7th September 2022
Bite-sized business news from the UK and beyond
Australia's avocado glut
What happened?As Liz Truss gets to grip with her new role as prime minister she has a burgeoning in tray to address. She’s inherited the UK’s cost-of-living crisis, Brexit’s aftermath, a war in Europe and waning support for her party, all of which she’s tasked with turning around.Arguably the most pressing issue is dealing with the fragile economy which she could tackle with her own brand of economics aka Trussonomics.How did we get here?Among the world’s major economies, the International Monetary Fund predicts that only Russia, battered by global sanctions, will perform worse than the UK next year. The Bank of England forecasts UK inflation will peak north of 13%, the highest since the early 1980s, and Goldman Sachs said it could top 22%. Many analysts expect the economy to tip into recession in the coming months. On Monday, the pound fell to the lowest level against the US dollar, $1.1443, since 1985.Meanwhile, energy prices keep soaring. The average energy price cap is set to almost triple the rate one year ago next month. Enter Trussonomics:Truss is a low-tax libertarian who plans to reverse a recent increase in national insurance and ditch a planned corporate tax hike. When it was noted her plan would benefit top earners by £1,800 per year and the poorest by just £7, Truss said: “Yes, it is fair. The people at the top of the income distribution pay more tax, so inevitably when you cut taxes, you tend to benefit people who are more likely to pay tax.”Truss has promised significant state action to help households and businesses cope with energy prices. Ideas include reducing the price cap and giving businesses loans to pay their bills which could cost £130bn in 18 months – more than any Covid related support package. Zooming out: Critics have warned that Truss’ combination of low tax and high spending is unsustainable and damaging to the economy in the long run. Her plans would in all likelihood involve more government borrowing, adding to the UK’s £2.3tr national debt – the highest in decades.
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AGRICULTUREAustralia's avocado glut
What happened?Australia is drowning in avocado. After drastically overestimating demand, Australian farmers are now selling avocados at rock bottom prices.How did we get here?Australia is facing annual inflation of around 6%, according to its Bureau of Statistics. That may sound rather moderate compared to the UK's 10% but it still marks the nation’s worst year for inflation since 1990. Fortunately for fans of avocado, the bright green fruit has been blessedly spared from this particular economic deprivation.Instead, prices are hovering around an all-time low, and farmers and grocers alike are doing whatever they can to keep product moving. The average price of a single avocado in Australia is down roughly 30% to 60p from a few years ago, according to The Wall Street Journal.Avocado production in the nation increased 26% in the 12 months through July, according to a report from agribusiness bank Rabobank. That’s enough, according to the report, to supply each of the nation’s 26m residents with 22 avocados for the year.Australian households consumed 30% more avocados in 2021, and low prices are expected to lead to an increase again this year.Looking ahead: Australia’s production may expand by 40% in the next five years, Rabobank reckons, as Australian exporters tap growing markets in Europe and Southeastern Asia.
Stat of the day
It will cost £800 to stream every game in the current Premier League season by the end of 2022 — an increase of 30% since 2019
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