London: Stock and oil prices fell on Wednesday after a brief break from a painful rout in the global market last week as central banks raised interest rates to combat decades of high inflation. .. Asia, Wall Street and Europe all showed healthy rises on Tuesday, but analysts warned that a weak mood on the trading floor meant that sales were unlikely to end soon.
This week’s two-day testimony to Federal Reserve boss Jerome Powell’s parliament is officials’ plans to combat supply chain roars, China’s blockade, and runaway prices fueled by the war in Ukraine. You will be able to make a hole in your thoughts about. Most observers expect the Fed to aggressively raise US interest rates a few more times this year, with the Fed’s sharpest rate hike in nearly 30 years. The expectation is to pass support to the dollar, which temporarily pushed the yen to a new low for the first time in 24 years on Wednesday.
The Bank of Japan, in contrast to other major central banks, is refraining from raising interest rates. “The surge in interest rates acts as a gap in economic growth, which is not lost in today’s market,” said Sophie Lund Yates, a equity analyst at Hargreaves Landsdown. “Today is a darker day for the global market than has been seen for some time. Serious questions remain about consumer resilience and traders seem to be preparing for a tough hand with interest rate concerns.”
Oil prices have been feverish due to fears of a recession, with both major contracts being tanked at more than 5 percent at one point. Crude oil and gas prices have skyrocketed in recent months after major economies lifted the pandemic blockade and Russia, a major energy producer, invaded Ukraine. Soaring energy costs are driving global inflation, with the UK’s annual rate hitting a 40-year high of over 9%, according to official data on Wednesday.
In the United States, President Joe Biden urges Congress to suspend the federal gas tax for three months on Wednesday. This is because soaring prices have caused widespread anger in Americans just months before the critical midterm elections. The White House wants to eliminate the 18-cent per gallon tax until September and calls on the state government to do the same. Government officials said US gas prices (nearly $ 5 per gallon) have skyrocketed by nearly $ 2 since Russian President Vladimir Putin began building troops on the Ukrainian border earlier this year.
Meanwhile, Britain’s withdrawal from the European Union will further reduce workers’ wages in the coming years, the study concluded Wednesday. The country is already facing a crisis of living expenses due to soaring inflation. A study by the Resolution Foundation think tank and the London School of Economics was released because official data showed that UK inflation had reached its new 40-year peak of 9.1%.
And Wednesday’s report claimed that Brexit had hit the openness and competitiveness of the UK economy abroad. As a result, household income was already under strong pressure from the surge in inflation and was expected to fall further. “It will take years for the economy to adjust … but the overall effect will be to reduce household income as a result of the weaker pound and lower investment and trade,” the report read.
He added that the weaker pound also pushed up import costs. The report predicts that Brexit will reduce real wages (or inflation-adjusted earnings) by 1.8% by the end of the decade. He added that this was equivalent to a loss of £ 470 ($ 577) per worker per year. “Brexit … isn’t expected to change the nature of the UK economy,” the report concludes. “Instead, the impact of Brexit is better thought of as a widespread reduction in workers’ wages and productivity.” – AFP