“,”elementId”:”8fd4e4d2-bcf6-42e6-bf96-2b4218e7a3a0″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The economics thinktank said that the additional funding will be needed to achieve the £24bn package of aid announced in May, largely because the forecast increase in energy prices over the next year has jumped from 95% to 141%.
“,”elementId”:”e3da1285-1327-4fd8-ba93-1d91e4498136″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
This means that working age benefit claimants are now on course to see their real income fall by £620 over the year.
“,”elementId”:”66221aad-147d-4653-81ac-9f332f87645f”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The IFS says that the government would need to double the current £650 grant to those on benefits to protect them, as well as help low income pensioners and families in work, at a cost of £5.5bn.
“,”elementId”:”9a93ec30-c791-44ed-bb34-a956f4d8cd7e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Similarly, the cost of maintaining the £150 council tax rebate and £400 energy discount will now cost the government another £7bn if it wants to continue to cover around half the increase in costs a typical family will be hit by over the year.
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Paul Johnson, director of the IFS, said:
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n
As prices of essentials including food, heating and fuel continues to rise, families on low-incomes are facing more uncertainty and pressures. The government is still playing catch up as inflation and the cost of energy continue to spiral upwards. Just achieving what they wanted to achieve back in May will cost an additional £12bn, and a package on that scale will still leave many households much worse off.
n
“,”elementId”:”65830bad-aead-408b-ae7d-15f17b1bd21d”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1660549209000,”blockCreatedOnDisplay”:”03.40 EDT”,”blockLastUpdated”:1660549736000,”blockLastUpdatedDisplay”:”03.48 EDT”,”blockFirstPublished”:1660549736000,”blockFirstPublishedDisplay”:”03.48 EDT”,”blockFirstPublishedDisplayNoTimezone”:”03.48″,”title”:”Another £12bn needed to keep UK energy bills support at same level, says IFS”,”contributors”:[{“name”:”Mark Sweney”,”imageUrl”:”https://i.guim.co.uk/img/static/sys-images/Guardian/Pix/pictures/2007/10/16/mark_sweney_140x140.jpg?width=300&quality=85&auto=format&fit=max&s=b44cb1e0f0dc4a472ded53e6488ba934″}],”primaryDateLine”:”Mon 15 Aug 2022 03.48 EDT”,”secondaryDateLine”:”First published on Mon 15 Aug 2022 03.19 EDT”},{“id”:”62f9e3eb8f083b8f4440140b”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.
“,”elementId”:”ee6dee8e-1c55-4393-9808-ab98a69a5e53″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
China’s economy is showing signs of slowing activity as a series of economic indicators suggested industrial output and retail sales growth were below economists’ expectations.
“,”elementId”:”acd1971e-7046-486c-9526-955316fc3d86″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Oil prices dropped on Monday morning after the data were published; slower economic activity in the world’s second-largest economy would likely lead to less demand for oil. The price of a barrel of Brent crude for October delivery dropped by 0.8% to $97.36, while North American benchmark West Texas Intermediate dropped by 0.9% to $91.13.
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Chinese industrial production still grew, but it was up by only 3.8% on a year-on-year basis (slower than the 4.3% growth expected), whilst retail sales were up 2.7% year-on-year, significantly slower than the 4.9% expected rate. The data suggest that both industry and consumers may be reining in spending, while there were also signs that China’s property market is also struggling. Property has long been a source of growth, but economists have been questioning its sustainability.
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It was a “sharper loss of momentum than expected”, said Craig Botham, chief China+ economist at Pantheon Macroeconomics, a consultancy. He said:
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n
The slowdown in Chinese industrial production supports the narrative that stronger performances in May and June were primarily the result of a reopening rebound, and that with order backlogs now cleared, China’s factories will increasingly run idle once more.
n
“,”elementId”:”30de5630-e5c5-479c-897d-383e89762559″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”
Shock July data out of China as economy battles Covid Zero, weakening demand, housing slump. Yoy:
Retail sales 2.7%; est. 4.9%
Industrial output 3.8%, est. 4.3%
Home sales -28.6%
Property investment -12.3%
Crude steel output -6.4%Youth unemployment rises to record 19.9%
— Richard Frost (@frostyhk) August 15, 2022
n”,”url”:”https://twitter.com/frostyhk/status/1559004644080500741″,”id”:”1559004644080500741″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”f712a77a-a132-4380-8338-a3ce0bda0050″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The People’s Bank of China, the country’s central bank, quickly responded by cutting borrowing costs over one week and one year, in a bid to get more money into the economy.
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The cut was “a surprise move” to cut interest rates to support the economy following “weak” economic data, according to Mohit Kumar, a managing director for interest rate strategy at Jefferies, an investment bank.
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Julian Evans-Pritchard, senior China economist at Capital Economics, a consultancy, said:
“,”elementId”:”b562cf99-efa6-4ac1-ab0b-a738ca00b78a”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
n
The July data suggest that the post-lockdown recovery lost steam as the one-off boost from reopening fizzled out and mortgage boycotts triggered a renewed deterioration in the property sector. We think the outlook will remain challenging in the coming months as exports turn from tailwind to headwind, the property downturn deepens, and virus disruptions remain a recurring drag.
n
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You can read more on the China data here:
“,”elementId”:”c86a45dc-e3b2-488c-82ad-cd79c69fd7a0″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2022/aug/15/china-economy-slows-unexpectedly-as-covid-and-property-crisis-bite”,”text”:”China’s economy slows unexpectedly as Covid outbreaks and property crisis bite”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”bc38cb29-bafc-4a73-a133-9a1b9a8749d9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
In the UK the big news driving the day is Labour leader Keir Starmer, who has returned from holiday with a £29bn plan to freeze energy bills.
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The Guardian’s Andrew Sparrow and Phillip Inman report:
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n
Starmer said the plan would cost £29bn over the winter and that it could be funded by extending the scope of the windfall tax on energy companies (raising £8bn), halting the proposed £400 payments for all households offered by the government to compensate for the price cap rise scheduled for October (saving £14bn), and lowering government interest payments on debt (saving £7bn), which Labour said would be possible because its plan would reduce inflation.
n
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Whether it would reduce inflation in the longer term is open to debate, but the move will certainly put clear water between Labour and the two Conservative leadership candidates, Rishi Sunak and Liz Truss. Sunak has pledged to spend about £10bn on the crisis, while Truss has not revealed costings of how she will support households. Truss is seen as the frontrunner in the race because of her poll lead among Conservative party members.
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Remember, how the government responds is seen as the key variable in how the UK economy will perform in the coming months. The Bank of England’s forecasts of a long recession and 13% inflation are predicated on fiscal policy staying the same. That seems unlikely, given the huge scale of energy price increases expected in the winter if wholesale oil and gas prices remain high.
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important event
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The economics thinktank said that the additional funding will be needed to achieve the £24bn package of aid announced in May, largely because the forecast increase in energy prices over the next year has jumped from 95% to 141%.
“,”elementId”:”e3da1285-1327-4fd8-ba93-1d91e4498136″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
This means that working age benefit claimants are now on course to see their real income fall by £620 over the year.
“,”elementId”:”66221aad-147d-4653-81ac-9f332f87645f”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The IFS says that the government would need to double the current £650 grant to those on benefits to protect them, as well as help low income pensioners and families in work, at a cost of £5.5bn.
“,”elementId”:”9a93ec30-c791-44ed-bb34-a956f4d8cd7e”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Similarly, the cost of maintaining the £150 council tax rebate and £400 energy discount will now cost the government another £7bn if it wants to continue to cover around half the increase in costs a typical family will be hit by over the year.
“,”elementId”:”41a2ac91-c610-4269-9a53-62cf6460acc1″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Paul Johnson, director of the IFS, said:
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n
As prices of essentials including food, heating and fuel continues to rise, families on low-incomes are facing more uncertainty and pressures. The government is still playing catch up as inflation and the cost of energy continue to spiral upwards. Just achieving what they wanted to achieve back in May will cost an additional £12bn, and a package on that scale will still leave many households much worse off.
n
“,”elementId”:”65830bad-aead-408b-ae7d-15f17b1bd21d”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1660549209000,”blockCreatedOnDisplay”:”03.40 EDT”,”blockLastUpdated”:1660549736000,”blockLastUpdatedDisplay”:”03.48 EDT”,”blockFirstPublished”:1660549736000,”blockFirstPublishedDisplay”:”03.48 EDT”,”blockFirstPublishedDisplayNoTimezone”:”03.48″,”title”:”Another £12bn needed to keep UK energy bills support at same level, says IFS”,”contributors”:[{“name”:”Mark Sweney”,”imageUrl”:”https://i.guim.co.uk/img/static/sys-images/Guardian/Pix/pictures/2007/10/16/mark_sweney_140x140.jpg?width=300&quality=85&auto=format&fit=max&s=b44cb1e0f0dc4a472ded53e6488ba934″}],”primaryDateLine”:”Mon 15 Aug 2022 03.48 EDT”,”secondaryDateLine”:”First published on Mon 15 Aug 2022 03.19 EDT”},{“id”:”62f9e3eb8f083b8f4440140b”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.
“,”elementId”:”ee6dee8e-1c55-4393-9808-ab98a69a5e53″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
China’s economy is showing signs of slowing activity as a series of economic indicators suggested industrial output and retail sales growth were below economists’ expectations.
“,”elementId”:”acd1971e-7046-486c-9526-955316fc3d86″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Oil prices dropped on Monday morning after the data were published; slower economic activity in the world’s second-largest economy would likely lead to less demand for oil. The price of a barrel of Brent crude for October delivery dropped by 0.8% to $97.36, while North American benchmark West Texas Intermediate dropped by 0.9% to $91.13.
“,”elementId”:”8f2e8187-d343-4fcb-ba3c-f3b3faafd6f6″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Chinese industrial production still grew, but it was up by only 3.8% on a year-on-year basis (slower than the 4.3% growth expected), whilst retail sales were up 2.7% year-on-year, significantly slower than the 4.9% expected rate. The data suggest that both industry and consumers may be reining in spending, while there were also signs that China’s property market is also struggling. Property has long been a source of growth, but economists have been questioning its sustainability.
“,”elementId”:”2951e62e-02db-4cc8-b96d-101f1b0889b5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
It was a “sharper loss of momentum than expected”, said Craig Botham, chief China+ economist at Pantheon Macroeconomics, a consultancy. He said:
“,”elementId”:”a4e93eb9-7f37-4ab2-9f09-680db47c385d”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
n
The slowdown in Chinese industrial production supports the narrative that stronger performances in May and June were primarily the result of a reopening rebound, and that with order backlogs now cleared, China’s factories will increasingly run idle once more.
n
“,”elementId”:”30de5630-e5c5-479c-897d-383e89762559″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”
Shock July data out of China as economy battles Covid Zero, weakening demand, housing slump. Yoy:
Retail sales 2.7%; est. 4.9%
Industrial output 3.8%, est. 4.3%
Home sales -28.6%
Property investment -12.3%
Crude steel output -6.4%Youth unemployment rises to record 19.9%
— Richard Frost (@frostyhk) August 15, 2022
n”,”url”:”https://twitter.com/frostyhk/status/1559004644080500741″,”id”:”1559004644080500741″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”f712a77a-a132-4380-8338-a3ce0bda0050″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The People’s Bank of China, the country’s central bank, quickly responded by cutting borrowing costs over one week and one year, in a bid to get more money into the economy.
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The cut was “a surprise move” to cut interest rates to support the economy following “weak” economic data, according to Mohit Kumar, a managing director for interest rate strategy at Jefferies, an investment bank.
“,”elementId”:”297420fa-cee2-4fe9-a9b5-8229b1d093cf”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Julian Evans-Pritchard, senior China economist at Capital Economics, a consultancy, said:
“,”elementId”:”b562cf99-efa6-4ac1-ab0b-a738ca00b78a”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
n
The July data suggest that the post-lockdown recovery lost steam as the one-off boost from reopening fizzled out and mortgage boycotts triggered a renewed deterioration in the property sector. We think the outlook will remain challenging in the coming months as exports turn from tailwind to headwind, the property downturn deepens, and virus disruptions remain a recurring drag.
n
“,”elementId”:”58bf44c9-51ae-461d-8ac7-c741fc9fc7d1″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
You can read more on the China data here:
“,”elementId”:”c86a45dc-e3b2-488c-82ad-cd79c69fd7a0″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2022/aug/15/china-economy-slows-unexpectedly-as-covid-and-property-crisis-bite”,”text”:”China’s economy slows unexpectedly as Covid outbreaks and property crisis bite”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”bc38cb29-bafc-4a73-a133-9a1b9a8749d9″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
In the UK the big news driving the day is Labour leader Keir Starmer, who has returned from holiday with a £29bn plan to freeze energy bills.
“,”elementId”:”fa8b9b20-87f1-42fa-ac46-50a32bcab0db”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
The Guardian’s Andrew Sparrow and Phillip Inman report:
“,”elementId”:”590930bf-3474-4538-b8ba-94da5d01874f”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”
n
Starmer said the plan would cost £29bn over the winter and that it could be funded by extending the scope of the windfall tax on energy companies (raising £8bn), halting the proposed £400 payments for all households offered by the government to compensate for the price cap rise scheduled for October (saving £14bn), and lowering government interest payments on debt (saving £7bn), which Labour said would be possible because its plan would reduce inflation.
n
“,”elementId”:”a8ca9e0f-4ebe-4725-bf7f-8eb624c84fd9″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/politics/2022/aug/14/labour-announces-plan-to-freeze-energy-price-cap-with-reinforced-windfall-tax”,”text”:”Labour announces plan to freeze energy price cap with reinforced windfall tax”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”bbf1f248-d695-493b-baec-78781e7ba92b”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Whether it would reduce inflation in the longer term is open to debate, but the move will certainly put clear water between Labour and the two Conservative leadership candidates, Rishi Sunak and Liz Truss. Sunak has pledged to spend about £10bn on the crisis, while Truss has not revealed costings of how she will support households. Truss is seen as the frontrunner in the race because of her poll lead among Conservative party members.
“,”elementId”:”081fb67f-3ada-415c-9c58-00977ab38975″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Remember, how the government responds is seen as the key variable in how the UK economy will perform in the coming months. The Bank of England’s forecasts of a long recession and 13% inflation are predicated on fiscal policy staying the same. That seems unlikely, given the huge scale of energy price increases expected in the winter if wholesale oil and gas prices remain high.
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filter beta
An additional £12bn is needed to keep UK energy bill support at the same level, according to IFS
Mark Swenney
According to an analysis by the Institute for Fiscal Studies (IFS), the government has taken additional We have to spend £12 billion.
The economics think tank said additional funding would be needed to meet the £24bn aid package announced in May, largely due to projected increases in energy prices jumping from 95% to 141% next year.
This means that applicants for working-age benefits now have a £620 reduction in real earnings per year.
According to the IFS, the government should double the current £650 subsidy to help low-income pensioners and families to work and protect them at a cost of £5.5bn.
Similarly, the cost of maintaining the £150 local tax rebate and the £400 energy discount, if the government wants to continue covering about half the increase in costs a typical household would incur in a year, It will cost the government another £7 billion.
Paul Johnson,director IFSMoreSaid:
Low-income families face more uncertainty and pressure as the prices of essential commodities such as food, heating and fuel continue to rise. Governments are still catching up as inflation and energy costs continue to rise. Just achieving what they hoped to achieve in May would cost them another £12 billion, and a package of that size would make many households even worse.
The FTSE 100 rose 0.3% in the first minutes of trading this mid-August week, hitting its highest level since early June.
The biggest gainer was RS Group (previously known as Electrocomponents), which has sparked speculation that it may be poised for an acquisition.
Pharmaceutical group AstraZeneca rose 2.5% after it said its breast cancer drug Enheartu showed positive test results.
Stocks in the rest of Europe look positive. Here’s the Reuters snap:
-
European Stox 600 up 0.4%
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French CAC 40 UP 0.4%
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Spain IBEX UP 0.2%
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Eurozone blue chips up 0.4%
-
German DAX up 0.4%
China’s lockdown recovery boost ‘gone away’ amid signs of economic slowdown
good morning. Welcome to live streaming of business, economics and financial markets.
China’s economy is showing signs of slowing activity as a range of economic data suggest industrial output and retail sales growth are weaker than economists expected.
oil price It fell Monday morning after the data was released. A slowdown in economic activity in the world’s second largest economy could lead to a decline in oil demand. The price of a barrel of Brent crude for October delivery fell 0.8% to $97.36, while the North American benchmark West Texas Intermediate fell 0.9% to $91.13.
China’s industrial production still rose, but grew only 3.8% year-on-year (slower than expected growth of 4.3%), while retail sales jumped 2.7% year-on-year, up 4.9%. fell below. % Expected rate. The data suggests that both the industry and consumers may be holding back spending, but there were also signs that China’s property market is also struggling. Real estate has long been a source of growth, but economists have questioned its sustainability.
It was “a steeper-than-expected loss of momentum.” Craig BothamChief China+ Economist pantheon macroeconomics,consultant. He said:
The slowdown in China’s industrial production is theorized that the strong performance in May and June was largely the result of a rebound in reopening, and that the clearing of the backlog of orders has forced factories in China to become increasingly idle again. is backed by
Shock July data out of China as economy battles Covid Zero, weakening demand, housing slump. Yoy:
Retail sales 2.7%; est. 4.9%
Industrial output 3.8%, est. 4.3%
Home sales -28.6%
Property investment -12.3%
Crude steel output -6.4%
Youth unemployment rises to record 19.9%
— Richard Frost (@frostyhk) August 15, 2022
n”,”url”:”https://twitter.com/frostyhk/status/1559004644080500741″,”id”:”1559004644080500741″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”b1fd70e1-f212-42b3-b631-0145698dee74″}}”>
Shock July data from China as economy battles Covid Zero, weakening demand and sluggish housing. Yoi:
Retail sales 2.7%. estimated 4.9%
Industrial output 3.8%, estimated 4.3%
Home sales -28.6%
Real estate investment -12.3%
Crude steel production -6.4%Youth unemployment rises to record high of 19.9%
— Richard Frost (@frostyhk) August 15, 2022
China’s central bank, the People’s Bank of China, responded quickly by cutting weekly and yearly borrowing costs to get more money into the economy.
It said the rate cut was a “surprise move” to cut interest rates to support the economy in the face of “weak” economic data. Mohit KumarManaging Director of Interest Rate Strategy Jeffriesan investment bank.
Julian Evans-PritchardSenior China Economist capital economicsThe consultancy firm said:
July data suggests the post-lockdown recovery has lost momentum. We believe the outlook will remain grim for the month.
You can read more about the Chinese data here.
In the UK, the big news leading the day is Labor leader Kiel Sturmer, who is back from vacation with plans for £29bn. freeze electricity bills.
The Guardian’s Andrew Sparrow and Philip Inman report:
Mr Sturmer said the scheme would cost £29bn over the winter and could be financed by extending the reach of the windfall tax to energy companies (raising £8bn). An increase in the price cap due in October (savings of £14bn) and a reduction in interest payments on government debt (savings of £7bn). This is what the Labor Party plan said would be possible to keep inflation down.
Whether it will lower inflation in the long run is up for debate, but the move certainly brings clear water between Labor and two Conservative leadership candidates, Rishi Sunak and Liz Truss. Snack has pledged to spend around £10bn on the crisis, but Truss has not disclosed the costs of how it will support households. are considered the frontrunners in the race as they are leading.
Remember, how the government responds will be seen as a key variable in how the UK economy will perform in the coming months. The Bank of England’s forecast for a prolonged recession and 13% inflation assumes no change in fiscal policy. If wholesale oil and gas prices remain high, that is unlikely, given the large increase in energy prices expected in the winter.
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