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38 WEDNESDAY, AUGUST 16, 2017 international business US retail sales jumped 0.6 per cent in July Consumers went out shopping in a big way in July, pushing up retail sales by the largest amount in seven months. According to The Associated Press, retail sales advanced 0.6 per cent last month, the best showing since a gain of 0.9 per cent last December, the Commerce Department reported Tuesday. For most of this year, retail sales have been lackluster, including a decline in May of 0.2 per cent and a modest 0.3 per cent June gain. Consumer spending accounts for around 70 per cent of economic activity, so the latest result is a good sign for overall economic growth. Michael Pearce, United States economist at Capital Economics, said the strong gain in July sales showed that consumer spending was off to a good start for the third quarter. “With the labor market still adding jobs at a rapid pace, consumption growth looks set to remain strong for at least the rest of this year,” Pearce said. Sales got a boost in July from a 1.2 per cent jump in auto sales, the strongest result since December. There were sales gains in other areas as well, including furniture stores, hardware stores and restaurants. The overall economy, as measured by the gross domestic product, grew at a 2.6 per cent annual rate in the April-June quarter, a significant rebound from growth of just 1.2 per cent in the first quarter. Economists are looking for growth to remain strong in the current July-September period, although some forecast a slight slowdown from the second quarter pace. They ongoing strong gains in employment will add further fuel to proposed £14bn class A action lawsuit against Mastercard is being revived after lawyers filed to appeal against a ruling that barred the case from heading to trial last month. As reported by The Guardian, UK, lawyers for former financial ombudsman Walter Merricks have made their application to the UK’s Competition Appeal Tribunal just weeks after it refused to certify his claim. Merricks’ claim was lodged on behalf of nearly 46 million consumers and alleged that Mastercard’s interchange fees forced consumers to pay higher prices to businesses that accept the credit card over a 16-year period, therefore breaching EU competition law. The damages being sought were more than £14bn. The tribunal last month ruled that the case could consumer spending. The unemployment rate in July dropped to a 16-year low of 4.3 per cent. For July, sales of furniture, hardware and building supplies and sporting goods were all up. Sales at general merchandise stores posted a tiny 0.1 per cent gain. Sales by non-store retailers, the category that tracks internet commerce, posted Germany’s second largest airline, Air Berlin, is filing for bankruptcy protection after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available following years of unsuccessful turnaround attempts. The Associated Press reports that the loss-making airline, which carries some 80,000 people a day mostly on short-haul destinations, will get a €150m ($177m) government loan to keep flights running and not leave travellers stranded during the peak summer season. “We’re in a time when many tens of thousands of travellers and vacationers are in multiple international holiday spots,” the German Economy and Transport Ministries said in a statement Tuesday. “The return flights of these travellers back to Germany with Air Berlin would not have been otherwise possible.” The loan cash is expected to last for three months, the government said, after which the airline’s future is uncertain. Rival Lufthansa, which is Germany’s biggest carrier, and another a strong gain of 1.3 per cent. Online shopping has been making major inroads over traditional brick-and-mortar stores. Pearce said that the surge in online sales reflected in part Amazon’s Prime Day promotion event which boosted US orders for the giant internet shopping company by 50 per cent compared to the same event last year. Air Berlin files for bankruptcy after shareholder pulls plug £14bn class action case against Mastercard revived not proceed through a socalled collective action, saying that even if losses had been suffered and could be estimated across the whole class, there was no way of ensuring that an individual would receive an amount compensating for any loss suffered. Merricks says that the tribunal should have considered the “clear policy intent” behind the claim against Mastercard. “In essence this is a simple case. It has been conclusively established that Mastercard acted unlawfully and anticompetitively in imposing excessive credit and debit card fees,” Merricks said. He added: “If I can establish the total amount of harm that Mastercard has caused to UK consumers, then why should consumers then get nothing at all if I cannot calculate the precise unidentified airline are in talks to take over some operations, the government said. Union verdi called it a “severe blow” for the morethan 7,000 employees of Air Berlin. “Our priority now lies with securing the jobs,” said Christine Behle, a union board director. “Air Berlin must proceed with transparency and provide all important information.” Economy Minister Brigitte Zypries said that the bridge loan should give Air Berlin enough time to wrap up talks on the sale of some operations. The bankruptcy filing was prompted by the decision by Etihad, which holds a 29.2 per cent stake, to stop funnelling money into the airline after years of propping it up. Air Berlin said that in light of Etihad’s decision, it “came to the conclusion that there was no further positive way ahead for Air Berlin.” Already the carrier had been trying to ease its costs and lighten its debt load of €1.2bn In December; it reached a deal to lease 38 plans to Lufthansa’s units Euro wings and Austrian Airlines. loss that each individual consumer suffered? “Rather than allow consumer recovery, this would reward unlawful conduct by allowing companies to keep their illgotten gains.’ Mastercard has until September 8 to respond to the filing, after which point the tribunal could decide to hold a hearing on the appeal application before issuing its judgment. A spokesman for Mastercard, which last month said it welcomed the tribunal’s ruling, said that an appeal against the CAT’s decision would be “without merit”. “Consumers across the UK and around the world derive real value from Mastercard’s payments technology through the benefits of security, convenience and consumer protection.”
WEDNESDAY, AUGUST 16, 2017 international business Young graduates reluctant to move for new jobs The unwillingness of young graduates to move from their home regions is behind a marked drop in Britain’s labour mobility since the turn of the millennium, a thinktank has said. The Guardian, UK reports that a study by the Resolution Foundation showed that the share of the population prepared to switch both region and employer in 2016 had fallen from 0.8 per cent to 0.6 per cent. The think-tank said the decline was only partly the result of the deep financial and economic crisis of 2007-09 and came despite a number of factors – an increase in renting, a rise in the number of graduates and higher immigration – that would tend to make the country more mobile. It said the evidence was that the decline was being driven by the young, particularly young graduates, many of whom were giving up the chance of getting a pay rise by their reluctance to move. A person under 30 who moves job and employer secured an 11per cent boost to their wages, the Resolution Foundation said. The stay-at-home tendency among graduates coincided with an increase Mears Group issues profits warning The UK social housing maintenance company Mears Group has issued a profit warning and slashed full-year revenue forecasts as its clients delay new contracts following the Grenfell Tower fire. As reported by The Guardian, UK, the company, which carries out repair and maintenance work for properties belonging to local authorities and other social housing landlords, said new orders were on hold as authorities focused on ensuring all their properties were safe and compliant in the wake of the June fire, in which 80 people died. Mears, which provides services across the UK – delivering more than 6,000 repairs every day to a portfolio of more than 1m homes – said it had had no involvement with Grenfell Tower, nor with any properties run by Kensington and Chelsea council. But it warned that the “tragic events at Grenfell Tower will impact the housing division later this year as clients review the commissioning and safety practices at their properties”. This would cut the revenue it had expected to make this year from housing by £30m, to £800m. It said that would result in a lower than previously expected annual profit, although it has not disclosed its profit forecast. The group posted revenues of £471m and pretax profit of £13m for the six months to June. The UK authorities are currently reviewing building and fire safety rules after police said they believe the cladding panels added during a refurbishment of Grenfell Tower may have contributed to the rapid spread of the fire. The Mears chief executive, David Miles, said, “While the likely revenue shortfall for the full year is frustrating, it is entirely understandable in the circumstances and the group will be working closely with its partners and clients at this time to address their immediate priorities.” He said delays in procurement decisions by housing clients were expected to be temporary and would not impact its long-term order book. Mears, which was set up in 1996, employs more than 13,000 people in the UK. It also has a smaller care division providing support and help for older and disabled people who live independently in their in the proportion of those with degrees doing nongraduate jobs and, according to the think-tank, was one possible explanation for Britain’s dismal pay and productivity record over the past decade. In 2001, when 31 per cent of graduates were doing jobs for which they were overqualified – 1.8 per cent of people with degrees moved region and employer. By 2016, only 1 per cent of graduates moved region and employer, and 35.6 per cent were doing non-graduate jobs. It said international Consumer price inflation in Britain unexpectedly held steady in July at an annual rate of 2.6 per cent, official figures showed Tuesday, in a development that may ease pressure on the Bank of England to raise interest rates at a time when the economy has slowed amid uncertainty over the country’s exit from the European Union. According to The migrants accounted for an increasing proportion of UK regional job-to-job moves – up from 8 per cent to 24 per cent over the past two decades – and warned the government it needed to be alive to the impact of Brexit on labour mobility. Stephen Clarke, a policy analyst at the Resolution Foundation, said: “The Noman Tebbit notion that the unemployed should be getting on their bikes and travelling around looking for work is obviously outdated, but our thinking on job mobility in the UK has not really evolved much beyond Associated Press, the reading from the Office for National Statistics was short of economists’ expectations for 2.7 per cent, largely because lower fuel costs helped offset a wide array of price increases. The news saw the pound fall as traders priced in a lower likelihood of any imminent increase in rates. By midday in London, it was down 0.6 per cent at $1.2883, while the euro rose 0.3 per cent to 0.9114 Rail users face steepest fare rise in five years Rail fares for commuters in England and Wales will increase by 3.6 per cent from next year, adding pressure to incomes already squeezed by higher prices. The rise, the biggest annual increase in five years, is set by the government and linked to July’s retail price index measure of inflation announced by the Office for National Statistics on Tuesday. The higher fares will take effect from January, The Guardian, UK, reports. Economists had expected RPI to increase to 3.5 per cent in July, while rail fares rose by 2.3 per cent at the start of 2017 based on last year’s figures. The change applies to about 40 per cent of rail fares, including season tickets on many commuter journeys, some off-peak return tickets on long-distance journeys and anytime tickets around major cities. So-called regulated fares are set by the government but normally provide the benchmark for rises across the network. Unions and campaigners have been holding protests against the rises at railway stations around the country. The RMT general secretary, Mick Cash, said government policies of it. With only 10 per cent of those moving regions for jobs previously unemployed, the focus needs to be on why there has been a fall in the share of people already in work moving region and employer, a move that leaves the typical earner £2,000 better off. “Job mobility matters not just for the individual getting the pay rise but to our economy as a whole. On a basic level that’s about avoiding labour shortages, but more importantly in an economy nearing full employment, ensuring the talent and potential of pound. Homeowners on flexible mortgages and consumers with increasing debt have been on guard for a possible rise in interest rates as inflation has risen above the Bank of England’s target of two per cent. A minority of rate-setters at the bank have in the past few months voted in favour of raising the benchmark interest rate from the record low of 0.25 per cent to keep a lid on price increases. Higher rates could be an unappetizing prospect for an economy that’s slowed down this year and has to steer the choppy Brexit waters ahead. Inflation in Britain has risen sharply over the past year since the country voted to leave the EU, a decision that caused a fall in the pound of about 15 per cent 39 individuals and firms doesn’t go to waste is essential to boosting productivity. “But not everyone can up sticks. Alongside encouraging more mobility among the minority of inwork people – such as young people and graduates – for whom it is often more feasible to move, we should be improving thinking on how people can move into jobs they are qualified for without uprooting their family’s lives. That involves thinking not just about progression and employment, but housing and transport too.” • Pedestrians walk past a stock quotation board flashing the current foreign exchange rate of the yen against the US dollar in Tokyo... on Tuesday. Photo: AFP UK inflation lower than expected, easing rate hike prospects holding down wages while allowing fares to rise was a “toxic combination”. He said: “The private operators and government say the rises are necessary to fund investment but the reality is that they are pocketing the Factory activity in New York surged this month to the highest level in nearly three years. The Associated Press reports that the Federal Reserve Bank of New York said Tuesday that its Empire State manufacturing index jumped to 25.2 this month from 9.8 in July. The August profits while passengers are paying more for less with rail engineering work being delayed or cancelled , skilled railway jobs being lost and staff cut on trains, stations and at ticket offices.” New York factory activity rises reading was the highest since September 2014. New orders, shipments and hiring all picked up in August. Factories also expressed optimism that conditions would continue to improve over the next six months. The index measures sentiment among firms in New York States, but is closely followed by economists because it provides an early read on factory output nationwide. American manufacturers have recovered from a slump in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes US products costlier in foreign markets. and pushed up prices for imports like oil and food. Inflation, which hit 2.9 per cent in May, was barely positive when Britons cast their votes in the June 2016 referendum. The rise in inflation has hurt living standards as price increases outstrip annual wage rises, which are running at below two per cent. The worry is that consumers will either respond by further reining in spending or opt instead to pile up on credit, leaving them more vulnerable in the event interest rates rise or if unemployment increases due to Brexit. “While inflation has plateaued in recent months, current levels are nonetheless placing significant pressure on consumers,” said Jack Coy, economist at the Centre for Economics and Business Research. The fact that inflation is not rising further could prompt some cheer both among policymakers at the central bank and consumers. Among rate-setters, it could strengthen the hand of those urging to not raise interest rates. Earlier this month, the bank’s ratesetting panel voted 6-2 in favor of keeping borrowing rates unchanged.
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