Good morning.
The United Kingdom could be plunged into recession as unexpected inflation threatens everyone but erodes economic growth.
KPMG has become the newest organization to sound the alarm, saying it has an approximately 50% chance of Britain falling into a “mild recession”.
He warned that the United Kingdom was particularly vulnerable to a downturn if a cut in Russian gas supplies led to a contraction in the eurozone economy or if an aggressive rise in US interest rates caused a recession there.
KPMG predicts that the UK economy will slow to 3.2% this year from 7.1% in 2021, before almost stopping to 0.7% next year.
5 things to start your day with
1) The world is at a “turning point” at constantly high prices Inflation risk to become embedded in leading economies and difficult to control, warns the Bank for International Settlements
2) French energy giants tell households to ration supply ahead of impending winter shortage Households are asked to “immediately” limit energy consumption to conserve gas supplies
3) Jaguar Land Rover’s battle to stop dealers from selling in China The carmaker has strict rules for its dealers who want part of the highly lucrative market
4) Train operators retaliate against RMT’s attack on “thick track bosses”
5) Thousands of PwC employees to receive wage increases in line with inflation
What happened during the night
Asian markets rose again this morning, building on progress from last week and after a strong performance on Wall Street, as speculation that inflation may have improved expectations of rising central bank interest rates.
Hong Kong rose more than 2% thanks to the strong performance of Chinese technology companies. Indications that China’s crackdown on the sector may be coming to an end added to the city’s optimism.
Tokyo, Shanghai, Seoul, Singapore, Sydney, Manila and Wellington were also good.
Expect today
Corporate: No updates planned
Economy: Orders for durable goods, orders for non-defense capital goods, upcoming home sales (USA)
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