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The World Bank has slashed its growth forecasts, and warned of a rising risk of stagflation, as the latest economic data continues to show economies are slowing.
The World Bank now expects global growth of just 2.9% this year, down from 4.1% previously, and fears many countries could fall into recession.
David Malpass, the Bank’s president, said:
“The war in Ukraine, lockdowns in China, supply chain disruptions and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid.”
London’s economy is outpacing the rest of the UK, with new data showing the capital was the fastest growing region in the first quarter of the year.
But the UK’s services sector has slowed, as inflation hits consumer spending. And with petrol prices hitting new highs in the UK, again, households face further pressures.
Germany’s economy is feeling the strain too. Factory orders dropped for the third month in a row, as the Ukraine war, supply chain problems, high energy prices and China’s lockdowns hit demand in April.
The pound came under pressure, with analysts warning that political instability would weigh on sterling after Boris Johnson narrowly won last night’s confidence vote among Conservative MPs.
Activity at eurozone construction firms has fallen for the first time in nine months, another sign that Europe’s economy is slowing.
But South Africa beat forecasts with 1.9% growth in th first quarter of 2022, as it recovered from the disruption caused by the Omicron variant last autumn.
In other news....
Car retailer Cazoo is cutting 700 jobs.
US retailer Target has announced it will slash prices to shift surplus stock, showing the pressure on retailers as the pandemic spending boom fades.
Britain’s competition watchdog has found that JD Sports and Elite Sports, along with Rangers Football Club, broke competition law by fixing the prices of some Rangers-branded clothing to keep them high at the expense of fans.
UK retail spending fell in May, although retailers did get a boost over the jubilee weekend.
PricewaterhouseCoopers has been fined a total of £5m for failures in its audit of the construction firms Galliford Try and Kier, in the latest fines imposed on a “big four” accounting firm.
The cost of food is a big worry for the vast majority of Britons while the number of people who skip meals or use a food bank has jumped in the past year, according to the Food Standards Agency (FSA).
The British Gas owner, Centrica, has warned that Rishi Sunak’s windfall tax will “damage investor confidence” as Britain attempts to build up green energy supplies.
And pressure is building for an international agreement on a rescue mission for Ukraine’s grain, which is desperately needed to feed the world, and which Kyiv urgently wants to sell to get its hands on vital foreign currency.
UK petrol prices have hit another record high, as the increase in crude prices continues to hurt motorists.
Petrol prices set a new record of 178.5p a litre, while diesel increased to 185.2p a litre.
It is the third time in six days that a new high has been hit.
Simon Williams, a spokesperson for the RAC, says:
“The cost of filling a 55-litre family car with petrol has now topped £98 for the first time in history.
The RAC believes prices will continue rising, to £2 a litre which would mean a fill-up would rise to “an unbelievable £110,” Williams said.
Louise Haigh MP, Labour’s Shadow Transport Secretary, called on ministers to take action to support motorists:
“The Conservative government are too busy tearing themselves apart to tackle the brutal price hikes facing working people.
“Motorists are being taken for a ride, and this hapless government are too distracted to do anything about it.
“The Conservative government needs to tackle the brutal petrol hikes, and support Labour’s call to put money back in the pockets of working people with an emergency budget.”
BREAKING: The average price of unleaded petrol has hit a record high - now costing 178.50p a litre.
— Sky News (@SkyNews) June 7, 2022
The price of diesel has also increased to 185.20p a litre.
Full story: https://t.co/cv2asOx3nO
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