According to the British Retail Consortium, retail sales increased 5.2% in the year to April, which is about half the rate of inflation over the same period. The hospitality sector has shown tremendous resilience in the face of the challenges and expenditure in restaurants and bars increased by 4% last month – no doubt the Early May Bank Holiday and the bonus one we got yesterday will have got May’s numbers off to a strong start too. UK energy suppliers are being urged to renegotiate long term energy contracts with UK small businesses to help them avoid facing closure. The Federation for small businesses has called for action as thousands of UK businesses are stuck in multi year fixed energy contracts that were entered into when costs were spiraling in 2022.
Since then, wholesale gas prices have fallen by 80% and the government has also withdrawn its support packages – meaning companies are stuck paying more, without support whilst the open market is much better value. Suppliers offering fixed price contracts will almost certainly have gone and hedged their own exposure in the market, meaning that they might be reluctant to renegotiate for fear of facing losses themselves. The FT has the story: www.ft.com/content/621f4906-18d2-408c-9fdf-b667547be254
The debt ceiling debate is once again dominating the news cycle, with Janet Yellen calling it a potential “economic catastrophe”. We don’t disagree with her at all, but the bipartisan game of chicken has been played so many times over the last decade or more that we’re fully expecting this to be ‘amicably’ resolved with a couple of concessions here and there – though both parties are miles apart on what they want in exchange for signing off an increase in the credit limit. Reuters is reporting that Ms Yellen has resorted to calling CEO’s directly and warning them of the “dangerous consequences of the current brinksmanship” probably in the hope that they in turn can pick up the phone and provide a ‘non-political’ intervention to their state legislators and try and get common sense to prevail. The debt ceiling is likely to be hit in the first week of June, so the countdown begins (again).
The rescue of another failed bank in the US has prompted the G7 to think about a rapid response plan to future failings – or perceived failings that then in turn become a self-fulfilling prophecy. The plans would involve more focus on mid-sized banks, that have been benefactors of deregulation in recent years and would require them to hold more capital and more deposit insurance. The G7 finance ministers are meeting later this week in Japan, ahead of the main G7 meeting which takes place next week. Nikkei has the story: www.asia.nikkei.com/Spotlight/G-7-in-Japan/G-7-eyes-responses-for-rapid-Silicon-Valley-Bank-type-failures
If you would like a PDF of this commentary, please contact us and we'll be in touch.Contact us
Find out how we have helped our clients meet their hedging requirements.
UK average property prices fell in November, expectations met by the Bank of Canada, lower than expected Eurozone retail sales, and what's happening today.
PMI's higher-than-expected, UK has highest food price inflation in G7, and oil prices dip to lowest level in last 5 months.
Military aid to Ukraine from the US could run dry by the end of December, step forward for 'Deep Mind', Google's AI specialist, aims to increase nuclear power usage by over 20 countries, and forecasts for UK house prices to fall.
Gold market reacts to Fed comments, easing of Swiss inflation, EU uncertainty in supplying aid package to Ukraine, and what's happening today.
We discuss the conflicts of interest that have come out of COP28, namely why a petrostate is hosting the climate change event. Other global conflicts are also covered in this months issue, with Djibouti at the pinch point of one of the world's busiest shipping routes.
Easing of French inflation, first day of. the OPEC+ meeting, China increase involvement in Israel-Palestine conflict, and what is happening today.
A focus on Fed's next interest rate decision, the words most 'powerful' passport, recession for Sweden, and food price accusations from the CMA.
In a win for the UK space industry, the CAA looks set to approve Britain’s first vertical spaceport in the Shetlands according to The Telegraph