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Colder May puts chill on summer clothing sales as consumer spending falls for second month in a row
Britain’s consumers have reined in spending after an unseasonably cold May prompted a sharp decline in summer clothing sales.
The Office for National Statistics said retail sales dropped by 0.5% in May from a month earlier, the biggest decline in spending this year, after shoppers seemingly had shrugged off Brexit fears earlier in 2019.
Over in the eurozone, Italy’s government is refusing to roll over in its long-running budget battle with Brussels.
Italy will try to change the European Union’s fiscal rules to reduce the role of “structural” budget deficits and to allow more room for investments, the government said on Wednesday, backing a parliamentary resolution by the ruling coalition.
The resolution was tabled by the right-wing League and the anti-establishment 5-Star Movement in the Chamber of Deputies ahead of an EU summit this week.
Newsflash: Inflation in Canada has hit a seven-month high, in contrast to the small slowdown in the UK.
The Canadian consumer prices index jumped to 2.4% per year in May up from 2% in April. More expensive food and transport costs pushed up the cost of living.
CAD CPI above expectations 2.4% (Exp. 2.1%) - BoC preferred measure at 2.1% (Prev. 1.9%) - Citi Surprise Index hovering at best levels in 9yrs pic.twitter.com/9eYBsD6Kkt
Here’s a good thread from the Resolution Foundation on UK house prices...and how buying in London is still simply unaffordable for many.....
New @ONS House Price Statistics out this morning: UK house price growth has slowed substantially over the past two years. From 8.3% in March 2016 (a recent peak) to 1.4% in April 2019 (most recent data). pic.twitter.com/xke44jVvoa
Despite the recent slowdown in house price growth, house prices have grown faster than earnings in recent years. Since April 2011, house prices have grown by 36% while earnings have grown by 13%. pic.twitter.com/bV4lT46HJV
London house prices are lower today than two years ago. The average London house price is now £472,000, down from a peak of £489,000 in July 2017. pic.twitter.com/ELyab2pLq0
But despite being lower than a year ago, house prices in the capital have increased six times faster than earnings since early 2011 – meaning that home ownership in London is far out of reach for many families. pic.twitter.com/rncBhQWzPQ
In other news, Britain’s factories are stalling as Brexit weighs on the economy.
The CBI’s latest industrial trends showed that manufacturing output slowed to a halt in the three months to June, the slowest growth since April 2016.
“The bringing forward of planned closures to car manufacturing plants had a real impact and led to manufacturing output grinding to a halt. While the picture elsewhere in the sector was more benign, total orders weakened once again revealing some underlying causes for concern.
“There’s clear evidence that Brexit uncertainty is really biting, with our surveys showing volatility in both stocks and output in recent months. Firms are desperate to see an end to the current impasse – that means securing a Brexit deal that can not only command the support of parliament and the EU, but prioritises the protection of jobs and the economy.”
@CBI_Economics Industrial Trade Survey showed a sharp decline in motor vehicle production puts brakes on manufacturing output. The latest @SMMT data indicates that UK car production fell by 44.5% in April. YTD car production is over 22% lower y-o-y. pic.twitter.com/8iukZqYXBk
CBI says UK manufacturing output for the three months to June flat. Rises in ten industries completely offset by the worst fall in car manufacturing output since the financial crisis. #Brexit uncertainty biting.
Weak June #CBI#industrial trends survey points to poor end to a very difficult Q2 for #manufacturers. Orders balance at 32-month low in June, seemingly primarily due to poor domestic demand. Output balance for past 3 months flat (weakest since Apr 2016) https://t.co/vQLuqzhPv6
Despite falling over the last year, London house prices have still more than doubled over the last 15 years.
Housing expert Noble Francis of the Construction Products Association points out that low interest rates have helped push up mortgage affordability -- which puts asking prices beyond the reach of many younger Londoners.
The ONS/Land Registry average London house price in April was 1.2% lower than a year ago but, for all the concern about recent price falls, it was still 57.9% higher than at the pre-crisis peak & still more than double (115% higher) than in January 2004.#ukhousing#Londonpic.twitter.com/j6Tc1KHiHu
The updated chart of London house prices & UK mortgage rates between January 2004 & April 2019. Must see if there's a way of putting Value of Quantitative Easing on there as well, perhaps as a background image...#ukhousing#Londonpic.twitter.com/OUpPIaqUrT
Here’s my colleague Philip Inman on the UK inflation report:
A fall in transport costs and cheaper clothing brought to an end the recent rise in inflation that threatened to push the Bank of England to increase interest rates.
Energy costs, which spiked in April, and a price war in the car industry following a slump in sales over the past year also helped to bring down the consumer prices index (CPI) from 2.1% in April to 2% in May. Transport costs fell by 3.8% overall between April and May this year, led by falling airfares.
Underlying UK inflation, which strips out volatile items such as air fares, rose in May -- even though the headline rate of CPI dropped a little.
That’s significant, as it suggests the cost of living will keep rising in the coming months.
Our analysis of more than 130,000 goods and services included in the basket, however, suggests that the fall is due to a small number of large price changes, such as air fares.
Our measure of underlying inflation, which excludes extreme price movements, picked up by 0.3 percentage points at the national level. Underlying inflation also increased in every region of the United Kingdom, rising most in the West Midlands, the North and London.
UK inflation is going to hover around 2% in the coming months, reckons Josie Dent, senior economist at the CEBR thinktank.
Looking ahead, Cebr forecasts CPIH inflation will average 2.0% in 2019, as upward pressures from higher energy prices and the strong labour market are offset by weak demand, demonstrated by the negative economic growth recorded in April.”
The confusion and uncertainty over Britain’s exit from the European Union is hurting London’s housing market.
Jonathan Hopper, managing director of Garrington Property Finders, says the Brexit extension has left the capital’s property market struggling:
“After spending the run up to what was due to be Brexit Day in low gear, the property market struggled to find the gas pedal in April - with the national picture being dragged down by sharp price falls in London and the Southeast.
“Modest though this year’s Spring bounce is [+1.4% in April], the stagnation of the first quarter has been replaced by a cautious equilibrium. Sellers are being coaxed back to the market by the gradual return of stable demand, and activity levels are brisk.
More expert reaction:
Decent news for #BoE and #consumers as #consumer#price#inflation dips to 2.0% in May from 2019-high of 2.1% in April, helped by sharp monthly drop in air fares as impact of later Easter this year drops out. Core inflation edged back to 1.7% in May from 1.8% in April
UK CPI inflation of 2%y/y in May, down from April's 2.1%y/y. Air fares (Easter timing) and car prices the biggest contributors to the 0.1% fall. Some offset from prices of toys & games, furniture and accomodation. Core inflation (ex. food & fuel) down from 1.8%y/y to 1.7%y/y. pic.twitter.com/RUNqQHkdzi
Average house price changes where you live. London & the S.East are the only two regions with falling house prices in April. Wales' figure should be interpreted with caution, as the growth rate spiked to 6.7%y/y from 3.9%y/y in March. pic.twitter.com/jtKU3kiqtq
“Today’s house price release from the ONS and Land Registry shows house prices increased by 1.4% in the year to April 2019, down from 1.6% in March. The price of a typical UK house is now £229,000, down from a peak of £232,000 in August 2018.”
“The house price growth story is split between the South East and the rest of the country.”
Today’s drop in inflation means there’s no chance of the Bank of England raising interest rates on Thursday, say City economists.
Tom Stevenson, investment director for Personal Investing at Fidelity International, explains:
The prospect of low rates for the foreseeable future, together with last week’s above-inflation increase in average earnings, means UK households should be feeling more relaxed about their financial prospects than for some time.
“In the thick of a leadership contest - and with Brexit as far from resolution as ever - the Bank will most likely err on the side of caution as we face continuing political and economic uncertainty during the rest of 2019.
While much of the month-to-month noise can be disregarded - inflation slowed from April because of changes to the cost of airfares around the Easter holiday - of more significance is the longer-term trend of consumer price growth slowing and settling at the rate desired by the Bank.
It is highly unlikely that the Bank of England will adjust interest rates when it meets tomorrow. Although it would likely prefer to tighten monetary policy, which remains extraordinarily loose, with inflation around target, economic growth crawling along and no clarity on the future path on Brexit, its hands are tied. Indeed, we do not expect the Bank to be able to adjust rates until greater clarity is provided on Brexit, which means the end of October at the very earliest.
Here’s the ONS’s head of inflation, Mike Hardie, on today’s data:
“Inflation eased in May, as travel prices such as air fares fell back after their Easter highs in April.
The overall rate of inflation has remained steady since the beginning of the year.
While London house prices are falling, rents are going up.
Annual private rental prices in London rose by 0.9% in April, its highest rate since September 2017. The ONS suspects that demand for rental properties is outstripping supply.
House prices also fell across the South East of England in April - helping to narrow the gap with the rest of the country.
There’s not much sign of inflation in Britain’s housing market.
The ONS has reported that average house prices in the UK increased by 1.4% in the year to April 2019, down from 1.6% in March 2019.
Over the past three years, there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England.
Today’s inflation report confirms that families are hit hard in the pocket if they take a foreign break during the Easter holidays.
Inflation fell back in May, having spiked in April as air fares jumped.
Transport fares fell by 3.8% overall between April and May this year, with the April prices influenced by Easter and the associated school holidays falling in the middle of the month.
In 2018, when Easter fell in early April before the price collection dates, fares rose between April and May by 2.0%. The contribution from transport services came from all categories – air, sea, rail and road – with the single largest contribution from air transport.
CPIH, another inflation measure which includes housing costs, also fell last month - to 1.9%, from 2%.
Newsflash: Britain’s inflation rate has fallen, bringing some relief to UK households.
The Consumer Prices Index rose by 2.0% in the 12 months to May, the Office for National Statistics reports.
Falling fares for transport services, particularly air fares influenced by the timing of Easter in April, and falling car prices produced the largest downward contributions to the change in the rate between April and May 2019.
Stand By Your Desks! UK inflation data is up next and we will find out if the weaker growth path for house prices continues. I certainly hope so.
Brexit uncertainty is also continuing to weigh on UK building firms.
European stock markets have opened cautiously, holding onto yesterday’s strong gains.
The FTSE 100 has dipped by 4 points to 7,439, close to Tuesday’s seven-week high.
The latest BAML data shows fund managers are at their most bearish since the global financial crisis a decade ago. Equity allocations have experienced their second worst drop on record – we’ve seen a huge move into cash. And yet and yet, we’re close to all-time highs again for US equity markets at least. This is what you may call an unloved rally.
Ouch! Shares in holidays and insurance group Saga have hit a record low after it warned that its business is still suffering from Brexit uncertainty.
Conditions in the travel market are very competitive and affected by current political uncertainties.
The Group’s Tour Operations business is not immune to such pressures, with booked revenues for the full year down 4% as of 15 June when compared to the same period last year. In addition, margins for this year will be impacted by competitive discounting.
City economists broadly expect that UK inflation fell last month, but there are a range of forecasts.
Some see CPI falling as low as 1.8% in May, from 2.1% in April, while others actually predict it rose to 2.2%. We’ll find out in 70 minutes who’s right.
Today’s inflation data should confirm a softening in May.
The British consumer price index is expected to have eased from 2.1% y-o-y to 2.0% in May, as the core inflation is seen at 1.6% y-o-y versus 1.8% printed a month earlier. A soft inflation read can only revive the BoE doves and increase the selling pressure on the pound.
We did see a modest uptick in April largely as a result of increases in energy prices and council tax rates pushing headline CPI up to 2.1% and a six-month high.
Core prices were slightly more subdued but nonetheless the weaker pound and higher energy prices do appear to be exerting upward pressure on prices. We could see a rise to 2.2% in May, which will inevitably fuel speculation about a possible interest rate rise.
Stock markets across the Asia-Pacific region have jumped sharply today, following last night’s gains in Europe and the US.
Big moves in global equities y'day as Draghi admitted defeat in rekindling Eurozone inflation and Trump plans meeting with Xi. DJI closed 1.4% higher and UK shares should maintain momentum at the off. German 10 yr bund yield -0.32% , US T 10yr +2.06%
“Investors are taking heart from the new development.
The two countries will at least be talking (after a lull), so the market thinks there is little chance that talks get broken off soon after they meet,”
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
With Brexit uncertainty still gripping Britain, households could use a boost to real incomes. And the latest UK inflation data, due this morning, could provide it.
“We look for headline inflation to slow to 1.9% year-on-year, while core inflation slows to 1.6% y/y.
The recent depreciation in sterling should help support inflation in May and beyond, and the dip in inflation in May is largely due to base effects in core inflation that will unwind in June.”
Rise in interest rates unlikely, with CPI down to 2% in May from 2.1% in April
A fall in transport costs and cheaper clothing brought to an end the recent rise in inflation that threatened to push the Bank of England to increase interest rates.
Energy costs, which spiked in April, and a price war in the car industry following a slump in sales over the past year also helped to bring down the consumer prices index (CPI) from 2.1% in April to 2% in May. Transport costs fell by 3.8% overall between April and May this year, led by falling air fares.
Venezuela’s president, Nicolás Maduro, last year cut five zeroes off the currency and prices. The move was supposed to ease shortages of cash that pushed most of the economy toward debit and credit card operations and put heavy strain on digital commerce platforms.
Tech innovations have driven the drift down in prices – policymakers ignore such forces at their peril
Debates about inflation in advanced economies have changed remarkably over the past decades. Setting aside (mis)measurement issues, concerns about debilitatingly high inflation and the excessive power of bond markets are long gone, and the worry now is that excessively low inflation may hinder growth.
Moreover, while persistently subdued – and, on nearly $11tn (£8.7tn) of global bonds, negative – interest rates may be causing resource misallocations and undercutting long-term financial security for households, elevated asset prices have heightened the risk of future financial instability. Also, investors have become highly (and happily) dependent on central banks, when they should be prudently more fearful of them.
ARM has issued a brief statement on the Huawei ban, saying:
“ARM is complying with all of the latest regulations set forth by the U.S. government.
No further comment at this time.”
The crisis facing Huawei has deepened today, as British chipmaker ARM suspended business with the Chinese company.
ARM took the move after America put Huawei on its “banned entity” list, which forbids US companies to supply it with technology.
An exclusive from @DaveLeeBBC - UK chip designer ARM has sent a memo to its staff telling them to suspend business with Huawei in a move that could threaten the Chinese firm's ability to create its own smartphone chips https://t.co/778iE5TUnl
The sight of Theresa May hanging onto her premiership by her fingernails is hurting sterling, says Fawad Razaqzada, analyst at foreign exchange firm Forex.com.
It looks like the Conservatives have had enough of their Prime Minister, as calls grow ever louder from her own party to quit. Although Mrs May looks dejected, she will not bow out without a fight. She still fully intends to put her Withdrawal Agreement Bill to a vote in the Commons in the week beginning June 3 for one last time.
“Historically, we are at significantly low levels and have been since the Referendum. In the short term risks remain for the pound and are unlikely to go away anytime soon.
The withdrawal agreement will go back to the Commons at the start of next month – coincidentally the same week Donald Trump is in town – and more imminently we have the EU elections which it seems like the Brexit party are going to dominate in. The risk of No Deal was at its highest just before Christmas where the low was cemented around 1.25. This is the closest we have been to that since the turn of the year.”
The pound has continued to slide on the foreign exchange markets, as Brexit uncertainty bubbles away.
Sterling continues its record-breaking losing run against the euro, down half a eurocent at €1.1320. That’s a new three-month low, and the 13th daily fall in a row - the worst since the euro was created 20 years ago.
No cheers, no jeers, no booing even, just the worst sign for a prime minister possible in the chamber- a consistent dull muttering. They’re not even listening any more.
Hearing there are "ongoing conversations" among cabinet ministers about whether there is any point at all in pressing the wab to a vote. "Today could be fluid", says one cabinet source. All eyes on the PM's statement this afternoon.
Pizza club absent from frontbench as PMQs gets underway. Karen Bradley has moved to fill Andrea Leadsom’s usual seat
Financial analyst Frances Coppola certainly isn’t convinced that Brexit uncertainty drove British Steel to the wall.
The fact the company is now being liquidated means it is effectively insolvent, suggesting more deep-seated problems.
OMG. British Steel has gone in to compulsory liquidation, not administration as was predicted. In other words it is totally bust and short-term loans would not have saved it. Just like Carillion.
I agree. British Steel tried to coerce the government into supporting them by arguing that their problems were due to Brexit uncertainty, but I don't believe it. Compulsory liquidation means they are completely bust. Can't see Brexit slowdown causing that.
“Having rescued the business from closure over three years ago, we have worked hard to bring this important company back on its feet. Since 2016 we have arranged a financing package of more than £500 million, appointed a new and talented management team, helped the business open up new markets and reduce costs whilst addressing long-term underinvestment.
“The turnaround of British Steel was always going to be a challenge, and yet the business overcame many difficulties, and until recently looked set for renewed prosperity.
“The Workforce, the Trade Unions and the Management team, have worked closely together in their determination to strengthen the business, however, the additional blows dealt by Brexit-related issues have proven insurmountable.
We are grateful to all those who supported British Steel on the attempted journey to resurrect this vital part of British industry. We are now focused on assisting all involved as best we can through this process.”
Here’s our news story on today’s rise in inflation:
British Steel’s liquidation has already sent shockwaves through the sector.
Industrial and property group Hargreaves Services warned investors this morning that its revenues and profits would be hit if British Steel failed. Its share price has slumped by 15% this morning, to a two year low.
“The closure will have a huge knock on impact across the communities surrounding the company’s plants. A raft of small firms like caterers, cafes, cleaners, shops and visitor attractions, all of which employs their own staff, rely heavily on British Steel.
“Businesses throughout the supply chain will need guidance and support as the situation develops.”
Greybull Capital, the private equity firm which owned British Steel, is facing serious questions over the company’s collapse.
Greybull bought the business for £1 in 2016, and have since taken millions out of the company in management fees.
A fortnight ago the government agreed a £120m loan to cover British Steel’s cost of buying carbon credits under an EU-scheme to limit emissions. At the time it seemed a respectable use of public money since the delay in the UK’s exit from the EU meant the allocation of credits to all UK companies had been temporarily suspended.
But the FT later reported that Greybull had already sold surplus allocations in what appeared to be an a badly timed trade. Other UK steel producers, note, have not asked for loans to get over the permit obstacle. Again, there is an issue of trust with Greybull.
Devi Shah, Partner at law firm Mayer Brown, hopes that some jobs at British Steel can be saved:
The immediate priority will be to seek a buyer, and secure the future of as many employees as possible, especially since this is an area where options for those affected will be limited, and the repercussions are likely to be felt across the region.
British Steel’s collapse is the biggest industrial insolvency since Rover in 2005, says Freddy Khalastchi, business recovery partner at accountancy firm Menzies LLP.
He fears the worst for the company...
“Unfortunately, the writing has been on the wall for some time and the business has been struggling to compete in a market flooded by cheap imports from China. The business has also experienced a slump in orders due to Brexit.
“In the past we might have expected the Government to intervene to protect a major industrial employer and key supplier to the UK defence sector. However, we are in uncertain times and it is not clear whether it will be possible to tap into Brexit mitigation funds in this case. The fact that British Steel recently borrowed more than £100m from the Government to pay an EU carbon bill and avoid further fines also suggests further intervention may be unlikely.
Rebecca Long Bailey MP, Labour’s Shadow Business Secretary, says the solution to the British Steel collapse is to nationalise it.
Long Bailey says:
“This is absolutely devastating news for the thousands of workers, their families and the communities in Scunthorpe and Teesside and those throughout the supply chain.
“The Tories’ legacy will once again be industrial decline whilst they endlessly squabble over the European Union.
Roy Rickhuss, general secretary of the Community trade union, is hopeful that jobs can be saved at British Steel, even though it’s now in the hands of the Official Receiver (an employee at the Insolvency Service).
“This news will heap more worries on workers and everyone connected with British Steel, but it will also end the uncertainty under Greybull’s ownership and must be seized as an opportunity to look for an alternative future.
“It is vital now that cool heads prevail and all parties focus on saving the jobs.
Breaking: British Steel has collapsed, after failing to agree a £30m rescue funds from the UK government.
“The government has worked tirelessly with British Steel, its owner Greybull Capital, and lenders to explore all potential options to secure a solution for British Steel.
“The Government can only act within the law, which requires any financial support to a steel company to be on a commercial basis. I have been advised that it would be unlawful to provide a guarantee or loan on the terms of any proposals that the company or any other party has made.”
“UK inflation moved above the Bank of England’s 2% target for the first time since December 2018, with rising energy prices and higher air fares, placing the largest upward pressure on price growth in April.
“Rising inflation alongside slowing wage growth is a concern as it squeezes real household incomes. If this trend continues it could well choke off the recent improvement in consumer spending, a key driver of UK growth.
This jump in inflation to 2.1% means that real wage growth in the UK has slowed.
Average earnings rose by 3.3% in the 12 months to March, which means real wages are only up by 1.2%
“With progress on Brexit completely paralysed, rising inflation poses a challenge for Carney. As prices creep up above 2% target, the improvements in wages seen earlier in the year are being cancelled out.
Uncertainty persists around the UK’s future relationship with the EU and the US trade war with China shows little sign of abating.
Peter Earl, head of energy atcomparethemarket.com, says households on standard energy tariffs have suffered“brutal” increases since Ofgem lifted the price cap three months ago.
The new price cap level that came into force on 1st of April saw those customers face an average annual price rise of £117, a hefty 10% increase, which all of the Big Six energy companies were quick to implement. Rather than preventing energy companies from repeatedly upping the cost of energy, the price cap looks to have done the opposite. Many customers have already switched to a more competitive fixed price tariff but, for the millions that remain, we strongly recommend shopping around to ensure they are on the best deal possible as this will help to minimise their household bill inflation.”
Beer and tobacco prices fell last month, the ONS adds:
Prices for cigarettes overall fell by 0.6% between March and April 2019 compared with a rise of 1.4% between the same two months a year ago.
Prices for beer, particularly larger packs of canned lager, also had a small downward contribution, although this was partially offset by spirits, which rose in price between March and April 2019 by more than a year ago.
Consumers were hit by a 10% jump in electricity costs last month, today’s inflation report shows.
Consumer prices for electricity rose by almost 11% between March and April 2019, while input producer prices for electricity rose by around 2% over the same period.
Wholesale electricity prices are only available until December 2018 but rose by around 3% between November and December 2018, and rose considerably faster than producer and consumer electricity prices between June 2017 and September 2018.
This chart shows how air fares surged in April - unlike in 2018, when Easter came earlier:
Prices for air fares typically rise during the school holidays, which follow similar patterns each year for the summer and Christmas holidays. As such, we see similar price patterns with prices rising through the summer before falling back in the autumn and rising again in December.
For Easter, however, school holidays typically move as the timing of Easter moves from year to year, sometimes falling in March and sometimes in April.
Newsflash: The cost of living in the UK jumped last month, back over the official target.
Consumer prices jumped by 2.1% in April, compared to a year ago, up from 1.9% in March, the Office for National Statistics says.
Marks & Spencer are the top faller on the FTSE 100, down 4%, after launching a £600m rights issue to fund its new tie-up with Ocado.
The high street chain is also speeding up its latest transformation plan, by closing another 20 of its full-line stores.
The retailer said it planned to close 85 of its big high street stores, which is on top of the 35 it has already shut. The company is battling the transfer of clothing sales online and it had already told the City to expect about 100 closures.
The news of the extra branches being axed came as the group pointed to “green shoots” of recovery despite annual profits being pulled down by a £440m bill for a modernisation programme. The overhaul of the struggling chain will also involve the closure of 25 of its Simply Food convenience stores.
Quite... if govt tries to delay bringing the bill forward extremely hard to see how your party allows PM to stay on past sunday/monday - just asked a minister if she can stay on past this weekend - answer, ‘I hope not’ https://t.co/53Pj4YSCEU
Any more negative responses to the new proposed deal and Prime Minister May could resign as soon as this week and attention will shift to the likely Conservative leader contest.
That will probably yield a hard-Brexit supporting PM, which in turn will incrementally raise the odds of a hard Brexit.
The U.S. is considering cutting off the flow of vital American technology to as many as five Chinese companies including Hangzhou Hikvision Digital Technology Co., widening the dragnet beyond Huawei to include world leaders in video surveillance.
The U.S. is deliberating whether to add Hikvision, Zhejiang Dahua Technology Co. and several unidentified others to a blacklist that bars them from U.S. components or software, people familiar with the matter said.
Trump is considering blacklisting two Chinese surveillance giants over accusations of human rights violations https://t.co/f1EpA0cpFg
According to the New York Times, the US is considering banning Chinese surveillance kit-maker Hikvision from buying US components. A similar ban was slapped on Huawei last week, in a dramatic escalation of the spat between the two sides.
The report has sent the company’s shares down, even as Hikvision said it received no notice of the potential blacklisting and said its operations in Xinjiang had never been..
But as Keynes has shown, loose monetary policy is not the only way to respond to stagnation
Alvin Hansen’s timing could hardly have been worse. In early 1939, almost a decade after the Wall Street crash and six months before Hitler invaded Poland, he said America’s best years were behind it. An ageing population, fewer migrants and the exhaustion of existing technologies meant there would never be complete recovery from the Great Depression. Instead, the US was stuck in what Hansen called secular stagnation, in which secular means persistent or long term.
The second world war meant the idea of secular stagnation was a five-minute wonder. Demand soared as the US government geared up to fight on two fronts, and strong growth persisted for a quarter of a century after the war ended. Many of the technological innovations of the late 19th and early 20th century – the car, for example – only came into their own in the US post-1945 when family incomes rose and the interstate highway network was built.
Rising vacancies and falling unemployment fail to push firms into raising wages
Wage growth has slowed in the UK to put a squeeze on living standards despite unemployment falling to its lowest level for more than 40 years.
The fall in pay growth to 3.3% on the year in the three months to March, from 3.5% in the three months to February, also came as the buoyant labour market recorded a rise in employment to a new high of 32.7 million.