The Bank of England (BoE) has released data showing that public expectations of inflation over the next 12 months are at their highest in five years, according to Reuters.
The proportion of the public anticipating that interest rates will rise has dropped, according to the research.
Brits surveyed in February 2019 said they expect inflation to average 3.2% over the next year, unchanged from November levels which were the highest proportion since November 2013.
The quarterly BoE survey of 4,000 people found 47% of UK citizens expect that interest rates will be raised over the next 12 months, down from 53% in November.
In February, consumer price inflation in Britain grew to 1.9% after a two-year low of 1.8% in January. The BoE forecast is that inflation will rise a little above the target 2% this year.
BoE has warned that a no-deal Brexit would impact these predictions, weakening sterling and making inflation rise sharply.
Businesses have asked UK politicians to ‘get a grip on Brexit’, amid continued uncertainty over the future relationship with the European Union, according to Reuters.
Businesses are stepping up preparations for the event of a no-deal exit while some large companies are setting up emergency rooms to deal with the chaos of leaving without adequate trade provisions.
By law the UK is due to leave the EU on 29 March 2019, but there is as yet no agreement on the terms of leaving will be. In a parliamentary vote, MPs rejected the withdrawal agreement negotiated by Prime Minister Theresa May.
Leaving the EU without a deal could result in ports facing significant delays, damage to supply chains and shockwaves in financial markets.
The UK shipping industry’s representative body, the UK Chamber of Shipping, said through chief executive Bob Sanguinetti: “We need to put aside party politics and in the moment of need that we find ourselves in, we need to look at the bigger picture and look at what’s best for the country.”
James Stewart, head of Brexit at KPMG, said: “may of the businesses we’re speaking to are praying for an extension to Article 50. Nearly all larger firms are now preparing for Brexit, after some came late to the party – however the timing of no-deal implementation planning remains highly variable.”
Possible resolutions to the crisis include a no-deal Brexit, a last-minute agreement on an amended deal, a delay, a fresh general election or a referendum re-opening the question of Brexit altogether.
The prolonged hot weather in the UK could impact food supplies later in the year, worsening the impact of any disruption caused by a no-deal Brexit, according to the Food and Drink Federation (FDF).
There is still no certainty about the nation’s trading relationships following Brexit, which is due to take place in March 2019.
Ian Wright, director general of the FDF, said on BBC radio: “We’re going through the most extraordinary summer and we’re already seeing farmers struggling with crops, with feed for ruminants (Cattle and sheep). There are vegetable shortages because there hasn’t been enough rain.”
Brexit-related disruption to food imports and border crossings could exacerbate the situation, according to Wright.
Brexit Secretary Dominic Raab indicated the government is making preparations to ensure a stable supply of food in the event of disruption. Around 40% of food eaten in Britain is imported, mostly either from or through the EU.
Raab said: “Those businesses importing food, ingredients and finished goods will need to get their goods across the border before March 29 to ensure they don’t suffer disruption from customs changes.”
One in two British employers anticipate that they will struggle to recruit permanent staff in the near future, according to a survey from the Recruitment and Employment Confederation (REC) reported by Reuters.
Fifty percent of companies said they were concerned about the availability of candidates for permanent positions, up 8% from the 2017 level. On the other hand, there was a slight increase in confidence about the economy between February and April.
The Bank of England has said it believes the tighter labour market may lead to wage growth soon. Since the 2016 Brexit referendum, the UK has seen a strong employment rate but this has not translated into higher pay until now.
Tom Hadley, director of policy at REC, said: “There is a growing concern with the lack of candidates available for key roles, this is one of the biggest challenges facing the UK jobs market.”
The poll analysed answers from 600 employers questioned between 12 February and 25 April 2018.
A landmark ruling by the Supreme Court could have huge ramifications for the UK’s gig economy, according to BBC News.
Plumber Gary Smith worked for Pimlico Plumbers for six years before a heart attack prompted him to request part-time working hours. The request was refused and Pimlico Plumbers took back the van they had leased Mr Smith.
The plumber challenged Pimlico Plumbers in an Employment Tribunal. The plumbing company’s defence claimed Smith, who was paying self-employed tax and was VAT-registered, was not an employee.
The Supreme Court held that Smith was a worker, and therefore entitled to employment rights such as holiday pay and sick pay.
Pimlico Plumbers Chief Executive Charlie Mullins condemned the finding, saying it would lead to a ‘tsunami’ of claims from former contractors claiming unfair dismissal.
TUC General Secretary Frances O’Grady said the case indicated “how widely sham self-employment has spread” and called on the government to “crack down on bogus self-employment.”
The government has pledged to overhaul workers’ rights to improve conditions for workers, including those in the gig economy. The pledge was made after the 2017 Taylor Review argued that workers carrying out tasks for platform-based companies such as Deliveroo and Uber should be classed as dependent contractors and given ‘fair and decent’ working conditions.
The Bank of England has been put under pressure to delay raising interest rates, according to the Guardian.
The move comes after figures for manufacturing and consumer credit indicated weakness in the UK economy. The Bank of England had been widely expected to approve a further interest rate increase until the figures were released on Friday.
A snapshot of economic performance by the Chartered Institute of Procurement and Supply together with information company Markit indicated that the economy slowed in the first quarter of 2018 and continued to slow in the second quarter.
CIPS/Markit fell from 54.9 in March to 53.9 in April, the weakest rate of expansion in 17 months. Any figure above 50 indicates growth in manufacturing output.
Data from the Bank of England indicated a drop in consumer demand for unsecured borrowing. According to monthly money and credit statistics, lending to consumers stood at £300m in March, the smallest increase since November 2012 and well below the six-monthly average of £1.5bn.
The slowdown in consumer borrowing follows a tightening of rules by the Financial conduct Authority, which aimed to restrict the growth rate of consumer borrowing. This had been rising at 10% or more on average between 2014 and 2017. In March, the rate fell from 9.4% to 8.6%.
The proportion of UK mothers of working age in employment has risen by almost 50% since the 1970s, according to the Institute for Fiscal Studies (IFS).
As reported by BBC News, a report from the IFS found that there has been a “huge change in working patterns” in the last four decades. Women are now much more likely to continue in paid employment after having children.
Researchers said that employment levels among partners of high-earning men has been most pronounced. In 1975, only 50% of mothers aged 25-54 were in paid work. In 2015, the figure was 72%.
Maternal employment has increased the most among women with children of pre-school or primary-school age, and among single mothers. Researchers said that the trend to have children later and opting for cohabitation rather than marriage has contributed to the change.
Three quarters of all women aged 25-54 are in paid work in the UK, up from 60% in 1977. Growth in female employment has been faster across the UK than in London. In 1975, the capital had the highest proportion of women in employment at 63%. The level is now 74%, joint lowest along with Northern Ireland.
The research comes amid controversy about the gender pay gap in the UK. A BBC analysis of pay information in April 2018 found that 78% of companies pay men more than women.
Barra Roantree, a research economist at the IFS, said: “Employment rates for working-age women in the UK have increased dramatically over the past four decades, particularly for those with young children.
“With the earnings of women increasingly important for these families, understanding the reasons behind persistent differences in the wages of men and women is all the more important.”
Britain has gone three days without electricity generated from coal, the longest period since the 1880s that the nation has been without the fuel source, according to BBC News.
From Saturday morning at 1000 BST until Tuesday afternoon, the UK was coal-free, beating the previous record of 55 coal-free hours set just a few days earlier.
Power generated by gas and wind were the largest sources for users in England and Wales.
The government has pledged to phase out the use of fossil fuel for generating power by 2025. In 2017, coal accounted for 7% of the UK’s power mix, according to official figures. April 2018 saw the UK go for the first full day without coal power since the 1800s.
However, energy experts have warned that coal is largely being replaced by gas, another fossil fuel, rather than renewable sources.
Andrew Crossland of the Durham Energy Institute said: “As a country we consumer nearly eight times more gas than coal.” Gas provides around 40% of energy for the nation’s electricity.
In 2017 wind energy produced more electricity than gas generation on just two days, while renewable sources produced more than fossil fuels on only 23 days of the year.
Crossland said current progress is “nowhere near enough” to meet the UK’s commitments of reducing greenhouse gas emissions by 80% compared with 1990 levels by 2050.
Brexit has had a stronger impact on Britain’s financial sector than the global financial crisis, according to a survey reported by Reuters.
Although the financial crisis sent some of the world’s biggest banks into collapse and plunged economies into recession, a quarterly poll by CBI and PwC found that optimism in the sector is at levels not since 2007-2009 and that declines in optimism have been more sustained than at that time.
The low levels of optimism were in spite of growing business volumes and growing employment in the quarter ending March 2018, and firms reporting that they plan to recruit more staff in the next quarter.
Rain Newton-Smith, chief economist at CBI said: “Financial services firms have performed well over the last three months, with business volumes and employment on the up and beating expectations. But there is no escaping the elephant in the room.”
An agreement between the UK and EU to put a transition period in place has quelled concerns in the sector somewhat, but it is still unclear how Brexit will impact access to EU markets from 2020.
PwC head of financial services Andrew Kail said firms were struggling with strong competition, changing consumer behaviour, rapid technological change, new regulation and increased costs. Kail said: “Collectively, it is denting confidence about the future.”
A report from the Institute for Fiscal Studies (IFS) has said consumers may see prices fall by up to 1.2% if Britain decides to abolish all tariffs following Brexit, according to BBC News.
However, the think tank said any gains would be very small and were based on ‘optimistic’ assumptions. Consumers have already seen a 2% increase in prices since the EU referendum due to a weaker pound.
The IFS also said new EU trade barriers could cause extra costs for consumers in the UK, which would offset any gains from cutting tariffs.
The report says: “We estimate that complete abolition of all tariffs would reduce prices faced by households by about 0.7-1.2%. This could have additional positive economic benefits inn the long run but could also be very damaging for some UK industries in the short run.”
Tariffs are paid on imports to a country, usually in a bid to protect key sectors such as farming and manufacturing from foreign competition. Cutting all tariffs would increase competition from companies abroad, resulting in UK job losses. However in the long term it is likely that prices for consumers would fall.
The IFS suggests that only reducing tariffs on products that are not produced in the UK in high quantities, such as olives and oranges, could help to avoid economic damage.
Paul Johnson, director of IFS said: “If we leave the customs union, we can come to our own trade deals with other countries, we can reduce tariffs. But even if we reduce that as much as possible, the effect on prices will be really quite small relative to what is still a big cost of leaving the customs union because it would make trade with the rest of Europe so much more expensive.”
The report found that average tariffs on UK imports within the EU customs union are around 2.8%.