexible."
The party also provided analysis from the House of Commons Library which showed that women in London across all age groups were over £4,300 a year worse off.
In the South East, and Yorkshire and the Humber, they were over £2,000 a year worse off.
The release of the figures coincides with the week of Equal Pay Day, which the Fawcett Society says marks the time in the calendar year when women start to work for free because of the pay lag on male earnings.
Read more:
Parents say childcare costs forcing them out of work
Iceland's PM joins women on strike over equal pay
ONS figures earlier this month showed that the gender pay gap increased across all age groups between 2022 and 2023, except for 18 to 21-year-olds, where it decreased from 1.1% to negative 0.2%.
The largest increase was seen among employees aged 30 to 39 years, where the gender pay gap increased from 2.3% to 4.7%, which the ONS said was the highest value of the gender pay gap for this age group since 2009.
The body said that the gender pay gap stood at 7.7% in April this year, despite the fact it has been declining slowly over time.
Conservative Minister for Women Maria Caulfield said: "Labour cannot be trusted to support women's livelihoods - the number of unemployed women rose by 25 per cent when they were last in office.
"On the other hand, we have supported millions more women into work, helped record numbers of women entrepreneurs set up businesses, and made significant progress in slashing the gender pay gap.
"We are going further than ever before in reforming childcare to support parents in the workplace, and as set out in the autumn statement this week, we are helping more women keep more of their hard-earned money with the biggest package of tax cuts since the 1980s.
"We are ensuring that women have the opportunity to build brighter, more secure lives for themselves and their families. Labour's £28bn borrowing plan would fuel inflation and inevitably result in tax rises for households across the country." | United Kingdom Business & Economics |
Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more.
Welcome back to Chain Reaction.
Earlier this week, I took a look at what some major crypto whales’ wallets were doing, where they parked their funds and how their activity signals movement in the broader market.
I examined six wallets, which were provided to TechCrunch by on-chain portfolio data from Nansen. The wallets are worth almost half a billion dollars, with the majority of their assets allocated on the Ethereum blockchain, the data showed.
A majority of the wallets include “wrapped” crypto assets, which is a tokenized version of the original coin that holds the same value. For example, there’s bitcoin (BTC) and wrapped bitcoin (wBTC) and an investor would own the latter if they wanted to use bitcoin on the Ethereum network, which it doesn’t operate on. It can, though, through the wrapped version.
Overall, these whales are generally risk-off, given the majority are holding liquid staking tokens, stablecoins and wrapped bitcoin and ether, signaling a conservative mindset.
There were also some surprising aspects to a few of the wallets, which we dive into further here.
This week in web3
The definition of a security is “intentionally broad and flexible,” Former SEC Chairman Jay Clayton said. But, there’s a chance that something once labeled a security, “might not always be a security.” So what could cause that shift? Present utility versus future utility, Clayton said. Take broadway show tickets as an example: If someone bought 1,000 tickets for $10 and told their friends and family they would be able to resell those tickets for $100 or $1,000, then it’s a security, he said. “But if you just buy the ticket 10 years later, it’s just a ticket.”
While the Western world debates how to regulate stablecoins, Hong Kong is forging ahead with a regulatory framework for cryptocurrencies pegged to traditional financial assets. The Hong Kong Monetary Authority (HKMA) is in the process of seeking comments from the public regarding stablecoins and aims to introduce a regulatory framework by the end of 2024, said the city’s Undersecretary for Financial Services and the Treasury, Joseph Chan Ho-lim, according to local media.
US VC giant Andreessen Horowitz — which has about $35 billion in assets under management — is to open its first (yes, the first) international office in London, led by one of the firm’s general partners, Sriram Krishnan. The office will focus on supporting the development of crypto, blockchain technologies and associated web3 startups. a16z has committed $7.6 billion to crypto startups globally.
Consumer trading and investment app Robinhood is moving to restrict the holding and trading of certain major cryptocurrencies on its platform, barely a week after the U.S. Securities and Exchange Commission’s lawsuits against crypto exchanges Binance and Coinbase. After reviewing Robinhood’s most recent quarterly results, we feel that the decision is backed by some amount of reason.
The U.S. Department of Justice has charged two Russian nationals for hacking and causing the subsequent collapse of Mt. Gox, one of the largest and most popular crypto exchanges. In an unsealed indictment, the DoJ named Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, of hacking the exchange and conspiring to launder about 647,000 bitcoins, worth about $17.2 billion today. Mt. Gox shutdown in 2014 after filing for bankruptcy when the theft was revealed, and then was ordered to liquidate.
The latest pod
For this week’s episode, Jacquelyn interviewed Patrick Kaminski, the director of digital innovation for web3 and metaverse at L’Oreal, and Manon Cardiel, head of strategic planning and partnerships within web3 and metaverse at L’Oreal.
Patrick is the leader behind NYX Professional Makeup’s GORJS DAO, which launched in mid-January with hopes of combining the NFT world and the beauty industry in the metaverse. While Manon worked on the GORJS project, she also helped launch NFT collections for companies like Mugler and Yves Saint Laurent.
L’Oreal is best known for its beauty products, but the over 100 year old company is also home to a plethora of brands that many of us use and own like Maybelline, Yves Saint Laurent, Armani, Kiehls, Valentino, Prada, CeraVe and more.
We discussed why L’Oreal wanted to get into the web3 ecosystem, what it’s like incorporating a DAO into a traditional brand and how other brands and companies are – or aren’t – getting into the cryptosphere.
We also dove into:
- Growing brand loyalty
- Consumer demand and feedback
- Brands skepticism of NFTs, metaverse
- Advice to brands looking to get into web3
Grewal has been at Coinbase, the second largest crypto exchange globally, for almost three years. Previously he was the vice president and deputy general counsel at Facebook, among other roles.
We got into:
- Potential crypto legislation from Congress
- U.S. agencies sentiment toward digital assets
- Future of assets listed on its exchange
- Binance’s SEC case
Follow the money
- Gensyn raised $43M in round led by a16z for blockchain-based AI protocol
- Ironforge raised $2.6M for its Solana-focused interface
- Crypto payments solution BoomFi raised $3.8M to improve crypto and fiat settlements
- Interoperability protocol Connext raised $7.5M to help devs build multi-chain apps
- Collectibles.com raised $5M seed round to launch web3 community and marketplace
This list was compiled with information from Messari as well as TechCrunch’s own reporting.
To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here. | Crypto Trading & Speculation |
The growth of digital payments, along with the, may be sparking a tipping backlash among Americans, who are suffering from so-called
A, a consumer financial services company, suggests two-thirds of Americans now hold a negative view of tipping, and the number of people who always leave a tip is declining — even at sit-down restaurants — in just the last two years.
Molly Moon Neitzel, the owner of Molly Moon's Ice Cream Shop in Seattle, shared her frustration with the current tipping culture.
"I have to say I'm highly annoyed at tipping," Neitzel said. "It's really awkward, especially in the counter service interaction, to watch someone make a decision."
"It never feels good," she added.
According to credit card processor Square, nearly 75% of remote transactions now include gratuity prompts, which are even seen at drive-thrus.
Social media platforms like TikTok are filled with videos of customers questioning the necessity of leaving a tip for small purchases.
However, eliminating tipping practices can be challenging.
Cornell University professor Michael Lynn said research indicates restaurants that replace tipping with higher menu prices often face negative online ratings.
Lynn also noted that technology has made it easier for non-traditional businesses, such as electricians or plumbers, to request tips discreetly through electronic bills, avoiding the potential awkwardness of asking for gratuity in person.
When Molly Moon's ice cream shop used to accept tips, credit card processors benefitted the most due to higher processing fees, Neitzel said.
However, data from the very checkout system that prompted tipping revealed disparities in pay. Neitzel noticed that Black employees were earning less tips than their White counterparts.
"It became clear to us how unfair our total compensation system was," Neitzel said.
As a result, the company made significant changes, now offering a minimum wage of $21 per hour, along with comprehensive benefits such as healthcare, 401(k) and childcare assistance.
To cover the increased costs, prices were adjusted accordingly, but Neitzel said customers didn't end up paying more overall.
"We just shifted how the money came in," Neitzel said.
for more features. | Consumer & Retail |
Citigroup Cuts Over 300 Senior Manager Roles In Latest Restructuring
Citigroup Inc. is eliminating more than 300 senior manager roles as part of Chief Executive Officer Jane Fraser’s efforts to simplify the Wall Street giant.
(Bloomberg) -- Citigroup Inc. is eliminating more than 300 senior manager roles as part of Chief Executive Officer Jane Fraser’s efforts to simplify the Wall Street giant.
The company started announcing the cuts — which affect those staffers two levels below Fraser’s executive management team — on Monday, according to a person familiar with the matter. They amount to roughly 10% of the workers at that level, according to the person, who asked not to be identified discussing personnel information.
“Today we shared with our colleagues the next layer of changes across many of our businesses and functions as we continue to align Citi’s organizational structure with our new, simplified operating model,” Citigroup said in a statement, which didn’t disclose the number of cuts involved. “As we’ve acknowledged, the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but we believe they are the right steps to align our structure with our strategy and ensure we consistently deliver excellence to our clients.”
The workforce reductions, which the bank has said may continue around the globe into next year, are part of Fraser’s strategy to eliminate layers of management and get rid of co-head structures to speed up decision making across the bank. The company hasn’t put a number on how many employees may ultimately be dismissed.
“Building a winning bank requires a great deal of commitment, hard work and resilience from each of us,” Fraser said in a memo to staff. “I’m fully aware we’re asking a lot of our people.”
The bank remains on track to announce the next layers of change early next year and to complete the final changes by the end of the first quarter, according to the memo.
The restructuring is set to be New York-based Citigroup’s biggest in two decades. It includes abandoning the firm’s two core operating units and instead focusing on five key businesses: trading, banking, services, wealth management and US consumer offerings.
Read more: Citigroup to Remove Five Management Layers in Restructuring
©2023 Bloomberg L.P. | Banking & Finance |
(Bloomberg) -- Hong Kong is assessing whether to allow exchange-traded funds that invest directly in crypto as officials step up efforts to create an Asia-Pacific digital-asset hub while tackling the fallout of the JPEX scandal.
Most Read from Bloomberg
The city is weighing retail-investor access to such spot ETFs providing regulatory concerns are met, Securities and Futures Commission Chief Executive Officer Julia Leung said.
“We welcome proposals using innovative technology that boosts efficiency and customer experience,” Leung said in her first interview with international media since taking office on Jan. 1. “We’re happy to give it a try as long as new risks are addressed. Our approach is consistent regardless of the asset.”
The crypto sector sees ETFs as a way of making digital assets more mainstream since the funds are readily available to a variety of investors. Bitcoin has surged 110% this year partly on expectations that the likes of BlackRock Inc. will soon win permission to start the first US spot ETFs for the token.
ETF Outlook
Both Hong Kong and the US currently allow futures-based crypto ETFs, but the take-up has been modest compared to the overall size of the fund industry. The Asian city current lists the Samsung Bitcoin Futures Active, CSOP Bitcoin Futures and CSOP Ether Futures ETFs. They have combined assets of about $65 million.
Just how popular spot funds will be is an open question following the 2022 digital-asset rout and the conviction of Sam Bankman-Fried for the multibillion dollar FTX fraud, which damaged crypto’s reputation.
Hong Kong rolled out a dedicated virtual-asset regulatory framework in June, part of an effort to restore its luster as a cutting-edge financial center. The rules seek to woo companies but also focus on investor protection — a need underlined by the alleged HK$1.6 billion ($204 million) fraud that recently erupted in the city at the unlicensed JPEX crypto exchange.
“The incident underscores the requirement for a robust, comprehensive regulatory framework,” Leung said. The SFC has enhanced transparency over applications for virtual-asset exchange licenses, she said.
The JPEX blowup ensnared some 2,600 people and a police investigation is ongoing. Leung declined to comment on the details of the probe.
Tokenization
Under the SFC’s digital-asset regime, retail investors can trade major tokens like Bitcoin and Ether on licensed exchanges. BC Technology Group Ltd.’s OSL and HashKey Exchange are the only platforms with Hong Kong crypto permits at the moment. Mandatory rules for stablecoins — crypto tokens that are meant to hold a constant value — are due by 2023-2024.
Officials are also exploring tokenization, or digital representations of real-world assets. The segment has long been touted as a potentially key use of crypto’s underlying blockchain technology. Hong Kong sold its inaugural digital green bonds in February and the SFC just updated its regulatory guidance to open a path to tokenized products for retail investors.
“As the crypto ecosystem evolves step-by-step to the point where we’re comfortable, then we’re happy to open up more access to the wider investing public,” Leung said in the Nov. 2 interview.
The SFC latest circulars released the same day provided a road map for issuing tokenized funds and bonds to retail investors. Leung said she expects to see experimentation with “different levels of tokenization” initially.
Security Tokens
A restriction on security token offerings limiting them to professional investors has been removed based on the latest circular. Tokenized securities are basically traditional securities with a tokenization wrapper, according to the regulator.
The city’s central bank, the Hong Kong Monetary Authority, is looking into providing guidance for banks on providing digital-asset custodial services. Such services would be one of the keys to developing a digital-asset ecosystem.
Citigroup Inc. estimates that by 2030, there will be as much as $5 trillion of tokenized private-sector securities and funds, spanning everything from corporate debt and financing collateral to alternative assets such as real estate, private equity and venture capital.
Hong Kong is one of a number of jurisdictions trying to develop digital-asset hubs as the industry slowly recovers from last year’s $1.5 trillion market crash. Competitors include Singapore, Dubai and the European Union, whereas the US has imposed a clampdown.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
PUEBLO, Colo. — As 41% of American adults face medical debt, residents of this southern Colorado city contend their local nonprofit hospitals aren’t providing enough charity care to justify the millions in tax breaks they receive.
The two hospitals in Pueblo, Parkview Medical Center and Centura St. Mary-Corwin, do not pay most federal or state taxes. In exchange for the tax break, they are required to spend money to improve the health of their communities, including providing free care to those who can’t afford their medical bills. Although the hospitals report tens of millions in annual community benefit spending, the vast majority of that is not spent on the types of things advocates and researchers contend actually create community benefits, such as charity care.
And this month, four U.S. senators called on the Treasury’s inspector general for tax administration and the Internal Revenue Service to evaluate nonprofit hospitals’ compliance with tax-exempt requirements and provide information on oversight efforts.
The average hospital in the U.S. spends 1.9% of its operating expenses on charity care, according to an analysis of 2021 data by Johns Hopkins University health policy professor Ge Bai. Last year, Parkview provided 0.75% of its operating expenses, about $4.2 million, in free care.
Centura Health, a chain of 20 tax-exempt hospitals, reports its community benefit spending to the federal government in aggregate and does not break out specific numbers for individual hospitals. But St. Mary-Corwin reported $2.3 million in charity care in fiscal year 2022, according to its state filing. The filing does not specify the hospital’s operating expenses.
The low levels of charity care have translated into more debt for low-income residents. About 15% of people in Pueblo County have medical debt in collections, compared with 11% statewide and 13% nationwide, according to 2022 data from the Urban Institute. Those Puebloans have median medical debt of $975, about 40% higher than in Colorado and the U.S. as a whole. And all of those numbers are worse for people of color.
“How far into debt do people have to go to get any kind of relief?” said Theresa Trujillo, co-executive director at the Center for Health Progress’ Pueblo office. “Once you understand that there are tens of millions of dollars every single year that hospitals are extracting from our communities that are meant to be reinvested in our communities, you can’t go back from that without saying, ‘Oh my gosh, that is a thread we need to pull on.’”
Trujillo is organizing a group of fed-up residents to engage both hospitals on their community benefit spending. The group of at least a dozen residents believe the hospitals are ignoring the needs identified by the community — things like housing, addiction treatment, behavioral health care, and youth activities — and instead spending those dollars on things that mainly benefit the hospitals and their staffs.
For the fiscal year ending June 2022, with total revenue of $593 million, Parkview reported $100 million in community benefit spending. But most of that — more than $77 million — represented the difference between the hospital’s cost of providing care and what Medicaid paid for it.
IRS guidelines allow hospitals to claim Medicaid shortfall as a community benefit, but many academics and health policy experts argue such balance sheet shifts aren’t the same as providing charity care to patients.
Parkview also reported $4.7 million for educating its medical staff and $143,000 in incentives to recruit health professionals as community benefit. The hospital spent only $44,000 on community health improvement projects, which appear to have consisted mainly of launching a new mobile app to streamline appointments and referrals.
Meanwhile, the hospital recently spent $58 million on a new orthopedic facility and $43 million on a new cancer center. Parkview also wrote off $39 million in bad debt in fiscal 2022, although that is different from charity care. The bad debt is money the hospitals tried to collect from patients and ultimately decided they’d never get. But by that time, those patients would likely have been sent to collections and potentially had their credit damaged. And outstanding debt often keeps patients from seeking other needed care.
There is a disconnect between what the community said its biggest health needs were and where Parkview directed its spending. The hospital’s community needs assessment pegged access to care as the top concern, and the hospital said it launched the phone app in response.
The second-largest perceived health need was addressing alcohol and drug use. Yet, the only initiative Parkview cited in response was posting preventive health videos online, including some on alcohol and drug use. Meanwhile, the hospital shut down its inpatient psychiatric unit.
Parkview declined to answer questions about its charity care spending, but hospital spokesperson Todd Seip emailed a statement saying the hospital system “has been committed to providing extensive charity care to our community.”
Seip noted that 80% of Parkview’s patients are covered by Medicare or Medicaid, which pay lower rates than commercial insurance. The hospital posted a net loss of $6.7 million in the 2022 fiscal year, although its charity care wasn’t appreciably higher in previous years in which it posted a net gain.
Centura St. Mary-Corwin reported $16 million in Medicaid shortfall and $2 million in medical staff education in 2022, according to its state filing. The hospital spent about $38,000 for its community health improvement projects, primarily on emergency medical services outreach programs in rural areas. The hospital provided another $96,000 in services, mainly to promote covid-19 vaccination.
Centura also declined to answer questions about its charity care spending. Hospital spokesperson Lindsay Radford emailed a statement saying St. Mary-Corwin was aligning its community health needs assessment process with the Pueblo Department of Public Health and Environment “to develop shared implementation strategies for our community benefit funds, ensuring the resources are targeting the highest needs.”
Trujillo questioned how the hospital has conducted its community health assessments, relying on a social media poll to identify needs. After community members identified 12 concerns, she said, hospital leaders chose their priorities from the list.
“They talk about a community garden like they’re feeding the whole south side of the community,” Trujillo said. The hospital established a community garden in 2021, with 20 beds that could be adopted by residents to grow vegetables. Trujillo did praise the hospital for converting part of its building into dorms for a community college nursing program.
Trujillo’s group has spent much of the summer researching hospital charity spending and showing up at public meetings to have their views heard. They are working to gain seats on hospital and other state boards that influence how community benefit dollars are spent, and are urging hospitals to reconfigure their boards to better represent the demographics of their communities.
“We’ve made folks now aware that we want to be a part of those processes,” Trujillo said. “We’re willing to help them reach deeper into the community.”
Tax-exempt hospitals have been under increased state scrutiny for their charitable spending, especially after the Affordable Care Act and Medicaid expansion drove down the uninsured rate. That in turn cut the amount of care hospitals had to provide without being paid, potentially freeing up money to help more people without insurance or with high-deductible plans.
In Colorado, hospitals’ charity care spending and bad debt write-offs dropped from an average of $680 million a year in the five years prior to the ACA being fully implemented in 2014 to an average of $337 million in the years after, according to the Colorado Healthcare Affordability and Sustainability Enterprise Board, a state advisory group.
In states like Colorado, which used federal funding to expand the number of people covered by Medicaid, hospitals shifted more of their community benefit spending to cover Medicaid reimbursement shortfalls.
A January report from Colorado’s Department of Health Care Policy & Financing concluded that payments from public and private health plans help the state’s hospitals make more than enough money to offset lower Medicaid rates and still turn a profit while providing more true charity care.
Colorado has enacted two bills in the past five years to increase the transparency of hospitals’ charitable efforts with new reporting requirements.
“I think overall, we’re pleased with the amount of money that hospitals are reporting they spent,” said Kim Bimestefer, the executive director of the Department of Health Care Policy & Financing. “Is that money being expended in meaningful ways, ways that improve health and well-being of the community? Our reports right now can’t determine that.” | Nonprofit, Charities, & Fundraising |
Homeowners are being hit with a “Tory mortgage penalty” of £7,000 a year with interest rates triple what they were two years ago, according to Labour.
Pat McFadden, shadow chief secretary to the Treasury, blamed what he called the “reckless economic gamble” taken by the Conservatives during September’s mini-budget when Liz Truss was prime minister.
Truss became the shortest-serving British prime minister, lasting 45 days in office, after the fallout from her and then-chancellor Kwasi Kwarteng’s “growth plan”, which sent the value of the pound plummeting and mortgage rates soaring.
Analysis by Labour suggests the average homeowner who renewed their mortgage since what officials called the “kamikaze mini-budget” in the autumn is now spending an extra £150 every week.
It means the average household is paying £223 a week in mortgage interest payments – an increase of £7,000 a year, party officials said.
An estimated 1.4 million people are due to renew their fixed-rate mortgages by the end of this year.
Labour said those with a 75% loan-to-value ratio mortgage faced average interest rates of up to 4.63% in April.
The party said the same deal had an interest rate of 1.49% in April 2021 – a third of what it increased to 24 months later.
“Britain’s homeowners continue to suffer thanks to the Tories’ reckless economic gamble,” McFadden said.
“This Tory mortgage penalty has increased the cost of home ownership by thousands of pounds a year, causing huge worry for families, while putting the prospect of owning a home further out of reach for many others.
“Rishi Sunak might want to forget the economic misery the Conservatives have inflicted, but the public can’t forget about it as their outgoings soar.
“Labour will make our economy stronger and more secure, and stop working people paying the price for 13 years of Tory failure.”
Financial information website Moneyfacts said it had seen several mortgage providers raising rates last week while some mortgage lenders temporarily pulled some products from the market.
On Thursday, HSBC announced it had temporarily withdrawn mortgage deals for new borrowers due to a rise in demand in advance of expected rate rises.
The bank said it would remove all its “new business” residential and buy-to-let products, with deals becoming available again on Monday.
It is the first time that HSBC, which accounts for almost a quarter of the home loans market, withdrew from the mortgage market since the aftermath of September’s disastrous mini-budget.
Nationwide, Britain’s biggest building society, said it needed to increase fixed rates to ensure they remain sustainable.
On Thursday, the average two-year fixed-rate mortgage rate on the market across all deposit brackets was 5.82%, according to Moneyfacts’ figures, up from 5.49% at the start of June.
The average five-year fixed-rate mortgage on the market on Thursday was 5.49%, up from 5.17% on 1 June.
In a response, the Conservative party did not reference Labour’s mortgage rate criticisms but instead focused on the opposition party’s decision to backtrack on a £28bn green prosperity plan.
The shadow chancellor, Rachel Reeves, on Friday said drastic changes to the economic backdrop over the past two years mean the party’s full spending pledge should be delayed.
A Conservative spokesperson said: “Labour proved once again this week why they can never be trusted with our economy.
“Their economic credibility is in tatters after Rachel Reeves finally admitted Labour’s borrowing spree would fuel inflation and send interest rates spiralling.
“The truth is Labour would have to resort to unlimited borrowing and hiking up taxes to fund their plans, hitting hardworking British people’s wallets.
“The Conservatives are getting on with the job of halving inflation, growing the economy, and reducing debt.” | United Kingdom Business & Economics |
Supermarkets are increasingly pricing budget items at £1.25 rather than £1 as retailers balance attempts to draw in shoppers through bargain deals with stubbornly high grocery inflation.
The price point is now frequently the joint second-most popular price tag for a grocery item, alongside £2 and behind £1, according to the data firm Kantar.
Supermarkets typically use “round-pound” deals to sell budget items, but have been forced to raise prices.
Grocery inflation has eased to its lowest level this year but remains high, Kantar said on Tuesday.
Annual grocery inflation in the UK declined to 16.5% in the four weeks to 11 June, down from 17.2% last month and a record 17.5% in March. It remains at its sixth-highest level since the financial crisis in 2008. The biggest price rises were for eggs, cooking sauces and frozen potato products.
Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “Traditionally, ‘round-pound’ prices have been attractive to shoppers, who find them easier to relate to and practical as well with no leftover change.
“But, with retailers eager to offer value and cash buying less popular, £1.25 has emerged as an increasingly important price point.”
The Kantar figures were released a day before the official UK data on inflation, which is expected to ease to 8.4% in May from 8.7% in April, when food and drink prices rose at an annual rate of 19.1%.
Rishi Sunak’s pledge to halve inflation this year is at risk from stubbornly high food inflation, which has kept the headline rate at a higher than expected level.
McKevitt said: “This is the lowest rate of grocery price inflation we’ve seen in 2023, which will be a relief to shoppers and retailers.
“But prices rising at 16.5% isn’t something to celebrate… Price rises are now being compared to the increasing rate of grocery inflation seen last summer, which means that it should continue to fall in the coming months, a welcome result for everyone.”
A survey for Kantar found that of consumers’ top five financial worries, rising grocery prices is the only one that they are more concerned about now than at the start of the year.
Almost 70% of households are either “extremely” or “very worried” about food and drink inflation, compared with just over two-thirds in January. It remains the second-biggest concern behind rising energy bills.
Consumers have been switching to supermarkets’ cheaper own-label lines to save money, where sales are up 41% compared with last year, and changing how they eat and cook, Kantar said.
McKevitt added: “People are thinking more and more about what they eat and how they cook as the cost of living crisis takes its toll on traditional behaviours.
“The most prominent change we’ve seen is that people are preparing simpler dishes with fewer ingredients.”
There were 4% fewer meals made using an oven in the last 12 weeks compared with the same period last year, while microwaved meals rose by 8%, and there was a rise in food prepared with toasters and grills.
Sue Davies, the head of food policy at the consumer group Which?, said high prices have been “hammering the household budgets of millions, including desperate families and people on low incomes who have been skipping meals for many months to make ends meet”.
She called on the government to get urgent commitments from supermarkets on stocking essential budget ranges in all their stores, particularly in areas where people are most in need, as well as make pricing much clearer so shoppers can compare prices and find the best value products.
As costs for producers and retailers have risen, the proportion of products sold for £1 has almost halved in a year, from 9% to 5%, according to Kantar.
With the advent of warm weather, consumers have been buying more ice-cream and mineral water, with sales up by 25% and 8% respectively last month, despite price increases of 20% and 17%.
Barbecue food has also gone up in price, with fresh sausage prices up 16% and fresh burgers 13% more expensive.
Aldi was the fastest-growing retailer in the past four months as people turned to the discount supermarkets in an attempt to conserve cash. The chain posted a sales rise of 24.6% to hit a record market share of 10.2%. Lidl’s sales growth was only slightly behind its fellow German discounter, increasing sales by 23.2% to take 7.7% of the market.
The eight biggest selling items for £1.25
Milk 2-pint bottle British semi-skimmed at Morrisons, Sainsbury’s, Tesco and Asda
Sharing bag of sweets Haribo Starmix 175g at Morrisons and Sainsbury’s
Bags of potatoes 2.5kg of ‘all rounder’ potatoes at Tesco or Just Essential potatoes at Asda
Chocolate biscuit bars Five pack of Bahlsen Pick Up chocolate biscuits at Ocado or Waitrose
Wrapped white bread 400g Warburtons Milk Roll from Morrisons, Tesco or Asda or Hovis Simple White bread 800g at Tesco
Chocolate block Aero chocolate sharing bar 90g from Waitrose, Sainsbury’s, Tesco and Ocado
Pack of button mushrooms 400g pack of closed cup mushrooms at Tesco
Chocolate multipack Six pack of Cadbury Dairy Milk little bars at Morrisons, Sainsbury’s, Ocado and Iceland | Inflation |
Some suppliers have raised prices by more than their costs went up over the past two years, according to the UK's competition watchdog.
This has helped push up food prices, the Competition & Markets Authority (CMA) said.
The findings are part of an analysis of pricing in 10 categories, including baby formula, milk and baked beans.
High food price inflation has mainly been driven by rising energy and fertiliser costs, the CMA said.
But about three quarters of branded suppliers have also been making more profit on individual products.
As a result shoppers have increasingly turned to own-label products, meaning branded products have lost market share, and so have been making less money.
But in the case of baby formula there are not many alternatives, and prices have risen by a quarter over the past two years.
New parents could make significant savings of £500 in the first year of a baby's life on baby formula by shopping around, the CMA added.
Cheaper formula still needs to follow rules on providing the nutrients babies need, it said.
But the market is dominated by two big players, and there is little evidence of parents switching to cheaper alternatives.
"We're concerned that parents may not always have the right information to make informed choices and that suppliers may not have strong incentives to offer infant formula at competitive prices," said Sarah Cardell, chief executive of the CMA.
She added that the pace of food price rises "has put huge strain on household budgets".
The watchdog will probe the baby formula market further, and will also look at supermarket loyalty card schemes.
Some supermarkets have only been making cheaper prices available to customers on loyalty card schemes, and the watchdog will look at this practice in 2024.
In September, consumer group Which? warned that loyalty card schemes were not as good as they seem, with supermarkets Tesco and Sainsbury's increasing the prices of everyday items so the discounts for people with loyalty cards looked bigger than they really were.
However, both supermarkets rejected the claims. | Inflation |
Sir Ed Davey has insisted the Liberal Democrats will continue to support the pensions triple lock under any circumstances.
The policy means the state pension has to rise in line with wages, inflation or 2.5% - whichever is higher - each year, with the government taking the decision in the autumn ahead of it being implemented the following April.
The 13-year-old pledge has been back in the news in recent weeks, with a debate raging over whether it is a fair protection for pensioners amid a cost of living crisis, or a costly pledge paid for by struggling working-aged people.
And there are currently questions looming over Prime Minister Rishi Sunak and Chancellor Jeremy Hunt as to whether they will stick to the policy in full or adjust the goalposts to save some cash - though Downing Street has insisted they are committed to the triple lock.
But Sir Ed said it was his party that brought the idea into government and, no matter what, it would continue to have his backing.
Speaking to Sky News' Sunday Morning with Trevor Phillips show during his party's annual conference in Bournemouth, the leader said: "The Liberal Democrats first came up with the triple lock... the Tories weren't keen on it [but] we introduced it and we think it has been very successful.
"The Conservatives broke the link between pensions and earnings back in 1980. For 30 years, British pensioners fell behind the rest of Europe and we became bottom of the league for the state pension.
"Countries that are much less wealthy than us were paying their pensioners, [still] are paying their pensioners more, so the triple lock from the Liberal Democrats was designed to try to begin to rectify that."
Sir Ed also said his party would not look to reduce or remove inheritance tax after reports this weekend claimed it was a move being considered by Mr Sunak ahead of the next election.
Also appearing on Sky News' Sunday Morning with Trevor Phillips, Grant Shapps, the defence secretary, made his distaste for the tax clear, calling it "particularly punitive and unfair".
But he said the government is currently in "a fiscal straightjacket", and the chancellor has already told the press "he doesn't see room for tax cuts".
Asked about the Lib Dem position, Sir Ed said: "It is really clear when a Conservative leader is in trouble [as] they reach for the inheritance tax gig. They've done it before but they have never delivered on it.
"And I think people reading that should look at the Conservatives' record on tax. They have raised taxes for people on lower incomes and the idea that they should now be talking about inheritance tax is quite preposterous. It would be a tax cut for the wealthiest."
Follow all Sky News' coverage from the Liberal Democrat conference in Bournemouth on TV and online | United Kingdom Business & Economics |
Point.me, an online search engine and concierge service that makes it easy to discover real-time reward flight options, has raised $10 million in Series A funding led by by Thayer Ventures. The platform checks for flights on 33 loyalty programs across more than 150 airlines to uncover real-time award flight options.
The New York-based startup was founded in 2019 by point.me CEO Adam Morvitz and president Tiffany Fund. Since the platform’s launch in February 2022, Point.me has surpassed 1.5 million users and 7.8 million searches.
“Redeeming points is typically a time-consuming, complicated, and frustrating process,” Morvitz told TechCrunch. “Our mission is to make it as easy as possible for travelers to find the best deals, no matter the loyalty program,”
With Point.me, users can filter search results by program, airline or route to find the best available deals, which will be tailored to their preferences and points balances. The platform offers a variety of services, including access to its self-serve search tool, full-service concierge, and elite status and credit card consulting.
Point.me’s self-serve standard plan costs $12 per month or $144 per year and comes with unlimited searches, the ability to sync your reward account balances, step-by-step booking instructions and exclusive monthly destination tips. The service’s self-serve premium plan cost $260 per year and comes with everything in the standard plan, along with 10% discount on all concierge services, a personalized points consult call and five starter passes to gift to friends and family.
The platform also offers a $5 starter pass that gives users access to Point.me’s standard plan for 24 hours. The company notes that this plan is great for people who are planning for a single trip.
In addition to the self-serve plans, Point.me also offers concierge offerings that come with full-service booking that cost $200 per person.
In terms of the new funding, the company plans to use it to support enterprise partnerships with leading U.S. card issuers, expand its concierge service and scale its consumer subscription business.
“The funding will support enterprise partnerships with leading U.S. card issuers, scale our consumer subscription business and grow our affiliate relationships for premium concierge services,” Funk said. “Currently, we operate in tandem with providers including American Express, Bilt, Capital One, Chase and Citi, and the funding will both facilitate deeper integrations with existing partners and also forge new partnerships. Additionally, we have some very exciting features planned that will expand the ways consumers think about using their points.”
Morvitz said the funding will also go toward B2B operations, including joint platform development, technical infrastructure support for major loyalty programs and integrated employee travel solutions.
The Series A funding round included participation from PAR Capital Ventures, RiverPark Ventures, Plug and Play Ventures and MoreThanCapital. Prior investors, including Gaingels, and David Baggett and Carl de Marcken, the co-founders of ITA Software (now known as Google Flights), also returned for the new funding round.
Point.me’s latest funding round brings the company’s total amount raised to $12 million. The startup raised $2 million in seed funding led by PAR Capital Venture in February 2022.
Regarding the future, Point.me sees itself going beyond search, as the company aims to be the go-to loyalty management site for travelers.
“We aim to become the go-to loyalty management site for travelers, using our investment in data to improve the experience for our customers and enterprise partners,” Morvitz said. “This will include AI-based algorithms that highlight redemptions consumers are most likely to book and predictive technology to recommend which awards have the best chance of becoming available. We can empower business partners with data driven analytics to target potential customers and better define the travel experience for their customers using our comprehensive data on award redemption patterns and user behavior.” | Consumer & Retail |
NEW YORK, Oct 31 (Reuters) - Investors should be prepared for long-duration Treasury yields to reach 7% if the U.S. economy skirts a widely anticipated recession, Ned Davis Research warned in a note on Tuesday.
Benchmark 10-year Treasury yields, which move inversely to prices, are hovering near 16-year highs of 5% as investors price in rising U.S. federal deficits and the Federal Reserve's guidance that it will keep rates high until it is convinced that inflation is under control. The sell-off in Treasuries has weighed on stock market valuations and increased borrowing costs for companies and consumers alike.
Joseph Kalish, chief global macro strategist at Ned Davis Research, said the Treasury sell-off could continue if the neutral rate of interest - the rate at which monetary policy is neither contractionary nor expansionary - rises due to a prolonged expansion.
Inflation as measured by the PCE price index, which rose 3.4% in September compared with the same time last year, is just above its 3.3% average since 1960, while the neutral rate of interest - also know as r-star - appears to be above its 2% benchmark, he noted.
Add a term premium for longer-dated debt, which pre-pandemic averaged 1.65% for the period since 1961, "and you get 7.20%," he said.
"So getting comfortable with a 5% 10-year Treasury is actually quite conservative," he wrote.
With the potential for a worsening Treasury market sell-off, Kalish is bullish on gold and remains slightly underweight bonds, and favors large-cap equities over small-caps, he noted.
The firm does not expect the Federal Reserve to raise its benchmark rate at its meeting that concludes Wednesday, and predicts that there is a 50-50 chance for one more rate increase before the end of the year, Kalish wrote.
"Powell will want to affirm that another hike is still on the table," he wrote.
The Treasury Department's refunding announcement Wednesday will not likely sway markets given that it will likely emphasize that Treasury will remain on a stable and predictable borrowing schedule, Kalish noted.
"Don't look for anything dramatic," he wrote.
Reporting by David Randall; Editing by Andrea Ricci
Our Standards: The Thomson Reuters Trust Principles.
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For most Americans, when it comes to peanut butter, only one question is paramount: creamy or crunchy?
What most consumers don't know, is how that choice is shaped by hundreds of years of development through technology, innovation and marketing, that allowed it to become a popular, if not favorite snack in the U.S.
The product, made famous for its unique taste, affordability and adaptability, can be eaten by itself, spread on a sandwich or even spooned into a dessert.
Those factors and more have turned it into a $2 billion industry this past year, according to Circana, a Chicago-based research firm, in just spreadable peanut butter, which averages about $0.20 a serving.
Peanut butter's longevity in the U.S. boils down to several factors but starts with advancements in technology in the early 1900s with hydrogenation that made transporting the spread possible.
Experts believe farmers in the southern U.S. had been grinding peanuts into a paste in the 1800s for years before it reached widespread success.
It was Peter Pan, originally known as E.K. Pond, that became the first brand to commercially develop peanut butter in 1920, sparking the way we eat peanut butter today.
The brand, using a patent from Skippy creator Joseph Rosefield, was the first to use hydrogenation to ship off the spread and revolutionized the industry forever.
Skippy followed soon after in 1933 and Jif in 1958. Skippy was the leading peanut butter brand in the U.S. until 1980, a title that now belongs to Jif.
Peanut butter holds a 90% household penetration rate, comparable to other grocery staples such as breakfast cereal, granola bars, soup and sandwich bread, according to Matt Smith, VP of Equity Research at Stifel Financial Corp.
Circana says the top three brands, the J.M. Smucker Co.'s Jif, the Hormel Foods Corp.'s Skippy and Post-Holdings' Peter Pan account for two-thirds of the market share with Jif at 39.4%, Skippy at 17%, and Peter Pan at 7%. Private-label brands such as Costco's Kirkland and Target's Good & Gather, plus Trader Joe's, Whole Foods and Kroger's own versions that make up 18%, as of July 2023.
The market share leader, Smucker's, reached $453.4 million in net sales in its consumer foods section in its Q4 earnings, where Jif falls in, and holds another secret weapon: its Uncrustables brand, consisting of frozen, pre-made PB&J's.
"Over the past 10 years, the brand went from $126 million in sales to over $600 million and the company expects sales to reach $1 billion by 2026," said Smith. "The growth in Uncrustables has been so robust, and the brand has grown to the size that it is, adding one percentage point to Smucker's overall sales growth," he added.
Senior Vice President and General Manager of Smucker's consumer foods division, Rebecca Scheidler, says the brand has been showing double-digit growth for multiple years in a row, held back only by the capacity of the company's plants.
"Our primary unlock for future growth is increased capacity," she said. "You'll see in 2019 we actually doubled our production footprint and capacity with the addition of a plant in Longmont, Colorado. And then we recently announced that we're building another third facility in McCalla, Alabama, which will double the size of Longmont," she said.
Though Smucker's growth has been unparalleled, Hormel Foods also boosts million-dollar sales in its retail division, the category its peanut butter brands fall under, reporting its 2023 Q2 net earnings in the section as $1.9 million.
Hormel Foods, well-known for Spam, acquired the brand in 2013 from Unilever for its first venture into non-meat proteins. Smith says they've helped grow the brand consistently ever since.
"That was a real pivot for Hormel into kind of a non-meat center of store product to help evolve the company into a more consumer product-facing company. They hold near 20% of the market share today behind that Skippy brand," said Smith.
"There was a lot of untapped opportunity with this brand. And for us, really Skippy was and is a big focus," said Ryan Christofferson, the senior brand manager for Skippy at Hormel Foods.
Christofferson says Hormel Foods' next endeavors are focused on new ways to expand the already-beloved brand into a range of different products.
"Peanut butter is something that always has been popular for decades with consumers but is continuing to grow not just as a product in a jar, but in new formats and in new places. So, people are thinking about, 'how can I get more peanut butter into snacks, into desserts and other places, into cooking sauces," Christofferson said.
For such a storied product, there aren't many risks.
In 2022, a salmonella outbreak caused Smucker's to recall Jif peanut butter products after the contamination was found across 12 states. Though it was a setback, Smucker's says it did not have long-term effects.
"We were already back at a number one position," said Scheidler. "And we just continue to see growth as we look into the future as well," she added.
When it comes to allergies, experts aren't too worried about their effect on the peanut butter market, only that it could corrupt its link with the next generation.
"The concern I have is that if they're not eating peanut butter at school, they're not going to develop that lifelong emotional attachment to it like my children did and like I did," said National Peanut Board President, Bob Parker.
According to the FDA, about one million children in the U.S. suffer from peanut allergies, and only one out of five will outgrow it. Some school campuses, both K-12 and colleges across the country, have banned the snack completely or in certain spaces.
"It's become more of an issue in the last 10 years or so, but the categories continue to grow even as the prevalence of allergy or the reporting of the prevalence of allergy has picked up. So while it's a threat, it's certainly not impacting sales," said Smith.
Food giants Smucker's and Hormel Foods are concentrating on innovation either by product count, development or international reach.
"We have pretty aggressive growth plans in overseas markets for this brand," Christofferson said.
Hormel Foods is eyeing countries that are already curious about the snack, such as Mexico, Canada or China, where Christofferson says they are meeting consumers' needs differently than in the U.S.
"It's especially used as a cooking ingredient in recipes and in sauces in Asian cuisine," he said. "We've launched certain innovations specifically in Asian markets to help enable that type of cooking use for peanut butter. And we'll continue to look to tailor our product and our marketing messaging to the consumers in different parts of the world based on their needs and the way that they eat," said Christofferson.
"China is beginning to consume peanut butter. And if we could just get them to consume one pound per capita of peanut butter, they would far surpass what we consume," added Parker.
Domestically, Americans eat an average of 4.25 pounds of peanut butter per capita, a figure that increased temporarily during the Covid-19 pandemic, according to the National Peanut Board.
"Peanut butter and peanuts as a whole reached a record per capita consumption level of 7.8 pounds per capita," Parker said. "And during COVID, when people were hugely stressed and were having to work remotely and children were having to go to school remotely, they took refuge in peanut butter. As odd as that sounds, it was the ultimate comfort food for many Americans that reminded them of happier times of childhood," Parker added.
"We saw adults go back to it. It was an easy, quick food to make between Zoom calls and to help their kids make a quick PB&J. As the family came together in the middle of the day, we saw that it introduced this love and affection for peanut butter to children who will hopefully carry that love and affection for peanut butter into [their] lifetime," he added.
Peanut butter's endurance through these last hundred years and potentially the next hundred is rooted in this, perhaps its most powerful tool: nostalgia.
From eating a PB&J sandwich on the playground, to celebrating a birthday with a peanut butter pie, those memories have allowed it to cement itself permanently in society — and even space.
"When you look at the composition of most school-aged children's lunch boxes, 75% of them are including PB&J," said Scheidler.
With that in mind, both Smucker's and Hormel Foods have to be stewards for these legacy brands.
"We're holding on to what made these brands great, what people love about these brands today and then finding ways that we can continue to integrate it into consumers' lives so that it's not only great today, but it's great for the next generation of consumers," Scheidler said.
Watch this video to learn more.
Correction: Smucker's reached $453.4 million in net sales in its consumer foods section in its Q4 earnings. An earlier version misstated the amount and quarter. | Consumer & Retail |
Food inflation rises to 18.2% as it hits highest rate in over 45 years
Food inflation hit its highest rate since 1977 last month, having risen to 18.2% in the year to Februaury 2023.
This saw select fruit and vegetables rationed in UK supermarkets, due to shortages caused by bad weather conditions in the South of Europe and Northern Africa and many growers having to cut back due to rising costs of heating greenhouses.
While this has since eased, the price movements resulted in an annual rate of 18% for vegetables in the year to February 2023, the highest rate since February 2009.
Bread and cereals, chocolate and confectionary, ready-meals and sauces, as well as hot beverages were each also at the highest rate since at least 2008.
“The curve is yet to break for inflation. Today’s inflation figures will be disappointing news for households across the country. Food and non-alcoholic beverages prices are running at record levels,” McKinsey partner, Kevin Bright said.
“This is eating into a significant proportion of disposable income,” he added, explaining that “a large portion are being driven by those containing grains, eggs, oil and certain proteins.”
Bread was up 20.8%, with pasta products and couscous up 25.3%, eggs rose by 32.5%, margarine and fats up 30.4% and pork up 22.4%.
“Today’s figures mean that many consumers will be further forced to make difficult decisions about what they can put in their baskets, with ever increasing pressure on the price of fresh food.”
Bright said that in the long-term, “retailers can explore opportunities to improve productivity, review their relationships and network of suppliers and take an intelligent approach to pricing and promotions.” | Inflation |
LONDON, Nov 7 (Reuters) - Europe has nowhere to hide from U.S. plans to mandate clearing of U.S. Treasuries transactions that will need to be carefully introduced over time, a global derivatives industry body said on Tuesday.
Wall Street is waiting for the U.S. Securities and Exchange Commission to finalise its rules for clearing much of trading in the $25 trillion Treasuries market, one of the world's deepest and most liquid markets, to bolster stability and resilience.
A clearing house is backed by a default fund, ensuring that a transaction is completed even if one side of a transaction goes bust.
Regulators began mandating the use of clearing more widely in derivatives markets after the global financial crisis in 2008 to improve stability and transparency.
Regulatory reviews were prompted by stresses in Treasuries and other parts of the market when economies went into lockdown in March 2020, forcing central bank intervention.
"It's not just a U.S. domestic problem - we're effectively changing the plumbing for the world's most significant financial assets, and that feeds into dollar funding globally," Eric Litvack, chair of the International Swaps and Derivatives Association (ISDA), told reporters.
"It's something that you need to look at carefully and at this stage I think we still have more questions than answers as to how the actual process of clearing Treasury cash and Treasury repo will play out," Litvack said.
ISDA chief executive Scott O'Malia said it was critical that certain parts of the market don't lose access to Treasuries, or pull away due to the new regulatory requirements.
Much will hinge on the details in the final rules that determine who will be within scope, O'Malia said.
"I don't want to do a 'sky is falling' here, but we do want to make sure the timetable suits the implementation challenge," O'Malia said.
Financial markets in the United States already face pressure on compliance resources from pending changes to bank capital rules, and a shift to settling U.S. share trades within one working day next year.
O'Malia said only a small portion of repos are cleared currently, meaning many players need hooking up to clearing houses, and suggested this would be best phased in over time, in the same way that margining for uncleared derivatives was over several years.
Reporting by Huw Jones; Editing by Chizu Nomiyama
Our Standards: The Thomson Reuters Trust Principles. | Bonds Trading & Speculation |
More than six million people with disabilities in the UK will start to receive a £150 payment from Tuesday, to help with the cost of living.
Households who qualify will receive the payment, distributed by the government, over the next two weeks, between 20 June and 4 July.
The payment is made automatically and those eligible for the support do not need to take any action.
It follows a disability cost-of-living payment paid in September.
People on the following disability benefits are eligible for the latest payment:
- Disability living allowance
- Personal independence payment
- Attendance allowance
- Scottish disability payments
- Armed Forces independence payment
- Constant attendance allowance
- War pension mobility supplement
Cost-of-living payments were originally introduced to help struggling families cope with the soaring cost of gas and electricity.
However, they were never exclusively targeted at these bills, and households could always spend the money as they saw fit.
Cost-of-living payments aimed at low-income households and pensioners have also been made by the government in recent months.
In addition all household energy bills were cut by at least £400 between October and March, although there are no plans to repeat this next winter.
Households' finances have been hit by soaring prices, with inflation - the rate at which prices rise - hitting 40-year highs last year.
Food prices in the UK continued to surge at the fastest rate in nearly 45 years in April, with staples like sugar, milk and pasta up sharply.
Chancellor Jeremy Hunt said: "The additional costs faced by disabled people mean inflation is particularly challenging, which is why halving it this year and getting back to the Bank of England's 2% target is our priority."
However, the head of one charity said the £150 payment would "barely scratch the surface" for many households.
Richard Kramer, chief executive of Sense, a charity for people with complex disabilities, says those that are dependent on "energy-intensive equipment" such as powered wheelchairs and feeding machines are facing spiralling costs.
"The increased costs of running this equipment, alongside other key expenses such as paying for accessible transport and specialist diets, have already pushed almost three-quarters of disabled households into debt."
The inflation rate fell to 8.7% in the year to April - down from 10.1% in March. However, a lower rate does not mean prices are coming down, only that they are rising less quickly.
The latest inflation figures are due to be released on Wednesday.
What do I do if I can't afford to pay my debts?
It is important that you do talk about financial difficulties before finding yourself in a spiral of debt. The earlier, the better.
If you think you cannot pay your debts or are finding dealing with them overwhelming, seek support straight away. You are not alone and there is help available.
A trained debt adviser can talk you through the options available. | United Kingdom Business & Economics |
dIn late June, Jim Schuls and his 16-year-old son, Michael, woke up at 4am for their usual drive from their apartment in Florence, Wisconsin to begin work at 5am at a sawmill. Father and son made this journey together five times a week in the summer, when Michael worked longer hours than he did in term time. His two older brothers had also worked at the same mill when they were about his age.
Their day at Florence Hardwoods – one of the largest employers in the town with a population of about 2,000 – began as normal. Jim operated a forklift outside while Michael worked alone inside the mill. Jim says he never worried because he believed “young kids were stacking lumber”, not operating dangerous machines.
According to a Florence County sheriff’s office report, when the conveyor machine became jammed Michael stepped on to it to try to straighten the wood, but he had not pressed a safety button to turn it off. The conveyor started to move and he became caught in the machine. The teenager was trapped for 17 minutes before a supervisor, who had been operating a forklift outside, discovered him unconscious.
After freeing him, sawmill employees administered CPR and a sheriff’s deputy who responded to the incident used a defibrillator before paramedics transported Michael to hospital. However, Michael died two days after the incident. The Florence County coroner, Jeff Rickaby, told the Associated Press that an autopsy identified the cause of death as traumatic asphyxiation.
Michael’s death has had a seismic effect in Florence, the kind of town where “one person is saying something at one end of town, while a person on the other end is hearing about it before they even finish talking”, says Schuls. “Our small community is in absolute shock,” the Schuls family said on a GoFundMe page set up after Michael’s death.
It has also happened at a time of serious national debate across the US about the role of children in the workforce. Child labour violations across the US are soaring. Earlier this year, the Labor Department reported a 69% increase in children being employed illegally since 2018. Meanwhile, a concerted effort to loosen or abolish regulations around children in the workforce is under way across the country. Republicans are pushing to loosen child labour laws in at least 16 states, according to the Economic Policy Institute.
Those efforts are driven by groups such as the Foundation for Government Accountability, funded by conservative donors including Richard “Dick” Uihlein, who has also backed a group that sponsored the January 6 Capitol rally in 2021, according to Opensecrets.org.
The foundation claims that eliminating work permits for teenagers would help solve the labour shortage in the US and would not undermine health and safety protections already in place. In August, there were 1.5 job openings for every unemployed person, according to the Bureau of Labor Statistics.
This year Wisconsin Republicans introduced bills that would eliminate work permits for 14- and 15-year-olds and allow children as young as 14 to serve alcohol in restaurants, which would be the lowest age limit in the country, according to the National Institute on Alcohol Abuse and Alcoholism.
Arkansas, a Republican-led state, approved legislation this year that eliminated the requirement for children under the age of 16 to obtain permission from the state department of labor to be employed, and restored decision-making to parents, proponents said.
However, the permit process helped to protect minors because it meant a state official reviewed the application and ensured they were old enough to work and that the job was safe, says Reid Maki, a director of child labor advocacy for the National Consumers League and coordinator of the Child Labor Coalition, which aims to prevent exploitation of children.
“One of the problems with this whole debate is that legislators extol the value of teen work, but that’s not really the issue because every state allows teens to work. The issue is whether that work is going to be protected and limited to reasonable amounts that doesn’t harm the kid. At a time when we’re seeing such egregious (child labour) violations, you need to be strengthening protections, not weakening them,” Maki adds.
Schuls says he faced additional financial pressure after he and his wife, Stephanie, separated about six years ago, and he became the main carer for their four children. Michael started to work at the sawmill when he was 14 and would chip in to help the family. That money became even more crucial about a year ago when Schuls, who has diabetes, needed to take time off work after an operation to have all the toes on his left foot removed.
“If we had to get to a baseball game, and I was short on gas, [Michael] would say, ‘Dad, here’s 20 bucks’,” Schuls says.
When Michael was about 14, he accompanied his father to get his driving licence renewed and asked him why he was an organ donor.
“I said, well, Michael, because if I can help some other family, that’s what I’m going to do,” his father recalls. So when Michael turned 15 and got his own driving permit, he also ticked the box to become a donor.
This act of altruism, seemingly typical of Michael’s sense of responsibility, turned out to be of huge significance after his death. Michael’s mother, Stephanie, had cirrhosis of the liver. “We have liver disease on my mom’s side of the family, but alcohol don’t help either,” she says.
Before Michael died, she hadn’t drunk alcohol for 18 months and was on a transplant list, she says. It turned out Michael was a match. “Never in a million years did I think I was going to get my son’s liver,” she says. “He’s my hero, and he’s other people’s hero.”
She describes her son’s death as “like your heart being ripped out of your chest, the worst feeling in the world”, and she remains angry at Florence Hardwoods. “He should not have been left alone at all,” she says.
Florence Hardwoods declined to comment when approached by the Guardian and directed questions to Leonard & Finco Public Relations. They released a statement saying: “As a small company, employees are like family, and the death of Michael Schuls was devastating. We are only able to move forward thanks to the love and support of our workforce and the community.”
A Labor Department investigation launched in response to Michael’s death discovered that three Florence Hardwood employees, ages 15 to 16, also were injured while working there between November 2021 and March 2023. One of them was injured on two occasions.
The Department deemed the company’s products “hot goods” because they were manufactured with oppressive child labour and prohibited them from shipping the wood. The government lifted that restriction, after the owners agreed not to employ anyone under age 16 and paid $190,000 (£157,000) in civil penalties.
Michael was found to be among nine teens, ages 14 to 17, who illegally operated machinery at the company. They also employed seven teens, ages 14 and 15, outside legally permitted hours. Michael was one of those who worked outside legally permitted hours before he turned 16 – when the regulations change – and had also previously illegally operated dangerous equipment.
“While we did not knowingly or intentionally violate labour laws, we accept the findings and associated penalties,” said a statement provided by the public relations agency about the Labor Department investigation. The owners were responsible for knowing the laws, but they did not knowingly violate them, according to the Labor Department.
The day after the accident, the company terminated all employees under age 18, according to the Labor Department.
“If I could crawl under a rock, I would,” Schuls says. The death of a child would hurt any compassionate person, he says. “To have it be your kid? Totally different level.”
The night before the high school’s homecoming football game in September, Schuls stood watching as local firefighters doused a mountain of scrap wood with gasoline and set it ablaze for a bonfire outside the school.
His middle son, Logan was wearing his brother’s number, 31, for the season. The players also had a sticker, “Schuls 31” on the back of their helmets, and there was a banner with the words “Mikey Strong” on a fence beside the field. People hugged Schuls and asked how he was doing. Later that season, the high school won its first state football championship; Schuls believes Michael continued to help the team.
Two days before the homecoming game, Schuls left his house at 3am. At that time in the rural area, the stars are often bright and Schuls can see the Big Dipper. For the first time since his son had died, Schuls was setting off for a familiar destination: Florence Hardwoods.
He has returned to work there because he needs money and health insurance. Despite his grief, Michael’s father remains grateful to the company for giving him and his sons jobs, he says.
“The company has treated me good over the years,” says Schuls, who started to work at the sawmill in 2016. “They really think that it’s tragic. It should have never happened.” Going back to the sawmill was “one of the hardest things I ever did in my life”, he says. “Life is different. I think I’m a changed man.” | Workforce / Labor |
In all the noise generated by the collapse of the NHS, you hear one refrain over and over again. The basic point is so obvious as to be almost banal: as the chaos deepens, it is a reminder not only of how much the health service has been underfunded and neglected, but of the UK’s deep problems with the questions of disease prevention, lifestyle and nutrition bundled up in the term public health.Doctors I have spoken to recently have explained the grim experience of seeing the same patients come in and out of their wards for years. We are all familiar with that litany of conditions that account for so many admissions – diabetes, heart disease, high blood pressure – and the fact that they are often rooted in obesity, sedentary ways of living, bad diets and all the rest. Behind older people’s falls and fractures, moreover, lie many of the same factors. Once again, the necessity of a more preventive approach to health is screamingly clear, but what it might mean in practice is still largely a mystery.Clearly, this is a country that needs to get better at looking after itself. But while glaring facts about the intersection of poverty and ill health are serially ignored, public health is also hindered and damaged by a dismal failure to join up one area of policy with another. If you want particularly vivid proof of that very British syndrome, try this: as hospitals break and buckle, local leisure centres and swimming pools are also in the midst of crisis.Piece through the news archives, and there it all is: recent closures in such places as Huddersfield, Milton Keynes, Rye in East Sussex, Coventry and Hull. In Gateshead, people are waiting for a council decision about two big leisure centres, which could spell the end of pools, gyms and squash courts. One high-profile local doctor recently nailed what is at stake: “Take a poor area with massive health inequalities. Remove the last remaining public exercise facilities from the poorest bits of said poor areas. Watch what happens to health. It’s an experiment that the people of Gateshead don’t deserve to be a part of.”In many cases, the heating bills for public pools have tripled. Last week, the government announced its new energy bills discount scheme, which will last for a year and have two levels of financial help for businesses, charities and the public sector. The most generous tier is reserved for “energy and trade-intensive industries”. Museums, libraries and even “botanical and zoological gardens and nature reserve activities” are on the list, but pools and leisure centres have been excluded. As the national governing body Swim England sees it, that is a “hammer blow” that “flies in the face of previous statements from the government about the importance of physical activity and reducing pressures on the NHS”.‘A quarter of the children who left primary school in England in 2022 were unable to swim.’ Photograph: Jon Santa Cruz/REX/ShutterstockThere is a longer story here. Lots of pools and sports centres were built from the 1960s onwards. Swim England puts the average life of a public swimming pool at 38 years, which means that large numbers of local facilities are now in a state of decay. As with so many things, the mess bears the fingerprints of George Osborne: because local public spending was so slashed in the mad frenzies of post-2010 austerity, they have been neither refurbished nor replaced – and unless something changes, by 2030 the number of pools in England threatens to fall by more than 40%. To make things even worse, the pandemic blew a huge hole in councils’ leisure budgets that has yet to be mended.The result is a burgeoning tragedy. Swimming is a basic human skill that everyone ought to have, and a perfect way of keeping fit and sharing the company of others. Public pools usually work with schools to provide swimming lessons. But a quarter of the children who left primary school in England in 2022 were unable to swim 25 metres, and that deficit threatens to be passed on: as the former Olympic swimmer Greg Whyte recently put it, “Non-swimming children become non-swimming adults … and non-swimming parents have non-swimming children.”Beyond that lies a whole range of stuff, much of it directly tied to health provision: my mum, for example, has a heart pacemaker, and is part of an organised group of older people who meet at their local leisure centre once a week and use the gym. Amid closed-down libraries and community centres, what we often think of as sports facilities are also a central part of communities’ remaining defences against isolation and loneliness. If they shut, what remains?There is a small but vital part of this story that is too often ignored: rural places that have outdoor pools, which are often the only spaces for exercise and recreation left. There is a cluster of examples in and around Dartmoor – such as the small Devon town of Buckfastleigh, where child poverty runs at 30%, and the local pool has been in existence for 125 years. Three local primary schools use the pool for swimming lessons. It is fully open between May and September, but at this time of year it offers cold-water swimming on Sundays. In 2019, its annual energy bill came in at about £8,000. It is now £26,000, and looks set to rise to as much as £34,000. The hole in its running costs currently stands at £20,000.Last week, I spoke to Pam Barrett, one of the key people who keeps the pool in business. “It’s our last standing leisure facility,” she said. “We’ve got football and rugby clubs for fit young men, but what about everyone else? For women, kids, disabled people, older people, it’s the pool. This is it.” Exactly the same applies to other outdoor pools not far away, in such places as Chagford, Moretonhampstead, Ashburton and Bovey Tracey. “We’re really, really worried,” Barrett told me. “I have no idea how we’re going to find that £20,000 a year. How can we sustain the fundraising?”There are some obvious answers to the pool’s predicament, which also apply to much bigger local assets: changes to the tax arrangements that cover pools and sports centres, ringfenced increases in the money that goes from central government to councils, and an urgent placing of the places where we exercise at the highest level of help with energy costs. In their absence, this story will only continue to fester: one more blow to the flimsy fantasy of levelling up, and further proof of our current national condition – sickness and chaos in all those wards and surgeries, and at the top a quite terrifying stupidity. John Harris is a Guardian columnist | United Kingdom Business & Economics |
Yellow Corp., a 99-year old trucking company that was once a dominant player in its field, halted operations Sunday and will layoff all 30,000 of its workers.
The unionized company has been in a battle with the Teamsters union, which represents about 22,000 drivers and dock workers at the company. Just a week ago the union canceled a threatened strike that had been prompted by the company failing to contribute to its pension and health insurance plans. The union granted the company an extra month to make the required payments.
But by midweek last week, the company had stopped picking up freight from its customers and was making deliveries only of freight already in its system, according to both the union and Satish Jindel, a trucking industry consultant.
While the union agreed not to go on strike against Yellow, it could not reach an agreement on a new contract with the trucking company, according to a memo sent to local unions Thursday by the Teamsters’ negotiating committee. The union said early Monday that it had been notified of the shutdown.
“Today’s news is unfortunate but not surprising. Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government. This is a sad day for workers and the American freight industry,” said Teamsters President Sean O’Brien in a statement.
Company officials did nor respond to numerous requests for comment Sunday and Monday.
There were reports last week that a bankruptcy filing would come by July 31, although the company said last week only that it continued to be in talks with the Teamsters and that it was considering all of its options. The Teamsters said Monday the company is filing for bankruptcy.
The closing is bad news not only for its employees and its customers, who generally used Yellow because it offered some of the cheapest rates in the trucking sector, but also for US taxpayers. The company received a $700 million loan from the federal government in 2020, a loan that resulted in taxpayers holding 30% of its outstanding stock. And the company still owed the Treasury department more than $700 million according to its most recently quarterly report, nearly half of the long-term debt on its books.
Yellow’s stock lost 82% of its value between the time of that loan and Thursday close after reports of the bankruptcy plans, closing at only 57 cents a share. It bumped up 14 cents a share on Friday, but still remained a so-called penny stock.
The company had received that loan during the pandemic, despite the fact that at the time it was facing charges of defrauding the government by overbilling on shipments of items for the US military. The company eventually settled the dispute without admitting wrongdoing but was forced to pay a $6.85 million fine.
Yellow handles pallet-sized shipments of freight, moving shipments from numerous customers in the same truck, a segment of the trucking industry known as less-than-truckload, or LTL. The company had been claiming as recently as June that it was the nation’s third largest LTL carrier.
But the company handled only about 7% of the nation’s 720,000 daily LTL shipments last year, said Jindel. He said there is about 8% to 10% excess capacity in the LTL sector right now, so the closure of Yellow shouldn’t cause a significant disruption in supply chains. But he said it will cause higher rates for shippers who depend on LTL carriers, since it was the excess capacity that sent prices lower.
Higher prices will hit Yellow customers, Jindel said.
“The reason they were using Yellow was because they were cheap,” he said. “They’re finding out that price was below the cost of supporting a good operation.” | Workforce / Labor |
The cost of health coverage through work jumped this year, in part because of inflation, according to a survey of U.S. employers.
Premiums for both family and single plans climbed 7% after barely rising in 2022, according to a report Wednesday by KFF, a nonprofit that researches health care issues.
Later this fall, companies begin their annual coverage enrollment window for 2024, and health care experts say another price hike could be coming.
“It’s hard to imagine that there won’t be another year of health care cost increases, at least at the level we’re seeing right now,” said Paul Fronstin, director of health benefits research for the Employee Benefit Research Institute.
Employer-sponsored health insurance is the most common form of coverage in the United States. KFF says almost 153 million Americans have it. Companies generally pay most of the premium — 70% or more in many cases.
That can soften the impact of price hikes on employees. Coverage costs also are taken out of paychecks before taxes, which helps mitigate the financial pinch workers may feel, noted Fronstin, who was not involved in the KFF study.
KFF noted that premiums climbed roughly with wages and inflation.
The wider economy has felt those two pressures for more than a year, and now they are starting to affect health care costs, said Gary Claxton, a senior vice president with KFF. He noted that there can be a delay because health care contracts can keep costs stable after prices start rising in other parts of the economy.
Fronstin said health care provider consolidation also can drive up care costs, which ultimately affects premiums.
He also thinks the U.S. health care system — with its limited capacity to treat people — is still catching up on providing care that was delayed during the COVID-19 pandemic.
“There’s only so much room for catch up,” he said. “I don’t believe colonoscopy centers are running 24/7 to catch up.”
___
The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content. | Inflation |
Karnataka Bank Ties Up With Bajaj Allianz To Provide Insurance Products
This partnership will help provide structured insurance solutions to customers, the bank said.
Karnataka Bank Ltd. has partnered with Bajaj Allianz Life Insurance Co. to provide life insurance products to its customers.
This partnership will help satisfy the financial requirements of people and also provide structured insurance solutions to customers, the bank said in an exchange filing on Thursday.
"We have partnered with Bajaj Allianz Life and are happy that our customers nationwide will now enjoy a wider range of protection and investment options, enhancing their financial portfolios," said Srikrishnan Hari Hara Sarma, managing director and chief executive officer of Karnataka Bank.
"Bajaj Allianz Life offers some of the most distinctive products, and we are pleased to provide our customers with access to them," he said.
"Our partnership with the prestigious Karnataka Bank marks a significant milestone in our journey, and I'm confident that with our shared goal of financial empowerment for customers, we will enable many more customers to achieve their goals in a simple and effective manner," said Tarun Chugh, managing director and chief executive officer of Bajaj Allianz Life Insurance.
Karnataka Bank also entered into a tie-up with HDFC Life Insurance Co. to provide insurance products to its customers, according to a filing on Monday.
Through the partnership, it plans to provide innovative and customer-friendly solutions to those who are in search of financial security and life protection, it said.
Shares of Karnataka Bank closed 0.16% lower at Rs 215.90 apiece, compared with a 0.01% fall in the benchmark BSE Sensex. | Banking & Finance |
Gemini Trust Company, a cryptocurrency exchange helmed by the infamous Cameron Winklevoss and Tyler Winklevoss, just got alleging that it defrauded investors. The suit was brought forth by New York Attorney General Letitia James, the same AG currently prosecuting former president Donald Trump on sweeping charges of fraud.
This isn’t solely directed at Gemini, as cryptocurrency firms Digital Currency Group (DGC) and Genesis Global Capital are also named in the suit. All told, the civil lawsuit alleges that the three companies collectively defrauded 230,000 investors to the tune of more than $1 billion, The AG also charged former Genesis CEO Soichiro "Michael" Moro and DCG founder and chief Barry Silbert for trying to conceal the true financial condition of its lending unit.
As for the Winklevoss twins and Gemini, the suit alleges that the digital asset platform didn’t properly disclose the financials of Genesis before partnering with the crypto exchange to form an investment platform called Gemini Earn in 2021. The suit alleges that Gemini announced that Genesis was a “trusted company” despite internal risk analyses to the contrary.
It goes on to allege that in February 2022, Gemini revised its estimate of Genesis’ credit rating, lowering it from the investment-grade BBB to the junk-grade CCC, all without publicly revealing this change to investors and continuing to advertise correlated investments as “low-risk.” Additionally, it’s been alleged that many of the company’s risk assessors took their own money out of Gemini Earn without informing investors.
There are even allegations that more than 60 percent of Genesis’ financials were tied to Sam Bankman-Fried’s . To that end, the connection between Gemini and Genesis is eerily similar to the ties between FTX and Alameda Research, and
Gemini took to the preferred social media platform for crypto-enthusiasts, X/Twitter, to writing that it was simply the victim of fraud on the part of Genesis and DCG. It’s notable the firm didn’t comment on what they knew about Genesis’s poor financial condition and when they knew it, placing the onus of blame on Genesis CEO Moro and DCG founder Silbert.
“Blaming a victim for being defrauded and lied to makes no sense and we look forward to defending ourselves against this inconsistent position,” Gemini wrote.
For his part, DCG founder Barry Silbert penned a statement that completely refuted his side of the allegations, writing that he is “shocked by the baseless allegations in the Attorney General’s complaint” going on to say that he intends to “fight these claims in court.” Cameron Winklevoss hasn’t issued his own statement, but did retweet Gemini’s post on the matter.
Genesis last month, as reported by CoinDesk, after filing for bankruptcy protection back in January. Today’s lawsuit seeks to recoup the $1 billion in losses and hopes to ban all three companies from the financial industry in New York. | Crypto Trading & Speculation |
The California Legislature passed a pair of bills greenlighting Gov. Gavin Newsom’s campaign to build 10,000 new beds and housing units and increase drug addiction treatment as part of his response to the state’s homelessness and drug crises. The Democratic governor is expected to sign the bills, which received bipartisan support.
The first bill, SB 326, is designed to transform the state’s Mental Health Services Act into the Behavioral Health Services Act, using an existing tax on millionaires to treat the most seriously mentally ill and to increase programs for substance use disorders. The second, AB 531, authorizes the state to issue $6.38 billion in bonds to build more housing for homeless people and treatment beds for those with the most severe needs.
Newsom will now ask voters to approve the changes on the March primary ballot.
“This reform will bring much needed accountability currently lacking at the local and state level, increased transparency and visibility into the whole mental health and addiction treatment system, and a modernized focus to address today’s crises,” Newsom said in a statement.
According to a June statewide study on homelessness by the University of California-San Francisco, more than 171,000 Californians experience homelessness daily, representing 30% of the nation’s homeless population. The majority of participants in the study reported high lifetime rates of mental health and substance use challenges; 82% reported a period in their life in which they experienced a serious mental health condition, and nearly two-thirds reported the use of illicit drugs or heavy drinking.
The mental health act was passed as Proposition 63 by voters in 2004 and levied a tax of 1% on income above $1 million, known as the “millionaire’s tax.” That money then flowed from the state to counties for use in five mental health areas, including community support, prevention, and facilities. Funding changes year to year, but the tax generated $3.3 billion in the 2022-23 fiscal year, according to the nonpartisan Legislative Analyst’s Office.
However, the program has been criticized over the years for falling short of its initial promise. Last year, the Los Angeles Times highlighted several reasons, including revenue swings, consistent underfunding of social and mental health programs, tension between state and county officials, and a shortage of mental health clinicians.
Newsom pledged that the newly renamed Behavioral Health Services Act would build 10,000 new beds and housing units for people experiencing homelessness who have behavioral health needs. It would also focus on diversifying the workforce and improving accountability — tracking outcomes in a more detailed way — so the government can understand what’s working and what’s not.
However, counties that administer this money at the local level have raised concerns. A letter from the California State Association of Counties and other organizations representing local government interests expressed fear that Newsom’s proposal would result in counties receiving significantly less funding for core services, little protection from fluctuation in funds, and less flexibility in spending.
The governor’s office emphasized that new requirements still provide flexibility.
Assembly member Jacqui Irwin (D-Thousand Oaks), who was the lead author of the bond bill and served for seven years as the chair of the body’s Military and Veterans Affairs Committee, is particularly proud of a provision that will reserve $1.07 billion for housing for veterans. California has the largest number of veterans experiencing homelessness — 31% of the nation’s homeless veteran population — according to a 2021 homelessness report by the U.S. Department of Housing and Urban Development.
“Getting veterans experiencing homelessness off the streets has long been a priority for California, but getting some of our most vulnerable veterans into needed treatment for behavioral health challenges will be transformative,” Irwin said.
Sen. Susan Talamantes Eggman (D-Stockton), who co-authored the bond bill and was the lead author of the other bill, said the bills are critical to the state’s continuum of care. “Together they will build out voluntary housing, reprioritize resources to those with the greatest needs, and provide a true safety net to prevent the many people falling through the cracks that we see today,” she said. | Real Estate & Housing |
An exclusive Sky News/Ipsos poll has found that young people are feeling increasingly lonely - with the cost of living crisis leading many to take on extra work, move in with their parents and cut back on socialising.
The poll, conducted in December, found 37% of 18 to 24-year-olds felt lonelier this winter than they did a year earlier.
England's last remaining COVID regulations were lifted nearly a year ago, but the cost of living crisis means young people are struggling to take advantage of their new freedoms.
The effects of inflation mean almost half of those aged 16 to 25 fear they will never earn enough to start a family, a report found, while other research has found young people are likely to be "cautiously hopeful" but "struggling" in 2023.
But many young people are having to work more than one job to make ends meet.
Fizah, 22, a student at a university in Manchester, feels like she has no choice but to take up two jobs alongside her studies.
"It's just so I can pay for the essentials of my rent, food and travel," she says.
The extra work leaves little time for socialising.
She said: "You're taking yourself away from your social group, your family and friends, which mentally detaches you a lot."
Some 36% of young people surveyed said that they have less free time than they did a year ago, compared with just 24% of the public as a whole.
Ipsos surveyed 2,235 British adults, including 400 people aged 18 to 24, between the 7 and 9 of December.
It found that 45% of young people had taken on more hours at work since January 2022 due to rising prices, while 21% said they had taken on a second job as a result of the spending squeeze.
And in a bid to avoid rising rents and energy bills, nearly 23% have moved in with family.
Even for those living with their parents to reduce costs, the stress and social isolation caused by rising prices can be significant.
Tasnia, 20, who lives with her mum in Tower Hamlets, says that the cost of living crisis has exacerbated her depression and made it harder to find a job.
"There are times where I'm going into overdraft simply to get to [job interviews]," she says.
The main financial pressure comes from energy bills.
She said: "We've been rationing the heating a lot lately ... We can only use it three times a day."
Nearly two in five young people surveyed told Sky News that they had found it difficult or very difficult to pay their energy bills over the last three months.
The poll also found that young people were more than twice as likely to report missing energy bill payments as the general public, while 18% said they had fallen behind on housing payments.
Others have staved off falling behind on bills in ways that may be difficult to sustain.
While 27% said that they had used savings to pay energy bills in the past three months, 19% have had to borrow money.
Young people are less likely to have savings to fall back on than other age groups. The latest data from the Office for National Statistics shows that, between 2018 and 2020, 34% of people aged 16 to 34 had more debt than savings - compared with just 11% of over-55s.
After paying their bills, Tasnia and her mum are struggling to budget £50 for a month's groceries.
"It's taken a massive toll on my mental health," Tasnia said. "It's inevitable that even considering going to a food bank might make you feel like a burden or a charity case. It's really rough."
Tasnia has also cut back on social gatherings because she "just can't afford it".
"It feels really isolating," she says.
'We need help'
The cost of living crisis has made it difficult for Jem, 26, to move out of her parents' home.
"My social life is gone," she says. "I can't invite friends or partners around."
Jem says it feels like young people have been "forgotten about" by the government.
She added: "We need help, we need support."
In the Sky News survey, 22% of young people said that the UK's political system works for people like them - with just 18% saying that it works for people on low incomes.
By contrast, the majority of young people surveyed said that the system works well for high earners and large businesses.
"Young people have been given little to no support in the last few years," says Jem.
"We can't do the jobs we're qualified for, we can't do the jobs we want to do.
"And then by our mid-20s, we feel like failures having to stay at home or stay in jobs we don't actually like - all because the government doesn't want to know that we are desperate for help."
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The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done. | Inflation |
FIRST ON FOX: A major left-wing dark money nonprofit organization earmarked millions of dollars last year to a private law firm that's spearheading climate litigation against the oil industry on behalf of Democrat-led cities and states, according to newly published tax filings.
New Venture Fund — which is managed by Arabella Advisors, a firm that oversees a liberal billion-dollar dark money network — wired grants worth a total of $2.5 million to the California-based Sher Edling in 2022 alone, per the tax filings reviewed by Fox News Digital. Across the country, Sher Edling has taken up novel climate litigation against major oil and gas producers, arguing the industry has misled the public about the threat posed by global warming.
"It smacks of a political operation," Tom Pyle, the president of the Institute for Energy Research, told Fox News Digital in an interview. "You have this whole self-dealing scheme where progressive donors are hiding behind nonprofits and taking advantage of that from a tax perspective, then funding Democrat law firms, and also, Democrat politicians and elected officials are participating as well."
"Across the board, it's rotten," Pyle continued. "This is further evidence that the green movement is no longer about protecting the environment. It's about being a political, financial and organizational arm of the Democratic Party."
Since 2016, the year Sher Edling was founded, the firm has pursued aggressive climate-related litigation on behalf of Delaware, Minnesota, Rhode Island, New Jersey, New York City, Washington, D.C., San Francisco, Baltimore, Honolulu and several local governments across the country. The first-of-their-kind lawsuits argue that oil companies are financially responsible for global warming and, therefore, weather events that impact people and communities.
On its website, the firm says its climate practice seeks to hold oil companies like Chevron, ExxonMobil and Shell accountable for their alleged "deception" about climate change. It says that the fossil fuel industry has known for decades that burning fossil fuels would cause global warming, thus making the industry responsible for mass human devastation caused by such human-induced climate change.
While the entirety of Sher Edling's funding structure is unknown, the firm has for years raised millions of dollars from nonprofits whose individual donors are obscured from public view, meaning anonymous individuals and groups are supporting its climate litigation. The arrangement, though, has attracted scrutiny from Senate Commerce Committee ranking member Ted Cruz, R-Texas, and House Oversight Committee Chairman James Comer, R-Ky.
"As I’ve warned, it’s clear radical, left-wing dark money groups are footing the bill for Sher Edling’s climate crusade with the goal of bankrupting American energy employers," Cruz told Fox News Digital in a statement. "New Venture Fund and Sher Edling’s litigious gamble is nothing but an attempt at achieving a goal lacking majority support in Congress: the eradication of fossil fuels."
"It’s no surprise that a dark money group is funding activist litigation that seeks to bankrupt American energy companies," Comer added in a separate statement. "The House Oversight Committee raised concerns about this exact issue in our letter to Sher Edling that was sent in partnership with Ranking Member Cruz and the Senate Commerce Committee."
The Oversight Committee chairman noted the panel recently held a hearing on Sept. 13 about left-wing litigation funding and said it will "continue to follow the facts wherever they may lead."
Shortly after that hearing, Cruz and Comer fired off their latest probe into Sher Edling's finances, sparking a tense back-and-forth between the two sides, letters shared with Fox News Digital showed.
"Setting aside the namecalling, donations to Sher Edling do not finance any particular lawsuit; rather, such donations support only the firm’s general operations in this area," counsel for Sher Edling wrote to Cruz and Comer in a letter on Oct. 6.
According to tax filings, between 2017 and 2020, the Collective Action Fund for Accountability, Resilience, and Adaptation (CAF), a secretive group fiscally sponsored by New Venture Fund, wired more than $5.2 million to Sher Edling. Then, in 2021 alone, CAF funneled another $3 million to the firm. CAF switched its fiscal sponsorship to New Venture Fund from a smaller dark money group in 2021.
Including the funding revealed this week in the 2022 tax forms, CAF has sent $10.7 million to Sher Edling since the small firm began suing oil companies.
Though CAF's, and by extension Sher Edling's, individual donors are unknown, a previous Fox News Digital review showed past funding has flowed through the Leonardo DiCaprio Foundation, MacArthur Foundation, William and Flora Hewlett Foundation, and Rockefeller Brothers Fund.
And Fox News Digital previously reported that Ann Carlson — a senior Biden administration official serving as acting administrator of the Department of Transportation's National Highway Traffic Safety Administration — secretly coordinated to raise money for CAF and Sher Edling. She further helped recruit at least one state, Hawaii, to hire Sher Edling.
Led by Cruz, Republicans succesfully killed Carlson's nomination to permanently lead NHTSA, in part, due to her connection to Sher Edling.
Sher Edling and New Venture Fund didn't respond to requests for comment. | Energy & Natural Resources |
July's wet weather caused a slowdown in UK retail sales, new figures suggest, with demand for clothing falling as people felt less need to restock their summer wardrobes.
Overall retail sales grew 1.5% in July, down from 2.3% the year before, the British Retail Consortium (BRC) said.
The group said rising interest rates were also squeezing shoppers' budgets.
"While consumer confidence is generally improving, it remains below longer-term levels," said boss Helen Dickinson.
According to the trade body's research, spending in July was dented by the damp weather, which did "no favours to sales of clothing, and other seasonal goods".
It found that sales of all types of clothing and shoes declined in what is usually a busy month for fashion retailers.
The wet weather also slowed down the post-pandemic return to brick-and-mortar stores, the BRC said, while online sales continued to slide, falling nearly 7% year-on-year.
Sales of furniture, health and beauty goods held up though.
'Doing more with less'
The group found that retailers were offering more promotions to get shoppers through the door.
"Both consumers and retailers are finding that they are having to get used to doing more with less as conditions remain incredibly challenging," added Paul Martin, head of retail at KPMG, which helped with the research.
It comes after inflation - the rate at which prices rise - fell to 7.9% in June, which is its lowest level in more than a year but still high by historical standards.
This is due to energy bills and food prices starting to fall, official figures suggest.
Last week, the Bank of England put up interest rates for the 14th time in a row in a bid to make borrowing more expensive, dampen demand and therefore slow price rises.
This is driving up mortgage rates, something Ms Dickinson said was squeezing household budgets.
Economist Michael Hewson from CMC Markets said the slowdown in the pace of consumer spending was "not surprising", considering interest rate rises.
"This is what rate hikes are designed to do," he said.
But Mr Hewson said there was a "looming cliff edge" as there is a lag before the effect of such rises is fully felt in the economy.
He said consumers were now saving more to mitigate a sharp rise in mortgage costs as their fixed rate deals come up for renewal.
New figures from Barclaycard, which monitors about half of credit and debit card spend in Britain, also suggest there has been an overall slowdown in spending.
But there were a few bright spots, with more being spent on takeaways and streaming services as people stayed indoors away from the rain. | Consumer & Retail |
Karina Montoya is a journalist with a background in business, finance, and technology reporting for U.S. and South American media. She researches and reports on broad media competition issues and data privacy at the Center for Journalism & Liberty, a program of the Open Markets Institute, in Washington, D.C.
Last week, the Department of Justice (DOJ) Antitrust Division, joined by eight states, sued Google over illegal monopolization of digital advertising technologies, known as “ad tech.” In a historical move by the antitrust enforcer, the suit seeks to break up the giant’s dominance over this industry by having Google divest its ad server platform for publishers, Google Ad Manager, as well as its ad exchange, AdX.
DOJ’s complaint is lengthy and dense, but it attempts to throw open the black box powering the digital ads we see every day, which – while ubiquitous – we are likely to give little thought. This myriad of servers and platforms are the backbone that connects publishers and advertisers in the $270-billion U.S. digital advertising market, where Google controls most of the tools to sell, buy, and load online ads.
Given this market is invisible to users, it is hard to see what is at stake in this lawsuit. But as we read through DOJ’s allegations, a first clue emerges: the financial future of publishers. DOJ shows how, due to Google’s ability to manipulate ad prices, publishers ended up at the mercy of a monopoly that once promised them prosperity in their transition to the web.
Three Google programs, “Bernanke,” “Bell,” and “Poirot,” are described in the suit. To understand them, it is first necessary to review how the ad tech industry works.
How Digital Ads Are Placed
For ads to be placed, publishers and advertisers use three main ad tech products — which are also the focus of DOJ’s complaint: publisher ad servers (for publishers to manage their ad spaces), ad buying tools (for small and large advertisers to buy ads), and ad exchanges, where supply and demand meet.
Ad sales occur through auctions. When a webpage loads, a publisher ad server requests a bid for a number of ad views (impressions) to an ad buying tool. But it’s not a direct connection. The ad exchange receives the bid request, makes it “more appealing” (adding data such as a user’s location or browsing history), sends it to the ad buying tool, receives bid prices, determines the winner, and executes the sale on the publisher ad server. Finally, the ad is shown, all in a split second.
Google owns the largest ad exchange in the market, AdX. And it also owns the publisher ad server called Google Ad Manager — which resulted from the acquisition of DoubleClick in 2007 — and two ad buying tools, DV360 (which serves large advertisers) and Google Ads (for smaller advertisers).
For each ad dollar spent, the ad buying tools and the exchange collect fees, which vary upon the bid price. The publisher ad server also collects a fee, but it typically does not vary. In total, Google keeps at least 35 percent of every ad dollar spent, and Google’s AdX has maintained an undisturbed 20 percent fee since 2009, while rivals charge a fraction of that amount, according to DOJ. Google’s advertising revenues — including YouTube Ads — make up a sizable 80 percent of the giant’s total revenues.
Project Bernanke
Until late 2019, AdX executed ad sales through what is known as a second-price auction. This means that between two of the highest bids, where one is $1 and another 90 cents, the winner will pay only 91 cents – one cent above the second-highest bid. In essence, the second-highest bid serves to drive the final price of the auction upwards or downwards.
This incentivized ad buying tools to submit one bid per auction to AdX, to avoid driving up the ad price. But Google Ads allegedly submitted two bid prices, unbeknownst to advertisers and publishers, effectively controlling the winning bids and the price floors. To entrench its market power even further, the suit argues Google started manipulating ad prices under a different method, which it dubbed “Bernanke.”
Starting in 2013, according to the suit, Google Ads would submit bid prices to AdX above the amount advertisers had budgeted, in order to win high-value impressions for a group of publishers — the ones most likely to switch ad tech platforms. This insight could only be obtained by leveraging data in Google’s own publisher ad server. Once AdX cleared the bids, Google Ads would offset the losses by charging higher fees to other publishers less likely to switch ad tech providers.
This scheme allegedly helped Google lock in key publishers away from other ad exchanges and ad buying tools, all while maintaining its profits at the expense of other smaller publishers.
Project Bell
Technically, publishers in an auction — regardless of the ad servers they use — can choose whether or not they want AdX to buy ad spaces from them before other ad exchanges. But Google appears to have turned this choice into an obligation. With “Project Bell,” Google allegedly penalized publishers that did not give preferential access to AdX’s buyers, including Google Ads, by paying those publishers less revenues once an ad was placed.
For example, “if publishers tried to use a rival source of advertising demand for ‘first-look’ access to inventory, Google reduced bids by about 20 percent,” the lawsuit reads. This was Google’s scheme to protect AdX from other competitors having access to the same data about publishers that Google Ads had. In practical terms, if you were a web publisher and were growing in traffic, that scale wouldn’t matter to get a good deal on an ad sale. What mattered was who you were partnering with to make that sale.
In a previous complaint led by the Texas Attorney General over similar monopolization charges, “Bell” and “Bernanke” are also mentioned, but DOJ’s complaint provides a far more complete context.
Project Poirot
This program was launched in 2017 as a way for Google to fend off competition from a new auction technology called header bidding, which the complaint suggests executives at the company saw as an “existential threat.” “Poirot” is also part of the Texas AG complaint, but the DOJ makes the case that this scheme should be a part of Google’s anti-competitive actions to thwart header bidding.
To simplify matters, header bidding emerged around 2013 as a new way for publishers to obtain bid prices from multiple ad exchanges– not just from AdX, since it was believed to be prone to manipulation. Such rival ad exchanges connected with large advertisers, most of whom used Google’s ad buying tool, DV360. By 2017, DV360 was the top buyer on every other ad exchange, which meant that a big portion of publisher header bidding revenue was coming from Google’s large advertising clients.
To stop this, DOJ says Google redirected the DV360 demand to AdX, to the detriment of other ad exchanges that used header bidding.
Poirot was an algorithm that allegedly detected rival ad exchanges engaging with the header bidding technology. That way, DV360’s bid prices would consistently be below the advertisers’ budgets on those exchanges. When the publisher ad server received the bid back, it used it as a reference to ask for more bids on AdX. Because DV360 also trades on AdX and knows what the advertiser’s budget is for that particular ad sale, it would now bid the maximum allowed budget, effectively taking a win away from header bidding.
This scheme shifted about $200 million of DV360 advertiser spend away from rival ad exchanges and toward Google, the DOJ states. Eventually, this reduced the competitiveness of header bidding and the benefits it had brought to publishers.
Time for a Reckoning?
All of the above claims will have to be contested in court. As expected, Google quickly responded to DOJ’s allegations, focusing on the many other players that operate multiple ad tech platforms as well. But if anything, DOJ’s findings would appear to crack open a Pandora’s box of conflicts of interest throughout the entire industry. In Europe, for example, similar observations were made by a panel of experts, which supported including new transparency obligations for ad tech in the Digital Markets Act.
Unsurprisingly, Google’s communications never mention nor contest the massive market shares it holds in each segment of this market: measured by revenue or ad impressions placed, Google Manager’s share of the publisher ad server market is 90 percent, AdX’s share of the ad exchange market is 50 percent, and Google Ads dominance of the ad buying tools market stands at 80 percent. These are the real figures to keep in mind when thinking of Google’s power over the financial future of web publishers.
It will take at least a couple of years to see this complaint move forward to trial, judging by how long it has taken another DOJ case against Google, regarding monopolization of online search, to show signs that it may go to trial this year. For now, we can see how the case questions the benefits of extreme consolidation in online services, which goes well beyond digital ads. If read through a privacy lens, the case even shows the high value of personal data obtained in real-time for programmatic ads to exist. The implications of a win by DOJ would be, to say the least, transformative for the entire web.
Karina Montoya is a journalist with a background in business, finance, and technology reporting for U.S. and South American media. She researches and reports on broad media competition issues and data privacy at the Center for Journalism & Liberty, a program of the Open Markets Institute, in Washington, D.C. She holds a Master of Arts from Columbia Journalism School, with a concentration in business and economics. Opinions expressed here are her own. | Banking & Finance |
Average income around the worldThe worldwide highest income is earned in Monaco. The smallest budget per capita exists in Afghanistan. In our comparison over 75 countries, the USA comes 7th with an average income of 76,370 USD.
The average gross annual wage per full-time employee in the USA was $74,738 in 2021, or around $6,228 per month ($4,648/year more than in the previous year).
The average annual income
|Country||Ø Annual income||Ø Gross annual wage|
|Monaco||186,080 $|
|Bermuda *||125,240 $|
|Norway||95,510 $||72,697 $|
|Luxembourg||91,200 $||83,318 $|
|Switzerland||89,450 $||98,177 $|
|Ireland||81,070 $||61,117 $|
|United States||76,370 $||74,738 $|
|Denmark||73,200 $||73,540 $|
|Qatar||70,500 $|
|Iceland||68,220 $||92,175 $|
|Singapore||67,200 $|
|Sweden||62,990 $||53,501 $|
|Australia||60,430 $||66,776 $|
|Netherlands||57,430 $||60,324 $|
|Austria||56,140 $||55,796 $|
|Israel||54,650 $||54,882 $|
|Hong Kong *||54,370 $|
|Finland||54,360 $||53,653 $|
|Germany||53,390 $||51,710 $|
|Canada||52,960 $||59,156 $|
|United Arab Emirates||48,950 $|
|United Kingdom||48,890 $||53,896 $|
|Belgium||48,700 $||57,299 $|
|New Zealand||48,460 $||55,049 $|
|France||45,860 $||47,444 $|
|Macao *||44,980 $|
|Japan||42,440 $||40,476 $|
|Italy||37,700 $||35,119 $|
|South Korea||35,990 $||37,175 $|
|Spain||31,680 $||32,504 $|
|Brunei||31,410 $|
|Slovenia||30,600 $||33,092 $|
|Estonia||27,640 $||24,560 $|
|Saudi Arabia||27,590 $|
|Czechia||26,590 $||21,594 $|
|Portugal||25,800 $||22,722 $|
|Lithuania||23,690 $||25,834 $|
|Slovakia||22,060 $||19,024 $|
|Greece||21,740 $||19,219 $|
|Latvia||21,500 $||21,857 $|
|Hungary||19,010 $||15,051 $|
|Poland||18,350 $||17,137 $|
|Romania||15,660 $|
|China||12,850 $|
|Russia||12,830 $|
|Malaysia||11,780 $|
|Argentina||11,620 $|
|Turkey||10,590 $||11,657 $|
|Mexico||10,410 $||8,981 $|
|Brazil||8,140 $|
|Thailand||7,230 $|
|South Africa||6,780 $|
|Colombia||6,510 $|
|Ecuador||6,310 $|
|Indonesia||4,580 $|
|Ukraine||4,270 $|
|Egypt||4,100 $|
|Vietnam||4,010 $|
|Philippines||3,950 $|
|Iran||3,900 $|
|Sri Lanka||3,610 $|
|Bolivia||3,450 $|
|Bangladesh||2,820 $|
|India||2,380 $|
|Nigeria||2,140 $|
|East Timor||1,970 $|
|Cambodia||1,700 $|
|Cameroon||1,660 $|
|Pakistan||1,580 $|
|Nepal||1,340 $|
|Myanmar||1,210 $|
|Ethiopia||1,020 $|
|Sudan||760 $|
|Congo (Dem. Republic)||590 $|
|Afghanistan||390 $|
Difference between wage and incomeThe wage or salary is paid to a worker or employee for his work in an employment relationship. Self-employed persons, freelancers, pensioners or also social welfare recipients have neither wage nor salary, but nevertheless an income. Workers or employees can also have additional income to their wages or salary. This includes, for example, capital gains (e.g. securities or interest) or rentals.
Steve Jobs had an annual salary of only $1 for a long time. In addition, however, he had an income, namely the proceeds from rising stock prices. In many countries, interest is also paid on shareholders' deposits in corporations. These are also income, but not wages, because they do not arise from active work.
A person's income is therefore the sum of all money earned. The average income of a country is calculated from the gross national product and the number of inhabitants. Dividing all earnings and profits of all inhabitants (= gross national income) by the number of inhabitants gives the average income per person. This includes all wages and salaries, but also other income, e.g. from capital gains.
At first glance, that may sound somewhat inaccurate in a country comparison, as companies also generate an income. Regardless of size, the company is also owned by individuals. Therefore, the income of the owners increases to the same extent as the income of their companies.
Salary, on the other hand, is something quite different and can only be compared internationally in a few cases. It only includes those who also receive a salary (or wage) and ignores large parts of the money earned. Moreover, what is covered by this salary varies from country to country. In the major industrialized nations, social security contributions (e.g.: Pension, health care, accident and health insurance, unemployment insurance or even insolvency contributions) are parts of the salary. Sometimes the employer already pays part of it, and this part is no longer part of the gross salary. In other countries, there are no employer contributions at all, or even unemployment or pension insurance. Worldwide, around 4 billion people live without social security.
Another difficulty in the statistics is already the determination of salaries. In countries where social insurance does not exist, the state has hardly any possibilities for a reasonably accurate count. Of course, any state could simply count its taxpayers. But what reason does an employer have to report his employees at all? Once there is no social security, there is almost no incentive to do so.
Niger, Thailand and Cambodia, for example, have had unemployment rates well below 1% for decades. This is not because these countries have full employment, but because there are no benefits to register as employed or unemployed. Those who are not registered do exist – but do not appear in the official statistics.
In the particularly poor countries, there is also the fact that they cannot afford the luxury of a governmental – and thus taxpayer-funded – statistical authority. Apart from a few unrepresentative survey results, there are often no reliable figures. This is also the reason why no average salary is given for numerous countries. Even determining an average value that is comparable across countries is therefore complex to impossible. The specification of a median value, which is often desired here, is then already pure utopia.
Surviving on 33 USD per month?The lower end of the table clearly shows that countries like the US and Australia are doing pretty well. Almost all countries with a remarkably low income are also developing countries with unstable political and economic conditions. The figures are quite correct in content, but also reflect only what is actually recorded by the official side. Illicit services and sales are not included in government statistics. And that, in turn, reduces gross national income. Such numbers should always to be looked at with caution.
What is the gross national income?National income is always attributed to the domestic population. These are people who live predominantly in the respective country. They do not necessarily have to have the same citizenship, habitual residence is sufficient. Also included in the gross national income are any earnings generated by these residents in another country. If a Mexican worker earns their money in the US during the day, but lives in Mexico, their income is counted for Mexico. If they actually live in the US for at least six months a year, they become a fiscal resident in the USA and their income is counted there.
Data basis and calculationOfficial data is published by several organizations like the World Bank, International Monetary Fund or the OECD on a regular basis. Unfortunately, there are no standardized procedures to adjust for inflation, currency fluctuations or real purchasing power. That’s why each institution has its own ranking and varying results.
The income is therefore calculated according to the Atlas method from the quotient of the gross national income and the population of the country. The OECD determines the data of the gross labor income annually in the respective national currency. For better comparison, we have converted this national currency into US dollar using the annual average exchange rate. For all figures, we take the latest official numbers, which are usually those of the previous year. For the vast majority of countries, the above table is based on information from 2022. In some countries, however, these starting figures are not collected regularly or published and may therefore be older or official estimates by the above-mentioned institutions.
* Dependent territoriesThe following countries are not sovereign states, but dependent territories or areas of other states:
- Bermuda: self-governing territory of the UK
- Hong Kong: special administrative region of China
- Macao: special administrative region of China | Inflation |
Interest rates are expected to rise for the 14th time in row as the Bank of England continues its battle to control stubbornly high price rises.
Most economists have predicted the Bank will increase its base rate to 5.25% from its current 5% later on Thursday.
That would mean higher interest rates on mortgages and loans for some people, but also higher savings rates.
UK inflation, the rate at which prices rise, remains elevated and is putting households under pressure.
The last time interest rates stood at 5.25% was 15 years ago in April 2008. However, a rise to 5.25% would mark a smaller increase than July's dramatic rise to 5% from 4.5% and follows signs that price rises have begun to ease.
Inflation fell by much more than expected in June and at 7.9% is at its lowest level in over a year but remains nearly four times higher than the Bank of England's 2% target.
Pantheon Macroeconomics said this meant policy makers would not need to hike interest rates as much as previously thought.
By making borrowing more expensive the Bank's aim is that people will spend less money, meaning households will buy fewer things and then price rises will ease.
But it is a balancing act as raising rates too aggressively could cause the economy to slump, but not raising them at all could lead to inflation rising even more.
Free market think tank the Institute of Economic Affairs (IEA) said the Bank should wait for previous interest rate rises to take effect before raising rates further.
''It will take some time for previous rate rises and falling global commodity prices to feed into lower inflation.
"Further rate rises are unnecessary and could do some economic damage without lowering inflation any faster. The UK economy is on the precipice of a sharper slowdown," said Trevor Williams, a member of IEA and former chief economist at Lloyds Bank.
Mr Bailey has previously denied the Bank has been trying to cause a recession - which is usually defined as the economy shrinking for two three-month periods in a row- in a bid to tackle soaring prices.
"Many people with mortgages or loans will be understandably worried about what this means for them... but inflation is still too high and we've got to deal with it," he said at the Bank's previous interest rate decision.
There are signs that higher rates are already affecting the UK economy with house prices falling at their fastest annual rate in 14 years in July, according to Nationwide.
On Wednesday, Prime Minister Rishi Sunak told LBC radio that inflation was not falling as fast as he would like, but that he believed people could "see light at the end of the tunnel".
What's the impact?
A rise in rates would affect different people in different ways.
Mortgage holders with variable or tracker mortgages, or those who are looking to secure a new fixed-rate deal, will find it costs more to borrow the money for their homes.
In the event of a 0.25% increase, people on a typical tracker mortgage will pay about £23.71 more a month, while those on standard variable rate (SVR) mortgages face a £15.14 jump on average.
The majority of mortgage holders are on fixed-rate deals, which shields them from the current interest rates rises, but about 800,000 deals will end by the end of this year and 1.6 million more will do so in 2024.
Hopes that the Bank of England might not have to raise rates as high as previously forecast have helped to bring down fixed-rate mortgage rate deals in recent weeks, although they still remain much higher than the levels they were at two years ago.
Jane Foley, head of FX strategy at Rabobank, told the BBC's Today programme that the costs of fixed-rate deals "are more tied to money market rates which factor in expectations of where rates will be in two years or one year etc".
UK interest rates had previously been expected to peak above 6% but when inflation eased in June, markets changed their forecasts to a peak of around 5.85%.
Ms Foley said that if the Bank signals that core inflation is stabilising and interest rates are close to a peak, "money market rates may not move, they may even come down a bit", which could cut the cost of fixed-rate deals further.
Other impacts of higher rates include charges on some non-secured loans and credit cards going up.
However, people with savings should get better returns on their money - though banks have been condemned for "weak excuses" over their savings rates on offer.
For the government though, a rise in rates will have a knock-on effect meaning it has to pay more interest on the country's debt.
What to do if I can't pay my debts
- Talk to someone. You are not alone and there is help available. A trained debt adviser can talk you through the options. Here are some organisations to get in touch with.
- Take control. Citizens Advice suggest you work out how much you owe, who to, which debts are the most urgent and how much you need to pay each month.
- Ask for a payment plan. Energy suppliers, for example, must give you a chance to clear your debt before taking any action to recover the money
- Ask for breathing space. If you're receiving debt advice in England and Wales you can apply for a break to shield you from further interest and charges for up to 60 days.
Tackling It Together: More tips to help you manage debt
Sign up for our morning newsletter and get BBC News in your inbox. | Interest Rates |
ED Issues Showcause Notice To Byju's, Founder For FEMA Violation Worth Rs 9,300 Crore
The ED investigated Byju's based on complaints regarding the foreign investment received by the company and its business conduct.
The Enforcement Directorate has issued showcause notices to Byju's parent company and founder, Byju Raveendran, alleging violations worth over Rs 9,300 crore under the Foreign Exchange Management Act, 1999.
The investigative agency said it initiated an investigation on the basis of various complaints regarding the foreign investment received by the company and its business conduct.
"The company was also stated to have made significant foreign remittances outside India and investments abroad, which were allegedly in contravention of provisions of FEMA, 1999, and caused loss of revenue to the government of India," it said in a press release.
Based on the information, the ED conducted searches at the premises of Think and Learn Pvt. and Raveendran's residence in Bengaluru in April this year and seized documents pertaining to investments received by Byju's. It also interviewed Raveendran and the then-Chief Financial Officer, Ajay Goel.
The ED said its investigation concluded that Byju's contravened the provisions of FEMA by:
Failing to submit documents of imports against advance remittances made outside India
Failing to realise the proceeds of exports made outside India.
Delayed filing of documents against the foreign direct investment received into the company.
Failing to file documents against the remittances made by the company outside India
Failing to allot shares against FDI received into the company
The showcause notices are the latest among headwinds for the beleaguered edtech startup. It is still in the middle of a battle with lenders over $1.2 billion debt and in talks to sell its subsidiaries—Great Learning and Epic!—to raise funds to settle the amount.
It also posted an Ebitda loss of over Rs 2,250 crore for its standalone business, even as revenue grew to over Rs 3,500 crore for FY22. It is yet to file its financials with the Ministry of Corporate Affairs, despite releasing a statement on its earnings about two weeks ago.
Its auditor Deloitte and three key investor representatives resigned from the board, while Chief Business Officer Pratyusha Agarwal; Mukut Deepak, business head for Byju's Class 4–10 school segment; and Himanshu Bajaj, head of Byju's Tuition Centres business also exited.
Other headwinds included valuation cuts by prominent investors, mass layoffs, and unhappy employees taking to social media routinely. | Banking & Finance |
Shoplifters are overrunning retailers and avoiding public rebuke because politicians have accused supermarkets of profiteering, the chief executive of Co-op Food has said.
Matt Hood said there has been a surge in crime at his stores and that he was “disappointed” people were defending looters after MPs criticised rip-off prices.
Co-op, which runs 2,500 outlets, recently released figures showing police were not responding to more than 70pc of call-outs over serious crimes in its stores.
It said cases of crime, shoplifting and anti-social behaviour were up 35pc year-on-year as criminal gangs target stores to steal goods such as coffee, alcohol, and baby formula.
Rival retailers, including Waitrose, have also reported a rise in shoplifting incidents, blaming the increase on organised gangs.
Mr Hood, who took over as managing director of the food business last September, said: “I was reading some of the comments when we’ve spoken about shoplifting being on the rise and people were saying ‘well, they are making so much money, so what difference does it make?’
“What drives me insane is the amount of people who want to claim it is victimless. Tell me, if that was your child working in that shop, would you say it is a victimless crime because it is fundamentally not.”
He said he would encourage his children to work in supermarkets “but even me, as somebody who runs the business, would be thinking, do I feel safe with them being in there? And that’s fundamentally wrong”.
Threats to safety could also put people off working in retail, he said: “If it continues as it is at the moment, it’s going to be an industry that becomes hard for us to bring people into.”
This could mean grocers must increase wages further, having already hiked salaries to battle staff shortages.
Higher prices in-store could follow if labour costs remain permanently elevated.
However, recent suggestions that shoplifting is on the rise because families cannot afford groceries due to the cost-of-living crisis are incorrect, Mr Hood said.
He urged the public to dismiss the idea “that this is because people can’t afford to feed themselves”.
“No, it’s fundamentally because people are using baby formula to cut drugs. They’re using it for organised crime,” said Mr Hood.
The growing sense that shoplifters may be justified in stealing from stores follows a recent storm over spiralling grocery bills in Britain, with supermarket food prices having jumped around 15pc over the past year, according to Kantar.
Politicians, including Liberal Democrat leader Ed Davey, claimed part of the rise was due to so-called “greedflation”.
Supermarket chiefs were subsequently dragged before MPs to explain their prices.
However, a recent investigation by the UK’s competition watchdog found no evidence of industry profiteering.
The Competition & Markets Authority (CMA) said supermarkets’ margins had been squeezed by higher food costs and that falls in wholesale prices were being passed through to shoppers.
It also pointed to supermarkets’ low profit margins, which are between 2pc and 3pc.
Mr Hood said he was “not enamoured” by the fact the CMA felt the need to investigate in the first place, saying: “The assumption that we are profiteering was never ever going to be found to mean anything.
“This is the most competitive retail environment in the world. There is no other country that has 10 or 11 players all competing for 70 million people’s share of wallet, it just doesn’t exist.”
He said he understood that the Government was under pressure to deliver on its target of bringing inflation back down. Prime Minister Rishi Sunak earlier this year pledged to cut the headline rate of inflation in half by the end of the year.
Inflation has started to ease in recent months and the rate fell to 7.9pc in June.
“We know that the Government needs food manufacturers and retailers to help bring inflation down. The frustration was that there was an assumption that we weren’t doing that for our own benefit. The reality is we weren’t doing that because we hadn’t seen costs come down,” said Mr Hood.
The CMA last month unveiled plans to turn its focus to big food brands such as Heinz and Unilever, in an effort to clear up whether consumers are being ripped off.
Unilever last week revealed a 9pc jump in sales after it raised prices by 9.4pc in the first half of the year. Its profit margins edged up from 17pc to 17.1pc.
The Marmite maker has hit back against claims that it is setting prices higher than necessary.
However, Mr Hood said he was not surprised by the regulator’s latest move: “Unilever and others have posted some big numbers recently, so it’ll be interesting to see what the CMA finds as they delve into that.”
The comments came amid concerns that global food prices could creep higher again, as the British Retail Consortium this week warned of “dark clouds on the horizon”.
Retail chiefs on Tuesday warned that prices on the global food market had jumped again suddenly after Russia President Vladimir Putin moved to block Ukrainian grain exports and India restricted rice exports.
Mr Hood said supermarkets would battle to protect customers but warned retailers “haven’t got the deep pockets” to absorb further supply chain turmoil down the line.
“If there are fundamental changes in the supply chain then that does have to pass back through to customers,” he said.
He was speaking as Co-op announced it was cutting prices on hundreds more products for its members, in a £70m investment which it said was the biggest investment ever announced by a convenience retailer.
Mr Hood said: “The reality is, that’s not funded by commodity cost falls, which is what I wish it was because I wish they were going the right way.”
He said the price drop was because Co-op had stripped costs out of its business since its leadership overhaul last year, which saw Mr Hood join as Co-op Food chief and Shirine Khoury-Haq take over at the helm of the wider business.
Co-op also runs 800 funeral homes across the UK, as well as acting as an insurer and operating a legal services business.
Mr Hood said the company had a “bit more leeway” on prices after cost-cutting efforts, which also included it trialling dimming lights in its stores last year.
He added Co-op was now “one of the most financially secure retailers” and was hoping to soon get back to a point where it could open more convenience stores again, with store numbers expected to rise.
However, despite this, the surge in retail crime may mean some tough decisions need to be made on where Co-op operates.
Mr Hood said: “We might have to make some extreme choices. It’s probably only 20pc of our shops that contribute 80pc or 90pc of all of the theft - or as I call it looting.
“Of course, I don’t want to take those stores away. But for the benefit of my colleagues, let alone the profitability of those stores, we might have to. The reality is, if this is taken as an apparent victimless crime, then it will grow. If we don’t find a way of dealing with this, something somewhere escalates. | Consumer & Retail |
Mount Isa mayor Danielle Slade says people who have lived in the city 'all their lives' no longer 'feel safe' due to crime crisis
The mayor of Mount Isa, who is also a victim of youth crime, has spoken out after police data showed the city has the worst crime rate in Queensland.
Mount Isa has been dubbed the Alice Springs of Queensland as new police data reveals the city's crime rate is the worst in the state.
Speaking to Sky News Australia host Laura Jayes on AM Agenda, Mount Isa mayor Danielle Slade said youth crime was an "ongoing problem", but had not always plagued the mining city.
"I grew up in Mount Isa, so this isn't usual business for Mount Isa," Ms Slade told Jayes on Monday.
The crime rate has increased so dramatically, Ms Slade said she now puts paddocks on her elderly mother's front and side gates every night.
It was an extra measure she "never thought in a million years" she would need to take.
"We've got local people here who've lived here all their lives now saying, 'I don't know if this is where I want to live anymore, I don't feel safe'," Ms Slade said.
Her comments follow recent police data obtained by The Courier-Mail which reveals the crime rate in Mount Isa is the worst in the state.
About 41 people in every 1,000 have been broken into in the last year and more than 10 in every 1,000 have experienced their car being stolen, the data reveals.
"I'm also one of those people who have been broken into last year and in the next week or two, I'm going to be doing mediation with a very young child," Ms Slade said.
Ms Slade revealed what she believed was a contributing factor to the crime spike.
"We've seen about 400 people come to Mount Isa since January 30 this year," she said.
"Prior to that, we probably had about 200 people living rough in the Leichhardt River and majority of them would have been from the Northern Territory.
"One of the things that started affecting us about 18 months ago was a Bush Bus that was coming directly from Alice Springs... dropping people straight into our Leichhardt River."
Ms Slade claimed people who were listed on the Northern Territory's banned drinker register were travelling to Mount Isa, whether it by Bush Bus or private transport, to buy alcohol.
"This is making Queensland very attractive," she said.
The Northern Territory's banned drinker register identifies people who are banned from purchasing takeaway alcohol and stops their purchase.
"So there's a real encouragement to come to Queensland because then you can buy as much alcohol as you want and you're not banned here," she said.
Ms Slade claimed it was impacting other cities in the state like Townsville and Cairns.
She highlighted public housing was also being overcrowded by the increase in migration, which in turn has forced youth onto the street.
"At times the police were picking up people as young as eight, taking them home and finding either there was no one at home... or the party was raging that big it wasn't safe to leave the kids at the home," she said.
Ms Slade said tacking youth crime required a "whole of government approach" with help from the community and non-for-profit organisations as they are affected as well.
"I know myself and other mayors have been advocating for quite a while now and we're at wits' end with a lot of this," she said. | Australia Business & Economics |
Government Allows Enforcement Directorate To Share Data With GSTN
New Delhi, Jul 9 (PTI) The government has amended provisions of the money laundering Act to allow enforcement directorate (ED) to share information with GST Network.
The government has amended provisions of the money laundering Act to allow enforcement directorate to share information with GST Network.
The move would help recovery of Goods and Services Tax evaded through money laundering.
GSTN handles the technology backbone of the indirect tax regime and is the repository of all GST-related information, including return, tax filing and other compliances.
As per the amendment to the provisions of Prevention of Money Laundering Act, 2002, GSTN has been included in the list of entities with which ED will share information.
AMRG & Associates Senior Partner Rajat Mohan said notifying GSTN under PMLA would enable a legal framework under which high-value tax offenders can be traced, apprehended made liable to pay due taxes.
"GSTN can pass on relevant information on probable tax offenders to jurisdictional officers so as to initiate proceeding under GST law for scrutiny, adjudication and recovery of taxes," Mohan added.
Nangia Andersen LLP Partner Sandeep Jhunjhunwala said the inclusion of GSTN under PMLA will now facilitate mutual sharing of information or material in possession of the Enforcement Directorate with GSTN if they have reasons to believe that provisions of GST Act have been contravened in any manner.
"Currently, GST Act under Section 158 gives power to disclose information it has with regard to any prosecution under IPC and even under any other law for the time being in force. However, there was no corresponding power under PMLA to disclose information to GSTN unless notified under Section 66(1)(ii) of PMLA. With the current notification, GSTN has now been included in the list," Jhunjhunwala said.
KPMG National Head & Partner, Indirect Taxes, Abhishek Jain said this move would help ED in probing against GST evasions. "Given the detailed financial disclosures under GST, such information should help larger investigation objectives of ED and also aid GST recovery in larger evasion cases," Jain added.
In November last year, the government had allowed the ED to share information about economic offenders with 15 more agencies, including SFIO, CCI and NIA.
Following that notification, the ED, which deals primarily with cases of money laundering and violations of foreign exchange laws, was allowed to share data with a total of 25 agencies, including the 10 specified earlier.
The list also includes CBI, RBI, Sebi, IRDAI, Intelligence Bureau, and Financial Intelligence Unit, among others.
With the addition of GSTN, the list of entities now stands at 26. | Banking & Finance |
The Fed Still Has A Lot Of Quantitative Tightening To Do
(Bloomberg Opinion) -- The US Federal Reserve’s efforts to quell inflation have sent long-term interest rates to their highest level in a generation, putting a lot of stress on banks, companies and anyone looking to finance a new home.
How long will this go on? Judging from the sheer volume of long-term debt securities that the Fed still needs to unload, I’d say at least a couple more years.
For more than a year, the Fed has been shrinking its holdings of Treasuries and mortgage-backed securities at a rate of about $75 billion a month. This process, known as quantitative tightening, gradually reduces the amount of excess cash reserves in the banking system. The aim is to reach a level of reserves adequate to ensure that banks can satisfy their customers’ variable demands for cash and meet regulatory liquidity requirements.
The last time the Fed embarked on quantitative tightening, in 2018 and 2019, it went a bit too far. The supply of reserves fell below what banks required, triggering a scramble for cash that sent short-term interest rates spiking and destabilized the repo market, where banks, hedge funds and others borrow money against Treasury and mortgage-backed securities. The Fed was forced to step in with emergency liquidity — an experience that it doesn’t want to repeat.
This time around, the Fed’s starting point is much higher. Its holdings of long-term debt securities exceed $7 trillion, compared with $4 trillion in 2018. Reserves in the banking system stand at about 12% of gross domestic product, up from 7% in September 2019. If one assumes — consistent with the most recent report on the Fed’s open market operations — that 8% of GDP would be a suitable cushion of reserves, and that the Fed won’t slow the rate of quantitative tightening until reserves fall to 10% of GDP, there’s still a long way to go.
The shrinkage is likely to proceed even if the economy slows and the Fed needs to ease. The federal funds rate is its primary tool of monetary policy: It employs the balance sheet only when short-term rates are pinned near the zero lower bound. With the target rate currently above 5%, the central bank has plenty of room for maneuver without resorting to altering the path of quantitative tightening. So it should proceed on autopilot — about as exciting as “watching paint dry,” as Janet Yellen once remarked.
There’s also a new complicating factor: the Fed’s reverse repo facility, where money market mutual funds and others have parked some $1.5 trillion (as of October 11), at interest rates exceeding 5%. As quantitative tightening continues, cash will migrate from the Fed’s facility to other repo markets in pursuit of higher rates, increasing the supply of reserves. (If this doesn’t happen on its own, the Fed will help it along by slightly lowering the reverse repo rate relative to other money market rates.) About $1 trillion has already moved over the past year, even as the Fed has shrunk its balance sheet by $800 billion, resulting in a net addition of $200 billion in reserves.
So when will quantitative tightening end? Assuming an annual runoff rate of $900 billion, nominal GDP growth of 4% and reverse repo balances declining to zero, reserves should reach the initial target of 10% of GDP in about two years. At that point, the Fed will slow the run-off pace as it assesses what constitutes an appropriate reserve buffer.
I see three main repercussions. The first will be upward pressure on long-term interest rates and on the bond term premium — the added yield investors demand to lend for longer. Second, higher term premiums will tighten financial conditions, allowing the Fed to keep interest rates lower than it otherwise would (as Dallas Fed President Lorie Logan implied in a recent speech).
Finally, by increasing the volume of securities that market participants must absorb and finance, quantitative tightening will risk further turbulence in the Treasury market. Currently, the supply of Treasuries is expanding by nearly 10% of GDP ($900 billion in Fed runoff plus a federal budget deficit of $1.7 trillion), potentially straining the balance sheets of the dealers at the center of the market.
It’s possible that serious dysfunction in the Treasury market could cause the Fed to relent. Barring that, quantitative tightening should proceed unabated, and this should put upward pressure on long-term interest rates until at least late 2025.
More from Bloomberg Opinion:
- The Federal Deficit Matters Now More Than Ever: Matthew Yglesias
- Hurting From Rate Hikes? Fed Looks as If It’s Done: Conor Sen
- What I’ve Learned From Powell's Inflation Fight: Jonathan Levin
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Bill Dudley, a Bloomberg Opinion columnist and senior adviser to Bloomberg Economics, is a senior research scholar at Princeton University’s Center for Economic Policy Studies. He served as president of the Federal Reserve Bank of New York from 2009 to 2018, and as vice chairman of the Federal Open Market Committee. He was previously chief US economist at Goldman Sachs. He has been a nonexecutive director at Swiss bank UBS since 2019.
More stories like this are available on bloomberg.com/opinion
©2023 Bloomberg L.P. | Interest Rates |
This has not been a good week for Rishi Sunak. Accused of weakness for not backing the report into Boris Johnson, he now appears to be failing on the economic priorities which Tories had hoped would be in reach.
Mr Sunak promised to halve inflation this year, from a high of more than 10% in January, as his first priority - a hostage to fortune as it is now stalling.
Also in today's ONS figures is another grim statistic - that public sector debt, likely fuelled by support with energy bills, is at more than 100% of GDP for the first time in 60 years.
Politics latest:
Sunak opens Ukraine conference ahead of first PMQs since partygate vote
Interest payments on government debt could wipe out any headroom the chancellor would have used for pre-election tax cuts.
Getting debt down was the third of Mr Sunak's five priorities at the start of the year. At that point, controlling inflation and debt - compared with stopping small boats and cutting NHS waiting lists - looked like the easier ones to meet.
Not so, now.
Forecasters predicted inflation would tumble this year, and the prime minister decided to own it, despite many of the factors being out of his control.
The Conservatives now face heading into an election year with 30,000 people a week coming off fixed-rate deals and paying far more.
Chancellor Jeremy Hunt is today holding the line, calling for patience, and the prime minister is expected to do so too when Labour challenge him about it at Prime Minister's Questions, arguing the opposition would rack up more borrowing and debt.
With another hike in interest rates expected tomorrow, the chancellor is backing the Bank of England as they try to - in his words yesterday - "strangle inflation". He is batting away louder calls for direct mortgage relief or tax cuts.
But it threatens to be a slow burn crisis for millions of homeowners, and also renters who are seeing prices soar as landlords try to recoup their costs.
Last month, Mr Hunt told Sky News' Ed Conway that he would support a rise in interest rates north of 5% - "even if that would precipitate a recession" - to bring down inflation.
One of his economic advisers, Karen Ward of JP Morgan Asset Management, made the argument this morning that the Bank should go further and only recession-like conditions - with companies deciding against prices rises and workers deciding against asking for pay rises - would curb inflation.
In the Treasury, sources say fiscal support for people with mortgages could be disastrous and the chancellor must stick the course - but it could take far longer than hoped.
This is hardly the backdrop for what is expected to be the traditional debate in the Conservative Party at election time about lowering the tax burden - currently at a 70-year high.
With the Liz Truss period in mind, those publicly calling for tax cuts have been sidelined. But as the election looms, the battle between those backing giveaways and staying the course will ramp up. | Inflation |
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Government fraud has almost quadrupled under Rishi Sunak from £5.5 billion to £21 billion, a new report reveals today.
The Commons’ Public Accounts Committee compares the two years before the 2020 pandemic under Theresa May’s Government with the two years that followed when Rishi Sunak was Chancellor under Boris Johnson.
HM Revenue and Customs, which was the direct responsibility of Sunak, contributed enormously to the rise in fraud after the then Chancellor approved £97 billion to be spent on the pandemic furlough scheme, the bounce back loan scheme, and his ‘Eat Out to Help Out’ scheme to combat the downturn in the economy during the Coronavirus crisis.
“HMRC estimates that total fraud and error across the lifetime of these [furlough] schemes was £4.5 billion, although its estimate is highly uncertain,” the report states. “HMRC is forecasting that it will recover only a quarter (£1.1 billion) of the losses.”
The bounce back loan scheme – run by the business department – has lost an estimated £2.2 billion to fraud and error, and at the end of last year the department had only recovered £10 million. It did not contact the Cabinet Office to put in place counter fraud measures until months after the scheme had already been launched.
Another £1 billion was lost to fraud and error on grant schemes run by local government to mitigate the effects of the pandemic.
There was a huge discrepancy between the money Sunak put aside to tackle fraud caused by the money handed out by HMRC to alleviate the effects of the pandemic. The National Investigation Service has been provided with £13.2 million for counter-fraud activities, compared to the Department for Work and Pensions’ £613 million investment in counter fraud.
One side-effect of the measures to tackle the pandemic was that 4,000 tax compliance staff were transferred to run the programme, resulting in a big drop – estimated at £9 billion – in the revenue collected from businesses and people in the two years during the pandemic, compared to the previous two years.
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As a result, HMRC has been classified as a “department of concern “in the report.
The committee’s chair, Labour’s Dame Meg Hillier, said: “HMRC made the list last year because of growing tax debt and the levels of fraud and error that it is managing. I continue to be concerned about these two areas of risk. I am not convinced that HMRC is prioritising this work.
“HMRC has a clear case for focusing on recouping money that is owed. But prevention is better than corrective action and it must plan and implement better fraud and error safeguards in the future.”
Fraud and error reached it highest ever known figure at DWP, totalling £8.6 billion – of which £6.5 billion was fraud. This was almost entirely due to the expansion of Universal Credit payments during the pandemic.
The Department for Health and Social Care is also listed as a “ department for concern” because of the huge sums wasted on ineffective personal protection during then pandemic – amounting to £14.9 billion – and the fact its agency, the UK Health Security Agency, which the ran the hugely expensive test and trace programme, could not provide enough figures to allow the National Audit Office to audit its accounts.
The report also highlights that the turnover of ministers during this period was higher than previously and it was mirrored by civil servants leaving or moving jobs. In the Ministry of Defence, for instance, turnover of senior civil servants handling procurement contracts averaged 22 months, while the time to complete a contract was 77 months. As a result, a contract could be managed by three or four different civil servants before it was completed. | Banking & Finance |
Subros Q2 Results Review - Ready To Take Off: Dolat Capital
Targeting double digit margin in FY25
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
Subros Ltd. printed a strong operating performance in Q2. Revenue grew 17% QoQ with Ebitda margin expanded 181 basis points QoQ to 8.63%. Management expresses its confidence to attain double digit margin in FY25.
In the personal vehicle segment, the company outperformed industry growth due to model mix (17% growth in Q2 versus industry growth of 6%). Increase in market share in SUV by Maruti Suzuki India Ltd., new business from Mahindra & Mahindra Ltd. and other original equipment manufacturer would be key catalysts for Subros personal vehicle AC growth.
Government's recent announcement to make ACs mandatory in commercial vehicle from January-2025 will create a market opportunity for Rs 4-4.50 billion from FY26. However, further reduction in effective tax rate to 25% from FY25 would be positive for earning per share.
We maintain a positive stance on the stock led by-
Premiumisation and an increasing market share of Maruti Suzuki in SUV (SOB 75%),
increase in content per vehicle due to SUV trend and electrification
rapid acceleration of Ebuses and Railway business,
sharp margin expansion due to reduction in material cost, cost optimisation,
incremental revenue opportunity due to mandatory AC in commercial Vehicle.
We increase our earning per share estimates by 9/25% for FY24/25E factoring strong margin expansion.
We value the stock Rs 570 (based on 20 times FY26 earning per share). Recommend 'Buy'
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Stocks Trading & Speculation |
Wine and gin drinkers will have to shell out more from today as alcohol taxes rise.
The shake-up aims to encourage drinkers to cut back by taxing all alcohol based on its strength, rather than the previous categories of wine, beer, spirits and ciders.
The increase will see duty rise by 44p on a bottle of wine - something announced a few months ago in the budget.
When combined with VAT, the real increase per bottle will be 53p, the Wine and Spirit Trade Association (WSTA) said.
Chancellor Jeremy Hunt said in March that a freeze on alcohol duty would end on 1 August and increase in line with the Retail Price Index measure of inflation, which was 10.7% last month.
All types of tipple are therefore affected.
Duty on an 18% cream sherry will go up from £2.98 to £3.85.
Combined with VAT, it adds up to an increase of more than £1 a bottle, while a bottle of port will go up by more than £1.50.
The total tax on a bottle of gin or vodka will rise by about 90p.
For beer drinkers, Mr Hunt is cutting the duty on draught pints across the UK by 11p.
It is seen as a measure designed to boost pubs, many of which have been closing.
Prime Minister Rishi Sunak hailed the move as beneficial to "thousands of businesses across the country".
However, the British Beer and Pub Association said brewers will pay 10.1% more tax on bottles and cans of beer from Tuesday.
It means duty will make up about 30% of the cost of a 500ml bottle.
Scotch Whisky Association director of strategy Graeme Littlejohn described the 10.1% duty increase as a "hammer blow for distillers and consumers".
He warned: "Pubs and other on-trade businesses are about far more than beer and cider."
The Treasury has said that more than 38,000 UK pubs will benefit from tax relief that effectively freezes or cuts the alcohol duty on beer poured from tap from Tuesday.
Mr Hunt said: "British pubs are the beating heart of our communities and as they face rising costs, we're doing all we can to help them out. Through our Brexit Pubs Guarantee, we're protecting the price of a pint.
"The changes we're making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low alcohol drinks and boosting growth in the sector by supporting small producers financially." | Inflation |
Jeremy Hunt is preparing to soften the Government’s windfall tax on oil and gas companies after warnings of a jobs bloodbath in the North Sea.
The Chancellor could announce changes to the so-called energy profits levy as soon as Friday, The Telegraph understands, following intense lobbying by the industry.
Changes are expected in an effort to boost investment in the North Sea, with many operators either cutting or reassessing their commitments in the wake of the tax.
Easing the tax burden would also draw a clear line between the Government and the Labour Party, which has adopted a hardline approach to the oil and gas industry in recent weeks.
Sources close to discussions confirmed that one option Treasury officials have examined is a “floor” for the tax, which would mean it no longer applies if oil and gas prices drop below certain levels.
Gareth Davies, a junior minister, is expected to travel up to Scotland to meet with major companies including BP, Shell, Equinor and Total on Friday afternoon and an announcement may coincide with his visit.
It is seen as an opportunity to put “clear blue water” between the Conservatives and Labour ahead of the next general election, one industry insider said. Sir Keir Starmer has taken fire from his party’s union backers for his “reckless” plans to ban new oil and gas development completely.
Rishi Sunak joined criticism of Labour’s “bizarre” policy on Wednesday, warning that it put “ideology ahead of jobs, ahead of investment, and ahead of our energy security” and would leave Britain more reliant on imports.
However, oil and gas bosses have warned that the Government’s windfall tax is also hugely damaging, with companies already blaming it for job cuts and cancelled investments.
Ryan Crighton, policy director at Aberdeen and Grampian Chamber of Commerce, which represents many North Sea businesses, said: “We have been warning for over a year that the Energy Profits Levy risks accelerating the decline of our oil and gas sector at a pace which jeopardises the skills and investment required to deliver the UK’s net zero plans.
“It should be plain to ministers that this tax has had a corrosive impact on investment and confidence in the North Sea, to the point where we know jobs and discretionary capital are moving overseas.
“Prices have returned to historically normal levels, but the tax burden here remains astronomically high.
“This is starving the North Sea of new projects – but billions of pounds worth of investment and thousands of new jobs could be unlocked if a price floor mechanism is added to the Energy Price Levy.”
On Thursday evening it was not clear whether a floor mechanism was the route preferred by Treasury officials, with the level of such a threshold the subject of debate.
One idea considered in Downing Street has been to use the average price of oil over the last five years.
However, officials are understood to be concerned that this may mean revenues from the tax will soon be cut off, with oil prices falling this year amid concerns about global growth.
In 2019, the average price of crude oil per barrel was about $64. This plunged to about $42 per barrel in 2020 during the pandemic, before the reopening of many countries and the Ukraine war pushed it as high as $120 in 2022.
However, prices have collapsed this year and Brent crude was trading at $75 a barrel on Thursday.
Oil giants have warned that the windfall tax – imposed originally by Rishi Sunak and then expanded by Mr Hunt in his Autumn Statement – is having a devastating impact on investment and production.
Mr Hunt’s most recent change increased the effective tax rate on oil and gas companies to 75pc, with cash from the tax used to subsidise the energy bills of British households following price spikes in the wake of the Ukraine war. The Treasury said on Thursday that the Government had spent £40bn on subsidies over the winter.
Critics have repeatedly warned the windfall tax will damage investment in UK oil and gas fields, putting large numbers of jobs at risk.
Harbour Energy, the biggest North Sea producer, blamed the windfall tax for its decision to axe 350 jobs in April, while French giant TotalEnergies responded by vowing to slash investment in the North Sea by 25pc this year.
A particular problem with the tax that industry lobbyists have pointed to is its impact on oil and gas financing, particularly for smaller, independent producers.
It takes years to prospect, develop and produce from oil and gas fields, with these oil companies often reliant on bank loans to provide working capital.
But the loans are dependent on the value of their reserves, which are in turn directly affected by higher levels of tax. | Energy & Natural Resources |
Private schools would retain some of their tax breaks under a Labour government, after the party backed down on its pledge to strip them of charitable status.
The party said it no longer needs to end the charitable status of private schools to achieve its policy of charging 20% VAT on fees and ending business rates relief in England, as first reported by the i.
Independent schools are able to claim gift aid on donations and avoid paying tax on annual profits, which must be reinvested in education.
The latest move contradicts comments made in 2021 by Rachel Reeves, the shadow chancellor. Reeves said at the time: “Here’s the truth: private schools are not charities. And so we will end that exemption and put that money straight into our state schools. That is what a Labour government will do.”
But party sources are now claiming that they only ever intended to remove the VAT and business rates perks, saying charitable status was used more as shorthand for the policy.
A Labour spokesperson told PA Media: “Our policy remains. We will remove the unfair tax breaks that private schools benefit from, to fund desperately needed teachers and mental health counselling in every secondary school.
“This doesn’t require removing charitable status, however driving high and rising standards for every child against the backdrop of a broken economy requires political choices. Labour isn’t afraid to make them.”
Labour’s policy costings only ever took into account charging VAT on school fees and ending the business rates exemption, rather than the other tax breaks.
Julie Robinson, the chief executive of the Independent Schools Council, said: “If Labour takes away the tax relief associated with charitable status for independent schools, the policy would create a two-tier system within the charity sector, setting a worrying precedent that any charity seen as not reflecting the political ideology of the day could be subject to additional taxes.
“We would love to work with Labour to build more effective ways to achieve our shared goal of improving education for all young people.”
The shadow education secretary, Bridget Phillipson, had spoken of “scrapping charitable tax status for private schools to fund the most ambitious state school improvement plan in a generation”.
The Institute for Fiscal Studies has previously estimated that VAT on school fees would raise about £1.5bn annually, with average fees now about £15,200 a year.
The Conservatives said the development showed Keir Starmer was “clearly only interested in short-term policies designed to grab headlines”.
The chief secretary to the Treasury, John Glen, said: “Labour has been forced to U-turn on one of their major policies – this time admitting that their schools tax hike just doesn’t work. They are just making it up as they go along.” | United Kingdom Business & Economics |
The chancellor is considering cutting inheritance and business taxes at next week's Autumn Statement, the BBC has been told.
Jeremy Hunt could make such moves, as first reported by the Financial Times, depending on the latest predictions from the UK's main economic forecaster.
A Treasury source said no final decisions had been made, with Mr Hunt to consider such policies this weekend.
They added it is possible such tax cuts could be delayed until the spring.
Mr Hunt has previously said tax cuts are "virtually impossible" and instead warned of "frankly very difficult decisions" at next week's Autumn Statement, which is when he will outline the government's latest tax and spending decisions.
The chancellor is expected to receive the UK's latest economic forecast from the Office of Budget Responsibility (OBR) - a body which assesses the health of the UK's finances and is independent of the government - on Friday.
Despite playing down expectations of tax cuts, economists have estimated the chancellor could have more than £10bn available to spend on measures such as tax cuts.
But the amount of cash the government says it has available to spend is measured against its own, self-imposed spending and taxation - or fiscal - rules. Whether and how the government meets its rules, depends on its policy choices.
Most governments of wealthy countries follow fiscal rules in an attempt to maintain credibility with financial markets, which help to fund their plans.
Inheritance tax in the UK is a tax on the estate - the property, money and possessions - of someone who has died, but it applies to only around 4% of estates.
No tax is paid if the estate is valued at less than £325,000, or if anything above this threshold is left to a husband or wife, civil partner, charity, or a community amateur sports club.
But if a home is part of the estate and a person's children and grandchildren stand to inherit it, then the threshold can go up to £500,000.
The tax sparks considerable debate, partly owing to the fact many people are concerned about the tax and find it difficult to understand.
It is not clear what business taxes the chancellor might cut, but there are expectations that a tax break which allows firms to offset 100% of the money they spend on new machinery and equipment against their profits, will be extended or possibly be made permanent.
This policy - known as "full expensing" - is due to expire at the end of the 2025 tax year. | United Kingdom Business & Economics |
Bitcoin rose on Friday morning in Asia to trade above the resistance level of US$26,000, leading a rally across most top 10 non-stablecoin cryptocurrencies. The exceptions were Cardano and Toncoin, which both posted minor losses. Ether logged moderate gains but remained below US$1,650. U.S. financial services giant JPMorgan Chase & Co. is reportedly exploring a blockchain-based payment and settlement system, raising optimism for more institutional adoption of blockchain. U.S. stock futures traded mixed, after the S&P 500 and Nasdaq closed lower on Thursday. Stronger-than-expected jobs data has added to U.S. rate hike concerns.
Bitcoin spearheads crypto winners
Bitcoin rose 1.62% in the last 24 hours to US$16,179.43 as of 07:30 a.m. in Hong Kong, turning a weekly loss into a gain of 0.75%, according to CoinMarketCap data. The world’s leading cryptocurrency had been trading between around US$25,500 and US$26,000 since Saturday. It reached an eight-day high of US$26,409.30 early Friday morning.
JPMorgan, the largest bank in the U.S. by asset size, is “in the early stage” of developing a blockchain-based digital deposit token for cross-border payments and settlements. The bank has already laid out most of the underlying infrastructure, but will wait for approval from U.S. regulators before making the token itself, Bloomberg reported Friday.
Deposit tokens are transferable digital assets representing deposit claims against a commercial bank. Token transactions take place on blockchains, making deposits faster and cheaper than traditional methods.
“It is another sign that large corporations continue to build their blockchain capabilities during this bear market,” Markus Thielen, head of research & strategy at digital asset service platform Matrixport, said in an emailed comment.
The market is currently waiting on a decision from the U.S. Securities and Exchange Commission (SEC) regarding another U.S. financial giant — BlackRock. On June 15, the world’s top asset manager applied for approval to create a spot Bitcoin exchange-traded fund (ETF).
“While most expect the SEC Blackrock decision to hit the market in October, the news of a potential ETF approval can also come any time,” Thielen said.
“Once Bitcoin regains some momentum, the rally could have legs and bring prices back above US$30,000,” he added.
Elsewhere, Martin Gruenberg, chairman of the U.S. Federal Deposit Insurance Corporation (FDIC), said on Thursday that despite the apparent good health of the U.S. economy, the country’s banking industry “continues to face significant downside risks from the effects of inflation, rising market interest rates, and geopolitical uncertainty.”
Bitcoin prices have historically benefited from uncertainties in the banking system, such as the crisis at Zurich-based lender Credit Suisse in March. The bank’s sudden collapse sent the token’s price from below US$27,000 to over US$28,000 on March 19.
Ethereum gained 0.77% to US$1,644.68 over the past 24 hours and edged down 0.07% for the past seven days.
Most other top 10 non-stablecoin cryptocurrencies logged small gains. Cardano’s ADA and the TON network’s Toncoin were the only tokens that posted losses, dipping 0.14% and 0.70% respectively. But both coins posted gains for the week at 1.07% for ADA and 3.68% for Toncoin.
The total crypto market capitalization gained 1.37% to US$1.05 trillion. Trading volume dropped 11.95% to US$23.81 billion. | Crypto Trading & Speculation |
SEOUL, Sept 13 (Reuters) - South Korea's financial authorities said they would control household debt by tightening certain loan regulations, as rising mortgage demand drove up household borrowing by the biggest amount in two years in August.
Total household borrowing from banks stood at 1,075.0 trillion won ($810.94 billion) at the end of August, up 6.9 trillion won over the month, central bank data showed on Wednesday.
It exceeded the previous month's 5.9 trillion won increase and the biggest since July 2021, according to the Bank of Korea. Household borrowing has been rising since April.
The country's financial regulator held a meeting on Wednesday with related ministries and agencies to discuss ways to prevent further expansion of household debt, it said in a statement.
The Financial Services Commission said it would introduce measures against misuses of long-term mortgage loans, a stricter debt-to-service ratio for loans on floating rates, and tighter qualification criteria for the government's temporary policy mortgage loan.
In August, mortgage loans grew for a fifth straight month and by 7.0 trillion won, the biggest since February 2020, while other loans fell by 0.1 trillion won in their 21st month of decline.
South Korea's central bank held interest rates steady for a fifth straight meeting in August, as it tries to balance softer inflation with heightened risks to economic growth. Bank of Korea Governor Rhee Chang-yong said rate hikes would remain a secondary option for dealing with rising household debt.
($1 = 1,325.6300 won)
Reporting by Jihoon Lee Editing by Shri Navaratnam
Our Standards: The Thomson Reuters Trust Principles. | Interest Rates |
Of Sam Bankman-Fried’s alleged co-conspirators, Nishad Singh gave the most emotionally compelling testimony. And on cross-examination, he also proved to be the most unreliable.
Yesterday, Singh condemned Bankman-Fried for continuing to make venture investments despite knowing the money came from customer funds, even calling the actions taken at FTX “evil.” Today, the defense pointed out that Singh took out a loan from FTX in order to buy a $3.7 million house on Orcas Island in Washington after Singh says he found out about the misuse of customer funds.
Defense lawyer Mark Cohen began in the grand legal tradition of roasting the witness
So far, the prosecution’s witnesses have been credible — Caroline Ellison, the former CEO of Alameda, especially. The defense has been grinding away, trying to make it sound like Bankman-Fried’s alleged co-conspirators are just trying to save their own skins at Bankman-Fried’s expense. (All three have pleaded guilty to assorted crimes, made cooperation agreements, and await sentencing.) Sure, on some level, the suggestion that Singh may have been embezzling is worse for Bankman-Fried — Singh wasn’t a money guy, and someone had to approve it. But it’s the best the defense has done so far to undermine a witness’s credibility.
Defense lawyer Mark Cohen began in the grand legal tradition of roasting the witness. Some of the roasts were to be expected: Why was Singh opining on whether spending $1 billion on sponsorships was excessive, when Singh was head of engineering, a department is decidedly not marketing?
Then Cohen landed a pretty good dig on the Bahamas penthouse. Billionaires and millionaires (on paper, at least) living together as roommates is objectively funny; one of said roommates being cross-examined solemnly on whether or not he thought it was “really expensive” to live in a $30 million apartment is even funnier.
Singh said he didn’t know what was normal for billionaires and that he “felt confused about it.”
“But not confused enough to move out,” Cohen said.
The defense doesn’t seem clear on the notion of chronological storytelling
After that, Cohen lost some steam. The prosecution has a strong narrative, even managing to bring witness testimony to emotional crescendos. The defense, by contrast, doesn’t seem clear on the notion of chronological storytelling. Today we skipped around between September 2022, June 2022, November or December 2021, October 2022, and August 2020. Because I assume you also live in a unidirectional timeline, I am going to give my summary out of the order in which it was presented. I am also going to ignore the places where Cohen swung and missed because I am honestly sick of writing about the struggle-bus aspects of the defense.
In July 2019, Singh wrote the code for “allow_negative,” at the direction of Gary Wang, co-founder and chief technology officer of FTX, who, like Singh, has pleaded guilty to a handful of crimes. At the time, Singh said he understood the point of the code was to allow FTX to move FTT, as well as to modernize some of the accounting-related functions.
Wang had testified that the function of that code was to let Alameda Research, which was co-owned by Wang and Bankman-Fried, withdraw money, even when its account didn’t have any.
In August 2020, FTX had its first event where none of the market-makers, including Alameda Research, could assist in liquidating an account. (Alameda couldn’t step in because it had run out of collateral.) So what happened next was auto deleveraging, which is a different risk management system that sticks some traders with the loss. This kind of thing tends to make customers unhappy.
I am a little confused about why we are spending so much time with the bug
I am now going to give you some backstory that the jury didn’t get in this testimony. We’ve heard before — from Wang and from Ellison — about a $65 billion line of credit extended to Alameda. No one else on the platform had access to this amount of money, which was essentially unlimited. But here, for the first time, we have a plausible, non-criminal explanation for why Alameda got a huge line of credit: to avoid sticking other customers with losses through auto deleveraging. (Alameda would always take the hit instead, and it would always have enough collateral to do so.) Singh didn’t remember whether Alameda’s line of credit had been increased at this time, but if the timeframes do line up, that’s the least damning explanation for the line of credit I’ve heard yet.
It doesn’t undo the fact that Bankman-Fried repeatedly assured the public that Alameda had no special privileges on FTX — which seems like an obvious lie — but it does make the line of credit sound less bad. That’s not nothing!
In November or December 2021, Singh became aware of a bug in Alameda’s system that overstated how much Alameda owed FTX. Essentially, the bug didn’t correctly track account withdrawals, making the amount Alameda owed FTX look bigger than it was. Singh said that Adam Yedidia — another witness — seemed worried about it but Wang was relaxed because “the direction of the bug was safe.” If it had under-estimated how much Alameda owed FTX, that would have been a bigger cause for concern.
By June 2022, the bug had created an $8 billion discrepancy between how much Alameda actually owed FTX, and how much the internal accounting said Alameda owed FTX. Yedidia testified earlier that was when he noticed Alameda owed FTX an awful lot of money, and became concerned about it. But Singh said that he wasn’t concerned at the time, since he assumed Alameda had the assets to repay FTX.
Sadly, there were no photos, details on square footage or number of bedrooms, so I had to look that up afterward
I am a little confused about why we are spending so much time with the bug. In Yedidia’s case, it explains what he knew and why he knew it. For everyone else? The only thing I can think of is that I am to believe that the bug was so big that no one knew how much money Alameda actually owed, except that it was a lower amount, and thus Alameda spent money it didn’t have. But that seems pretty weak — especially since Singh testified about lying to auditors yesterday and last week, Ellison testified to making up seven fake balance sheets to send to lenders.
Singh claimed he wasn’t aware that Alameda Research was using FTX customer funds until September 2022, but the defense got me to doubt that. After all, Yedidia put together enough to get nervous about what Alameda was doing from handling the programming on the bug alone, and he wasn’t even doing anything shady like transferring money from Alameda’s account to the “Korean friend” account. (I still don’t know what the deal is with the username “seoyuncharles88” and I am starting to get kind of pissed that no one is explaining it.)
Singh testified that by September, he knew the money wasn’t there. And that was when Cohen brought up the Orcas Island house, which Singh bought in October 2022. (Sadly, there were no photos, details on square footage or number of bedrooms, so I had to look that up afterward: six bedrooms, a lap pool, and a hot tub.) He’d borrowed $3.7 million from the FTX exchange, despite his testimony yesterday about trying to slow down what he viewed as FTX’s frivolous spending. I guess he didn’t see his own spending as frivolous.
The testimony wasn’t as spectacular as on Singh’s direct yesterday — we didn’t get any more cinematic retellings of conversations — and Cohen’s tendency to jump around in time made the narrative a little less than clear. But the Orcas Island house undercut Singh’s moral authority, making him look inconsistent. Even if the jurors don’t follow the timeline or get some of the other nuances, that’s pretty easy to grasp.
“They weren’t really loans.”
The prosecution, on redirect, did manage to make the point that FTX was essentially a rats’ nest of scams, but Singh still seemed less reliable than he had in his initial testimony. Still, in discussing Singh’s loans, something curious came out: Singh apparently felt morally obligated to repay the money he’d borrowed from FTX, but not legally obligated. That’s because there was no paperwork associated with many of them — he just found large sums transferred to his bank account. They were loans “in a loose sense,” Singh said. “They weren’t really loans.”
Honestly… that kind of sounds like classic embezzlement. And to me, it made Singh’s sweeping moral statements about “heinously criminal” acts at FTX ring hollow. Singh was for sure the best storyteller of the alleged co-conspirators, but by the time he stepped down from the stand, I wondered how much of the story was self-serving.
At the break, I saw Joe Bankman, the defendant’s father, talking with defense counsel. He looked happy, and who could blame him. I think I wasn’t the only one who thought the defense finally managed to show up. | Crypto Trading & Speculation |
Egg prices are tumbling after five months ofthat drove some consumers to from Mexico.
Prices fell 6.7% in February, according to Consumer Price Index data released Tuesday. That comes after egg prices jumped each month starting in October, pushing the average price of a dozen Grade A eggs from $2.90 in September to $4.82 in January, according to figures from the Federal Reserve Bank of St. Louis.
With February's price drop, the cost of a dozen eggs declined to $4.21.
Even though prices are easing, shoppers are still paying 55% more for a dozen eggs than they did a year earlier, partly due to an avian flu epidemic. Tens of millions of egg-laying hens have been slaughtered in what has become the deadliest bird flu outbreak in U.S. history, which has limited egg supplies and pushed prices higher.
With eggs still relatively costly, Dollar Tree has halted egg sales in its Dollar Tree stores, with the chain not expecting to bring back the food item until this fall, according to Reuters.
That decision comes ahead of the spring holidays of Easter and Passover, when consumers tend to buy more eggs. But grocers are cautious about Easter demand this year because of concerns that still-high prices could dampen demand, according to a U.S. Department of Agriculture analysis of egg prices.
Meanwhile, grocery stores aren't discounting eggs because they "are content to keep eggs on the shelf moving through normal attrition," the USDA analysis found.
The avian flu outbreak has infected more than 58.5 million birds across 791 flocks in 14 states as of Tuesday, according to USDA data. Because infected birds must be slaughtered, the outbreak has been a major factor in higher egg prices.
It's not only egg prices that are hitting pocketbooks. Risinghave continued to crimp household budgets in recent months. Grocery prices jumped by an annual rate of 10.2% in February, with costs for items ranging from frozen fruits and vegetables to ham climbing last month, the CPI data shows.
for more features. | Inflation |
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WASHINGTON (AP) — The Biden administration is delaying plans to restock the nation’s emergency oil reserve amid a price hike that has pushed oil above $80 a barrel.
The Energy Department canceled a planned purchase of 6 million barrels for the strategic reserve this week, saying it wants to secure a good deal for taxpayers.
The administration said it remains committed to refilling the reserve, which President Joe Biden significantly drained last year in a bid to stop gasoline prices from rising amid production cuts by OPEC and a ban on Russian oil imports because of the war in Ukraine.
“The DOE remains committed to its replenishment strategy for the SPR, including direct purchases when we can secure a good deal for taxpayers,” Energy Department Deputy Chief of Staff Bridget Bartol said in a statement, using a nickname for the Strategic Petroleum Reserve, the official name for the emergency stockpile.
Officials also will use targeted exchange returns and cancellation of planned oil sales “where drawdown is unnecessary, in coordination with Congress,” Bartol said.
WATCH: Biden’s complex relationship with oil and gas, despite campaign promises
Biden withdrew 180 million barrels from the strategic reserve starting in March 2022, bringing the stockpile to its lowest level since the 1980s.
Biden’s drawdown brought the reserve to about half its approximately 700-million barrel capacity as he sought to tame high gasoline prices in the aftermath of Russia’s invasion of Ukraine. Tapping the reserve is among the few actions a president can take by himself to try to control inflation, an election-year liability for the party in control of the White House.
The Energy Department began refilling the reserve earlier this year, purchasing 6.3 million barrels and canceling 140 million barrels in congressionally mandated sales that were set to occur in the next three years. Congress approved the sales cancellations in a spending bill last December.
The price for the oil purchase was not announced, but benchmark West Texas Intermediate crude oil was selling at about $74 per barrel when the transaction was approved. Benchmark West Texas Intermediate crude oil was selling at $81.85 per barrel on Wednesday amid tighter global supplies.
Gasoline prices, meanwhile, have risen to about $3.80 per gallon, up from $3.53 per gallon in mid-May, according to the AAA auto club. Prices peaked at just over $5 per gallon in June 2022.
An Energy spokeswoman emphasized that the U.S. maintains plentiful reserves that “stand ready should there be an emergency” that requires officials to tap into the stockpile held in huge salt caverns in Louisiana and Texas.
Energy Secretary Jennifer Granholm has said she intends to refill the reserve, although she told CNN last month that it might not be completed during Biden’s current term, which ends in January 2025.
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Ivanka Trump will have to testify in the $250 million civil trial against her father and brothers, a judge ruled on Friday.
Judge Arthur Engoron, who is presiding over a non-jury trial in Manhattan to resolve final claims in New York Attorney General Letitia James’ lawsuit against Trump, his company and top executives, issued the ruling. The former president’s daughter was once a defendant in the suit, which accuses Trump of wildly inflating his net worth to secure favorable economic terms for his businesses and properties, but she was cut from the case in June on statute of limitations grounds.
Ivanka’s lawyers have unsuccessfully argued that the former president’s daughter, who left the Trump Organization in 2017 to work in the White House and later moved from New York to Miami, shouldn’t have to testify. Her lawyer, Bennet Moskowitz, told Engoron Friday that New York state lawyers “just don’t have jurisdiction over her.”
And one of her father’s attorneys, Christopher Kise, argued that lawyers in James’ office “just want another free-for-all” on another of Trump’s three children. (Trump’s two adult sons, Donald Jr. and Eric, are also scheduled to testify next week.) “The idea that somehow Ms. Trump is under the control of the Trump Organization or any of the defendants, her father — anyone who has raised a daughter past the age of 13 knows that they’re not under their control,” Kise said.
But Engoron rejected those arguments, arguing that Ivanka “has clearly availed herself of the privilege of doing business in New York” since 2017, citing evidence that Ivanka still owns homes in Manhattan and has ties to New York-based businesses. Engoron also swiftly denied a request from Kise to have Ivanka provide a video deposition taken remotely in Florida. “We want her here in person,” he said.
In September, a trial judge found Trump liable for fraud, ruling that he had likely inflated his net worth by between $812 million and $2.2 billion between 2014 and 2021. James’ office is seeking a $250 penalty, as well as several other punishments, including a ruling barring Trump from applying for loans and entering into real estate transactions in New York.
The oldest daughter, once widely seen as an influential White House advisor who consistently had the ear of the president, has distanced herself since testifying before the Jan. 6 Committee that she believed President Joe Biden won the 2020 election. On the same night of her father’s re-election bid announcement in November 2022, Ivanka told Fox News Digital she did not “plan to be involved in politics” during the 2024 race.
The former president is expected to testify in person on November 6. | Banking & Finance |
Why it matters: Rishi Sunak's plan to revise environmental regulations to spur housebuilding met strong resistance in the House of Lords. The move faced a significant backlash from environmental groups, underlining the political tightrope governments walk when tackling housing and environmental concerns.
The details:
- The Conservative government aimed to ease the EU-inherited "nutrient neutrality" regulations. These rules, which prevent builders from developing in certain areas or require them to mitigate their impact, were targeted to facilitate the construction of 100,000 additional homes by 2030.
- But that strategy hit a wall on Wednesday when the House of Lords voted it down 192 to 161. Given parliamentary protocols, the House of Commons can't reverse the decision, placing the policy in indefinite limbo.
What they're saying:
- Sunak criticized Labour Party leader Keir Starmer for fluctuating support and opposition to housing initiatives (despite the Tories and Sunak doing the same over the decade in power, housing prices show it). This was after the Labour Party voiced its intent to vote down the measure.
- As the current Parliament session nears its conclusion, the government's eleventh-hour push to amend the bill suggests possible strategic positioning. This could be a play by the Tories to paint Labour as prioritizing environmental concerns over housing needs.
- Starmer's representative argued that the Conservative's proposals were "hasty and flawed", with serious concerns about the environmental repercussions on waterways and ecosystems.
The bigger picture:
- Sunak's challenges lie in increasing housing construction to meet the surging demand ahead of the 2024 general elections and navigating the political minefields that accompany environmental debates.
- While developers supported the government's proposed pollution guideline amendments, environmental factions warned against the potential trade-offs.
- The Tories are scrutinized for not upholding their pledge to construct 300,000 homes annually, despite it not surprising to anyone considering the Tories prioritize home values over affordability. They're also facing criticism over sewage discharges into water bodies, making any relaxation in environmental standards a controversial move.
What's next: The government might consider introducing legislation in the next Parliament session, which kicks off on November 7, to find a way around this impasse. On the other hand, Labour has called for a consultation in the coming three months to consider alternative reforms for water pollution controls. | Real Estate & Housing |
Welcome back to The Interchange! If you want this in your inbox, sign up here. We’ll be taking a break next weekend as Mary Ann and Christine both take much-needed vacations (we didn’t plan this, honestly!) but don’t worry, The Interchange will be back in your inbox on June 25.
Consolidation continues in the world of fintech
Last week ended with a couple of significant news events in the fintech world. First up, Ingrid and I wrote about FIS acquiring banking-as-a-service startup Bond for an undisclosed amount. (Fintech Business Weekly’s Jason Mikula initially broke the news). The deal is both an example of the resilience of infrastructure in the fintech space and a year that is proving to be filled with consolidation – as expected in a no-IPO, less capital rich environment.
Earlier this year, Marqeta acquired financial infrastructure startup Power Finance in a $275 million deal. JPMorgan closed its acquisition of Aumni. And Brazilian fintech infra company Pismo is said to be in the midst of being courted by the likes of Visa and Mastercard in a reported $1 billion transaction.
As Ingrid pointed out, not every M&A deal works out well, of course, with the biggest often being the hardest to digest. FIS made one of the largest-ever acquisitions in the world of payments when it acquired WorldPay for about $43 billion in 2019. That deal never really came up trumps, though. In February of this year, FIS confirmed that it would be spinning WorldPay off.
I also wrote about Better.com’s laying off its real estate team and the related shedding of its real estate business unit – a move that we knew was coming, but just didn’t know when. The company reportedly bet big on real estate in 2022, presumably before the housing market turned and mortgage interest rates soared. But as the refinancing market dried up and fewer people wanted to lose their lower interest rates by buying another home in a tight market, the unit was negatively impacted. The company declined to comment on the move but one person (who wished to remain anonymous) who was affected by the layoffs told TechCrunch via email on June 8: “At 8AM yesterday, after being praised in Tuesday’s meeting, our computers where disconnected and logged out of work emails. No warning.” Guess Better.com hasn’t learned from its past experiences of botching layoffs. – Mary Ann
FedNow set to launch
As you may recall, the imploding of banks, like Silicon Valley Bank and First Republic Bank, shed a lot of light on payment rails, and the Federal Reserve’s new FedNow Service, set to launch in July, is being referenced as something that will ease some of the pain being felt by legacy payment rails.
The Fed suggests that FedNow, an instant payment infrastructure, will be a faster payment rail for financial institutions, offering real-time, 24/7, every day of the year with immediate access to funds. Even investors are keen on it.
This week, we saw some movements related to FedNow. First, TX Zhuo, managing partner of Fika Ventures, noted that “FedNow presents both compelling opportunities and potentially complex challenges,” and many of the effects will be something we can see as early as next year. Zhuo points to one of the immediate opportunities being risk management, especially with the incidences of fraud and scams we read about each day. Read more.
The other has to do with companies working to integrate FedNow. Global digital transformation company GFT is drawing on its experience with Pix in Brazil and the Universal Digital Payments Network to provide a three-part approach for banks. GFT developed architecture and compliance measures so that banks can scale transaction volume and no longer be dependent on closed, third-party services for instant payments.
To illustrate the potential for FedNow, Brazilian instant payments Matera released a report in May highlighting how well Pix is doing in Brazil. Notably, in 12 months, Pix reached 100 million users and 24 billion transactions were made in 2022, with nearly 3 billion transactions made just in December 2022. – Christine
Weekly News
Affirm has become the first buy now, pay later player to be added to Amazon Pay, the two companies announced on June 7. As part of the new partnership, any Amazon Pay merchants in the U.S. can now choose to offer their customers the option to “buy now, pay later” using Affirm’s technology. Affirm first announced an initial partnership with Amazon in August of 2021, which was exclusive through January of 2023. The news gave Affirm’s stock a much-needed boost. Shares had closed at $15.82 on June 6, the day before the announcement came out. By Friday late morning, they were trading at $18.32 after having shot up as high as $19.58 – up 15.8%. More on the news here.
As reported by Sarah Perez, Apple on June 7 “two significant changes to Apple Wallet among a handful of other updates that didn’t make the keynote address last Monday, which kicked off the start of its Worldwide Developers Conference. With the launch of iOS 17 this fall, Apple says users will be able to set up recurring payments with Apple Cash — handy for regular expenses, like rent, or for parents paying kids’ allowances, for example. In addition, Apple is announcing a new system that will allow businesses to accept IDs stored in Apple Wallet.” More here.
Anthemis Group announced last week that it has named Harry Harrison CEO of Anthemis Asset Management. Besides being the husband to Anthemis Group founder and CEO Amy Nauiokas, Harrison is the former head of Barclays Non-Core in London. The fintech-focused venture capital firm has been in the news several times in recent months. In May, TechCrunch reported that Anthemis Group is trying to raise $200 million for a third fund, according to an SEC filing. That new fundraising filing came just months after Anthemis laid off 16 people, or 28% of its staff, as reported by TechCrunch in April. At that time, a spokesperson for London-based Anthemis told TechCrunch that the move was an effort “to better reflect current market conditions and to set up the business for future growth” against its “strategic priorities.”
In a TechCrunch+ guest post, Healy Jones, who runs financial planning and analysis for Kruze Consulting, analyzed revenue, spending and runway data from 2021 and 2022 for over 700 startup clients to find out just how well certain industries were doing, including fintech. We won’t spoil the whole thing, however, we will note that the data confirms some things we’ve seen in the fintech industry in the past year, including growth among startups was doing well until the third quarter of 2022, “suggesting that the collapse of the cryptocurrency market severely impacted fintech sector revenues.” Read more.
Spotted on Twitter: Nik Milanovic, general partner at The Fintech Fund, tweeted “Impressive to see three UK neobanks – @monzo, @StarlingBank, and @tandem_bank – all turn a corner and declare profitability last week.” Catch our recent coverage of how well Monzo and Starling Bank have been doing.
According to Capterra’s 2023 Accounting and AI Survey of 317 business leaders, “51% of SMBs say AI and ML will fundamentally change business finance operations for the foreseeable future, and 76% of businesses have adopted at least one form of AI or ML technology to handle accounting and finance needs.” More here.
Other headlines
Plaid unveils new identity verification experience The company first expanded into identity (and income) verification in April 2022, a move that we reported on here
Human Interest: Can $250 get you to start saving for retirement? TechCrunch reported on BlackRock acquiring a minority stake in Human Interest earlier this year here. | Banking & Finance |
Transparency campaigners have called for thinktanks to be more open about their funding sources, after it emerged that some of Britain’s most influential ones received more than $1m (£787,000) from from donations in the US in 2021.
They include the Institute of Economic Affairs (IEA), regarded as an inspiration for policies adopted by the Liz Truss government, and Policy Exchange – a conservative thinktank used as a platform by ministers to trail new measures and which recently incubated hardline immigration plans.
Steve Goodrich, head of research and investigations at Transparency International UK, said: “Ensuring transparency around who funds our politics is essential for public confidence in how our democracy works.
“It is particularly concerning that those organisations with the most opaque funding arrangements are seemingly those getting the biggest hearing from ministers. We would urge any thinktank seeking to influence policy development to declare their funding sources and be transparent about their governance.”
Policy Exchange, where Truss was head of economic and social policy before entering politics, received almost $100,000 from a foundation controlled by Leonard Blavatnik, who has joint US-UK citizenship and was listed this year by the Sunday Times Rich list as Britain’s third-richest man.
The organisation’s American arm received $34,786 in 2021 from the Blavatnik Family Foundation 2020 – which is run by Blavatnik’s brother Alex – “to support and advance the program of policy exchange between the UK and US”.
It also took more than $270,000 from the family foundation of Yan Huo, a hedge fund magnate with US citizenship who has donated more than £1m to the Tories, including £200,000 shortly before the 2019 general election.
The IEA’s US wing, American Friends of the Institute of Economic Affairs (AFIEA), has accepted $118,000 since 2020 from the Sarah Scaife Foundation, a private foundation set up by the billionaire libertarian heir to an oil and banking dynasty.
The IEA is believed to have inspired many of the free-market policies pursued by Truss and the then-chancellor, Kwasi Kwarteng. Some of her staff worked at the IEA, and she founded its political wing, Freer. Truss spoke at more of its events than “any other politician over the past 12 years” according to the head of the IEA.
The figures on US funding were identified by the investigative US journalist, Peter Geoghegan, who analysed recently published US tax documents.
Tom Brake, the director of Unlock Democracy, a pressure group campaigning for greater transparency from thinktanks, said the figures “underlined the urgent need to break the secrecy that surrounds the funding of many of the UK’s thinktanks”.
He added: “Some thinktanks exert huge influence over government. For that reason, we need to understand who stands behind them financially and what their agenda might be. They aren’t innocent bystanders.”
Policy Exchange and the IEA have long faced questions about their refusal to name their donors. They argue that they respect their backers’ right to privacy unless the backers wish otherwise. Critics say the lack of transparency allows unseen donors to influence political debate.
Policy Exchange did not respond to a request for comment.
A spokesperson for the IEA said AFIEA was a separate organisation. They added that AFIEA’s contact details were available on the IEA website. It states: “A United States donor wishing to support the work of The IEA may make a donation to American Friends of the Institute of Economic Affairs.”
A spokesperson for the Huo Family Foundation (UK) said it had made three grants to Policy Exchange – £100,000 in 2019, 2020 and 2021 – and that the funding was restricted for work in education.
They added that all grant giving is done by the UK Foundation, but there is a US entity, Huo Family Foundation (US), which owns 100% of Huo Family Foundation (UK). Neither Yan Huo nor the Huo Family Foundation had supported Policy Exchange since 2021.
A Blavatnik Family Foundation spokesperson said: “In 2020-2021, The American Friends of Policy Exchange received a donation totalling GBP100,000 ($132,762) from the Blavatnik Family Foundation.”
The Guardian has previously reported that millions of dollars were raised from anonymous US donors to support British rightwing thinktanks that were among the most prominent in the Brexit debate.
A Guardian analysis in 2018 established that $5.6m (£4.3m) had been donated to these US entities since 2008. They included the IEA, Adam Smith Institute and Legatum Institute, which are all part of the Atlas Network.
It has described itself as “a global network of more than 475 free-market organisations in over 90 countries to the ideas and resources needed to advance the cause of liberty”. | United Kingdom Business & Economics |
Andrew Bailey has said he was “right” to tell people not to ask for a big pay rise despite soaring inflation and the biggest drop in living standards in decades.
The Bank of England Governor has doubled down on controversial comments made last year when he called on Britons to show wage restraint to help keep prices under control.
This drew widespread criticism from unions and economists at the time, who claimed Mr Bailey was out of touch.
However, when asked in a recent interview with Prospect magazine if the attacks were justified, he defended his view that higher wages would fuel inflation: “I think it’s easy sometimes to sit in sort of your own privacy and say ‘Well, I was right, wasn’t I?’”
Mr Bailey has previously admitted the Bank had “very big lessons to learn” over its failures to foresee the rapid rise in inflation, which followed accusations the institution raised interest rates from a record low of 0.1pc too slowly.
Inflation currently stands at 6.7pc, which is well above the Bank’s 2pc target and ahead of price rises in other G7 economies.
Policymakers do not expect inflation to return to target until the middle of 2025.
Sir Charlie Bean, the previous deputy governor for Monetary Policy and Bailey’s former boss, said suggesting workers refrain from seeking pay rises was “a bit silly”.
He said: “It won’t work and it looks as if they’re blaming workers for what’s happening, which I don’t think is the most constructive way to communicate the issue.”
Sir Charlie also said it invited criticism from unions, which could argue: “It’s all very well for Andrew Bailey and the people at the Bank who get paid very well to do this.”
As well as defending his position on pay, Mr Bailey said that “pretty dire” predictions about the demise of the City after Brexit had been wrong, but added the short-term impact on the economy had been negative.
He said Brexit had “created opportunities”, adding: “I think we have protected, and in a sense, ensured that much of the market and much of the industry remains here. And that’s been important.”
He added that the UK will need to continue to “build new trade relationships” to succeed. He said: “We will have to work even harder to make sure we don’t become isolationist”.
Mark Carney, a previous governor of the Bank, has claimed that the economic consequences of Brexit had all been negative, despite the resilience of the UK’s jobs market.
He has also partly blamed Brexit for the surge in inflation. | Inflation |
"NFTs aren't gone yet," writes the Verge.
"Disney will launch an 'all-new socially driven collectible experience' called Disney Pinnacle later this year, turning characters from Pixar, Star Wars, and its classic animated films into tradable digital pins." While announcing Pinnacle, Disney and its partner Dapper Labs won't even say the word "NFT." Dapper Labs still calls itself "the NFT company," but between a variety of scams, an eye-blistering episode at a recent Bored Ape event, and a market that has plunged since peaking in early 2021, that's a term they apparently will steer clear of. The only thing available on the site right now is a privacy policy that makes clear this is a Dapper Labs effort that's licensing content from Disney — not an in-house effort on the level of Disney Plus.
The NFT collection is being launched through an iOS app, and a spokesperson tells CoinDesk that web and Android applications will come later.
The Disney Pinnacle website has a few seconds of background animation showing the pins — and, of course, a waitlist signup form.
"Disney will launch an 'all-new socially driven collectible experience' called Disney Pinnacle later this year, turning characters from Pixar, Star Wars, and its classic animated films into tradable digital pins." While announcing Pinnacle, Disney and its partner Dapper Labs won't even say the word "NFT." Dapper Labs still calls itself "the NFT company," but between a variety of scams, an eye-blistering episode at a recent Bored Ape event, and a market that has plunged since peaking in early 2021, that's a term they apparently will steer clear of. The only thing available on the site right now is a privacy policy that makes clear this is a Dapper Labs effort that's licensing content from Disney — not an in-house effort on the level of Disney Plus.
The NFT collection is being launched through an iOS app, and a spokesperson tells CoinDesk that web and Android applications will come later.
The Disney Pinnacle website has a few seconds of background animation showing the pins — and, of course, a waitlist signup form. | Crypto Trading & Speculation |
Labour has pledged to slash the cost of rip-off school uniforms, saving parents hundreds of pounds.
Bridget Philipson, the Shadow Education Secretary, said Labour would “at a stroke” change rules to limit to three the number of items of branded uniform and PE kit parents are forced to buy. The party’s new research shows the cost of school uniform has risen 30% in the last three years, more than the 13% rise in the overall cost of clothing.
Under current guidance, many parents have to buy multiple branded items such as skirts, blouses, polo shirts, trousers, jumpers and ties. This newspaper has campaigned for the cost of uniforms to be cut - leading to guidance being introduced last year to make schools “reduce” the number of branded items.
A new law introduced by Labour MP Mike Amesbury, forced schools to review their uniform policies to see how they can be made more cost-effective by keeping branded items “to a minimum”. But research from the Children’s Society showed that the cost of uniforms was still high, as parents were found to have spent on average £422 a year on secondary and £287 on primary uniforms, driven by the cost of branded items.
Schools were expected to review policies to ensure they were compliant with the guidance by September last year. Nearly half of parents surveyed by the Children’s Society reported, however, that policies had not been updated. Mr Amesbury said today’s announcement was “good news.”
“People are struggling to define what a minimum is,” he told the Mirror. “Far too many schools are requiring four, five or in some cases seven items of banded clothing, still.
He said the plan was “a long time coming” and thanked this newspaper for its campaign. He added: “It was good to get it on the statute book, but even better to reduce costs for hard working families by limiting it to three items.”
Ms Philipson said the announcement was part of a move to “reset the relationship between schools and families.” She said: “With the Conservatives’ Cost of Living Crisis raging, it’s wrong that parents are having to shell out hundreds of pounds to kit out kids for the new school term. That’s why Labour will limit the number of branded items of uniform families must buy, save them money, and make sure that every child gets a brilliant state education. Yet again, Labour is leading the way where it comes to tackling the Conservative-made cost of living crisis and driving high and rising standards in our schools. That’s why families are better off under Labour. “ | Consumer & Retail |
Sam Bankman-Fried has been found guilty of fraud by a jury in a court in New York. The founder of bankrupt crypto exchange FTX has been convicted on all of the seven counts on which he was tried. He awaits sentencing.The US government had accused Bankman-Fried of overseeing a multi-billion-dollar fraud, whereby money belonging to FTX customers was swept into a sibling company, Alameda Research, and used to fund high-risk trades, debt repayments, personal loans, political donations and a life of luxury in the Bahamas. The exchange collapsed in November 2022 after it failed to meet customer withdrawals.The defense attempted to argue that Bankman-Fried acted as any rational businessperson would, amongst trying market conditions, and never intended to defraud anyone. Bankman-Fried even took the stand himself, against conventional legal wisdom, to appeal directly to the jury’s sympathies. But confronted with testimony from members of Bankman-Fried’s inner circle, who spoke of their own guilt, as well as customers and investors that lost money in the fall of FTX, the jury found against the defendant.The testimony of Caroline Ellison, CEO of Alameda Research and Bankman-Fried’s former girlfriend, “stood out,” says Jordan Estes, a former US prosecutor and partner at law firm Kramer Levin. Ellison painted Bankman-Fried as reckless, forceful and calculating; she described for the jury his various deceptions, the careful curation of his public image, and his miscalibrated moral compass. Ellison cried on the stand when she recalled her “state of dread,” racked with guilt about the stolen funds, and the sense of relief when FTX began to crumble.The US Department of Justice (DoJ), says Estes, will consider Bankman-Fried’s conviction a “signature victory,” as its first high-profile crypto scalp. Cryptocurrency has been used for more than a decade to conceal payment for illicit products, enable extortion-based cyberattacks and launder the proceeds of criminal activity. In 2021, the DoJ announced the formation of a specialist crypto enforcement team, to “tackle complex investigations and prosecutions of criminal misuses of cryptocurrency,” it said. But until now, the agency had secured few landmark convictions.Though he was charged with old-fashioned fraud, Bankman-Fried was crypto royalty, which lends his conviction a symbolic importance, says Estes. The DoJ, she says, has sent “a message to the crypto industry that fraud and wheeling-and-dealing is not to be tolerated.” An investigation into another member of crypto’s elite, Changpeng Zhao, CEO of Binance, the world’s largest crypto exchange, is reportedly ongoing.In crypto circles, the trial of Bankman-Fried was considered a “galactic embarrassment,” a sideshow whose outcome would have little effect on the prospects or trajectory of remaining crypto businesses, but cast a dark cloud over the industry and attracted a torrent of unflattering press.Its conclusion marks an opportunity for the crypto sector to start anew. Bankman-Fried and FTX may be the story of the day, says Kurt Wuckert Jr., bitcoin expert at media company CoinGeek, but they will soon become artifacts of crypto history, like the closure of underground marketplace Silk Road or bankruptcy of the Mt. Gox exchange. FTX will become just another “point of reference,” he says.But that does not preclude another similar fraud taking place in future, says Wuckert Jr., particularly while there remains a lack of regulatory clarity with respect to crypto in jurisdictions like the US. Bankman-Fried’s conviction does not signal that “crypto is clean,” says Kyla Curley, a forensic investigator specializing in crypto and partner at compliance advisory firm StoneTurn. Until crypto businesses are held to a clear and industry-specific set of standards, she says, “buyer beware” remains the message.The most immediately tangible benefit of the conviction may be in its cathartic effect for FTX customers, even though it will have no bearing on the amount of money returned at the end of the bankruptcy process. “It’s more about justice—about feeling and emotion,” says Mike van Rossum, founder of trading firm Folkvang, an FTX creditor and equity holder. “We need a world where there is responsibility for the bad things you do. In Sam’s case, bad things were done.”Now the jury has returned its verdict, judge Lewis Kaplan will decide on an appropriate sentence for Bankman-Fried. The maximum prison sentence for the seven counts on which he has been convicted is greater than one hundred years. But in practice, says Estes, the sentence is likely to fall far short of that mark. Kaplan is expected to make a decision on that within the next few months.In the meantime, Bankman-Fried must prepare for a second trial. In March 2024, he will be tried on an additional five charges, brought by the DoJ in the months after his initial arrest, including conspiracy to commit bank fraud, conspiracy to commit acts of bribery, and securities fraud.The problem for Bankman-Fried, says Estes, was always that he had to defeat each and every of the 12 charges against him to walk free. That was made more difficult when his trial was split in two, leaving him with two sets of jurors to win over. Although the burden of proof sits with the US government, Bankman-Fried was facing an “uphill battle,” says Estes, because he only needed to be convicted of “one count in either of the trials” for the judge to be able to “sentence him to jail.” | Crypto Trading & Speculation |
The government seems to be claiming that it’s winning the fight against inflation. But we are not out of the woods yet. Inflation currently is still far too high and the Bank of England has today increased rates again to 5.25% and lowered its growth forecast. But it doesn’t have to be like this. The case of Spain is a great counter-example. Its inflation has just fallen to the 2% target. How is it that it has already achieved this important milestone?
The reason is more forceful management of the economy – the Spanish government took quicker, more concerted action than ours did. Spain capped energy prices by more than the UK, lowered the cost of public transport, taxed excess profits and put in place limits on how much landlords can raise rents. While also coming with costs, this kept inflation from spreading more widely and more persistently than elsewhere.
Similar measures would have made a big difference here. One year ago, at the Institute for Public Policy Research, we argued for a similar approach in the UK, of using fiscal policy to reduce prices directly. But the call was only partly heeded, in the form of energy price support measures. While in Spain energy price caps are set to continue into next year, in the UK, the degree of support has already been lowered, covering fewer businesses than previously, and is set to end completely in autumn.
Pubs, restaurants and other businesses have had to bear the full brunt of still very high electricity costs since this spring. With the possibility of another energy price spike this winter, the government should give households and businesses certainty by extending energy price support measures and assure them that they will be protected from another price shock.
As it stands, the onus is now exclusively put on the Bank of England to stabilise UK inflation. The justification for this is that it is an overheating economy that is causing high inflation – too much money chasing too few goods. But what we’re seeing could alternatively be explained as “pass the parcel inflation”. This is the theory that, rather than a red hot economy, inflation is the result of businesses and people trying to pass on higher costs to others, if they can. Bank of England analysis partly confirmed this, finding that about three-quarters of inflation stemmed from people passing on high energy and food prices at the end of 2022.
But there was huge inequality in who was able to “pass the parcel” on inflation. The Bank of England recently highlighted that wage growth was “concentrated in higher-paying sectors such as financial and business services” while “pay growth in lower-paid sectors like wholesaling, retailing, hotels and restaurants had been broadly flat”.
Moreover, while there has been an all-present focus on wages, there has been too little attention paid to the role of businesses in keeping price pressures up by “passing the parcel”. In forthcoming IPPR analysis we show that a large chunk of businesses have either maintained or increased their profit margins in 2022. At the same time, many landlords were able to raise their rents in line with inflation – something that the temporary rent control policy in Spain was able to contain. If the costs of inflation were fairly shared, businesses and landlords would also take a hit and absorb some of the costs, rather than workers taking most of the hit.
In countries such as Japan, there is greater societal pressure for businesses to lower prices when input costs come down, and to absorb some of the higher costs themselves. France has taken policy action, making sure that food manufacturers and supermarkets play their part. Eminent institutions such as the Bank of International Settlements say that businesses reducing their profits is key for inflation to come down.
Back in the UK, further Bank of England rate increases can, ultimately, be effective in bringing down inflation, as businesses will find it harder to put up prices and people harder to bargain for higher wages. But this comes at a high cost. It means fewer jobs, higher mortgage costs and lower growth in the future. A more balanced approach – including through measures like Spain’s – would make this less necessary.
The Bank is very possibly already overdoing it. A lot of the interest rate hikes are yet to ripple through the economy. The Bank expects the effects of this to take a full one and a half years to feed through. This means that, next year, we might be in a situation where the economy is slowing down drastically with inflation already coming down more quickly.
There are some signs that this might be happening. The UK’s largest fund manager is now betting on the UK going into recession next year. In the labour market, vacancies have started to fall and unemployment is ticking up. Consumer sentiment is down. Meanwhile, global growth is slower than expected and so is unlikely to bring relief. One year from now, “pass the parcel inflation” might be over, but further Bank of England interest rates might also have killed the recovery.
It is not too late to change course. The Bank should hold off from further rate rises and even consider lowering them soon. The government should follow Spain, doing more to hold energy prices down, making businesses play their part, and supporting renters. Spain shows that inflation can come down without the economy going into tailspin. The UK should attempt the same.
Carsten Jung is a senior economist at the Institute for Public Policy Research’s Centre for Economic Justice | Inflation |
Donald Trump’s lawyers shared faulty evidence on Monday during his business fraud trial in New York, accidentally adding further fuel to the allegations against him.
The New York attorney general has accused Trump, his sons Don Jr. and Eric, the Trump Organization, and other company executives of fraudulently inflating the value of various real estate assets to get more favorable terms on bank loans. When Don Jr. took the stand Monday, Trump’s lawyers appeared to demonstrate exactly how the family overrepresented their assets.
Trump’s lawyers displayed a screenshot of a property tax document for 40 Wall Street, now called the Trump Building. The slide described the property as a “72 story landmark building in the Financial District, directly across from the New York Stock Exchange.”
The Trump Building is only 63 stories, according to filings from New York City and the Securities and Exchange Commission, and is actually around the corner from the Stock Exchange. The Trump Organization’s chief legal officer, Alan Garten, explained to Forbes a month ago that 40 Wall Street has 63 floors of commercial space, but “when you add the space from 63 to the cupola, the building totals 72 floors.”
Trump’s lawyers also showed a slide claiming the Trump International Hotel in Las Vegas is 64 stories. But an architectural drawing shows it likely has fewer levels because the floor numbers jump from eight to 16.
New York Attorney General Letitia James has alleged that Trump lied about the size and value of his many real estate holdings. His lawyers’ evidence, shared to make Trump’s case, actually appears to undermine it.
Trump may want to consider getting new lawyers, as his team seems to continually blow up his defenses in his various legal disputes. In addition to the New York fraud trial, Trump’s lawyers stumbled trying to defend against his federal indictment for attempting to overthrow the 2020 election.
His lawyer Alina Habba, who is also working on the fraud trial, undermined his defense in the other case by admitting that “everybody was made aware that he lost the election,” and his lawyer John Lauro also publicly confessed that Trump asked then–Vice President Mike Pence to delay certifying the nation’s votes (which is illegal). | Real Estate & Housing |
Greggs, the bakery chain, says it expects to open 150 net new stores this year despite persistent headwinds from pay rises and energy costs.
The company, best known for its sausage rolls and steak bakes, said that it expected challenges from high inflation to remain throughout 2023 while revealing upbeat sales figures for its last financial year.
It reported like for like sales growth in company-managed shops of almost 18%, taking revenues above £1.5bn during 2022.
Pre-tax profits came in almost 2% higher at £148.3m.
They were hurt by higher ingredient, energy and staff costs as pay increases reflected the elevated levels of inflation.
Greggs said it achieved a record 186 new shop openings over the year and closed 39, taking its estate to 2,328 shops.
The chain said it aimed to better the 147 net openings achieved last year during 2023 and said it had ambition to take its total to 3,000 shops.
It reported that trade had been bolstered by deliveries and evening trade - with the likes of pizzas and chicken goujons proving popular in terms of growth despite the continuing squeeze on consumers' budgets from the cost of living crisis.
Shop sales were more than 18% ahead of last year during the first nine weeks of 2023, it added, but said the figure was somewhat flattered by a tough comparison due to the impact of Omicron varient COVID disruption at the start of 2022.
Chief executive Roisin Currie said: "2022 has been a year of strong progress for Greggs, the result of committed efforts to deliver our strategic growth plan.
Read more from business:
Hundreds of community pharmacies 'could close due to rising costs'
One in seven people 'skipping meals' as prices soar
"The significant opportunities on which the plan is based will remain centre stage in the year ahead as we make Greggs more accessible to even more customers.
"Although consumer incomes remain under pressure, Greggs continues to offer exceptional value to people looking for great tasting, high-quality food and drink on-the-go.
"We have an exciting, ambitious plan for the years ahead and, by continuing to nurture what makes Greggs special, I believe we are extremely well-placed to realise the opportunity to become a significantly larger, multi-channel business." | Consumer & Retail |
It’s time to mint the coin, sickos!
If you have not been paying attention to the most tragically online sectors of the financial internet, here’s a summary: the government is about to grind to a halt — yes, again — to argue over the national debt. But there is a way out, and it’s been known for years. What we do is mint a $1 trillion platinum coin.
Nobody in Congress appears capable of even pretending to act like an adult. So in that spirit, I present to you the coin
Since 2003, there’s been an increasing level of dumbfuck nonsense from our elected officials around the debt ceiling. The “debt ceiling” is a limit on government spending that was instituted in 1917. When there’s a Democrat in the White House — and sometimes, even when there isn’t — politicians decide that playing with the debt ceiling is a great way to get their pet policies passed. These buffoons love playing chicken with the idea of defaulting on our government debt! Why they think this is cute or funny, I don’t know, but in 2003, 2011, 2013, 2014, 2015, 2017, 2019, 2021, and now, we’ve had to sit through a bunch of farce about the debt ceiling.
If we hit the ceiling, the US may default on our debts, which can potentially fuck up the entire world economy. I strongly suspect the “productive” talks going on right now are basically cosplay so the markets won’t freak out. But if we default, anyone who has a 401(k) retirement account is going to see their retirement go up in smoke.
There are theoretically adult-sounding ways to revise the law to fix this problem, but I invite you to contemplate our elected officials. Nobody in Congress appears capable of even pretending to act like an adult. So in that spirit, I present to you the coin, which is cool as hell.
What happens is that the US Treasury mints a platinum coin and deposits it at the Federal Reserve, and Congress is moot. We know the coin is legal; basically, a law passed in 1997 gives the Treasury full unilateral authority to mint platinum coins of any kind, for any reason. (This is separate from the process of increasing the supply of money, which originates with the Federal Reserve.) Former head of the US Mint Philip Diehl has said it can be done — so I think the main objection is that it comes from people who have been ruined by the internet.
In theory, it is not a great idea to meme policy into existence. In practice, if we don’t do it, the debt ceiling standoffs never end
That’s right, the platinum coin idea in its current form came from the comment section of a blog called Pragmatic Capitalism in 2011. The terminally online have been talking about it every time we’ve had a debt ceiling crisis ever since.
In theory, it is not a great idea to meme policy into existence. In practice, if we don’t do it, the debt ceiling standoffs never end. There are serious grownups who have written policy papers about the coin, but I am not focused on that. If you want a serious case for minting the coin, here’s one. Me? I am focused on (1) the coin is cool and (2) the debt ceiling debates suck.
Plus, think about the designs we could put on it, especially if we, for instance, make it roughly the size of a hubcap and maybe also make it glow in the dark. I don’t see why the Canadian Mint gets to have all the fun.
The coin is an idea whose time has come. Let’s shitpost our way into solvency. It’s time to mint the coin and be legends. | Inflation |
Stock Market Live: GIFT Nifty Signals Higher Open; Coal India, ONGC, LIC, Grasim, Eicher, Biocon In Focus
Live updates on India's equity markets on Nov. 13.
KEY HIGHLIGHTS
- Oldest First
Global Cues
U.S. Dollar Index at 105.8
U.S. 10-year bond yield at 4.65%
Brent crude down 0.50% at $81.02 per barrel
Nymex crude down 0.54% at $76.75 per barrel
GIFT Nifty was unchanged at 19,585 as of 4:37 p.m.
Bitcoin was up 0.24% at $37,271.21
Trading Tweaks
Record Date Interim Dividend: REC.
Insider Trades
Linc: Promoter Ekta Jalan bought 5,000 shares on Nov. 9.
ISMT: Promoter Kirloskar Industries bought 2,553 shares on Nov. 10.
New Listing
Protean eGov Technologies: The company's shares will debut on the stock exchanges on Monday at an issue price of Rs 792. The Rs 490-crore IPO was subscribed to 23.86 times on its final day. Bids were led by institutional investors (46.94 times), non-institutional investors (31.62 times), retail investors (8.93 times), and a portion reserved for employees (1.49 times).
Stocks To Watch: Coal India, ONGC, Glenmark, LIC, Grasim, Eicher Motors, SAIL, Biocon In Focus
Coal India: The board approved an interim dividend of Rs 15.25 per share.
Dr Reddy's Laboratories: The drugmaker acquired a 26% stake in a SPV called O2 Renewable Energy for Rs 24 crore for accessing renewable power through the Inter-State Transmission System under a captive structure. O2 Renewable Energy generates electricity using other non-conventional sources.
ONGC: The company approved an additional investment of Rs 3,501 crore in JV ONGC Petro Additions. | India Business & Economics |
Part of retirement planning includes determining how much to save and invest so you can enjoy the type of lifestyle you desire. Setting your savings target by age can be a good way to organize your strategy and gauge how to track progress with your goals. You might also be interested in how much the typical retiree has saved at age 65, 70 and beyond. In this article, we’re going to focus on how much the average person has saved and possibly should have saved at the age of 70. Keep in mind, though, that your situation is still completely unique to what your goals are. You may want to work with a financial advisor to make sure your savings goals are in line with where you need to be later on.
How Much Does the Average 70-Year-Old Have in Savings?
According to data from the Federal Reserve’s most recent Survey of Consumer Finances, the average 65 to 74-year-old has a little over $426,000 saved. That’s money that’s specifically set aside in retirement accounts, including 401(k) plans and IRAs.
The Federal Reserve also measures median and mean (average) savings across other types of financial assets. According to the data, the average 70-year-old has approximately:
$60,000 in transaction accounts (including checking and savings)
$127,000 in certificate of deposit (CD) accounts
$17,000 in savings bonds
$43,000 in cash value life insurance
In terms of overall trends, the numbers show an increase over the previous Survey of Consumer Finances. According to that survey, the average 65 to 75-year-old had $381,000 saved for retirement in 2016. That figure, however, was well below the $486,000 70-year-olds had saved on average in 2013.
Whether the Survey of Consumer Finances for 2022 shows an uptick in savings or a decline remains to be seen. While Social Security benefits have seen several cost-of-living increases since the last survey was completed, persistently high inflation has put more pressure on Americans’ spending power. The survey may show that 70-year-olds have less in retirement savings if they’re spending more to compensate for higher prices.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
How Much Should a 70-Year-Old Have in Savings?
Financial experts generally recommend saving anywhere from $1 million to $2 million for retirement. If you consider an average retirement savings of $426,000 for those in the 65 to 74-year-old range, the numbers obviously don’t match up.
The amount a 70-year-old should save for retirement can depend on several things, including:
Desired retirement lifestyle
When they apply for Social Security benefits
Other sources of retirement income, such as a 401(k), IRA, pension or annuity
Other savings, including taxable brokerage accounts, savings accounts and CDs
Overall health and life expectancy
The more money you anticipate spending to cover your cost of living in retirement, the more you’ll typically need to save. Social Security benefits are a staple part of many retirees’ income picture, but those payments may only go so far. Pensions, meanwhile, are becoming more of a rarity as employers opt for defined contribution plans instead.
Long-term care can put a strain on retiree budgets and increase the amount of money you need to save. Medicare doesn’t cover long-term care though Medicaid does. But to qualify for Medicaid, you’ll typically need to spend down your assets. Purchasing long-term care insurance can be a workaround so you’re not at risk of draining your savings.
What Is a Good Net Worth at 70?
Net worth is a measure of your assets vs. your liabilities. In other words, it’s the difference between what you own and what you owe.
The average net worth of Americans aged 65 to 74 hovers around $1.2 million. The median net worth is lower, at $164,000. The typical 70-year-old has around $105,000 in debt, including mortgages, home equity loans, credit cards and student loans, as measured by the Fed’s data.
What constitutes a good net worth is situation-specific and largely linked to your retirement goals. There are different rules of thumb you can apply to come up with an ideal net worth calculation. For example, one rule suggests having a net worth at 70 that’s equivalent to 20 times your annual expenses.
If you spend $100,000 a year to live in retirement, you should have a net worth of at least $2 million. On the other hand, if you only spend $40,000 on living expenses, then your target net worth would be much lower, at $800,000.
Is Retiring at 70 a Good Idea?
Whether it makes sense to retire at 70 can depend on your finances and what you envision for your dream retirement. When choosing a retirement age, it’s helpful to consider:
When you’ll really need to take Social Security benefits
Whether you’ll still work in a part-time capacity after retiring
How long you plan to live in retirement
Your desired savings goal and current savings rate
If you can delay taking Social Security benefits until age 70, that can boost your benefit amount. You’ll be eligible to collect 132% of your benefit amount by waiting longer to apply.
You can also continue saving and investing for retirement if you’re working longer. For example, you can continue maxing out your 401(k) each year, or at the very least, contribute enough to get your full employer match. You can also funnel money into an IRA for supplemental savings.
Retiring at 70 means you’ll have a two-year gap before you’ll need to begin taking required minimum distributions (RMDs) from a traditional 401(k). You’ll also need to take RMDs if you have a Roth 401(k), but Roth IRAs are exempt from this rule.
Within that window, you might decide to convert your traditional IRA to a Roth account. Doing so can mean a higher tax bill in the year of the conversion since you’re required to pay taxes on your traditional IRA earnings. But moving forward, you’d be able to take tax-free distributions from your Roth IRA.
The Bottom Line
How much does the average 70-year-old have in savings? Just shy of $500,000, according to the Federal Reserve. The better question, however, may be whether that’s enough for a 70-year-old to live on in retirement so that you can align your budget accordingly. With no end to higher inflation in sight, retiring on $500,000 may not be realistic for everyone. The good news is that the younger you are, the more time you have to plan, save and invest for the future.
Retirement Planning Tips
Consider talking to your financial advisor about the pros and cons of retiring at 70 and what your personal timeline for retirement should look like. If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Delaying Social Security benefits could help you to collect more money in retirement. Taking benefits early, however, could reduce your monthly payment amount. The earliest you can begin taking Social Security is age 62 but it may benefit you to wait until at least your full retirement age to apply. Also, keep in mind that if you do decide to take Social Security early and you continue to work, your benefit amount may be reduced even further. Understanding how to maximize Social Security benefits can help you get the most money possible.
Photo credit: ©iStock.com/kupicoo, ©iStock.com/AleksandarNakic, ©iStock.com/jeffbergen
The post How Much Does the Average 70-Year-Old Have in Savings? appeared first on SmartAsset Blog. | Personal Finance & Financial Education |
Labour can not commit to building HS2's northern leg after the government "took a wrecking ball" to its finances, Sir Keir Starmer has said.
Plans to build the high-speed route north of Birmingham have been scrapped by Rishi Sunak, with £36bn diverted to local transport schemes.
Sir Keir's comments could kill off the project, despite £2.2bn already being spent on the cancelled stages.
But Labour was promising to provide "better connectivity", he said.
"I can't stand here and commit to reversing that decision, they've taken a wrecking ball to it.
"An incoming Labour government will be laser-focused on growing our economy in all parts of the country - that means we need better connectivity," he added.
The Labour leader said he was already "talking to local mayors" about how to provide better transport links between northern cities.
HS2 was originally intended to provide a high-speed rail link connecting London to the Midlands before splitting to Manchester and Leeds.
It aimed to cut journey times, while creating more space on the rail network and jobs outside London
But the project has been beset by delays and a budget that has ballooned from £33bn.
The last official estimate of HS2 costs, excluding the cancelled eastern section, added up to about £71bn. However, this was in 2019 prices, so it did not take account of the rise in costs of materials and wages since then.
In his speech on Wednesday, the prime minister said that east-west links were "far more important" than those linking the north with the south of England.
He said his plans would see "hundreds" of alternative projects funded, such as:
- Building a Midlands rail hub, connecting 50 stations
- Upgrading the A1, the A2, the A5, and the M6
- Building a Leeds tram system
- Funding the Shipley bypass, the Blyth relief road, and 70 other road schemes
- Electrifying train lines in north Wales
- Resurfacing roads across the country
- Extending the £2 bus fare cap until the end of December 2024, which was due to rise to £2.50
He also said he would protect £12bn to "better connect" Manchester and Liverpool - although this will not necessarily be with high-speed rail.
Sir Keir said these were "reheated old proposals" the government had already committed finances to. The Integrated Rail Plan for the North and Midlands shows £5.25bn has already been committed to these projects.
Green Party co-leader Carla Denyer accused Mr Sunak of ending up with the "worst of all worlds" by cancelling the second leg of HS2.
The Greens did not support the project, but Ms Denyer told BBC Midlands Today that, by "not building the onwards legs, it ends up being the worst of both worlds".
"Where the Midlands ends up being a commuter belt for London, and yet we don't have benefits for the North of England connecting better to the Midlands," she added.
In a series of exclusive interviews with the BBC, Sir Keir also attacked Mr Sunak's ability to deliver change, saying he was the "nodding dog who nodded through the decisions that he now says are so terrible".
"The change we need is a change from the Tory government, not more of a Tory government," he added.
The Labour leader said his party would "bulldoze through the barriers" in the way of house building if elected at the next general election.
Challenged on what he would do if opposed by people who did not want housing development, he said: "We have to get the balance right, but for young people, young families, the dream of home ownership has been completely taken away from them - we have to restore that." | United Kingdom Business & Economics |
HCC Stock Surges To Over Five-Year High On Deal To Sell Swiss Unit
The stock rose as much as 9.09% during the day to Rs 32.40 apiece on the NSE.
Shares of Hindustan Construction Co. surged 9% to an over five-year high on Tuesday after it announced that it will sell its entire stake in Swiss construction unit to a French company for Rs 928 crore.
HCC subsidiary Steiner AG, Switzerland, entered into a share purchase agreement with Demathieu Bard to sell its entire stake in Steiner Construction SA, according to an exchange filing on Monday.
The deal is expected to be completed by the end of this month or the beginning of the next year, it said.
HCC's stock rose as much as 9.09% during the day on the NSE to Rs 32.40 apiece, the highest since February 2018. It pared gains to trade 6.57% higher at Rs 31.65 apiece, compared to a 0.74% advance in the benchmark Nifty 50 as of 10.48 a.m.
It has risen 57.46% on a year-to-date basis. The total traded volume so far in the day stood at 3.8 times its 30-day average. The relative strength index was at 60.49. | Stocks Trading & Speculation |
Chancellor Jeremy Hunt has insisted his tax cuts are about "long-term growth" for the economy, calling it "silly" to think they were instead about the timing of the next election.
The Conservative Party has been told to be ready for a general election from 1 January, a senior government source told Sky News's political editor Beth Rigby, with a vote being called as early as May if Wednesday's autumn statement goes down well with voters.
In his speech to the Commons, Mr Hunt announced a raft of measures, including reducing national insurance for employees from 12% to 10% and scrapping it entirely for the self-employed.
But economists have pointed out that the overall tax burden remains at a record high because of the continued freeze on tax thresholds.
The chancellor told Sky News he hadn't chosen "the most populist tax cuts", with most of the policies aimed at boosting business growth.
But he denied the NI cuts were a pre-election giveaway, saying: "It's silly to think about this in terms of the timing of the next election. We're trying to make the right decisions for long-term growth of the economy."
The tax cuts came amid long-standing pressure from the Tory backbenches to reduce the burden on both the public and business, which has been sat at a 70-year high.
But a general election is also looming, with the government having to call the ballot by January 2025 at the latest, and the Conservatives are still lagging behind Labour in the polls.
A senior government source told Beth Rigby that the Tories' campaign director, Issac Levido, is due to join the party on a full time basis from the new year in order to make sure they are ready for the election as soon as possible.
Another senior source also told Sky News' political editor that the plan was to "prepare for November" but be "ready for May", in case the tax cuts help them narrow the gap, giving them a better chance of winning an historic fifth term in office. | United Kingdom Business & Economics |
Confused And Surprised At Investor Interest In F&Os, Long-Term View Will Deliver Better Results: SEBI Chief
SEBI Chairperson expressed her confusion and surprise at the continued investor interest in F&O despite the fact that 90% of individuals lose money.
SEBI chairperson Madhabi Puri Buch on Monday said she is 'confused and surprised' at investor interest in Futures and Options despite 90% of individuals losing money in the segment.
Buch said there is a need for investors to look at the long term and added that chances of making inflation-beating returns are much brighter through this strategy.
Speaking during the launch of the Investor Risk Reduction Access platform at Asia's oldest stock bourse BSE here, Buch pointed to a recent research by the capital markets regulator which pointed out that only 11% of the 45.24 lakh individual traders in the F&O segment made profit.
As per the research, there was an exponential increase in the F&O segment participation during the pandemic, with the total number of unique individual traders increasing by over 500% from the 7.1 lakh in FY19.
"I must admit, I am always a little confused and surprised as to why people continue to do that (bet in F&O) knowing that the odds are not in their favour at all," Buch said.
"There is a 90% chance that the investor will lose money in the F&O segment, but we also know, and the data shows us, that if you take a long-term view of the market, and if you invest with a long-term perspective, you will rarely go wrong," she added.
There is a 'very good chance' that an investor will create wealth over a sustained period of time that will exceed the inflation rate in the economy, if the investment calls are for the long term, the SEBI chief said.
She 'urged' everybody to move and adopt a long-term and sustainable approach to investments, where there is a high probability of wealth creation rather than losing money on a daily basis in the F&O segment.
As per the SEBI research paper, the average loss booked by 89% of people who lost money on F&Os in FY22 stood at Rs 1.1 lakh, while for the minority which was lucky enough to be in the black, the average profit was Rs 1.5 lakh.
More than a third of the investors in the F&O segment were those aged between 20-30, as compared to only 11% in FY19.
Meanwhile, Buch said SEBI will be coming out with a revised notification on the upstreaming of funds after getting feedback from brokers on the challenges in complying with the norms.
She also said that the broking industry and exchanges seem to have agreed on 50 items focused on operational simplification and standard setting, and lauded the stakeholders for working together.
SEBI had first announced the introduction of IRRA – under which a trader can take a call on an open position in case her broker's system faces an outage - in December 2022.
Buch said efforts have been undertaken to achieve a 'perfect balance' between requirements in the worst case scenario to offer the alternative and the costs of creating such a capacity, and hoped that the system will be able to deliver on the promise.
As per an industry official, a trader will get a SMS with a link for downloading the IRRA in case his or her broker faces an outage, and will be able to square-off open positions in under two hours. | Forex Trading & Speculation |
Thermax Q2 Results Review - Healthy, Confident On H2 Order Inflows: Prabhudas Lilladher
strong operational performance drives profit after tax growth.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Prabhudas Lilladher Report
Thermax Ltd. reported healthy quarterly performance, with consolidated revenue growth of 10.9% YoY and Ebitda margin expanding 211 basis points YoY, driven by few projects reaching above average margin recognition level in Q2 FY24. Order inflows were down by 2.1% YoY to Rs 19.7 billion in Q2 FY24 due to absence of large orders, however management is bullish for H2 FY24 on order inflows front with couple of large order under discussion stage.
Domestic enquiry pipeline, continues to remain healthy for medium size order from food and beverages, chemicals, metals etc. Exports enquiry pipeline continues to remains strong. Large orders from oil and gas sectors is muted while it is gaining traction in steel and metals sector.
We believe Thermax is well placed to gain from increasing thrust on energy transition and de-carbonisation initiatives led by its-
technical expertise,
strong balance sheet and
prudent working capital management.
The stock is currently trading at price/earning of 55.3 times /47.6 times /42.5 times FY24/25/26E.
We roll forward to September- 25E and maintain ‘Hold’ rating with revised target price of Rs 2,771 (Rs 2,613 earlier), valuing it at PE of 43 times September-25E (43 times FY25E earlier).
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | India Business & Economics |
HONG KONG : A new exchange-traded fund (ETF) tracking Saudi equities made its trading debut in Hong Kong on Wednesday, becoming the first product of its kind in Asia amid warming bilateral relations between China and Saudi Arabia.
The ETF, called CSOP Saudi Arabia ETF, is managed by Hong Kong-based CSOP Asset Management. It counts Saudi sovereign wealth fund, Public Investment Fund (PIF), as an anchor investor, CSOP said in a press release.
The index was up about 0.9 per cent in opening trade.
"Today is a milestone in our financial cooperation with Saudi Arabia," said Hong Kong Financial Secretary Paul Chan at a launch event.
"It makes it possible for mass investors in our part of the world to invest and participate in the development of the Saudi Arabia's economy," he said. "We can expect to see more products to be made available in both the Hong Kong and the Saudi markets for our respective investor bases."
The fund tracks the performance of the FTSE Saudi Arabia Index, whose 56 constituents' total market value reached $276.8 billion at the end of October, an index document showed.
Through the ETF, investors in Hong Kong will be able to trade Saudi stocks including the oil giant Saudi Aramco and the Saudi National Bank in Hong Kong dollars or Chinese yuan.
"The fund will offer a unique opportunity to investors to gain exposure to our fast-growing economy," said PIF Deputy Governor Yazeed A. Al-Humied at the launch event
"Our aim is to continue to attract foreign investors into the Saudi capital markets... To show our commitment, PIF would act as the lead investor of this fund."
Reuters reported in August that the Hong Kong Stock Exchange and a mainland bourse were in separate talks with the Saudi stock exchange for pacts that would allow investors on both sides to trade equities and bonds in each other's markets.
The ETF launch comes as China's government, frustrated by what it sees as the U.S. weaponisation of economic policies, has sought to expand ties with countries in Europe, the Middle East and Africa.
That diplomatic push includes courting U.S. ally Saudi Arabia.
While economic cooperation between Beijing and Riyadh remain anchored on energy interests, ties in trade, investment and security have been expanding. China is Saudi Arabia's top trading partner with trade worth $87.3 billion in 2021.
The People's Bank of China and the Saudi Central Bank this month signed a local currency swap agreement worth 50 billion yuan ($6.93 billion) or 26 billion Saudi riyals, to strengthen financial cooperation, and promote trade and investment. | Asia Business & Economics |
Why Is UPI-Linked RuPay Credit Card Yet To Find Its Groove?
A paucity of official data on UPI-linked RuPay credit card transactions is a telling sign of loopholes in the payment mechanism.
India's ambitious project of linking the Rupay credit card to the Unified Payments Interface has turned a little over a year old. Yet, the direct competitor of Visa and Mastercard has failed to match the stellar success of the UPI despite this linkage.
Today, about 25% of all physical credit cards are identifiable to Rupay, and about Rs 100 crore worth of transactions per day have been taking place, according to a person with direct knowledge of the matter who spoke on the condition of anonymity.
A paucity of official data on UPI-linked RuPay credit card transactions, even after a year, is a telling sign of several loopholes in the payment mechanism.
Market participants that BQ Prime spoke to highlighted the sticking points—not one, but many.
The Tripartite Nexus
At this point, Rupay is the only credit card network linked to the UPI.
The lacklustre growth in this payment system is all about a tripartite nexus between merchants, banks and credit card holders, with the long-debated merchant discount rate taking centre stage.
The merchant discount rate, or MDR, is a fee that a merchant is charged by the card-issuing bank for accepting payments from customers via credit cards.
On Oct. 4, the NPCI announced that interchange fees would be applicable on Rupay-UPI transactions, but small merchants would be exempt from it. This meant that the interchange fee would be levied on transactions worth over Rs 2,000.
Even though 13 Indian banks and 15 payment service providers, including Google Pay, Paytm, Slice, and Mobikwik, are live with the feature, the problem continues.
"Usage of a credit card and UPI are for different purposes. Credit cards are used for high-ticket transactions. It is inconvenient to do small-ticket transactions because acceptance infrastructure is not available with small merchants," said Vijay Jasuja, former managing director and chief executive officer at SBI Card.
UPI-Linked Rupay Credit Card Crawls
Large Banks At Last
One of the reasons for the slow pace is that the larger banks, who are usually the drivers of the government's initiatives, such as the State Bank of India, ICICI Bank and Axis Bank joined the party quite late, the first person quoted above said, who spoke on the condition of anonymity.
This is because the payment system is expensive, Vivek Iyer, partner-financial services advisory at Grant Thornton Bharat, said. "Once they are pushed to adopt the Rupay credit card, they have to start asking the customers to adopt it too," he added.
The Expensive MDR
The expensive nature is owing to the combined charges of MDR levied on merchants, payment service provider charges, other fee components for banks along with the NPCI commission. While a major portion of the MDR goes to the card-issuing bank in the form of interchange fees, acquiring banks and payment service providers gain only a small share.
Even though linking UPI to the Rupay credit cards and subsequently levying MDR would translate into a hit on the margins for banks, they have no other option than to give in to the competition of acquiring the largest market share in the credit card segment, Jasuja said.
Unlike other fees and charges, MDR is determined by the "association of payment networks and banks," which makes it an onerous task to arrive at a fair value.
All this against the backdrop of low credit card penetration in India compared to the global market. Only 3% of Indians hold credit cards, compared with the global benchmark of 30%.
Indians in the lower-income bracket use UPI as a mode of payment on a vast scale, but they do not have high credit scores to be eligible for Rupay credit cards, according to Jasuja.
"This makes the entire mode of payment futile," he added.
Iyer echoed the view. "You can't give a credit card to someone who is below the poverty line. Anyway, the household low savings and small-ticket loans bubble will burst soon," he said.
The profitability factor also comes into play.
Owing to economies of scale, large merchants have an edge over the smaller ones. But they are also not willing to get on board with the RuPay credit card option with UPI because it would hit their profitability. "The commission and MDR on the RuPay credit card through UPI are additional cost. So, either one can reduce their margins or keep them the same and load that charge on yourself," Iyer said.
Beyond this, another big concern is that the merchants can not identify whether the payment has been made from a Rupay credit card linked with UPI or direct UPI, according to Mohit Bedi, chief business officer and co-founder of Kiwi, a fintech company that enabled credit on UPI.
The Way Forward
The solution boils down to the main problem: rationalisation of MDR, according to market participants.
To bolster the usage of UPI-linked Rupay credit cards, the need is to rationalise MDR charges to have a level playing field for all the participants, according to Jasuja.
Further, it is also important to define the minimum and maximum ticket size of transactions allowed via this method, as it would also reduce the associated risks that come with small-ticket size transactions, Iyer said.
While there is no definitive way to reduce MDR at this point, discussions around the pain point have started.
"Businesses have to be viable, so MDR costs are such that people need to figure out how to reduce them," Iyer said, while adding that regulatory guidelines are not enough.
"It is the market participants who need to come to a consensus with card-issuing and settlement agencies on how they can rationalise numbers. It's an oligopoly, after all," he added. | India Business & Economics |
Image source, Getty ImagesMoney borrowed to pay for Christmas could take years to repay, a charity has warned, as a poll for the BBC reflects fears over unmanageable debt.A third of respondents who used credit to help get through Christmas and the holiday season said they were not confident about their ability to repay.Advice charity StepChange said a debt hangover led to a surge in enquiries.It advised more people on 3 January, the first working day after the festive break, than on any day last year."Christmas can put great financial pressure on people, causing some to rely on credit and spend more than they can afford. In some cases, this can lead to a debt hangover in the new year that may take many months or even years to repay," said Richard Lane, from StepChange.He said many people were unable to adjust their spending habits or have a sufficient income as bills and prices soared, and he urged those struggling not to "suffer in silence"."While there are some promising suggestions that inflation may begin to ease later this year, it is likely that there will be some challenging months ahead financially, and the risk of falling into problem debt remains high," he said.The government has promised support payments to those most in need.The online poll of 4,187 UK adults by Savanta Comres for BBC News, Morning Live and Rip Off Britain was carried out on 4-6 January, found that more than eight in 10 of those asked were worried about the rising cost of living, with some losing sleep over it.But it suggests people are finding different ways to cut costs to pay their bills. A majority of respondents have been turning the heating down and lights off, or reducing their grocery shop.Image caption, Natasha and Linda have found ways to save moneyThat is also the case for Natasha Miller and her mum Linda, who spoke to BBC News as they took six-month-old Lana and two-year-old Penny to a free story and rhyme session in Garforth, Leeds."We try not to bath the girls every night, that's the big one," Natasha said.Linda added: "Week by week, with food prices, we've tried to budget, to only buy the things we need and not waste as much. We switch off the lights, and we keep the temperature at 16C to 18C in the house. We're conscious of what we're using."Normally we buy each other presents but we did a Secret Santa this year so we weren't buying for everyone."The poll for the BBC shows half those asked paid for at least some of their Christmas and holiday season spending on credit, and many would have received credit card bills in recent days.Many turn to credit at expensive times of year because they have little in savings. A quarter of UK adults have less than £100 set aside in savings, a recent survey by the Money and Pensions Service suggested, leaving people vulnerable to rising and unexpected bills.Official data from the Office for National Statistics shows almost one in 10 people (8%) have had a direct debit, bill or standing order they have been unable to pay in the past month, rising to 10% of those aged 16 to 29, and 13% of those aged 30-49. Guide to dealing with debtsWork out how much you owe, who to, and how much you need to pay each monthIdentify your most urgent debts. Rent or mortgage, energy and council tax are called priority debts as there can be serious consequences if you do not pay them, and so they should be paid firstCalculate how much you can cover in debt repayments. Create a budget by adding up your essential living costs like food and housing, and taking these away from any income such as your wage or benefits you receiveSee how you could boost your income, primarily by checking what benefits you are entitled to, and whether you are eligible for a council tax reduction or a lower tariff on your broadband or TV packageIf you think you cannot pay your debts or are finding dealing with them overwhelming, seek support straightaway. You are not alone and there is help available. A trained debt adviser can talk you through the options availablePrices are rising at a rate not seen for 40 years. The latest official data shows that the cost of living, as measured by the Consumer Prices Index (CPI) measure of inflation, rose at 10.7% a year in November. That means something which cost £100 a year earlier, would typically have gone up in price to £110.70.The CPI inflation rate has fallen slightly from a peak of 11.1% in October, with a further slowdown expected when the next set of data is published on Wednesday.However, it means prices are still much higher than they were, and the poll for the BBC suggests that higher bills - driven primarily by food and energy - are causing anxiety and people are doing their best to cut spending accordingly.Comparable polls for the BBC in June and October last year also showed that more than eight in 10 people were worried about the rising cost of living.This time, two-thirds of those said it was having an impact on their mental health. Specifically, among that group, 80% said they were feeling anxious, 62% had trouble sleeping and 50% had avoided social activities.Domestic energy bills are set to rise again in April, from £2,500 to £3,000 a year for a typical household. Yet the poll for the BBC suggests that a number of people have already fallen behind on their energy bills.Renters (29%), or those in social and council housing (32%) are most likely to have done so in the last six months, according to the responses.Adam Scorer, chief executive at National Energy Action, which has a helpline for those struggling with energy bills, said: "The cost-of-living crisis continues to devastate the most vulnerable people. "While the government support has helped offset some of the worst impacts, record energy bills mean every day millions of people are skipping meals or living for prolonged periods without any energy in their homes. At the moment, we are expecting it will get even worse from April."To reduce their energy bill, 68% of respondents said they had turned down their thermostat during the winter - an option not open to everyone, but generally regarded as a good way to cut costs.Around half (49%) said they had only heated certain rooms in their home, and a similar proportion (45%) had bought warmer clothes.Image caption, Frankie Lakin says parents feel financial pressureIn much the same way as last year, people are looking to cut costs in other areas to save money and cover bills.Frankie Lakin, from Kippax in West Yorkshire, told BBC News: "I personally sometimes feel the pressure of social media, you see all your friends doing stuff with their children and sometimes it's a bit overwhelming. I had to say no. I did cut it down a lot this year."You spend on your card and it is literally just a tap for everything and you don't realise how much you are spending," said the mum of Sophie, five, and Holly, three.More than 70% of those asked in the poll for the BBC had often or sometimes spent less on clothes in the last six months, while more than 60% had gone on fewer day trips, travelled less to meet up with family and friends, and put off big purchases such as buying a car, sofa or work on their home.Six in 10 have cut the amount they give to charities, including food banks.The government has said eight million people receiving benefits and on low incomes will receive £900 cost-of-living payments in three instalments in the next 18 months to help pay the bills.The first payment of £301 will be made in the spring, with a second of £300 in the autumn and a final £299 instalment in the spring of 2024.Ministers also confirmed that a £150 cost-of-living payment would automatically go to those with disabilities during the summer, a further £300 payment would be paid to pensioners during the winter of 2023-24, and benefits and the state pension would rise in line with prices in April."Tackling inflation is this government's number one priority, we have a plan that will help to more than halve inflation this year and lay the foundations for long-term growth to improve living standards for everyone," a Treasury spokesman said."We are also providing significant support to help people through these tough times by holding down energy bills and delivering up to £1,350 in direct cash payments to millions of vulnerable households."How to help yourselfImage caption, Dr Ranj Singh says support is available for people who are strugglingHere are some mental health tips from BBC Morning Live's Dr Ranj Singh:Exercise and diet - The three key areas of trying to eat a bit healthier, move a bit more and make sure you try to get good quality sleep are more important than ever. Shop around for deals, store and freeze food and build "incidental" exercise into your day, such as taking the stairs instead of the lift or walking to workBe kind to your mind - Take advantage of free online services and resources. The NHS Every Mind Matters website has lots of good advice on looking after your mental wellbeing, and charities can help tooSeek out support - Many local support groups will be free. There is a talking therapy search section on the NHS website. The 111.nhs.uk service also has a section that links to mental health supportReach out for help - If you are really struggling then make sure you reach out for help. This is sometimes the hardest, yet the most important step. Remember that your GP is there for any mental health difficulties, and A&E is open 24/7 for anyone in crisis or an emergency. If you are in serious financial trouble then organisations like Citizens Advice, StepChange, National Debtline and the Mental Health and Money Advice website can be really helpfulYou can see more on a Morning Live cost of living special at 09:15 GMT on BBC One on Monday, and on Rip Off Britain on BBC One at 10:00 | Inflation |
Who Owns the Most Satellites?
Nearly 7,000 satellites orbit the Earth, serving vital functions such as communication, navigation, and scientific research.
In 2022 alone, more than 150 launches took place, sending new instruments into space, with many more expected over the next decade.
But who owns these objects? In this graphic, we utilize data from the Union of Concerned Scientists to highlight the leaders in satellite technology.
SpaceX’s Dominance in Space
SpaceX, led by Elon Musk, is unquestionably the industry leader, currently operating the largest fleet of satellites in orbit—about 50% of the global total.
The company has already completed 62 missions this year, surpassing any other company or nation, and operates thousands of internet-beaming Starlink spacecraft that provide global internet connectivity.
Starlink customers receive a small satellite dish that self-orients itself to align with Starlink’s low-Earth-orbit satellites.
|Owner||Total||Share||Country|
|SpaceX||3,395||50%||USA|
|OneWeb Satellites||502||7%||UK|
|Chinese Government||369||5%||China|
|U.S. Government||306||4%||USA|
|Planet Labs, Inc.||195||3%||USA|
|Russian Federation||137||2%||Russia|
|Spire Global Inc.||127||2%||USA|
|Swarm Technologies||84||1%||USA|
|Iridium Communications, Inc.||75||1%||USA|
|Other||1,528||23%|
Percentages may not add to 100 due to rounding.
In second place is a lesser-known company, British OneWeb Satellites. The company, headquartered in London, counts the UK government among its investors and provides high-speed internet services to governments, businesses, and communities.
Like many other satellite operators, OneWeb relies on SpaceX to launch its satellites.
Despite Starlink’s dominance in the industry, the company is set to face intense competition in the coming years. Amazon’s Project Kuiper plans to deploy 3,236 satellites by 2029 to compete with SpaceX’s network. The first of the fleet could launch as early as 2024.
The Rise of China’s Space Program
After the top private companies, governments also own a significant portion of satellites orbiting the Earth. The U.S. remains the leader in total satellites, when adding those owned by both companies and government agencies together.
American expenditures on space programs reached $62 billion in 2022, five times more than the second one, China.
China, however, has sped up its space program over the last 20 years and currently has the highest number of satellites in orbit belonging directly to government agencies. Most of these are used for Earth observation, communications, defense, and technology development.
Satellite Demand to Rise Over the Decade
Despite the internet being taken for granted in major metropolitan areas and developed countries, one out of every three people worldwide has never used the web.
Furthermore, the increasing demand for data and the emergence of new, more cost-effective satellite technologies are expected to present significant opportunities for private space companies.
In this context, satellite demand is projected to quadruple over the next decade.
Charting the Depths: The World of Subsea Cables
Hidden beneath the waves and sprawling along the ocean floor, subsea cables account for approximately 95% of international data transmitted.
Charting the Depths: The World of Subsea Cables
Data may be stored in the “cloud,” but when it comes to sending and receiving data, a lot of that action is actually happening along the depths of the ocean floor.
Hidden beneath the waves, these subsea cables account for approximately 95% of international data transmission.
These maps, by Adam Symington, use information from TeleGeography to show the distribution of subsea cables around the planet.
Wired for Connectivity
It’s estimated that there are nearly 1.4 million kilometers (0.9 miles) of submarine cables in service globally. They ensure emails, content, and calls find their way, linking colossal data centers and facilitating worldwide communication.
Currently, there are 552 active and planned submarine cables:
Submarine cables harness fiber-optic technology, transmitting information via rapid light pulses through glass fibers. These fibers, thinner than human hair, are protected by plastic or even steel wire layers.
Cables usually have the diameter of a garden hose, but often with added armor near the shore. Coastal cables are buried under the seabed, hidden from view on the beach, while deep-sea ones rest on the ocean floor.
Length varies widely, from the 131-kilometer CeltixConnect cable, connecting Dublin, Ireland, and Holyhead, UK, to the sprawling 20,000-kilometer Asia America Gateway cable, connecting San Luis Obispo, California, to Hawaii and Southeast Asia:
With the current technology, cables are designed to last 25 years at least but are often replaced because of damage. Nearly two-thirds of cable damage is caused by fishing vessels and ships dragging anchors.
The Bottom Line
Traditionally dominated by telecom carriers, the makeup of the subsea cable market has shifted over more recent decades. Tech giants like Google, Facebook, Microsoft, and Amazon now heavily invest in new cables.
With data demand surging, at least $10 billion is expected to be invested in subsea cables worldwide between 2022 and 2024, driven by cloud service providers and content streaming platforms.
Even with the growth of satellites in telecom, cables still can carry far more data at a much lower cost than satellites. In fact, according to TeleGeography, satellites account for less than 1% of all U.S. international capacity.
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Bank of England’s Bailey Signals Rate Hikes May Be Near an End
Bank of England governor Andrew Bailey said UK interest rates are probably “near the top of the cycle” because a further “marked” drop in inflation is likely this year, a sign that the central bank may bring to an end its quickest tightening cycle in three decades.
(Bloomberg) -- Bank of England governor Andrew Bailey said UK interest rates are probably “near the top of the cycle” because a further “marked” drop in inflation is likely this year, a sign that the central bank may bring to an end its quickest tightening cycle in three decades.
Testifying to Parliament, Bailey and two colleagues from the nine-member Monetary Policy Committee sent the clearest signal yet that the BOE is worried that further tightening could cause an unnecessarily harsh recession.
The governor said much of the surge in the key rate to 5.25% from 0.1% at the end of 2021 is yet to be felt. The impact of soaring mortgage costs and the sharpest cost-of-living squeeze in generations is weighing heavily on households, darkening an already gloomy outlook.
“We’ve definitely got a substantial amount of transmission to come,” Bailey told lawmakers Wednesday in London. “It appears that there is a longer transmission, that the lags are longer. We have to factor that in our policy decision.”
The pound fell to a three-month low after the remarks, and investors reined in bets for further rate hikes. The UK currency declined 0.7% against the dollar to below $1.25 for the first time since June, with markets interpreting the comments as evidence of a dovish policy shift.
Inflation was in double digits at the start of the year but has now dropped to 6.8%. Bailey said, “indicators are signaling the fall in inflation will continue” and that in terms of rates, “we are much nearer the top of the cycle.”
His hint about that the BOE may have little more to do to return inflation to the 2% target built on comments made last month by other MPC members. Deputy Governor Ben Broadbent and Chief Economist Huw Pill argued that rates are likely to remain higher for longer. Pill added that a steady level of high rates was preferable to a spike up followed by a steep fall.
Taken together, the comments suggest a majority of the BOE’s nine-strong committee is preparing for a pause in policy. Investors have fully priced in two more quarter-point rate hikes by February, but in recent days market pricing has introduced doubts about one due at the next meeting on Sept. 21.
Major central banks have been shifting their policy stance amid signs that the aggressive moves since 2021 are taming inflation and curtailing activity. The annual US Federal Reserve conference last month in Jackson Hole, Wyoming, cystalized some of that thinking, with Chairman Jerome Powell suggesting rates will remain high for some time but that officials will move “carefully.”
The BOE’s tone about the UK has changed sharply in the past few months. In February, the central bank delivered its biggest ever upward revision to growth forecasts, erasing the prospect of a recession this year.
Last month, the Office for National Statistics said the UK performed more strongly than expected during the pandemic in 2021, raising Britain above Germany in terms of growth in the Group of Seven.
“We’ve been telling a story about the fact that we think the economy has been more resilient than we expected to be and of course, the revision helps with that story,” Bailey said.
More recent data tracking the sentiment of purchasing managers and for retail sales showed unexpected weakness, with surveys indicating businesses and consumers are feeling an increasing strain from higher rates.
The apparent shift in sentiment at the BOE has come despite faster than expected wage growth last month. Rather than stress the overshoot, Deputy Governor Jon Cunliffe, who appeared before MPs alongside Bailey, said the economic “evidence is mixed, which is what you expect when you come into periods where you might be close to turning points.”
Also testifying, Swati Dhingra, an external member of the MPC who has voted to hold rates for months, dismissed the pay data as a “lagging indicator.” She said policy was restrictive enough already and any further rate rises risk hurting growth.
“A recession poses a risk to our inflation mandate so that is something we would not like to happen at all,” Dhingra said. Cunliffe agreed and clarified that a recession would potentially lead to an inflation undershoot, which would not comply with the 2% mandate.
Asked about the risk of a recession, Bailey warned: “We can’t always say we will avoid it.” Headline inflation may tick higher when figures for August are released on Sept. 20 but a small increase wouldn’t change his overall outlook for a marked decline, he added.
“Inflation is coming down, and our sort of short term forecast is performing better. I think it is, I should say possible that we will get a tick up in the next release because fuel prices went down in August last year and went up a bit in August this year.”
Cunliffe said credit conditions were tightening and company indebtedness is climbing “but nowhere near to the levels that we’ve seen in past peaks.” “I don’t think we’re seeing anything like a credit crunch at the moment.”
Elisabeth Stheeman, a member of the BOE’s financial policy committee that oversees financial stability, warned that the committee is worried about the impact of high rates on commercial real estate.
--With assistance from Eamon Akil Farhat, Andrew Atkinson and Katherine Griffiths.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Interest Rates |
Long-term care in residential facilities like nursing homes is a financial challenge for many. When dealing with a loved one who is disabled, elderly or ill, families often try every other kind of long-term care facility first. Because nursing homes provide more health care services than some of the other options, the cost is significantly higher. Before committing to a nursing home, explore both assisted living and in-home care and compare their services and costs. You only need a nursing home for rehabilitation or long-term care when you require skilled nursing and help with assisted living services. If you’re thinking about how to cover nursing home costs, it may help to speak with a financial advisor. Try SmartAsset’s free advisor matching tool today.
Nursing Home Costs
Nursing homes differ from assisted living since there is 24-hour per day skilled nursing available to attend constantly to the medical needs of the patients. Nurses may be registered nurses, licensed practical nurses or certified nursing assistants available depending on the level of care offered by the facility. Nursing homes also provide help with daily living activities.
A Genworth Financial Cost of Care Survey in 2020 found that the average daily cost of a semi-private room is $7,756 per month or over $93,000 per year. Alaska is the most expensive state for nursing home care while Texas is the cheapest. Sometimes, individuals only need a short-term stay in a nursing home. More often, nursing home stays are longer in nature. The National Center for Health Statistics published a 2019 report that said the average length of stay in a nursing home is 485 days. This cost is only for basic room and board. If special services are needed, that’s extra.
The national median cost for a nursing home stay is $255 per day and $7,756 per month for a semi-private room. For a private room, which jumps up to $290 per day and $8,821 per month. For assisted living, the national median cost is $4,300 and $4,576 for in-home care with caregivers.
Private Pay
If you have access to Home Health Services, they can provide in-home help for up to 35 hours per week paid for by Medicare. The in-home care has to include skilled nursing care although Home Health can help with light housekeeping duties. You will have even better luck using Home Health Services for rehabilitative care. Medicare will cover occupational therapy, speech therapy and physical therapy at home for up to 60 days. You must have a physician approve a plan of care and go through a certified Medicare agency.
If you need longer term nursing home care, or even permanent nursing home care, then you have to weigh your payment options. Some take out a reverse mortgage to help defray the costs. A reverse mortgage taps into the equity you already have in your home. Before taking out a reverse mortgage, carefully study the terms of the mortgage and verify the credentials of the lender. A reverse mortgage does have to be paid back although they are usually paid back when the house is sold.
Others tap into retirement accounts. If you have a 401(k) or similar account or a traditional Individual Retirement Account (IRA), then you should speak with a tax advisor or financial advisor to determine the tax implications of liquidating your account before you do anything.
Long-Term Care Insurance
Long-term care insurance is a great option to pay for nursing home care if you have planned ahead and have had a policy for several years. It pays for certain expenses of in-home care, depending on the policy. All long-term care insurance policies are not created equally. Older policies, particularly, are very variable in their terms. You don’t want to spend years paying a premium for a long-term care insurance policy and then have it be of little use. However, after 65, 70% of us are going to need long-term care for some reason at some point, so it pays to be prepared.
Many of the newer long-term care policies are attached as riders on permanent life insurance policies. The rider allows the policyholder to access some of the face value of the life insurance policy to pay for long-term residential care like nursing home care. It’s often wise to ask a financial advisor for help in choosing a long-term care insurance policy since they tend to vary widely, and you don’t want to pay for something that you won’t be able to use.
It’s important to know that most long-term insurance policies do not cover pre-existing conditions – those that you might have before you take out the policy. These would include diabetes, cancer and heart disease. These policies also usually do not include long-term care for things like alcoholism, drug abuse or addiction, mental illnesses or self-inflicted wounds.
Medicare
Medicare will usually cover the first 100 days of a nursing home stay. It is for short-term intense rehabilitation from an injury or short-term illness. It does not cover long-term nursing home stays unless you buy a Medicare Advantage policy (Part C) and that policy has nursing home coverage. A Medicare Advantage policy has benefits you pay for over the original Medicare. Check with the provider before you buy a Medicare Advantage policy if you want nursing home coverage.
Medicaid
Medicaid is usually the funding source of last resort for nursing home care, but unless you are wealthy or have a good long-term insurance policy, many people have to resort to Medicaid. There is a Medicaid program in every state that pays for nursing home care if you can’t pay for it yourself.
Medicaid involves strict and complicated “means testing” of your income level and your assets. In general, an applicant over 65 cannot have more than $2,523, in 2022, in income each month. For a married couple, your income cannot exceed $5,046 per month. There is also an “asset test” with Medicaid to determine eligibility. You can have no more than $2,000 in assets to qualify for Medicaid to pay for your nursing home stay. Your home, car and home furnishings are usually exempt. The spouse can have no more than $2,000 in assets. Your bank records are also analyzed to make sure you have not made a large transaction in the past 2-5 years that would look like you were transferring assets to avoid liquidation by Medicaid.
Bottom Line
Affordable long-term care for the elderly or the disabled is an important issue and ongoing problem in the U.S. Deciding on options for yourself or an elderly relative is a complicated process. In some cases, you can use a mixture of private pay and a government program. In other cases, a government program may have to pick up some or all of the cost if you need extended care for a long time or permanently.
Tips on Extended Care
A financial advisors may be able to help you find long-term care options. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Retirement and long-term care planning aren’t always easy. For help, check out SmartAsset’s Retirement Tax Calculator that helps you determine the friendliest state to retire in, from a tax perspective.
Photo credit: ©iStock.com/FG Trade, ©iStock.com/shapecharge, ©iStock.com/Ridofranz | Personal Finance & Financial Education |
Only 6% of Global Sovereign Debt is AAA Rated Now
Following Fitch’s historic downgrade of US government debt in August, only 6% of the total sovereign debt outstanding still holds the top rating of AAA. As a result, the value of junk-rated bonds has exceeded those with the highest rating for the first time, a historic first for the bond market.
Just $5 Trillion of Government Debt is Still Top-Rated
For the first time, the worth of junk-rated government debt now exceeds top-rated bonds – a shift prompted by Fitch Ratings’ downgrade of the $33 trillion US debt to AA+ from AAA.
Because of it, only $5 trillion of government debt still holds the top rating, making it a smaller group than debt with a sub-investment grade, Fitch said in a Tuesday statement. This means that the portion of top-rated government bonds has declined to only 6% of the total debt outstanding, down from more than 40%.
“‘AAA’ had previously always been the largest sovereign rating category, measured by outstanding debt, notwithstanding the fall in the number of ‘AAA’ rated sovereigns since the eurozone crisis.”– Fitch Ratings said in a Tuesday statement.
Germany, Singapore, Switzerland, and Australia are also countries with top-rated government bonds at Fitch.
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Why are Bond Credit Ratings Important?
Sovereign credit ratings are assessments provided by rating agencies like Fitch, Moody’s, and S&P that evaluate a country’s creditworthiness. These ratings are essential for international investors, governments, and financial institutions as they offer insights into a nation’s ability to meet debt obligations.
Agencies offering bond ratings base their evaluations on economic stability, political risk, fiscal policies, and debt levels. Significant upgrades or downgrades by Fitch and other rating agencies are closely watched because they signal shifts in a country’s financial health and can affect its access to global capital markets.
In early August, Fitch reduced the US long-term foreign-currency issuer default rating from AAA to AA+, citing “expected fiscal deterioration over the next three years,” an erosion of governance, and a mounting general debt burden.
Although it was seen as a historic move, Fitch’s downgrade of the US credit rating is unlikely to impact the economy substantially. First of all, the demotion was not a huge drop. Even at AA+, the US is still seen as highly creditworthy.
Additionally, the issues cited by Fitch were not news. It has been known for a while that the US debt is on an unsustainable trajectory, and the country’s lawmakers struck a deal to raise the debt ceiling and reduce deficits by $1.5 trillion two months before Fitch’s downgrade. For that reason, the move has been largely dismissed by economists and analysts.
Do you think implications could worsen if other major agencies follow suit and downgrade the US credit rating? Let us know in the comments below. | Bonds Trading & Speculation |
Eric Trump got a little testy on the stand Thursday—moments before he was caught lying about his knowledge regarding his father’s financial statements.
After claiming that he had “never worked” on the Trump Organization’s statement of financial condition” and wasn’t aware of it until the bank fraud trial “came to fruition,” the taller Trump brother admitted he was in fact aware of them dating as far back as 2013.
The “gotcha” moment has big implications for how the rest of this case will unfold.
Trump’s sons Eric and Don Jr. spent the majority of Wednesday and Thursday on the stand, where they conveniently seemed to have forgotten many details about serving as the Trump Organization’s top executives.
The brothers’ have largely skirted specifics, blaming their faulty memories for the total lapses. Don Jr. claimed he could not remember the period in 2021 in which he was removed and then reinstated as a trustee of the Donald J. Trump Revocable Trust, couldn’t remember if his father was a trustee, had no idea why his father added himself back as a trustee during his presidency, and claimed he could not recall if he had worked on his father’s statement of financial condition.
Instead, the brothers’ testimony has attempted to divert most of the responsibility regarding the faulty financial statements onto the companies’ accounting team, including former CFO Allen Weisselberg, as well as their accounting firm, Mazars USA.
Yet Eric’s contradiction to his own deposition also shines a light on the prosecution’s strategy, which has been able to question the brother’s credibility without outright calling him a liar. Essentially, Eric has already revealed that his claims of having no knowledge were “at best, based on a very faulty memory and at worst, constituted deliberate falsehoods,” reported NBC News.
Both Donald Trump and his two sons are defendants in the $250 million New York bank fraud trial in which the trio stands accused of deceiving banks and insurers by massively overvaluing the elder Trump’s net worth.
That figure was sometimes off by as much as billions of dollars, the president’s former fixer, Michael Cohen, revealed last week.
So far, Judge Arthur Engoron has ruled that Trump and his sons committed fraud and has stripped the Trump Organization of its business certificates. Trump is also fighting hard to appeal that decision.
Trump and Ivanka are set to testify next week, though the heiress is working to appeal Engoron’s ruling that she must participate. | Banking & Finance |
How do you deal with the ballooning cost of medical care? The answer for a growing number of Americans: Pay it with plastic.
Medical credit cards, once limited to esoteric procedures that weren't covered by insurance, have grown in popularity in the past decade as health care costs have continued to rise and Americans are spending more out-of-pocket for even routine procedures.
But these products can cause trouble for patients, with many of them overpaying for specialized medical finance products, signing up for contracts they don't understand or, in the worst-case scenario, piling on debt they can't get out of, according to a recent report from the Consumer Financial Protection Bureau.
"These new forms of medical debt can create financial ruin for individuals who get sick," CFPB Director Rohit Chopra said in a statement.
More middlemen
Millions of patients are using this type of financing. CareCredit, a subsidiary of Synchrony Financial and one of three major medical cards examined in the report, has 11.7 million cardholders this year, triple the number a decade ago, the CFPB found.
Medical credit cards or installment loan companies pitch their services to doctors promising to save them time and money. Hospitals are drawn to these types of plans because they get paid upfront by banks for their services, Crain's Chicago reported last September.
"Lenders, for their part, see an opportunity to capitalize on the growing gap between the cost of medical care and what many Americans can afford," the outlet wrote.
PrimaHealth Credit, one loan provider highlighted by the CFPB, promises on its website to "generate up to 20% more revenue" for medical providers. "We take care of payment processing, resolve past due accounts and handle all credit reporting, so you don't have to," the company claims.
PrimaHealth founder and CEO Brendon Kensel said most patients use this financing for dental and orthodontic work, while the company also offers financing for procedures like outpatient surgery, LASIK, cosmetic surgery and hair replacement services. The APR for this loan can rise to 24.99% for someone with a low credit score, according to the site.
PrimaHealth has two classes of patients, according to its website and the CFPB. For people with good credit, PrimaHealth pays the medical provider upfront, minus a fee. But for patients with worse credit, the provider receives payment only as the patient pays off their bill.
Because "the provider carries the risk of the patient not paying their full bill," the CFPB writes, being signed up with PrimaHealth could lead providers to avoid patients they see as a credit risk, such as "people with limited English proficiency, older Americans, and people with lower incomes," the agency writes.
Kensel took issue with the CFPB's analysis, saying the service extends access to those who can't pay for care upfront. "The high cost of health care is really the crisis in the U.S.," he told CBS MoneyWatch. "Historically, only people with good credit get approved for finance. In my view, unequal access to finance leads to inequality."
Kensel, who ran an orthodontics practice before starting PrimaHealth, blamed inadequate health insurance coverage for the cost crisis. Asked whether doctors should consider lowering their fees, Kensel demurred, saying that most medical costs were "predictable" but that health plans often skimped on dental and orthodontic work, which is often considered "elective."
"Most people don't have an extra $5,000 lying around, and being able to access a monthly payment plan is the difference between being able to access care for their kids and not," he said.
Poor decisions
The CFPB questions whether specialized medical financing truly expands access to the underinsured. Instead, the bureau writes, formal financial services like medical credit cards or installment plans have come to replace informal, often zero-interest payment plans offered directly by health care providers.
That added convenience for doctors can come at a high cost to patients. Patients, who are often pitched these financial products in the midst of trying to make medical decisions, often miss crucial financial details like the interest rate on a loan or its specific payment terms, the CFPB found. And doctors aren't penalized if they suggest a less-than-ideal financial product because they're not bound by the same laws that bankers are, as some legal experts have noted.
"The employees at medical offices are selling a product they know little about without fully disclosing the terms and conditions to their patients," one patient complained to the CFPB.
Another patient described being signed up for a CareCredit card by their dental office, which pitched it as an interest-free payment plan costing less than $100 a month, only to be charged $1,400 in interest two years later. And one consumer told the CFPB their household was signed up for a credit card with no notification whatsoever.
"I am a senior citizen and went to a dentist office in my area to have them do a routine check up on my wife's teeth. They only did two x rays, yet I received a bill for $14,000 for services she never received or we agreed for. The dentist office opened up a credit card in my name in order to pay for these services without my consent," wrote the person, adding that they "do not speak good English."
"I never received any receipts or copies of anything until I received a bill in the mail from the credit card company," the person wrote, according to the CFPB.
$1 billion in interest payments
Patients using specialized medical cards wind up paying far more in interest than they would have in other circumstances — even paying with a general credit card. Many cards, for instance, offer an interest-free period, during which interest on a health procedure builds up but isn't charged to the patient. If the person doesn't pay off their entire debt during this time, they can be forced to pay a high amount of interest all at once.
"Our research suggests that many patients — specifically those who are unable to pay off a deferred interest product during the promotional period — can pay significantly more than they would otherwise pay," the CFPB noted. "Interest rates for medical financing products are generally higher than the interest rates for other products, such as general purpose credit cards," the report found.
In the three years between 2018 and 2020, people using medical cards or installment plans incurred $1 billion in deferred interest, the CFPB found.
Since medical finance offers are basically indiscriminate, according to the report, patients who find themselves on the receiving end of such a pitch should do their own research, the CFPB advised. For instance, they shouldn't assume that a finance-ready medical procedure won't be covered by insurance.
Hospital patients also should inquire about reduced costs through charity care — discounts for poor patients that nonprofit hospitals are required to offer as a condition of their tax-exempt status.
for more features. | Personal Finance & Financial Education |
Manga Artists, Taxi Drivers Hit As Japan Tax Frustrations Mount
About 4.6 million businesses that were previously exempt from paying sales tax have been impacted by a new invoice system.
(Bloomberg) -- From manga artists to independent taxi drivers, Japanese freelancers and small businesses frustrated with the potential loss of a tax break are among the growing numbers pushing down Prime Minister Fumio Kishida’s approval rating to record lows.
About 4.6 million businesses that were previously exempt from paying sales tax have been impacted by a new invoice system that came into operation last month, according to the Cabinet Secretariat.
Exempt businesses that pocketed the sales tax they charged clients will now have to hand that extra income over to the government if they adopt the system. Those that don’t switch to the new procedure may lose customers or face demands to lower their prices. All those embracing the new invoices will have a lengthier billing process to follow.
The new system comes amid growing dissatisfation over Kishida’s stance on taxation, a factor that has driven down public support despite his unveiling of a ¥17 trillion ($115 billion) economic package.
“The number of people affected who think this is unfair isn’t small, so it’s one reason for his unpopularity, though not the biggest reason,” said Mari Iwashita, chief market economist at Daiwa Securities Co., referring to the invoice system.
The introduction of the new invoice system should help bring in more tax revenue for the government and will clarify whether companies have paid the full 10% sales tax rate or a lower 8% rate applied to certain goods in Japan.
Freelancers and small businesses making less than ¥10 million ($65,900) a year remain exempt from paying the tax if they stay outside the invoice system. But their clients will be less willing to shell out the levy if they can no longer include the payment in their own tax accounts.
The situation has created a movement of hundreds of thousands of independent contractors and freelancers protesting against the government. Some of the protesters marched with posters in front of Kishida’s residence at the end of September. A campaign called Stop Invoice has garnered over 560,000 signatures on an online petition so far.
Some of them argue that the extra money they get to keep without the invoice system is an important part of the income for low earning freelancers and small businesses.
“The biggest problem for us is that we’ll lose our vital assistants,” said manga artist Leon Yutaka in a speech at the protest in front of Kishida’s building. “They have very low annual incomes to begin with. If they have to pay consumption tax, they are going to start wondering why they’re even doing this job.”
Another source of frustration is the extra administrative work needed. An online poll of around 1,500 companies conducted in October by Teikoku Databank Ltd. said that over 90% of the businesses had concerns about the new setup, with 70% citing the increased workload of the billing process as the top reason.
Kishida’s government has explained that the new set up is necessary to increase transparency, especially for the transaction of goods that have the reduced tax rate. Economists say the system is largely in line with procedures overseas and helps ensure that the sales tax is getting paid by all.
Various support measures have been put into place by the government to ease the burden on businesses, such as transitional tax deductions, and the expansion of IT subsidies for small businesses who use the invoice system.
Still, the invoice system is one of the tax issues weighing on Kishida’s popularity.
Opinion polls over the weekend showed Kishida’s support dropping into the lower half of the 20% range. A government move to return a portion of income tax has drawn unexpected criticism from voters unhappy that it won’t deliver any cash until early next summer.
The surveys showed respondents are also concerned about the impact of the tax rebate on Japan’s finances, with long-term funding still undecided for Kishida’s ramped-up spending on defense and measures to raise the nation’s birthrate.
The new invoice system is estimated to increase tax revenues by about ¥248 billion ($1.6 billion) according to 2019 data from the Ministry of Finance, so it’s unlikely Kishida will consider any U-turn.
“As social security costs increase due to the rapidly aging population, consumption tax is seen as a source of revenue that will be broadly and fairly shared among all generations,” Kishida said in parliament last month. “Thus, we do not plan to lower the sales tax rate, or scrap the new system.”
--With assistance from Isabel Reynolds.
©2023 Bloomberg L.P. | Asia Business & Economics |
Did right by people in our region
Residents of North Texas owe Rep. Kay Granger a debt of gratitude for her years of service. Always civil, considerate and sane. She worked for years to keep our aircraft industry alive and well, flooding under control and technology companies relocating to our region.
As the first woman to serve as mayor of Fort Worth, Granger faced a development crisis, the possible loss of Carswell Air Force Base and high crime rates. She rolled up her sleeves and went to work. She served us for decades in Congress, making friends and wielding influence. Her voice of sanity in Washington will be missed. We can only say, “Thank you and well done.”
- Wanda Conlin, Fort Worth
Good education, smaller price
The Nov. 24 front-page story “TCU approves largest tuition increase in over a decade” reminded me of my own college experience. I went to a state public university, received an excellent education in liberal arts and graduated without a dime in unpaid loans. In all my years of a business career, I was never asked once where I went to school or what my grade-point average was. Rising to an executive level wasn’t based on where I went or how much it cost.
Those who believe that going to a so-called prestigious university and studying under highly paid professors is the only way to a higher salary or better job are being fooled. College is a time for growing up, getting a sense of one’s identity and finding a potential direction. Graduating with ten of thousands of debt inhibits all that.
- Rick Weintraub, Mansfield
Flu shots are insurance for all
“Pay me now or pay me later” was a tagline for an auto repair shop years ago. I believe it applies to whether Tarrant County should provide free flu shots to the uninsured. The Nov. 26 editorial “Flu shots for the uninsured would save county money” (4C) made a strong argument for such an initiative.
It should not be limited to flu shots, though. Such a funding initiative should include several inoculations and other health needs.
It does not require an advanced degree in mathematics or statistics to see the long-term savings of preventing illness and hospitalization. It is called preventive care because it comes first and reduces the need later.
- Larry Anderson, North Richland Hills
Biden has handled economy well
Nicole Russell thinks President Joe Biden’s economy is a nightmare? (Nov. 21, 11A, “Biden economy is an American nightmare”) Our government is battling inflation while holding off a recession. Interest rates are high, but they are regulated by the Federal Reserve, not the president. What is the bigger picture of Bidenomics? Workforce participation is at a 54-year high. Biden’s “Investing in America” is restoring aging infrastructure and creating jobs. Corporate earnings this past summer exceeded expectations.
Some politicians who did not vote for Bidenomics are taking credit for the results. Inflation may push us to juggle shopping choices, but we can celebrate the holidays knowing more Americans are working and paying taxes than we have seen in decades.
- Loveta Eastes, Fort Worth
Ted Cruz versus the truth
Seeking the spotlight, Sen. Ted Cruz has again spread false information online. He claimed that the incident on a bridge between Canada and the United States was a terrorist attack. It was not.
Had he acted responsibly and waited for the result of the investigation, he would have learned differently before broadcasting fake news. Cruz again has failed our trust.
- Mark Gilbert, Hurst | Inflation |
Subsets and Splits