15th September 2022
Bite-sized business news from the UK and beyond
- Inflation dips for first time in a year
- Twitter v. Musk continues
Inflation dips for first time in a year
UK inflation unexpectedly dipped by 0.2% in August to 9.9% - less than the 10.2% forecast by economists.
How did we get here?
Cheaper petrol prices were the driver behind the fall in consumer prices from the 40-year-high in July. A litre of petrol fell from an average price of £1.90 in July to £1.75 in August. Other prices are still soaring – food inflation touched upon a 14-year-high driven by more costly milk, cheese and eggs.
UK inflation is still the highest among the seven leading industrial nations aka the G7 and way beyond the 2% target. This means pressure will remain on the Bank of England to raise rates again above 1.75% next week, having already done so at six previous policy meetings.
The US also had an unexpected inflation report this week
On Tuesday new figures revealed US inflation increased 0.1% in August from the previous month and 8.3% compared to a year ago—more than anticipated. The news sent US stock markets into a tailspin as it all but confirms a massive interest rate hike by the Federal Reserve next week. As is typical when investors get spooked by looming rate hikes, tech stocks bear the brunt of a sell off. Every single stock in the tech-focused Nasdaq 100 fell on the day—the first time that’s happened since March 2020.
Looking ahead: Economists now expect inflation to hover around the 10% mark this winter – far lower than previous forecasts of over 15%. That’s after the new prime minister announced a plan to cap average household energy bills at £2,500 a rise of 27% month-to-month in October, far less than the 80% increase announced by the energy regulator in August.
Other stories to keep you in the loop
- EU targets 5% peak electricity demand cut to tackle soaring prices and energy crisis
- Chancellor considers scrapping bankers’ bonus cap to boost City
- McDonald's and Greggs to close for Queen's funeral
- Google takes £3.6bn hit after losing competition court case
- Average UK house price hits £292,000 - biggest jump in 19 years
- The sovereign’s wealth: UK royal family’s finances – explained
- Zara’s owner reports surging sales despite cost of living pressures
- Billionaire Patagonia founder gives away company to fight the climate change
Twitter v. Musk continues
As we await the start of Twitter v. Musk on 17 October, the pieces are falling into place for what’s sure to be the most dramatic trial in tech history.
What happened: Twitter shareholders voted in favour of Musk’s proposed $44bn deal to purchase the company he’s been trying to ditch since July over claims of spam accounts.
Now, his fate rests in the hands of the judge who decides if he has to honour the deal. Musk agreed to buy the company for $54.20 a share, shares are now sitting at less than $42…
Meanwhile, Peiter Zatko, Twitter’s former head of security turned whistleblower for the lawsuit, testified before the US Senate about Twitter and national security.
In addition to previous complaints, Zatko further criticised Twitter’s security flaws and alleged staffers could take over powerful accounts.
Zoom out: With the deal approved and Zatko continuing to fire shots, each side is now set for the series finale, so sit back and get your popcorn ready.
Stat of the day
The public is expected to spend up to 30 hours in a queue to file past the coffin of Queen Elizabeth II
Interesting links from around the web