Closing summary
Time for a recap
UK house prices have fallen at the fastest rate in 20 months, as the surge in mortgage costs after the mini-budget hit demand.
The average price fell by around £1,000, or 0.4%, in October, Halifax reported, pulling down the annual rate of house price growth.
Economists and estate agents have predicted that house prices will keep falling over the coming months, with many predicting a drop of around 10%.
This risks pushing newer home-owners into negative equity, Resolution Foundation warned.
The head of the IMF has suggested that global inflation may be near its peak.
Global inflation may be peaking, according to the head of the International Monetary Fund.
Kristalina Georgieva told Bloomberg TV that:
“I’m not going to jump ahead of data, but it is very possible that we are peaking”
Failure to cool inflation would hurt economic growth prospects, she added.
Global inflation may be nearing its peak, IMF’s Georgieva says https://t.co/VkRpfnJxq6 via @CraigStirling @flacqua pic.twitter.com/oMUU3JEZeb
— Zoe Schneeweiss (@ZSchneeweiss) November 7, 2022
Inflation in boardroom pay doesn’t seem to have peaked, though. The average FTSE 100 saw their pay package swell by around a quarter last year, to £3.9m.
This has been criticised by investors and unions alike, as my colleague Rupert Neate explains:
Frances O’Grady, the general secretary of the TUC, has said the growing disparity between pay at the top and that paid to workers is fuelling the cost of living crisis.
“Workers deserve a fair share of the wealth they create. But right now, CEO pay is soaring while working people experience the biggest real wage falls in 20 years.
“These unbalanced pay policies have seen the gap widen between workers and bosses this year, adding to the cost of living crisis.
Despite signs the UK is heading into recession, Ryanair says there’s no let-up in demand for air travel.
The budget airline has reported a surge in profits to a record €1.4bn (£1.2bn) for the first half of its financial year.
Ryanair’s CEO, Michael O’Leary, has told the Guardian fares were likely to continue to rise into next year, bar a resurgence of Covid or escalation of war deterring travel.
He said that while Ryanair was growing:…
“the competition are all cutting capacity – Lufthansa, IAG, Air France – are exposed to higher oil prices. If capacity keeps falling we’ll see fares rise again by somewhere between 5% and 10%.
The chairman of the UK financial watchdog has warned that its independence would be undermined if the government introduces “call in powers” to intervene in regulation. Those powers could let ministers force regulators to scrap or amend a rule.
Facebook’s parent company, Meta, is reportedly preparing to cut thousands of jobs this week.
In the economic world….. China has suffered its first contraction in trade since May 2020. Imports and exports both fell in September, as demand weakened at home and abroad.
China's import of key #commodities, with the exception of #crudeoil (+3.7% MoM, +14% YoY) slowed last month. #Natgas (-25% MoM, -19% YoY, #Coal (-12%, +8.3%), #soybeans (-46%, -19%), #copper ore (-18%, +4%), pic.twitter.com/bYa97N2VHp
— Ole S Hansen (@Ole_S_Hansen) November 7, 2022
Covid-19 lockdowns mean Apple customers face a longer wait for the latest iPhone.
And….October was another bad month for construction firms in the eurozone; activity fell for the sixth month running, as new orders continued to slide.
FCA: 'Call- in powers" would undermine our independence
Britain’s financial watchdog fears its independence will be undermined if the government introduces controversial “call in powers” to allow parliament to intervene in financial regulation.
Richard Lloyd, the acting chair of the Financial Conduct Authority, has told the Treasury committee that allowing ministers to interfere with financial regulation would hurt the FCA.
Such ‘call in powers’ could allow ministers to change regulatory decisions if watchdogs are deemed too cautious.
Lloyd tells MPs that the FCA has already warned minister of the damage this could cause, creating the impression that the regulator was no longer independent, saying:
We have been very clear with ministers that is of great concern to us.
Even if the powers are “used very sparingly”, depending on the safeguards and the commitments to parliament about how infrequently it might be used, Lloyd says that:
…the perception that comes with the ability of ministers to direct independent regulators clearly will go towards undermining our independence.”
Lloyd says the watchdog has already heard this from statutory panels, from players in the market and consumer groups, adding “that’s how it will be seen internationally as well”.
FCA interim chair Richard Lloyd not pulling his punches on call in power: “Even if it’s used very sparingly…the perception that comes with the ability of ministers to direct independent regulators clearly will go to undermining our independence.
— Laura Noonan (@LauraNoonanFT) November 7, 2022
we have been very clear with ministers that is of great concern to us.”
— Laura Noonan (@LauraNoonanFT) November 7, 2022
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