Daily business and finance update 3rd August 2023
Good morning. Today we're talking about the US credit downgrade, Etsy’s changes its mind on UK sellers and the first UK airport returns to pre-pandemic passenger numbers.
The US was stripped of its top-tier government debt credit grade by Fitch Ratings, which criticised the country’s ballooning fiscal deficits and an “erosion of governance” that’s led to repeated debt limit clashes over the past two decades. The credit assessor cut the US from the gold-standard AAA to AA+, echoing a move made more than a decade ago by S&P. Tax cuts and new spending initiatives coupled with multiple economic shocks have swelled budget deficits, Fitch said, while medium-term challenges related to rising entitlement costs remain largely unaddressed. The decision drew criticism from leading economists with Former Treasury Secretary Larry Summers calling it “bizarre and inept” given the current strength of the US economy.
Etsy’s UK U-turn
Online marketplace Etsy has said it will change its policy after British sellers complained of money being held. The US website, known for its handmade and vintage goods, has been facing a boycott in the UK in recent weeks over the reserve system. The system, which is designed to protect buyers from fraud, originally froze 25% of sales, but Etsy increased it to 75% for some sellers in April 2023. Some sellers have reported having to wait up to 45 days to receive their full earnings, which has left them unable to pay their bills or buy supplies.
Airport pandemic milestone
Stansted Airport has recorded its busiest July on record, with over 2.7m passengers passing through the terminal. It means the Essex hub has become the first major UK airport to achieve above pre-covid passenger numbers. It comes as Ryanair, the biggest airline at Stansted, revealed it carried a record number of passengers across Europe in July of 18.7m. In contrast, London Heathrow airport recently reported that passenger numbers remain “consistently below pre-pandemic levels”.
Fuelling change: Asda has become the first retailer to publish daily petrol prices online after pressure from the competition watchdog.
Payment slippage: The number of people missing payments on essential household bills is as high as it was over the winter, according to consumer group Which?
The proportion of first time buyers taking mortgages of more than 36 years compared to 7% in 2021, according to house builder Taylor Wimpey.
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