Bids from voluntary groups seeking help from West Lothian Council topped more than £1m
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
2 hours ago
- Reuters
The US economy's key weak spots in five charts
ORLANDO, Florida, Aug 14 (Reuters) - The U.S. economy seems to be chugging along fairly smoothly, if a little too slowly for some observers' liking. Under the bonnet, however, the picture is more worrisome, and the risk of engine malfunction is rising. Technology's role in the U.S. economy has never been greater, and artificial intelligence could deliver a historic productivity boom. But return on the huge investment being made on that bet could take years to materialize. What's more, an unbalanced economy may not be desirable in the long term, as it can lead to poor investment and policy decisions. Below are five charts that indicate the foundations of the resilient U.S. economy and booming stock market may be much shakier than they appear, especially if AI- and tech-related spending, investment and optimism are stripped out. Inflation-adjusted investment in 'AI-sensitive' sectors of the economy since the end of 2019 has risen 53%, notes Troy Ludtka, senior U.S. economist at SMBC Nikko Securities. Investment elsewhere has inched up just 0.3%. Relatedly, the contribution of software and IT equipment capex to U.S. GDP has never been higher, according to analysts at BlackRock. Aggregate capex in all other areas of the economy, however, actually fell in the first half of this year – a rare occurrence. Meanwhile, personal consumption expenditures are slowing sharply, a worrying sign given that the consumer accounts for around 70% of total U.S. GDP. Personal consumption expenditures in the second quarter grew by only 0.9%, the slowest pace since the pandemic. And in real terms, consumer spending has completely flat-lined in the first half of the year. Corporate bankruptcies in July were the highest for a single month since July 2020, according to S&P Global Market Intelligence. Even more alarming, the tally of year-to-date bankruptcy filings through the end of July was the highest for this seven-month period since 2010. Nearly a third of this year's bankruptcies were in the consumer discretionary and industrial sectors. Finally, the concentration on Wall Street has been widely discussed, but the levels continue to be eye-popping. One stock, chipmaker Nvidia, accounts for 8% of the benchmark S&P 500's entire market cap. That's a record for a single name. And the top 10 stocks, most of which are Big Tech megacaps, make up 40% of the index's market cap and 30% of all earnings. These are also record levels. The more Wall Street – and even global markets - rely on the revenue, earnings and profitability of a set of companies that can be counted on two hands, the bigger the potential mess could be if the trends driving these companies' performance lose momentum. (The opinions expressed here are those of the author, a columnist for Reuters)
The Independent
2 hours ago
- The Independent
So the economy isn't shrinking… but when will we feel any benefit, chancellor?
UK plc delivered a welcome, and largely unexpected, shot in the arm for Rachel Reeves, with the Office for National Statistics recording second quarter growth of 0.3 per cent, comfortably beating the City's consensus forecast of 0.1 per cent. After a gloomy April and May, the summer sunshine warmed June, during which the economy expanded by 0.4 per cent. The quarterly figure was also boosted by April's contribution being revised up from a contraction of 0.3 per cent to a smaller fall of 0.1 per cent. While cheerier than expected, these figures still aren't enough to solve Reeves's wider problems. The Resolution Foundation, a think tank focussed on the plight of low income Britons, put it well. The economy isn't shrinking, it said – but it is slowing, and quite a bit from the 0.7 per cent growth recoded in the first three months of the year. The first quarter was powered by manufacturers racing to get product made and sent across the Atlantic ahead of Donald Trump's tariffs. That effect went into reverse after Trump's 'Liberation Day' on April 2, when most of his levies on imports kicked in. The UK economy contracted as manufacturers paused for breath and the tax increases announced in Reeves's Budget gave industry pause. The initial chaos delivered by Trump has now washed through the economy and it has found a level. However, the negative impact of Reeves's tax rises is still casting a pall. Economists said it had resulted in a sharp fall in business investment, which is something the government wants and needs. It rose by 3.9 per cent in the first three months of the year, but then went hard into reverse, falling by 4 per cent in the second. Businesses inevitably responded to the increases in their taxes, as businesses are wont to do. They focussed on reducing their costs to mitigate the impact of the increased labour costs caused by Reeves's decision to raise employer national insurance. And they shelved their investment plans while they were at it. Higher government spending helped to offset these effects. But that isn't sustainable if the private sector continues to stutter. The danger now is that the Office for Budgetary Responsibility downgrades its forecasts. That matters because it uses those forecasts to check the Treasury's sums, and whether the chancellor's tax and spending plans comply with her fiscal rules. The latter requires that day-to-day government spending is funded by taxation. Ministers can only borrow more to invest. If the OBR forecasts are downgraded, then the fiscal hole Reeves is in only deepens, requiring more tax rises to fill it. The chancellor got another unexpected boost as it emerged that the decision to scrap non-dom status, a controversial tax break available to some wealthy people who live here but are considered to be domiciled overseas for tax purposes, has not led to the sort of mass exodus of millionaires some had predicted. A number have left – but the numbers are broadly in line with Treasury projections. File under 'small crumbs of comfort'. Reeves, naturally, has hailed the fact that the UK's performance beat expectations – but she is right that there is 'still more to do'. Some of that must include more pro-business policies to get investment flowing again. Promises not to further increase the tax burden on them must also be kept. Yes, the chancellor needs revenue. But she needs growth to sustainably deliver it. Adding to the burdens on businesses now would simply be cutting off her nose to spite her face. A year in, and it is hard to grade her economic stewardship at much better than, say, C+. True, these figures do show that Britain is still outpacing the rest of the G7 – something Reeves highlighted and a line you will hear a lot if you can stomach spending any time listening to debates in the House of Commons (it isn't an edifying activity). But just because the neighbours are doing badly doesn't mean the UK is doing well. It isn't. It needs to do better. The chancellor faced a challenging situation when she took office, true. But she also needs to do better. She can't keep blaming the other lot. It won't wash with the voters. Finally, a word or two about mortgages. While the Bank of England is primarily focussed on inflation, the labour market and wage settlements, these figures will nonetheless add to the case of the interest rate hawks when it comes to the question of further cuts following the Bank's recent decision to lop a quarter point off base rates to 4 per cent (which they opposed). That's bad news if your mortgage tracks base rates, and bad news if you're looking for a fixed-rate deal, the price of which is dependent on the City's interest rate swaps market. The expectation there is that the rate cut curve will be shallower than had previously been hoped. Barclays recently delivered a fillip to would-be borrowers by cutting the price of some of its deals. However, I wouldn't expect to see many more announcements like it, at least not until we see signs that inflation is on a downward track. And that isn't currently the case.
Daily Mail
2 hours ago
- Daily Mail
Stocks plunge as key inflation gauge signals worst tariff-driven price hikes still ahead
US wholesale inflation surged unexpectedly last month, signaling that President Donald Trump's sweeping taxes on imports are pushing costs higher. The Labor Department reported Thursday that its producer price index - which measures inflation before it hits consumers - was up 0.9 percent last month from June and 3,3% from a year earlier. The numbers were much higher than economists had expected. The wholesale inflation report two days after the Labor Department reported that consumer prices rose 2.7 percent last month from July 2024, same as the previous month and up from a post-pandemic low of 2.3 percent in April. Core consumer prices rose 3.1 percent, up from 2.9 percent in June. Both figures are above the Federal Reserve's 2 percent target. The new numbers suggest that slowing rent increases and cheaper gas are at least partly offsetting the impacts of Trump´s tariffs. Many businesses are also likely still absorbing much of the cost of the duties instead of passing them along to customers via higher prices. Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably measures of healthcare and financial services, flow into the Federal Reserve's preferred inflation gauge - the personal consumption expenditures, or PCE, index.
