Weekly Digest: U.K. Inflation at 18%, Recession Worries
U.K. inflation could hit 18% in early 2023, JPMorgan boss warns “something worse” than a recession could be coming, Europe’s gas prices soar as Russia deepens supply cuts. And more.
18% inflation 😱 : According to Citi, one of the biggest banks in the world, inflation in the UK will reach 18% early next year as consumers weigh the cost of the worsening energy crisis. (The Guardian)
Citi’s prediction is much higher than previous forecasts. Earlier this month the Bank of England said it expected inflation to hit 13% by the end of the year.
JPMorgan boss Jamie Dimon has warned of an economic “hurricane” and reportedly told clients there might be a 40%-plus chance of a hard recession or even “something worse”. (Reuters)
The banking boss said that while the U.S. economy is still strong and consumer balance sheets are in “good shape,” there are storm clouds ahead.
Read our SPOTLIGHT to learn more about recession and its possible impact on the global economy and your savings.
European and Asian natural gas prices soared to near record highs as the worst energy crisis in decades intensified competition for supplies. (Bloomberg)
In September, lower flows are expected from Norway due to maintenance issues, and Russian gas shipments are still curtailed.
Germany's economy grew 0.1% in the second quarter, proving to be more resilient in spite of surging inflation and the Ukraine war. (Bloomberg)
Government expenditures and household spending both contributed to the expansion. Yet, with Russia curtailing natural gas shipments and prices soaring, headwinds to growth are getting stronger.
Haitham Al Ghais, OPEC's new secretary-general, said the producer group is not at fault for soaring inflation, instead pointing to chronic underinvestment in the oil and gas industry. (CNBC)
“This is the harsh reality that people have to wake up to and policymakers have to wake up to. Once that is realized I think then we can start to think of a solution here. And the solution is very clear. OPEC has a solution: invest, invest, invest,” Al Ghais said.
“How Inflation Can Be Both 0% and 8.5% at the Same Time:” Consumer prices didn’t increase in July. It doesn't mean they're not rising, though. (Bloomberg Opinion)
Since the advent of economic statistics, elected officials have emphasized the economic statistics that make them look good and downplayed the ones that make them look bad.
Read our SPOTLIGHT to find out how to fight rising inflation.
What else is happening
French transport minister Clement Beaune called for an investigation into whether French oil major TotalEnergies was involved in supplying jet fuel to the Russian army through a local joint operation. (Reuters)
"This is an extremely serious subject, so there needs to be an investigation into whether, voluntarily or involuntarily, there has been a bypass of either the sanctions or the energy that a company, French or other, has produced," Beaune said.
Taiwan proposed a $19 billion increase in defense spending for 2022, including funds for a new fighter jet, weeks after China staged large-scale exercises near the island. (Reuters)
China carried out its largest-ever drills around Taiwan after a visit this month by U.S. House Speaker Nancy Pelosi. The trip angered Beijing, which saw it as a U.S. attempt to interfere in China's internal affairs.
Russian President Vladimir Putin is betting that sky-rocketing energy prices and possible shortages this winter will persuade Europe to force Ukraine into a truce on Russia's terms. (Reuters)
It's the only way Moscow sees to achieve peace, according to two Russian sources familiar with Kremlin thinking, since Kyiv says it won't negotiate until Russia leaves the entire country.
🧑🔬 Researchers have identified evolutionary modifications in the voice box that distinguish human beings from other primates, which may explain why people can speak. (Reuters)
Unlike apes and monkeys, humans lack balloon-like laryngeal structures called air sacs that help them produce loud and resonant calls.
As a result of the loss of these tissues, humans were able to evolve speech - the ability to express thoughts and feelings through articulate speech.
See you next week!