UK retail sales fall more sharply than expected; World Bank Warns of Global Recession – Business Live | Company


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The World Bank has also warned that the global underlying inflation rate, excluding energy, could remain at around 5% next year, nearly double the five-year average before the pandemic, unless the disruptions in the economy continue. supply and labor market pressures are not easing.

To bring inflation down, central banks may need to raise interest rates by another 2 percentage points, on top of the two-point increase already seen, he said. But an increase of this magnitude, coupled with strains in financial markets, would slow global GDP growth to 0.5% in 2023, a contraction of 0.4% per capita, which would meet the technical definition of a global recession.

Malpass urged policymakers to move from reducing consumption to increasing production, including efforts to generate additional investment and productivity gains.

Previous recessions have illustrated the risk of letting inflation stay high for a long time while growth is weak, the Bank said, noting that the 1982 recession triggered more than 40 debt crises and ushered in a decade of losing growth in many developing economies.

World Bank Vice President Ayhan Kose said the recent tightening of monetary and fiscal policies would help bring inflation under control, but as this is happening simultaneously in several countries, it could aggravate the slowdown in global growth.

The report suggested that central banks could fight inflation without triggering a global recession by clearly communicating their policy decisions, and also called for credible medium-term fiscal plans and more targeted aid for vulnerable households.

David Malpass, President of the World Bank Group. Photograph: Issei Kato/Reuters

Introduction: British retail sales fall sharply; World Bank warns of global recession

Hello and welcome to our ongoing coverage of business, the global economy and financial markets.

Retail sales volumes in Britain fell 1.6% in August from July – much worse than expected.

Economists expected a decline of 0.5%. The Office for National Statistics, which released the figures, said all major sectors (grocery stores, non-food stores, online retail and fuel) fell during the month; the latter happened in July 2021, when all legal Covid restrictions on hospitality were lifted and people headed to bars and restaurants.

UK retail sales
UK retail sales Photography: NSO

Sales at supermarkets and other food outlets fell 0.8% in August, leaving them 1.4% below their pre-pandemic levels in February 2020. Gasoline and diesel sales fell 1.7%.

Department store sales fell 2.7%, while housewares stores fell 1.1%, mainly due to declines in furniture and lighting stores. Retailer feedback suggests consumers are cutting back on spending due to rising prices and affordability concerns.

In clothing stores, sales volumes fell 0.6% in August and were 5.7% below their February 2020 levels.

The proportion of online retail sales fell to 25.7% from 26.3% in July; but it remains significantly above pre-coronavirus levels, when it was 19.8%.

The world appears to be heading for a global recession as central banks are forced to raise interest rates to tackle high inflation, the World Bank has warned.

The world’s three largest economies – the United States, China and the eurozone – have slowed sharply, and even “a moderate hit to the global economy over the next year could tip it into recession” , the bank said in a new study.

He said the global economy was now in its steepest downturn after a post-recession recovery since 1970, and consumer confidence had already fallen more sharply than in the run-up to previous global recessions.

Expressing concern that these trends will persist, with adverse consequences for emerging markets and developing economies, World Bank President David Malpass said:

Global growth is slowing sharply, and further slowing is likely as more countries enter recession.

Agenda

  • 10:00 BST: Eurozone inflation for August, final estimate (forecast: 9.1%)

  • 10:00 BST: Inflation in Italy for August, final estimate (forecast: 8.4%)

  • 3:00 p.m. BST: Michigan US consumer sentiment for August


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