© Reuters. FILE PHOTO: A man wearing a face mask walks along the River Mersey with the Liverpool skyline amid the outbreak of the coronavirus disease (COVID-19) in Seacombe, Britain, October 12, 2020. REUTERS/Phil Noble
LONDON (Reuters) -Britain’s economy unexpectedly shrank in April, official figures showed on Monday, adding to fears of a slowdown three days before the Bank of England announces the scale of its latest interest rate response to the surge in inflation.
Gross domestic product contracted by 0.3% from March. Economists polled by Reuters had on average expected gross domestic product (GDP) to grow by 0.1% in April from March.
It was first time since January last year that all main economic sectors had contributed negatively to monthly GDP.
However, GDP would have grown by 0.1% excluding the impact of a scaling back of the government’s coronavirus test-and-trace and vaccination programmes, the Office for National Statistics said.
Over the three months to April, GDP was up by 0.2%, slowing sharply from growth of 0.8% in the three months to March. The Reuters poll had pointed to 0.4% growth in the February-April period.
“Many respondents reported that increases in the cost of production had affected their business,” the ONS said.
Some economists said before Monday’s data they had expected April’s jump in domestic power tariffs and an increase in taxes paid by workers introduced during the month to impact the monthly GDP data only in May.
Finance minister Rishi Sunak said Britain was not alone in facing the hit from surging inflation and the fallout from Russia’s invasion of Ukraine.
“Countries around the world are seeing slowing growth, and the UK is not immune from these challenges,” he said in a statement.
However, last week the Organisation for Economic Co-operation and Development said British gross domestic product would grow by 3.6% this year before flat-lining at 0.0% next year, the weakest forecast for 2023 among all countries in the Group of 20 with the exception of Russia.
Despite the slowdown, The BoE is expected to raise interest rates for the fifth time since December on Thursday.
It has forecast inflation will exceed 10% in the final quarter of the year, five times its target.
Most investors and economists expect another quarter percentage-point rate hike this week.
Separate trade data published by the ONS showed the impact of sanctions on Russia with exports to the country falling to the lowest monthly value since January 1999, and imports the lowest since March 2004.
(Reporting William Schomberg and Andy Bruce; editing by Kylie MacLellan)
Large US companies by market cap begin to think more about cutting investments and staff – survey
The chief executive officers (CEOs) of the largest US companies by market cap are revising downward their plans for hiring and investment amid a worsening outlook for the US economy, a quarterly Business Roundtable (BRT) survey showed.
That’s because of high inflation and rising costs, said the association, which includes dozens of major U.S. corporations. The S&P 500 and U.S. 100 indices are also declining amid the developments.
The index, which gauges the economic outlook, fell 11 points this quarter, to 73 points. The indicator is still above the 50-point mark, indicating that the economy is growing. However, it fell below the long-term average of 84 points for the first time since the third quarter of 2020.
The index of planned investments fell 7 points to 68 points and expected sales fell 8 points to 91 points, according to the BRT report.
What will the biggest U.S. companies do by market cap?
About 39% of CEOs plan to increase the number of employees at their companies in the next six months, while 28% of respondents intend to downsize. Last quarter, those numbers were 47% and 19%, respectively.
Nearly half (49%) said that labor costs are a major expense at their company. Twenty-one percent of CEOs plan to reduce capex in the next six months and 40% plan to increase it. In the third quarter these proportions were 18% and 43%, respectively.
U.S. CEOs on average forecast that U.S. GDP will increase by 1.2% in 2023. 142 CEOs participated in the BRT survey, which ran from October 31 to November 28.
Earlier, we reported that Saxo Bank presented “shocking predictions” for the next year.
Saxo Bank predictions 2023: Saxo Bank presents “shocking predictions” for the next year
Saxo Bank predictions 2023: The Danish Bank has published ten “shocking predictions” for 2023. They concern a series of unlikely and underestimated events because of which, however, “the world markets can be covered with a powerful shock wave”..
Saxo Bank analysis – what’s going to happen next year?
Against the backdrop of rising energy prices, leading U.S. technology companies and “billionaire technophiles” will create a multi-billion dollar project aimed at exploring new opportunities in the energy sector, the bank predicts. According to the bank, this project will be comparable to the “Manhattan Project” to study atomic energy and the creation of the nuclear bomb, and investments in the new project will be about $1 trillion.
Inflationary pressures and geopolitical instability will continue to affect not only the global economy but also the financial markets, says the Danish bank. Against this background, states will take a more conservative policy, reducing investments in more complex financial instruments, and investing in traditional assets such as gold. And traders at the same time are considering Gold Futures.
Increased demand for gold in 2023 will, according to Saxo Bank, cause its price to rise from the current $1,800 to $3,000 per ounce.
Earlier, we reported that Apple has postponed the release date of an unmanned electric car for a year.
Apple postponed the release date of Apple’s electric car by a year
U.S. Apple Inc. (NASDAQ:AAPL) has pushed back the release date of Apple’s unmanned electric car by a year to 2026 and somewhat tempered its ambitions about the extent of its self-driving capability, Bloomberg reported, citing sources.
Earlier, Apple announced electric cars. According to the sources, the Titan project has been in limbo for the past few months because top executives at Apple have concluded that their vision of a fully self-driving car with no steering wheel and no pedals can’t be realized with existing technology. The APPLE Price Chart showed a slight decline amid this news.
In this regard, the company has decided to adjust the project and now plans to create a less autonomous car, with a steering wheel and pedals, with the possibility of fully unmanned driving on highways, sources said.
The driver of the car is expected to be able to do his or her own thing while driving on the highway, such as watching a movie or playing a game, and will receive advance notifications to switch to manual control when approaching city streets or deteriorating weather conditions.
Apple shares fell 2.5 percent in trading Tuesday. Since the beginning of this year, their value has fallen by 19.5%.
We previously reported on World Economic News now through the morning of Dec. 6.
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