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COP28, Black Friday, and House of Lords Report

Thursday sees the start of COP28 in the UAE, and reports from the House of Lords calls reforms in the BoE.

COP28

The Conflict of Petroleum 28 (COP 28 for short) gets underway on Thursday in the UAE. The event, which is designed to be a forum in which world leaders gather to plan and implement agendas to tackle climate change, had already drawn criticism for being hosted by a petrostate, but now the BBC has seen confidential documents in which the UAE are using the event to make oil and gas deals! The meetings, between state oil company Adnoc and at least 27 foreign governments, are set to discuss things such as supporting Colombia develop their fossil fuel resources and co-investing with China to develop assets in Mozambique, Canada and Australia. COP works on a rotating basis, so the UAE are currently presiding over the global climate change agenda, as mandated by the UN – which means that whilst they’re in charge of trying to save the world, they’re doing side deals which will make things worse! The BBC has the article, click here to read.

 

Black Friday

Millions of consumers are expected to go online today in search of Cyber Monday deals, just days after people around the world flocked to stores and websites for Black Friday. According to Mastercard’s SpendingPulse data, US consumers saw their spending increase 2.5% from last year’s Black Friday to $9.8b. This included e-commerce sales which soared 8.5%, with over half of online sales being made from a smart phone. In-store sales rose more marginally 1.1% with health, beauty and clothing stores seeing particular increases.

While the rise in sales in absolute terms has caught a number of headlines, its important to note that these figures are not adjusted for inflation. Hence with annualised CPI inflation at 3.2%, analysing the data in real terms indicates that the US retail sector is not immune to the economic headwinds which has resulted in many households adjusting their discretionary spending.

Indeed, this was a similar situation in the UK, which according to preliminary data saw footfall decrease by 5% from last year across the country (though London saw a 1.5% uptick). This came against a sluggish week in retail sector in the run up to Black Friday with Barclaycard saying that the volume of members’ transactions rose by just 1.4% over the week. While Nationwide said that its clients’ spending had risen 3% by 17:00 on Friday, the jury is out on the how Black Friday will have impacted the UK’s retail sector. Of course, last Friday’s shopping figures come in the wake of October’s retail sales figures which came in considerably lower-than-expected, marking the fourth contraction this year as households continue to grapple with the rising cost of living. The data, released earlier this month showed retail sales dropping 0.3% between September and October, missing forecasts of a 0.3% rise.

 

Lords’ Report Calls for BoE to be More Accountable

A report from the House of Lords’ Economic Affairs Committee has called for a number of reforms in the Bank of England after it said that the central bank was complacent in addressing the inflation threat. The committee suggested that Threadneedle Street were overly reliant on inadequate forecasting models, and it should strengthen its accountability to Parliament. Here, the report stated that “The Bank must do more to foster a diversity of views and strengthen a culture that encourages challenge. Areas that need attention include governance, hiring practices and appointments, especially to the Monetary Policy Committee”.

Another key recommendation included how Parliament should be able to better express its views on the BoE’s performance and leadership. This came as the committee found that their “continued deployment [of QE] has blurred the lines between monetary and fiscal policy.” The BoE responded in saying that We’d like to thank the Lords EAC for this report and will be giving the recommendations careful consideration. We’ll respond formally in due course.”

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