Will US consumer price growth reach its highest level since 1990?
US consumer price growth should accelerate again in October, ending a series of more moderate rises and adding to concerns that high inflation will last much longer than expected.
Consumer prices are likely to have risen 5.8 percent from the same month last year, Wall Street economists forecast before a publication by the Bureau of Labor Statistics on Wednesday. That would be an increase from 5.4 percent in September and the highest value since 1990.
Bloomberg consensus forecasts suggest that prices are up 0.6 percent month on month. Between August and September they rose by 0.4 percent.
Price gains are expected to be more moderate in October once volatile products such as food and energy disappear, but remain high. The core CPI is expected to rise 4.3 percent on an annual basis, compared to 4 percent in September. Growth of 0.4 percent compared to the previous month is expected, twice as much as last month.
Economists and policymakers will scrutinize Wednesday’s data for further signs that inflationary pressures are extending beyond sectors most sensitive to pandemic-related disruptions, such as used cars. Rents and other housing-related expenses are likely to have risen again.
The latest inflation figures come after the last monetary policy meeting of the Federal Reserve. In addition to announcing a reduction in its asset-buying program, the US Federal Reserve more directly recognized the risk of rising inflation and highlighted the serious supply chain disruptions that are adding to today’s price pressures.
Chairman Jay Powell also stressed that the Fed would be ready to use its tools should inflation become a more pronounced problem, although he reiterated that he would eventually expect a pardon once the bottlenecks were resolved. Colby Smith
How much did UK economic growth slow in the third quarter?
The UK economy’s recovery is expected to have slowed significantly in the third quarter, economists said ahead of the release of new data on Thursday. In its latest monetary policy report, the Bank of England forecast that output growth would slow to 1.5 percent in the three months to September, from 5.5 percent in the previous quarter and below previously expected levels.
This would mean that the gross domestic product would be 1.8 percent below the level before the pandemic and thus more than the 0.5 percent gap for the euro zone.
The UK economy is now expected to return to pre-coronavirus levels only in the first quarter of next year, three months later than the BoE expected in August, as growth slows to 1 percent in the last three months of 2021 should slow down The BoE also lowered its forecast for the next year by one percentage point to 5 percent.
“The weaker near-term outlook mainly reflects the impact of supply constraints both domestically and globally, although UK consumer demand is also expected to be somewhat weaker,” the BoE said.
Ellie Henderson, an economist at the wealth management group Investec, forecasts slightly lower growth of 1.4 percent for the third quarter, as the economy is expected to grow by only 0.3 percent in September compared to the previous month. This is because it expects industrial production to be slowed by interruptions in the supply chain and construction activity to have flattened out due to rising production costs.
Henderson said the moderation in headline growth numbers was “no surprise” as the so-called low hanging fruit of the reopening has already been picked. Valentina Romei
Will delivery bottlenecks and the move to e-commerce weigh on UK retail profits?
Next posted better-than-expected third-quarter sales this week, but the apparel and housewares giant was unable to raise its full-year outlook. It warned that the backlog is now waning at a time when supply chain challenges and inflation are hampering consumer spending. A variety of results reports due in the coming days will show how such factors have affected the trade at other UK retailers.
These company updates will also detail the extent to which shopping has shifted into the digital arena after coronavirus restrictions sped a well-documented move away from stationary locations. The share of UK retail sales made online rose to 28.1 percent in September, according to the Bureau of National Statistics – much higher than the 19.7 percent in February 2020.
Marks and Spencer, which publishes half-year results on November 10, has taken steps in the past few months to accelerate its transition to a digital-first company, donating over £ 20 million to a technology fund for investment firm True. The company announced in late August that overall performance had been “encouraging” since the uncertainty at the beginning of 2021.
Meanwhile, the high street chain Primark lacks an e-commerce presence, but the owner Associated British Foods – on September 9th – 18th. Analysts forecast ABF’s operating profit of £ 959m, up from £ 1.02bn according to consensus estimates by FactSet.
From high street to high-end luxury company Burberry reported on Thursday the 11th “As good as [current boss Marco] Gobbetti’s exit, worries about a slowdown in China, a lucrative luxury brand market, had also depressed the share price, ”said Susannah Streeter of Hargreaves Lansdown. Burberry investors “will be keen to look out for any new signs of consumer confidence there.”
M & S’s shares are up more than two-fifths since the start of the year. AB Foods’ shares are down 16 percent. Burberrys are up 12 percent. Harriet Clarfelt