US prices continued to rise despite Trump claims they are ‘rapidly’ falling
US prices rose 2,7% in the year to November, according to federal data released a day after Donald Trump claimed they were falling “very fast” on his watch,The latest consumer price index, released on Wednesday morning, was down from 3% in September, and short of economists’ expectations of about 3,1% for last month,It comes amid questions over the strength of the US economy.
The longest US federal government shutdown in history halted collection of key data,There was no inflation report for October, and data was only collected for the second half of November,In a live TV address on Tuesday night, Trump claimed prices were falling “rapidly”, despite evidence to the contrary,“I am bringing those high prices down, and bringing them down very fast,” the US president said,Price growth, which surged in the US to its highest level in a generation three years ago amid economic disruption wrought by Covid, fell back sharply.
It has stubbornly remained above standard levels, however, and after retreating to 2.3% in April, it has since climbed higher – amid persisting concerns around affordability.The latest rise in prices coincides with a climbing unemployment rate, which hit 4.6% in November – a four-year high.Despite this growth, the number of jobs added to the economy last month was higher than economists anticipated, rising 64,000 after 105,000 jobs were lost in October.
The White House has insisted that any inflation are remnants from the Biden administration.“I have no higher priority than making America affordable again,” Trump told his supporters at a rally in Pennsylvania last week, echoing promises he made during his presidential campaign.“They caused the high prices and we’re bringing them down.”When inflation hit a 40-year high in June 2022, at 9.1%, many economists put it down to a combination of pandemic stimulus and recovery rippling through the economy.
By summer 2024, inflation had fallen back to 3%, though Americans were still feeling the pain of high prices.Economists widely agree that Trump’s tariffs have made prices rise.Even though the US president eventually exempted certain imports like coffee, bananas and beef from tariffs, the overall effective tariff rate is still the highest it’s been since 1938.The Yale Budget Lab estimated that, even with exemptions, Trump’s tariffs will cause prices to rise $1,700 for the average American household.Recent polls show that Americans, still price sensitive from increases seen in 2022, are now shifting the blame onto Trump.
Among other national issues listed in the YouGov/Economists poll, Trump’s net approval on prices have fallen the most compared to other issues like immigration and national security.Meanwhile, another poll from the University of Michigan’s Survey of Consumers shows that consumer expectation of inflation has soared this year since January.The rise in both prices and unemployment has created a tricky situation for the Federal Reserve, which is tasked with trying to keep both low.The central bank reduced interest rates three times this year, but defied Trump’s demands for deeper cuts.“We are committed to 2% inflation, and we will deliver 2% inflation, but it is a complicated and difficult situation where the labor market is also under pressure,” the Fed chair, Jerome Powell, said last week.
Fed officials have signaled that it may pause any further rate cuts as inflation and unemployment appear to be reaching a balance,Interest rates are currently sitting at a range of 3,5% to 3,75%,Powell also noted that Fed officials will be careful about assessing economic data from November, given the impact of the shutdown.
“We are going to get data, but we are going to have to look at it carefully and [with] a somewhat skeptical eye by the January meeting,” he said.
Leeds £2.5bn tram scheme delayed to late 2030s after government review
The opening of the long-awaited Leeds tram system has been pushed back by at least two to three years, after a government review of the £2.5bn project.The West Yorkshire combined authority (WYCA) said its mass transit scheme, including new tram lines connecting Leeds and Bradford, would now be completed in the late 2030s.West Yorkshire’s mayor, Tracy Brabin, said she was fully confident that she would be “driving this tram” by the end of the next decade, despite fears that the delay could lead to the whole scheme being cancelled.She said the new timeline would “help offer certainty” for the tram at the heart of plans for an integrated transport network with the region’s buses, which are being brought under local control
US prices continued to rise despite Trump claims they are ‘rapidly’ falling
US prices rose 2.7% in the year to November, according to federal data released a day after Donald Trump claimed they were falling “very fast” on his watch.The latest consumer price index, released on Wednesday morning, was down from 3% in September, and short of economists’ expectations of about 3.1% for last month.It comes amid questions over the strength of the US economy
US activist investor urges Whitbread review after budget tax changes
The owner of Premier Inn is facing calls from an American activist investor to rethink its business strategy, just weeks after the company warned the budget would cost it up to £50m next year.Corvex, a New York-based hedge fund, told Whitbread it should begin a strategic review as it braces for big tax rises next year after changes announced by the chancellor, Rachel Reeves.“Following the recently announced UK budget and changes to rateable values and business rates, we believe the company should undertake a strategic review to assess its capital allocation priorities and overall strategic direction,” the fund said in a statement.Whitbread, which also owns the restaurant chains Beefeater and Brewers Fayre, has been squeezed by higher costs this year due to higher wage bills and rising food prices. The FTSE 100 company is expected to come under further pressure as changes to the way business rates are calculated come into effect next year
Bank of England cuts interest rates to 3.75% in pre-Christmas boost for struggling economy
The Bank of England has cut interest rates by a quarter point, giving a pre-Christmas boost to the struggling UK economy, but a split vote among its rate-setters pointed to continued concerns about inflation.The Bank’s nine-member monetary policy committee (MPC) opted by five votes to four to reduce its key base rate from 4% to 3.75%, signalling that it now expects inflation to be “closer” to the 2% target in the first quarter of the new year.But minutes of the committee’s meeting cast doubt on the pace of any further rate cuts, with the Bank’s governor, Andrew Bailey, saying future decisions would be a “closer call”. It is the sixth rate cut since Labour came to power last year
Waterstones and Barnes & Noble owner looks to list booksellers on stock market
The owner of Waterstones and Barnes & Noble is reportedly preparing to list the booksellers on the stock market.Elliott Investment Management, the hedge fund that owns the most popular bookstores in the US and the UK, has spoken to potential advisers about an initial public offering (IPO), the Financial Times reported.The multibillion-pound group is thought to prefer London over New York for the listing, which could be a welcome boost to the UK stock market.While initial talks are under way, no final decisions have been made and the plans could change.The company’s financial year ends in April, which makes an IPO unlikely until after the summer at the earliest, the FT reported, citing unnamed sources close to the matter
BP names Meg O’Neill as new CEO after incumbent ousted
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