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UK job vacancies hit record amid Brexit and Covid staff shortages

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UK job vacancies hit record amid Brexit and Covid staff shortages

Job vacancies soared to a record high of almost 1.2m in September, according to official figures, as employers hunted for staff to meet shortages brought on by Brexit and the pandemic.

The Office for National Statistics (ONS) figures also showed a 207,000 increase in the number of people on payrolls to a record 29.2 million – 120,000 above pre-pandemic levels – and a steep fall in unemployment before the furlough scheme came to an end at the end of September.

London experienced the biggest rise in employment as the capital made up ground with the rest of the country after a large drop during the pandemic, but unlike many other areas, failed to reach pre-pandemic levels.

In the three months to September, vacancies grew across most sectors driven by a jump in demand for workers by shop owners and wholesalers while motor garages looked for 35,000 extra staff.

Ministers were known to be concerned that many of the 11 million people who relied on the furlough scheme at some time during the pandemic would be unable to find work once it came to an end, but the continued fall in unemployment to 4.5% is likely to ease those fears.

However, analysts warned there was likely to be a return to higher rates of joblessness once the the 1 million people still on furlough when the scheme ended, many of them in older age groups, had lost the government’s job subsidy.

Yael Selfin, the chief UK economist at KPMG, said: “The recovery is testing the capacity of the economy to adjust to a new post-pandemic environment, a task made more difficult by the reduced availability of overseas workers.

“Last month’s ending of the furlough scheme could briefly raise the headline unemployment rate, which could average 4.9% for 2021 as a whole, representing a smaller impact than originally expected,” she added.

Julia Kermode, a founder of Nantwich-based small business IWork, said job shortages were so bad that “the UK’s army of temporary workers, the traditional back-stop for businesses in need, cannot meet the demand”.

“It’s incredibly competitive, with some firms opting to increase pay rates, but many businesses simply don’t have pots of money to throw at the problem,” she added.

In the three months to August, the employment rate increased by 0.5 percentage points to 75.3%, while the unemployment rate decreased by 0.4 percentage points to 4.5%.

Darren Morgan, the director of economic statistics at the ONS, said that during the summer the jobs market continued to recover from the effects of the coronavirus pandemic.

“However, the figures are still being affected by special factors that make it hard to read underlying trends,” Morgan added.

Average weekly earnings the June-August period were 7.2% higher than in the equivalent three months of 2020, slowing from the previous reading of 8.3%. Excluding bonuses, earnings rose by 6.0%, also losing some momentum.

The ONS estimated the underlying pace of wage growth, taking into account how job losses during the coronavirus lockdowns affected predominantly lower-paid workers, stood between 4.1% and 5.6% for regular pay in nominal terms. That compared with regular pay growth of about 3% just before the pandemic began.

The chancellor, Rishi Sunak, said the government was committed to helping people find work after the expiry of the furlough scheme.

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UK’s Truss defends economic plan that sent pound tumbling

UK’s Truss defends economic plan that sent pound tumbling

British Prime Minister Liz Truss on Thursday defended her economic plan and shrugged off the negative reaction from financial markets, saying she’s willing to make “difficult decisions” to get the economy growing.

In her first public comments since the government’s announcement of billions in uncosted tax cuts roiled markets and drove the pound to record lows, Truss said Britain was facing “very, very difficult economic times.” But she said the problems were global and spurred by Russia’s invasion of Ukraine.

She spoke after the Bank of England took emergency action Wednesday to stabilize U.K. financial markets and head off a crisis in the broader economy after the government spooked investors with a program of unfunded tax cuts, sending the pound tumbling and the cost of government debt soaring.

Truss told BBC local radio that “we had to take urgent action to get our economy growing, get Britain moving and also deal with inflation.”

“Of course lots of measures we have announced won’t happen overnight. We won’t see growth come through overnight,” she said. “What is important is that we are putting this country on a better trajectory for the long term.”

In a series of interviews, Truss said her government’s decision to cap energy bills for households and businesses would help tame inflation and help millions of people facing a cost of living crisis.

But it was not that decision that alarmed the markets. It was the government’s announcement on Friday of an economic stimulus program that included 45 billion pounds ($48 billion) of tax cuts and no spending reductions — without an independent economic assessment of the cost and impact.

The Bank of England warned that crumbling confidence in the economy posed a “material risk to U.K. financial stability,” and said it would buy long-term government bonds over the next two weeks to combat a recent slide in British financial assets.

The bank’s former governor, Mark Carney said that the government and the central bank appeared to be pulling in different directions.

“Unfortunately having a partial budget, in these circumstances — tough global economy, tough financial market position, working at cross-purposes with the Bank — has led to quite dramatic moves in financial markets,” he told the BBC.

The pound traded at around $1.08 on Thursday, above its record low of $1.0373 on Monday. It has lost some 4% of its value since Friday.

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Stimulus Packages Provided During Pandemic Triggered Inflation- CBN

The Central Bank of Nigeria (CBN) has attributed the rising inflationary rates to the stimulus packages provided to citizens during and after the pandemic.

It added that although this increased spending, it also created global supply challenges.

CBN’s director, Monetary Policy Department, Hassan Mahmoud, said this on Wednesday at a post-MPC briefing tagged: “Unveiling Facts behind the Figures’’.

The Monetary Policy Committee had on Tuesday, unanimously voted to increase interest rate to 15.5 per cent.

“A lot of households and small businesses were injected with stimuluses; the U.S did two trillion dollars, Nigeria did about five trillion Naira, these increased the ability of people to spend.

“But the supply side could not meet up with the demand because that volume of injection was far more than the regular intake for those economies, this made prices go up,’’ he said.

Mahmoud also blamed the Russian-Ukraine war, as well as the resurgence of COVID-19 in China for the rise in global inflationary trend.

“That region accounts for more than 50 per cent of global commodity supply and 38 per cent of global oil and gas supply. The war resulted in some shortages which made prices go up.

“Then the COVID-19 lockdown in China. The country is the largest importer of commodities across the globe,’’ he added.

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China’s yuan slides to 14-year low against US dollar

China’s yuan slides to 14-year low against US dollar

China’s yuan fell to a 14-year low against the dollar Wednesday despite US central bank efforts to stem the slide after U.S. interest rate hikes prompted traders to convert money into dollars in search of higher returns.

A weaker yuan helps Chinese exporters by making their goods cheaper abroad, but it encourages capital to flow out of the economy. That raises costs for Chinese borrowers and sets back the ruling Communist Party’s efforts to boost weak economic growth.

The yuan fell to 7.2301 to the dollar, its lowest level since January 2008. One yuan was worth about 13.8 cents, down 15% from its March high.

The yuan has exceeded expectations it might fall to 7 to the dollar after the Federal Reserve started aggressive rate hikes to cool inflation that is at a four-decade high. The Fed has raised rates five times this year and says more increases are likely.

By contrast, the People’s Bank of China has cut interest rates to boost growth that fell to 2.2% over a year earlier in the first six months of 2022 — less than half the official 5.5% target.

The yuan is allowed to fluctuate up or down 2% from its starting price each day in tightly controlled trading. That prevents big daily swings, but down days can add up to a big change over time.

To shore up the exchange rate, Beijing cut the amount of foreign currency deposits Chinese banks are required to hold as reserves to 6% from 8% as of Sept. 15. That increases the amount of dollars and other foreign currency available to buy yuan, which should push up the exchange rate.

Still, that reserve cut is unlikely to stop a slide that is driven by “a strong U.S. dollar and the expectation of more Federal Reserve hikes,” said Iris Pang of ING in a report.

“Less aggressive rate hike talk” might help the yuan rally, but it might weaken further “if the Fed maintains its very hawkish tone” into next year, Pang wrote.

Chinese officials have previously promised to avoid “competitive devaluation” to gain an advantage in trade.

The yuan sank in 2019 during trade tension with then-President Donald Trump. That prompted suggestions Beijing was trying to reduce the impact of U.S. tariff hikes, but there was no official confirmation. The currency later strengthened.

Other governments also are struggling to manage capital flows under pressure from Fed rate hikes. On Friday, Vietnam’s central bank raised a key interest rate in what economists said appeared to be an effort to stop an outflow of money in search of higher returns.

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