Wall Street surges and dollar tumbles as US inflation rate drops to 7.7% – as it happened

Last modified: 04: 20 PM GMT+0

Dollar slides and stocks rally in New York on hopes that the Federal Reserve will slow its interest rate rises

Full story: US annual inflation rate cools slightly to 7.7% in October

Prices of goods and services in the US were up 7.7% in October compared with the same time last year, a sign that inflation is slowly starting to cool after reaching decades-high records over the last few months.

The US Bureau of Labor Statistics reported on Thursday that in October, the consumer price index showed a 7.7% rise in prices over the last 12 months, a 0.5 percentage-point decrease from September, which saw a rate of 8.2%. The October inflation rate is the lowest since January, when rates rose to 7.5%.

Along with the slight cooling in the overall inflation rate, the core inflation rate, which excludes the volatile energy and food sectors, also showed a small tempering off, reaching 6.3% – a small increase compared to the core inflation rate last month.

Greg Daco of Capital Economics has a neat summary of today’s US inflation report:

🇺🇸 Inflation is cooling!#CPI +0.4% (lower than expected)
🔥Core CPI +0.3%
🍲Food +0.6%
⛽️Energy +1.8% (gas -4.9%)

⬆️Goods +0.5%
🚗New +0.4%
🚘Used -2.4%
👕Apparel -0.7%

⬆️Services +0.4% (cooling)
🏠Shelter +0.8%
⚠️Rent +0.7%
⚠️OER +0.6% (cooling)
🏥Med -0.6%
🛫Air -1.1% pic.twitter.com/Z8dzqWIb5m

— Gregory Daco (@GregDaco) November 10, 2022

#Inflation: Persistent, but pivoting

▶️Headline & core #inflation cooled more than expected in October

🔥Headline inflation -0.5ppt to 7.7% y/y (still near high since 1981 but lowest since Jan '22)

🔥Core inflation -0.3pt to 6.3% y/y (still near high since '82 but plateauing) pic.twitter.com/Hr2Ww7LjNW

— Gregory Daco (@GregDaco) November 10, 2022

It’s been an “absolutely wild week for markets”, says Matt Weller, global head of research at FOREX.com and City Index.

The surprising drop in US CPI inflation, to 7.7% year-on-year, is driving “huge moves” in the markets today, he explains:

After the soft inflation reading, traders are pricing in an 80% chance of a downshift to a 50bps interest rate hike from the Federal Reserve and a lower terminal interest rate (back below 5%).

This dovish shift has had an outsized impact on markets, with US Treasury yields falling sharply (10-year back below 4% to a 1-month low), the US dollar falling across the board, gold rocketing to its highest level since August, and US indices surging.

UK bond prices strengthen

Government borrowing costs are falling across the board, in a boost to finance ministers including UK chancellor Jeremy Hunt.

Inflation fears are easing after US consumer prices rose by less than expected in October.

The yield, or interest rate, on 10-year UK government bonds has dropped to 3.27% from 3.45% last night, a sizeable move.

30-year gilt yields have also dropped, to 3.38%, the lowest since before the mini-budget rocked UK markets in late September.

US Treasuries are also rallying, on hopes that the Fed will ease its tightening cycle sooner than previously expected.

🏦🇪🇺*TRADERS SEE PEAK ECB RATE BELOW 3%, FIRST TIME SINCE OCT. HIKE

⚖️🇺🇸*US TREASURY 5-YEAR YIELD EXTENDS DECLINE TO 20 BASIS POINTS

⚖️🇩🇪*GERMAN, UK BONDS EXTEND RISE, 10-YEAR YIELDS BOTH FALL 12BPS

🦅🐍*MEXICAN PESO JUMPS TO 2022 HIGH AT 19.4125/USD AFTER US CPI

— Cable FX Macro (@cablefxmacro) November 10, 2022

⚖️🇮🇹*ITALIAN BONDS EXTEND SURGE; 10-YEAR YIELD DROPS 26BPS TO 4.03%
⚖️🇺🇸*TREASURIES EXTEND GAINS; 5-YEAR YIELD FALLS 25BP TO 3.99%

— Cable FX Macro (@cablefxmacro) November 10, 2022

If UK borrowing costs remain lower, then it would reduce the size of the ‘fiscal black hole’ which the UK government will try to fill in next week’s autumn statement.

Pound on track for best day against dollar since March 2020

The dollar is sinking further against the pound.

Sterling has now surged by 3 cents, which would be the biggest one-day move since the turmoil of March 2020.

It’s now reached $1.167, the highest level since mid-September.

Updated

Big Tech is leading the rally, with Apple up 6.5% and Google owner Alphabet rocketing 7.5%.

Big tech, monster green! $MGKhttps://t.co/dH0Fy7lqmV pic.twitter.com/lcXDJqLGdI

— Mike Zaccardi, CFA, CMT (@MikeZaccardi) November 10, 2022

The White House Council of Economic Advisers have cautioned that energy prices will remain volatile, due to the Ukraine war.

Inflation as measured by headline CPI increased 0.4 percent month-over-month in October, slightly below market expectations. Monthly core inflation in October fell to 0.3 percent, below market expectations. 1/ pic.twitter.com/C7fCydBapn

— Council of Economic Advisers (@WhiteHouseCEA) November 10, 2022

Energy prices increased in October, while food price growth declined to 0.6 percent. This is the slowest rate for food price growth since December 2021. 2/

— Council of Economic Advisers (@WhiteHouseCEA) November 10, 2022

Energy added 14 basis points to monthly inflation, the first positive contribution from energy to headline inflation since June. In 2019, the average contribution to monthly inflation from energy was 2 basis points. Food added about 8 basis points. 3/ pic.twitter.com/UaisG4rIL6

— Council of Economic Advisers (@WhiteHouseCEA) November 10, 2022

Energy prices will likely continue to be volatile in coming months, reflecting the impact of Russia’s invasion of Ukraine. Gas prices are down from their mid-June peak but higher than when Russia invaded. 4/ pic.twitter.com/yInmtuCOj3

— Council of Economic Advisers (@WhiteHouseCEA) November 10, 2022

They also point out that housing costs are making an outsized impact on inflation, due to recent rises in the costs of shelter.

Housing, a major component of services excluding energy, also contributed to the slowdown. Inflation in rent of primary residence ticked down to 0.7 percent, while inflation in owners’ equivalent rent declined to 0.6 percent. 11/

— Council of Economic Advisers (@WhiteHouseCEA) November 10, 2022

Together these housing cost measures contributed about 20 basis points to monthly headline CPI inflation in October, double the 9 basis points on average pre-pandemic (2019), reflecting prior price increases in the housing market that are still working their way into the CPI. 12/ pic.twitter.com/CzXNLOUURc

— Council of Economic Advisers (@WhiteHouseCEA) November 10, 2022

Year-over-year headline inflation rose by 7.7 percent in October, the slowest increase since January but still an elevated pace. Core inflation rose by 6.3 percent, declining from September but the same rate as in August. 15/ pic.twitter.com/GbFnOiyM7D

— Council of Economic Advisers (@WhiteHouseCEA) November 10, 2022

The drop in US inflation has driven the S&P 500 index of US stock up by 3.7% in early trading – on track for its best day in over two years.

S&P 500 JUMPS 3.6% ON OPEN, LARGEST IN TWO YEARS

— LIVE CF (@LIVE_CryptoFeed) November 10, 2022

Best day since April 2020 for S&P 500 and Nasdaq

(via @peterschack) @CNBC pic.twitter.com/rdEVne5RQz

— Carl Quintanilla (@carlquintanilla) November 10, 2022

Somebody did something strange with US equities.

This is what a 4.75% gain in NASDAQ and 3.55% rise in S&P 500 looks like.

Chart TY: @FINVIZ_com of the S&P 500. pic.twitter.com/fKiMowZkZg

— Jeffrey Cohen, Chicago Quantum (SM) (@chicago_quantum) November 10, 2022

Almost all of the 30 companies on the Dow Jones industrial average are rallying.

Salesforce.com is the top riser, up 6.5%, followed by DIY chain Home Depot (+5.4%), software giant Microsoft (+5.5%) and sportswear group Nike (+5.2%).

Technology company valuations benefit from lower inflation (it makes their future earnings more valuable today). Retailers could get a boost if falling inflation leaves people with more disposable income.

Updated

U.S. stocks surged at the open Thursday, with the Dow Jones Industrial Average jumping 900 points, after a highly-anticipated inflation report came in softer than anticipated: https://t.co/W0P4yjg3Th pic.twitter.com/nkQGzvJYog

— MarketWatch (@MarketWatch) November 10, 2022

Wall Street surges

Wall Street has jumped sharply at the start of trading, as the drop in US inflation cheers investors.

The Dow Jones industrial average gained 900 points, or 2.8%, while the tech-focused Nasdaq has surged 5%.

DOW JONES UP 902.59 POINTS, OR 2.78 PERCENT, AT 33,416.53 AFTER MARKET OPEN

S&P 500 UP 135.86 POINTS, OR 3.62 PERCENT, AT 3,884.43 AFTER MARKET OPEN

NASDAQ UP 520.83 POINTS, OR 5.03 PERCENT, AT 10,874.00 AFTER MARKET OPEN

— First Squawk (@FirstSquawk) November 10, 2022

🔺*NASDAQ 100 JUMPS 5.2% AT OPEN, MOST SINCE APRIL 2020

— Cable FX Macro (@cablefxmacro) November 10, 2022

Traders are optimistic that inflation may have peaked, meaning the US central bank stop raising interest rates sooner than feared.

Capital Economics told clients:

The better than expected 0.3% m/m increase in core consumer prices in October won’t on its own persuade the Fed to drop its hawkish stance.

But we expect this to mark the start of a much longer disinflationary trend that we think will convince the Fed to halt its tightening cycle early next year, with the policy rate peaking at 4.50% to 4.75%, and to begin cutting rates again before the end of 2023.

Quilter: the worst of US inflation may be behind us

Stuart Clark, portfolio manager at Quilter Investors, warns that America is not out of the inflationary woods yet…. but the worst may be over:

“Inflation in the US has once again fallen, giving some momentum to the idea that the worst is now behind us. The rate is lower than expectations and this will provide some relief to consumers and the wider market, however it is worth noting food and shelter is still increasing, so not completely out of the woods yet.

Inflation also remains stubbornly high, however, and as such the Federal Reserve is going to remain in a hawkish mood for some time to come.

The jobs market remains strong, so for as long as inflation is this elevated and the economy doesn’t completely grind to a halt, the market will have to wait for any indication of a pivot or pause from the central bank.

It's just one month, and we've seen months like this before, but this is exactly what we want to be seeing.

Core inflation right at the CPI target, driven by both deflation in goods and services declining. This is what a soft landing would look like. /1 pic.twitter.com/jxOI3xoDuk

— Mike Konczal (@mtkonczal) November 10, 2022

Wall Street futures jump

Wall Street futures have surged, with the Dow Jones industrial average on track to open 800 points higher, a gain of over 2%.

European investors have joined the party too, with the FTSE 100 index of blue-chip shares up 80 points or 1.1% in London.

good (eco) news is good news (for stocks futures):
October inflation data comes in tamer than expected = core/MoM/YoY/wages. Weekly jobless claims also tick higher, suggesting Fed tightening is having its intended effect. pic.twitter.com/wf3LsISo59

— Scarlet Fu (@scarletfu) November 10, 2022

Updated

Today’s US inflation figures confirm suggestions that the peak may be disappearing down the rearview mirror, says Neil Shah, executive director at Edison Group.

But even so, the Fed may eventually raise interest rates to 5% to squeeze out inflation (the current rate is 3.75-4% — the highest since early 2008).

At the same time, stubborn core inflation persists and continuing reports of a tight labour market will fuel wage inflation, pointing to a longer-term and more entrenched inflationary challenge for both fiscal and monetary policymakers.

As Fed chair Powell alluded to at November’s meeting, the FOMC’s December decision may well be a 0.5% hike, yet the higher than expected terminal rate of over 5% will still be a tough target for global markets to digest.

A cooler reading than expected for US #inflation CPI up 7.7% over the last 12 months vs the 8% expected
Core inflation also showed a slower rise at 6.3%
But those prices rises are really hitting the basics - food, gasoline and shelter

— Danni Hewson (@dannihewson) November 10, 2022

Traders have been looking for signs of peak inflation for months – could we finally be there?

Fresh signs of peak inflation: US consumer prices eased on a year-over-year basis in Oct. Headline CPI slipped to 7.8% & core CPI, which the Fed watches closely, eased to 6.3%. The update may give the Fed room to slow the pace of rate hikes at the upcoming Dec. 14 FOMC meeting: pic.twitter.com/DhZ4X8RxGb

— James Picerno (@jpicerno) November 10, 2022

US inflation is still well over the Fed’s 2% target, with prices rising much faster than average wages over the last year.

But it is – finally – trending in the right direction.

It's encouraging to see inflation -- both the "all items" index and the "core" index -- finally trending down.

US inflation peaked at 9.1% in June
October was 7.7%
The target = 2%

Used cars, clothes and airfares all fell in October pic.twitter.com/nnbs9gbkQX

— Heather Long (@byHeatherLong) November 10, 2022

US inflation, more detail.

Food prices continued to rise at a painful pace last month.

The food index increased by 0.6% over the month, with the food at home index rising 0.4%. Meats, poultry, fish, and eggs rose 0.6%, while cereals and bakery products jumped 0.8%.

On an annual basis, food inflation was 10.9%, while energy cost 17.6% more than a year ago.

Shelter, motor vehicle insurance, recreation, new vehicles, and personal care all became more expensive in October.

But, there was a drop in the cost of used cars and trucks, medical care, apparel, and airline fares indexes during the month (although all sectors cost more than a year ago).

America’s cost-of-living crisis seems to be easing, says leading economist Mohamed El-Erian, advisor to Allianz (and president of Queens’ College, Cambridge):

He believs the drop in inflation could help the Fed to ease off on its rapid interest rate rises.

Good news:
US CPI inflation came in better than expected, both for headline (7.7%, 0.4%) and core (6.3%, 0.3%).
Points to some easing in the cost of living pressures that hit the poor particularly hard
Supports some easing of what has had to be a very frontloaded Fed hiking cycle

— Mohamed A. El-Erian (@elerianm) November 10, 2022

Dollar slides after US inflation report

The dollar has fallen sharply after US inflation fell more sharply than expected last month.

Traders are anticipating that the US Federal Reserve may not have to raise interest rates as high as feared.

NOW: Dollar drops to session lows after US inflation data https://t.co/DqOcmeL0dE pic.twitter.com/0XsKGKBvnJ

— Bloomberg Markets (@markets) November 10, 2022

This has sent the pound surging by over two cents against the greenback, to nearly $1.16

The pound has jumped above $1.15 as the dollar slid quickly after US inflation slowed more than expected

City Latest: https://t.co/gjDNRqNfaC pic.twitter.com/FqTnXR9ySB

— Bloomberg UK (@BloombergUK) November 10, 2022

US inflation rate drops to 7.7%

Just in: US inflation was lower than forecast last month, in a welcome sign that the surge in prices may be fading.

The US consumer prices index rose by 7.7% in October, down from 8.2% in September, a bigger fall than expected.

That’s the lowest annual inflation reading since January 2022 – news that will cheer the Federal Reserve and the White House in the battle against inflation.

During October alone, prices rose by 0.4%.

The Bureau for Labour Statistics reports that:

The index for shelter contributed over half of the monthly all items increase, with the indexes for gasoline and food also increasing.

Core inflation also eased back.

If you strip out food and energy, then underlying inflation rose by 0.3% in October, down from 0.6% in September.

Annual core inflation dropped to 6.3%, down from 6.6%.

JUST IN: Consumer prices were up 7.7% from a year ago last month. In October, prices rose .4%.

Core inflation eased last month, up .3% after going up .6% the two months prior.

— Sarah Ewall-Wice (@EwallWice) November 10, 2022

US headline #inflation drops to 7.7%, the fourth straight monthly decline. Core inflation eases more in October than expect by Bloomberg poll. pic.twitter.com/ZeMlVwwdUO

— Marc Brütsch (@MarcBruetsch) November 10, 2022

Hundreds of workers at housing charity Shelter are planning a two-week strike in December in a push for better pay.

The walkouts, which involve more than 500 Shelter workers, will begin on December 5 and last until December 18.

It shows the extent of the cost of living crisis, as workers across the economy are hit by rising inflation.

One unnamed member of Shelter staff, in a quote provided by the Unite union, said:

At the very base level, absolute bare minimum, those working for a housing charity shouldn’t be experiencing housing insecurity as a result of being unable to pay rent.

Train drivers at 12 operators are to strike on November 26 in the long running dispute over pay, the Aslef union has announced (via PA Media).

National civil servant strike looms

There’s been a flurry of strike announcements so far today, as the UK’s autumn of discontent morphs into a winter of walkouts.

Tens of thousands of civil servants have voted for a national strike over pay,
pensions and jobs, the PCS union has announced.

The union represents workers employed by several British government departments including driving test examiners, border force officials and Jobcentre staff. An average of 86.2% of its balloted members voted for industrial action, the highest percentage vote in the union’s history.

The union warned that unless it receives “substantial proposals” from the government, it will announce a programme of “sustained industrial action” on November 18.

PCS is calling for a 10% pay rise, no further cuts to redundancy terms, and a job security agreement.

General secretary Mark Serwotka explained:

“The government must look at the huge vote for strike action across swathes of the Civil Service and realise it can no longer treat its workers with contempt.

“Our members have spoken and if the government fails to listen to them, we’ll have no option than to launch a prolonged programme of industrial action reaching into every corner of public life.

“Civil servants have willingly and diligently played a vital role in keeping the country running during the pandemic but enough is enough.

“The stress of working in the civil service, under the pressure of the cost-of-living crisis, job cuts and office closures means they’ve reached the end of their tethers.

Meanwhile in the capital, over 950 bus drivers employed by Abellio in South and West London will take 10 days of strike action in a pay dispute.

The Unite union says Abellio has not entered into meaningful pay talks, so workers will strike on 10 dates by the end of the year (dates here).

UK wholesale gas prices more than doubled last week.

The System Average Price (SAP) of gas rose by 110% in the week to 6 November 2022, the Office for National Statistics reports. That’s the largest week-on-week increase this year.

It pushed gas prices to more than triple their levels in February 2020. However, they were still 80% below the peak in August 2022, when European gas prices soared as countries raced to fill storage tanks before winter.

We’ve released economic activity and social change data.

The System Average Price of gas rose by 110% in the week to 6 Nov 2022, according to @NationalGridUK 🔥

This is 322% above Feb 2020’s pre-#COVID19 baseline level, but 79% below Aug 2022’s peak.

➡️ https://t.co/aJTOUNIpIx pic.twitter.com/TBH3PMvHOY

— Office for National Statistics (ONS) (@ONS) November 10, 2022

Consumer confidence at lowest point since first Covid lockdowns

Consumer confidence has tumbled to its lowest point since the early days of the Covid-19 pandemic, after the mini-budget hammered optimism.

The latest consumer confidence report from YouGov and Cebr has found that people are the most pessimistic since the first lockdowns in April 2020.

Optimism about the economic outlook, and the outlook for house prices, both fell, and people remain very gloomy about their household finances.

Here are the key points:

  • Consumer confidence declines (-3.0) to its lowest score (94.7) since April 2020

  • Confidence in short-term house prices (-9.4) and outlook (-11.3) plunges

  • Retrospective (-1.2) and forward-looking (-2.5) business activity metrics fall

  • Optimism around household finances improves (+2.5) but remains negative (45.5)

UK consumer confidence index
UK consumer confidence index Photograph: YouGov/Cebr

Josie Dent, managing economist at Cebr, explains:

Consumer sentiment suffered yet another decline in October as the fall-out from the so-called ‘mini budget’ compounded ongoing worries about the cost-of-living crisis.

A set of unfunded tax cuts announced by the then-Chancellor Kwasi Kwarteng sent financial markets into turmoil and caused mortgage rates to skyrocket, prompting speculation about a substantial price correction in the housing market in the months ahead. It is therefore unsurprising to see the backward- and forward-looking indicators on home values reporting the largest falls this month.

Declines in the business activity indicators and ongoing pessimism regarding household finances have also contributed to the 14.5-point year-on-year drop in the headline YouGov/Cebr Confidence Index this month, the largest annual fall since 2011.

Updated

Home repossessions jumped in last quarter

The number of UK homes being repossessed jumped in the third quarter of this year, as some households and buy-to-let landlords were unable to pay their mortgages.

Trade body UK Finance has reported that 700 homeowner mortgaged properties were taken into possession in the third quarter of 2022. That is a 15% increase on the previous quarter, although still below pre-pandemic levels.

An additional 390 buy-to-let mortgaged properties were taken into possession as well in July-September, an 11% increase.

UK mortgage repossessions
UK mortgage repossessions Photograph: UK Finance

Mortgage rates had climbed this year, even before the mini-budget in late September, as the Bank of England raised borrowing costs to fight inflation.

Karen Noye, mortgage expert at Quilter, says the process of a lender repossessing someone’s home due to missed payments has started to increase “at a significant rate” although levels still remain below pre-covid levels.

Compared to the same quarter in 2021, mortgage possession claims increased from 2,832 to 3,680 (30%), orders from 1,229 to 2,491 (103%), warrants from 947 to 2,437 (157%) and repossessions by county court bailiffs increased from 390 to 744 (91%).

Historically, periods of high interest rates have coincided with an uptick in the number of repossessions due to people’s monthly payments increasing to levels they can no longer pay.

With high energy and food prices some people will start to struggle to heat their homes, eat and service their mortgage and this will lead to repossession.

Tens of thousands of households are struggling to pay their mortgagers, UK Finance’s data shows.

There were 74,440 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the third quarter of 2022, which includes 28,910 homeowner mortgages with at least 10% of their outstanding balance in arrears.

Updated

Chinese banks made much fewer loans last month than forecast, as its economy slowed.

Banks made 615.2bn yuan (£74bn) in new yuan loans in October, down from 2.47 trillion in September, and below the 826.2bn a year earlier.

JUST IN:#China's new yuan #loans and total social #financing crashed in October:

China issued 615.2B yuan of new loans , compared with 2470B yuan in Sep.

Social financing was 907.9B yuan, compared with expected 1.6 trillion yuan and the previous 3.53 trillion yuan.

— macropanda (@macro_panda_) November 10, 2022

Bitcoin could fall to $13,000 amid FTX crisis

The crisis gripping crypto exchange FTX could wipe another 20% off Bitcoin’s value, JP Morgan analysts say.

They predict a wave of margin calls across the industry, which could send bitcoin down to $13,000, warning:

It looks likely that a new cascade of margin calls, deleveraging and crypto company/platform failures is starting.

Such a fall would wipe out all the bitcoin rally that began in November 2020, and peaked in November 2021.

The bitcoin price over the last five years
The bitcoin price over the last five years Photograph: Refinitiv

JPMorgan Team Says Crypto Markets Face ‘Cascade’ of Margin Calls. Bitcoin May fall to $13K https://t.co/AxYy5VHVK7

— Nouriel Roubini (@Nouriel) November 10, 2022

Bitcoin is already down 65% so far this year, to around $16,300, hitting a two-year low overnight after rival Binance abandond plans to rescue FTX.

Updated

Pandemic home working and long Covid drive up long-term sickness

Online teaching materials being prepared at home during the pandemic in January 2021.
Online teaching materials being prepared at home during the pandemic in January 2021. Photograph: Nathan Stirk/Getty Images

Back and neck problems caused by home working during the lockdown, and long Covid, have contributed to the surge in people unable to work owing to long-term sickness.

The Office for National Statistics reports that the number of economically inactive people with problems or disabilities connected with the back or neck has risen by 62,000, or 31%, over the last three years.

The biggest year-on-year increase was between 2021 and 2022, after millions of office staff spent many months working from kitchens, attics and spare bedroom.

An ONS senior statistician, Hugh Stickland, said the largest increase was from people with other health problems or disabilities.

While this category includes people affected by long Covid, we think that’s only one of several contributing factors.

The next highest rise was among people with back or neck problems. It’s possible that increased homeworking has given rise to these kinds of conditions.

Overall, the number of working-age adults out of the labour market because of long-term sickness has risen from 2 million in spring 2019 to about 2.5 million in summer 2022.

That 500,000 increase has pushed up economic inactivity, and contributed to the shortage of workers.

Former wholesale and retail workers are the most likely to be economically inactive because of long-term sickness.

Around 2.5 million people were economically inactive because of long-term sickness in summer 2022 – compared with around 2 million people in spring 2019.

Since the #COVID19 pandemic hit the UK, the number of people out of work because of long-term sickness has risen by 363,000. pic.twitter.com/HylYPhKG7K

— Office for National Statistics (ONS) (@ONS) November 10, 2022

With NHS waiting lists at record highs, it’s taking much longer for people to get treatment to help them back to work.

Waiting times for NHS treatment in England have almost doubled, from around 7 weeks in April 2019 to almost 14 weeks in August 2022.

The number of people in England waiting to start hospital treatment rose to 7.1 million at the end of September, up from 4.4 million before the first lockdown in February 2020.

The number of economically inactive people reporting mental illness and nervous disorders has risen 22% since 2019, with the sharpest increases seen after 2020.

But the number citing depression, bad nerves and anxiety as their main health condition has returned to pre-pandemic levels, after increases in 2020 and 2021.

The biggest relative increase in those inactive because of long-term sickness was seen among those aged 25 to 34, at 42%.

Of these, nearly 61% were men.

Increases in those aged 16 to 34 were largely driven by mental illness, phobias and nervous disorders. pic.twitter.com/TZxCC6yM3W

— Office for National Statistics (ONS) (@ONS) November 10, 2022

We also looked at which industries people worked in and what jobs they did in the two years prior to reporting long-term sickness.

Wholesale and retail trade had the most former workers out of work on long-term sick per every 1,000 current workers.

➡️ https://t.co/8xREKUkLtv pic.twitter.com/Rexsn3IQw0

— Office for National Statistics (ONS) (@ONS) November 10, 2022

Updated

Full story: ‘Not the Brexit I wanted’, says Next boss

Simon Wolfson, the chief executive of clothing and homeware retail Next has urged the government to make it easier to allow foreign workers into the UK and said this is “not the Brexit I wanted”.

The Conservative peer and Brexit supporter said the government was blocking much-needed workers from entering the UK, even though firms were desperate for labour.

“We have got people queueing up to come to this country to pick crops that are rotting in fields, to work in warehouses that otherwise wouldn’t be operable, and we’re not letting them in,” Lord Wolfson said in an interview with the BBC.

He said:

In respect of immigration, it’s definitely not the Brexit that I wanted, or indeed, many of people who voted Brexit wanted.

Businesses across the UK have been struggling to find staff, partly due to Brexit restrictions that meant EU citizens no longer had the right to work in the UK. It has affected hospitals, pubs, restaurants and logistics firms, and last year the government was forced to offer temporary visas to lorry drivers and poultry workers to help fix the resulting supply chain crisis.

Wolfson said most people in the UK had a “very pragmatic view” of immigration and urged the government to take a “different approach to economically productive migration”.

“Yes, control it, where it’s damaging to society, but let people in who can contribute,” the Next chief executive added.

More here:

Updated

Business has also been strong at discount retailer B&M, as shoppers seek out Christmas bargains.

B&M says trading has been good in the first few weeks of the key Christmas quarter as customers look for savings amid a cost-of-living squeeze.

The group, which sells household goods, food, DIY equipment and toys, has seen a 2.5% rise in like-for-like sales in in the first six weeks of the so called “Golden Quarter”.

The retail group WH Smiths has reinstated its dividend, despite the cost of living squeeze hitting the high street.

WH Smiths has announced a “significant recovery” in performance over the last year, with revenues rising to £1.4bn from £886m the previous year.

The company’s travel division, which runs shops at airports and railway stations, had a strong year as pandemic restrictions were relaxed.

CEO Carl Cowling said:

2022 has been a successful year for WHSmith and we enter the new financial year with the Group in its strongest ever position as a global travel retailer with multiple growth opportunities across the world.

We have opened 98 new stores in the year and we have a pipeline of 150 new stores yet to open across 16 countries and in airports as varied as Los Angeles, Salt Lake City, Brussels, Oslo and Melbourne.

Smiths lights up the gloom with rapid growth in sales https://t.co/NrpR6e1gOR

— Ben Martin (@Benjaminwmartin) November 10, 2022

Updated

Cost of living crisis puts food banks at 'breaking point'

Goods at a food bank.

The cost of living crisis is driving UK food banks to “breaking point” with almost 1.3m emergency parcels given to people over just six months.

The Trussell Trust charity has said families face record-breaking levels of need, with one in five individuals referred to its network now coming from working households.

Trussell gave out more emergency food parcels during the April to September period than ever before, with 320,000 people turning to food banks for the first time.

Nurses, shop assistants and youth workers are among large numbers of people in low-paid jobs forced for the first time to accept charity food parcels to stay afloat as the cost of living crisis transforms the profile of the typical UK food bank user, my colleague Patrick Butler points out.

More here:

Updated

Unions are urging rail bosses to “stand by” their staff, as London Underground workers hold a 24-hour strike that will disrupt travel for millions of commuters in the capital.

The strike is the latest move in a long-running dispute over jobs and pensions.

Most tube lines are fully or partly suspended, meaning overland trains and London buses are overcrowded as people try to get to work.

Commuters board a crowded train at Stratford Station in London on November 10, 2022.
A Tube train at Stratford in London this morning. Photograph: Daniel Leal/AFP/Getty

John Leach, assistant general secretary of the National Union of Rail, Maritime and Transport Workers (RMT), told PA Media outside King’s Cross St Pancras:

My message to TFL now is stand by your staff, listen to your staff, thousands of them are on strike today for the sixth time this year.

They’re losing lots of money, don’t they realise in management there’s a serious problem here? What they need to do is stand with their staff.

The Mayor of London needs to stand up for staff and do a proper finance deal which gives TfL money it needs to keep the capital city moving, and not trade off the staff pension, jobs and their conditions of employment for some bad deal, which is what they have done.

Updated

Centrica and National Grid lift profit forecasts amid energy crunch

A bill from British Gas.
. Photograph: Owen Humphreys/PA

Energy giant Centrica continues to make strong profits from the high electricity and gas prices that are fuelling the cost of living crisis.

Centrica, which owns British Gas, has announced that profits will be ahead of expectations this year.

Its electricity generation and gas production volumes have remained strong, while its energy trading arm has been busy during Europe’s energy crunch.

Centrica is to funnel spare cash back to shareholders, through a £250m share buyback.

But it also says British Gas’s profits will be lower, due to warm weather in October and the broader inflationary and economic pressures.

Shares in Centrica have jumped over 8%, to the top of the FTSE 100.

National Grid has also lifted its earnings guidance today, after growing its underlying profits by 50% in the first half of the financial year.

Yikes this won't go down well in a cost of living crisis: two of Britain's biggest energy companies Centrica and National Grid upgrade profits guidance and Centrica launches a £250mn share buyback. More here: https://t.co/FVptPVobP2

— Nathalie Thomas (@NathalieThomas3) November 10, 2022

UK house prices stall as demand weakens

An estate agents window, in Kentish Town, London.
An estate agents window, in Kentish Town, London. Photograph: Yui Mok/PA

The UK property market is continuing to weaken, as the jump in mortgage rates put off potential buyers.

Sales and inquiries from buyers both dropped last month, as house price growth grinds to a halt, the Royal Institution of Chartered Surveyors (RICS) has reported.

New buyer enquiries fell sharply in October, RICS says, which is the sixth monthly drop in a row. The number of new listings coming onto the market also fell.

Surveyers across the country now predict that prices will decline over the next year.

"Clear signs house prices now are falling." @G_Dickens11 on U.K. RICS Residential Market Survey, October #PantheonMacro

— Pantheon Macro (@PantheonMacro) November 10, 2022

Simon Rubinsohn, RICS chief economist, explained:

“The latest feedback to the RICS survey provides further evidence of buyer caution in the face of the sharp rise in mortgage costs.

As a result, the volume of activity is likely to slip back over the coming months and realistic pricing is now much more important to complete a sale.

This slowdown is forcing more people to rent. But with fewer landlords putting properties on the market, rents are expected to be driven higher over the near-term.

Buyers start to prepare for their winter hibernation hoping things will have settled down…ward, come spring. Whilst renters brave the inflation storm, foraging for expensive rental scraps that could be 4% higher next year according to RICS https://t.co/zfjxCLKMjf

— Emma Fildes (@emmafildes) November 10, 2022

Both Nationwide and Halifax have seen a drop in house prices in October.

Interactive
Halifax’s latest house price index

Updated

The turmoil following the disastrous mini-budget hit the jobs market in October, explains Neil Carberry, chief executive of the REC, said:

The economic and political uncertainty of September and October has caused employers to become more cautious in their approach to hiring than during the frenzy of earlier in the year.

Decision-making timelines for permanent hires have extended, for instance.

Updated

Economic gloom hits UK jobs market, with fewer foreign workers available

UK firms have cut back on hiring new workers for the first time since the pandemic lockdowns in February 2021, as they struggled to find staff.

Permanent placements dropped in October, the first decline in 20 months, according to the latest UK Report on Jobs from KPMG and REC.

It found that heightened economic uncertainty had led some clients to reassess their recruitment plans.

But candidate shortages also dampened hiring – which backs up Simon Wolfson’s call for more foreign workers to be allowed in.

The report says that the number of candidates available fell again last month, with reruiters pointing to the lack of overseas workers:

The decline in permanent staff availability remained more acute than that seen for temporary labour.

When explaining the latest drop in candidate numbers, recruiters commented that people had become more reluctant to switch or seek out new roles due to concerns around the weaker economic outlook, fewer foreign workers and a low unemployment rate.

The report also found that starting salary inflation slipped to 18-month low, as the jobs market cooled. That might allay the Bank of England’s fears that a wage-price spiral could break out.

Prime minister Rishi Sunak will hope to make progress over another Brexit headache – the Northern Ireland protocol – when he meets his Irish counterpart Micheal Martin today.

The two leaders will meet at a British-Irish Council summit in the north-west of England today, which may be a sign that relations are thawing.

The Protocol allows Northern Ireland to remain within the EU’s single market for goods, creating an effective border between NI and Great Britain. That has led to checks, delays and increased costs for businesses.

London wants a complete rewrite of the protocol that would ditch core elements, and threatened to unilaterally overturn it otherwise.

Rishi Sunak to meet the taoiseach Micheal Martin today in north west England at the British Irish Council. They will talk devolved govt in NI and protocol. Michael Gove also attending along with reps from Scotland, Wales, NI, Isle of Man and Channel Islands.

— Lisa O'Carroll (@lisaocarroll) November 10, 2022

The row caused Northern Ireland’s power-sharing Stormont Assembly to break down this year, as the DUP refused to take part due to its opposition to the Protocol.

Assembly elections could be delayed until next April to give talks between the UK and the EU on the controversial Brexit trade arrangements a chance,

Downing Street said Sunak will say he is “determined” to help restore the power-sharing assembly in Belfast “as soon as possible”.

Lord Wolfson also argues that the government needs to focus its “very limited resources” on the people who most need it during the upcoming recession.

That would be a better use of money than cutting taxes for businesses who are less needy, he argues:

That’s the people who are going to be cold, and people who are going to be hungry, not businesses that want a break on their taxes.

Corporation tax is due to rise to 25% next April, after the plan to freeze it at 19% was scrapped after the mini-budget imploded.

Updated

Next year will be tough in the UK, Lord Wolfson adds (with a recession widely expected).

He told the BBC:

The interesting thing about a supply side recession is that the seeds of correction are automatically certain. So as demand drops, and factories begin to empty, then prices begin to come down,” he said.

Next year will be tough but there is no need for a national nervous breakdown, he added.

Back in September, he predicted a second cost of living crisis next year:

Updated

Introduction: Next CEO says "it’s definitely not the Brexit that I wanted"

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Brexit means Brexit, as the prime minister-but-three would once insist. And six years after the referendum, Brexit means UK companies are strugging to hire workers.

It’s so bad that the boss of high street chain Next is calling on the government to allow more foreign workers into the UK, to help address chronic labour shortages that are hurting the economy.

Simon Wolfson, who was one of the most prominent business leaders backing the UK leaving the European Union, now fears the UK’s current immigration policy is crippling economic growth.

In an interview with the BBC, Lord Wolfson said that blocking foreign workers has a considerable cost to the UK economy.

He points out:

We have got people queuing up to come to this country to pick crops that are rotting in fields, to work in warehouses that otherwise wouldn’t be operable, and we’re not letting them in.

And we have to take a different approach to economically productive migration.

Wolfson admits that this is not the Brexit that he – or most people – wanted, saying:

I think in respect of immigration, it’s definitely not the Brexit that I wanted, or indeed, many of people who voted Brexit, but more importantly, the vast majority of the country, he said.

And we have to remember, you know, we’re all stuck in this Brexit argument, we have to remember that what post-Brexit Britain looks like, is not the preserve of those people that voted Brexit, it’s for all of us to decide.

Back in 2016, Wolfson had a much cheerier view, declaring that: “On balance, I think we will be better off out,” and that without radical change the UK was “heading for a long era of low growth”.

But now, the UK is facing its longest recession in decades, while the rise in long-term sickness pushed vacancies to record levels earlier this year.

Next itself has now issued two profit warnings this year, as soaring inflation and the weak pound undermined consumer confidence.

Sectors across the economy are find it hard to recruit, including hospitals, pubs and restaurants, and logistics companies. Last year, lorry drivers and poultry workers were offered temporary UK visas to help fix the supply chain crisis.

Government ministers have previously criticised businesses for hiring staff from overseas on lower salaries, undercutting domestic workers.

Wolfson’s solution? Businesses who need foreign workers should pay a tax of 10% to the government on those salaries – to incentivise them to look at home first.

As he tells the BBC:

It would automatically mean that businesses never bought someone into the company from outside if they could find someone in the UK.

But if they genuinely can’t, they’ll pay the premium.

'We need more immigrant workers', says Next boss https://t.co/5CHMdYUoCB

— BBC News (UK) (@BBCNews) November 10, 2022

Also coming up today

The cryptocurrency market is in turmoil, as the crisis gripping crypto exchange FTX deepens.

Overnight, rival Binance has backed out of a deal to rescue FTX, citing investigations by US financial regulators and concerns about its business practices.

FTX’s founder, Sam Bankman-Fried, has reportedly told investors that FTX needs funding of up to $8bn after a surge in withdrawal requests from customers.

As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.

— Binance (@binance) November 9, 2022

In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.

— Binance (@binance) November 9, 2022

Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.

— Binance (@binance) November 9, 2022

As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.

— Binance (@binance) November 9, 2022

Investors are bracing for today’s US inflation report, hoping it will show that price pressures cooled last month.

The annual CPI rate of inflation is expected to drop to 8% for October, from 8.2%.

A slowdown in inflation could encourage the US Federal Reserve to slow its interest rate rises.

But as Michael Hewson of CMC Markets explains, core inflation is the key to the Fed’s next moves:

Core prices are the main focus and they accelerated in September, pushing up to a 40 year high of 6.6%, and they’ve been sticky all year.

Markets will be looking for evidence of a slowdown here if the narrative of slowing inflation is to take hold. The rise in the US dollar does offer cause for optimism, given it acts as a brake on higher prices. Today we’ll find out whether core prices are giving any indication of slowing down.

We’ll also hear from Bank of England monetary policy committee member Silvana Tenreyro, who is giving the keynote speech at the Society of Professional Economists Annual Conference.

The agenda

  • 8am GMT:: China’s new yuan loans for October

  • 1.10pm GMT: Bank of England policymaker Silvana Tenreyro gives keynote speech at the Society of Professional Economists Annual Conference

  • 1.30pm GMT: US inflation report for October

  • 1.30pm GMT: US weekly jobless report

Updated

Contributors

Graeme Wearden

The GuardianTramp

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