The British are facing a terrifying reality. What problems does the UK have?
British Prime Minister Rishi Sunak has faced a lot of serious problems in the coming years, according to The Daily Mail. Earlier in his New Year’s speech, the British leader stressed that London will still support Ukraine. At the same time, Sunak added that the authorities will put the priorities of the British in the first place. What problems does the UK have?
The article notes that Sunak made an appeal to his fellow party members to “the fight starts now,” promising to build a country that would make posterity proud. But according to the Daily Mail, Sunak “faced a terrifying reality.”
The first challenge for the British leader was the “disastrous” revelation of the chief physician of the local ambulance service, who said that up to 500 patients were dying every week because of ward failures. The second shocker was that a record 45,756 migrants crossed the Channel last year, according to official information.
“And this despite the enormous efforts of ministers to try to stop the smuggling of people,” the publication recalled.
Also, the railroad unions have reiterated their willingness to strike in transport, and this at a time when the country is facing new protests by nurses and ambulance staff. Issues such as skyrocketing inflation, the cost of living crisis and England’s economic problems also remain relevant, the Daily Mail summarized. The GBPUSD exchange rate also demonstrates the problems in the country.
Western countries have increased sanctions pressure on Russia because of Ukraine. The disruption of supply chains led to a rise in fuel and food prices in Europe and the US. In the UK, the rising cost of living has hit millions of households. The U.K. The Financial Conduct Authority earlier reported that about 32 million British residents (60% of the adult population) are struggling to pay their bills amid high inflation and a record rise in the cost of living.
The Bank of England raised its benchmark interest rate by 50 basis points to 3.5 percent from 3 percent. The regulator also said that Britain’s economy has entered a recession, which is expected to last through 2023 and the first half of 2024. The annual inflation rate in Britain was 10.7% in November.
Earlier, we reported on the ECB’s rate decision: the rate should reach a “restrictive” level.
Fed Chair Powell to testify at US Senate June 22
Federal Reserve Chair Jerome Powell will testify at the U.S. Senate Banking Committee on June 22 at 10 am Eastern time, panel chief Sherrod Brown said on Friday.
The testimony marks the second iteration of the Fed chair’s twice-yearly reports to Congress on the state of U.S. monetary policy, and will come a week after the Fed’s upcoming interest-rate-setting meeting at which it is expected to leave borrowing costs unchanged despite still-high inflation.
S&P spares France from rating downgrade
Ratings agency S&P spared France on Friday the embarrassment of downgrading the country’s sovereign debt, but remained cautious about the outlook on account of the strained public accounts.
S&P left the country’s AA rating untouched after a regular review and said that the outlook remained negative due to “downside risks to our forecast for France’s public finances amid its already elevated general government debt”.
A downgrade would have been the second in six weeks after rival agency Fitch cut its rating at the end of April to AA- over concerns about potential political paralysis and social unrest.
Finance Minister Bruno Le Maire told weekend newspaper Le Journal du Dimanche that S&P’s decision to keep its AA rating was a “positive signal” and that the government’s public finance strategy was credible.
President Emmanuel Macron’s government is under pressure to prove that the government can stick to its deficit and debt reduction plans in the face of stubbornly high public spending and a rising cost of interest payments.
ECB’s Visco says falling energy prices should help tame inflation
The rapid decline in energy costs should help to tame inflation in Europe, Bank of Italy governor Ignazio Visco said on Saturday, urging companies not to seek to boost their margins by leaving prices higher for longer.
Visco, a member of the European Central Bank’s governing council, said the key issue was what happened to inflation now that energy prices had retreated from peaks hit after last year’s Russian invasion of Ukraine.
“I expect that at this point there will also be a cooling in the increase in core inflation, as we call it, which should reflect this reduction in the cost of energy,” Visco told the International Economy Festival in Turin.
“If this happens, (ECB) monetary policy is certainly the correct one at the moment even if I would perhaps have pressed for a more gradual approach,” he added.
Euro zone inflation eased more than expected in May fuelling a debate about the need for further ECB rate hikes beyond an increase expected later this month.
Inflation in the 20 nations sharing the euro eased to 6.1% in May from 7.0% in April, below expectations for 6.3% in a Reuters poll of economists.
Core inflation, which excludes volatile food and fuel prices and which has played an increasing role in the ECB’s policy deliberations, fell to 5.3%.
Visco warned against a wage-price spiral, saying salary rises should come against a backdrop of a growing economy rather than chasing inflation.
He also said companies had a role to play in ensuring that inflation was brought under control so that the ECB did not keep having to push up the cost of borrowing.
“It is not in the interest of companies themselves … to fail to reflect the lower cost of energy in their prices because then the cost of financing would rise,” he added.
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