US President Joe Biden GDP contraction recession inflation Russia - Samuel Corum/Bloomberg
The US economy unexpectedly shrank in the first three months of 2022, raising the prospect of a recession in a blow for Joe Biden.
Output fell at an annualised rate of 1.4pc in its first contraction since Covid first hit two years ago. The fall confounded economists' forecasts of a 1.1pc rise and will pile pressure on President Biden as he gears up for midterm elections in which the Democrats are expected to lose seats.
Mr Biden sought to dismiss the drop as being driven by "technical factors". Experts said that it was chiefly caused by a fall in US exports, while imports surged amid a wave of consumer demand as post-lockdown disruption at the ports eased. Stripping this effect out, the economy actually grew. Consumer spending continued to expand robustly.
Nonetheless, the figures were seized upon by the Republicans as evidence that Mr Biden has lost control of the economy. Inflation has already surged to a 40-year high of 8.5pc, driven partly by a $1.9 trillion stimulus plan launched last year by the White House.
Republican Representative Kevin Brady said: "Accelerating inflation, a worker crisis, and the growing risk of a significant recession are the signature economic failures of the Biden administration."
A second quarter of negative growth would tip the US officially into recession, raising fears for the world economy because of its heavy reliance on America.
It would also put the Federal Reserve under pressure to rein in interest rate rises, just days after governor Jay Powell suggested that he was likely to started increasing rates in increments of 0.5 percentage points instead of the usual 0.25.
In a statement, Mr Biden said: “The American economy – powered by working families – continues to be resilient in the face of historic challenges”. He said the 1.4pc drop was “affected by technical factors”.
Economists expect growth to be stronger in the second quarter, with an average prediction for a 3pc annualised expansion. According to Bloomberg polling, experts see a 25pc chance of a US recession in the next 12 months.
Expectations that the Federal Reserve will make a 0.5 percentage point increase to interest rates at its meeting next month were unchanged by the figures.
Ian Shepherdson, chief US economist at Pantheon Macroeconomics, said the GDP reading had been “massively distorted” by trade .
He said: “Net trade has been hammered by a surge in imports, especially of consumer goods, as wholesalers and retailers have sought to rebuild inventory.
“This cannot persist much longer, and imports in due course will drop outright, and net trade will boost GDP growth in Q2 and/or Q3.”
Lydia Boussour from Oxford Economics said the reading was “better than it looks”.
She said: “Beneath the weak headline print, the details of the report point to an economy with solid underlying strength and that demonstrated resilience in the face of omicron, lingering supply constraints and high inflation."
05:08 PM
Wrapping up
That's all from us today, thank you for following! Before you go, have a look at the latest from the business section:
Florida risks being saddled with $1bn debt amid Disney row
Florida risks being on the line for as much as $1bn (£800m) worth of debts used to build out Disney's amusement parks after it stripped away a special tax status enjoyed by the company. Hannah Boland has more:
Disney, which is Florida's largest private employer, is embroiled in a bitter battle with the state after it refused to back the Republican governor Ron DeSantis’s culture war waged over “woke” LGBT policies.
The entertainment company has condemned Florida’s new education law opponents call "Don't Say Gay”, which seeks to prohibit discussion about sexual orientation and gender identity in primary school classrooms and limits it for older students.
Disney has provided support to those working to oppose the law, and suspended political donations.
The company's opposition to the law has prompted fierce backlash from state officials, with Mr DeSantis signing into law a new bill that would dissolve Walt Disney's private government.
However, officials have raised the spectre that Florida could face having to pay off as much as $1bn in debts if it pushes through the changes.
04:50 PM
Premier Inn to increase room charges as costs rise
premier inn - REUTERS/Jason Cairnduff
Premier Inn expects to charge as much as 10pc more for its room as it grapples with higher running costs.
The hotel group has predicted a £15m surge in food costs and bills and is now targeting £140m in savings by 2025. It was previously aiming for £100m of cuts by 2024.
Despite the higher room rates, the hotel chain said it is trying to stay “very competitive from a pricing perspective”.
Alison Brittain, chief executive of owner Whitbread, said: “Our average room rate pre-pandemic was just over £60, so even a 10pc increase in price is well below £70.
“What we are expecting is people's pockets are constrained, they may well trade down to Premier Inn and an average room rate less than £70 still looks a remarkably competitive offer.”
04:33 PM
FTSE 100 ends strongest session in three weeks
The FTSE 100 has closed higher driven by strong earnings updates from companies including Whitbread and Standard Chartered, although Sainsbury hit the bottom of the index after warning of a drop in annual profit due to the cost-of-living crisis.
The blue-chip index ended 1.1pc higher at 7,509, recording its strongest session in nearly three weeks.
"Broadly going through this reporting season, things are coming out pretty much where we want them if not better ... the trouble with looking at the earnings is they're backwards looking," said Adrian Gosden, investment director at GAM Investments.
"The energy bills hit the UK consumer in April, that's when they really got stuck in and so it will take us through to the other side of the summer to get companies to report on the quarter that we're currently in to see how strong the consumer was in terms of willingness to pay a little bit more for what they wanted."
04:16 PM
Mastercard profit jumps as pandemic-weary consumers splurge on travel
Mastercard has reported first-quarter profit above Wall Street expectations and said consumers were braving stubbornly high inflation and concerns around new coronavirus variants to spend on travel.
Pent-up demand from Americans who stayed homebound for a prolonged period helped cross-border travel surpass 2019 levels in March for the first time since the pandemic began.
The company, however, flagged potential risks to its three-year performance objectives from 2022 to 2024 from its decision to exit Russia, a market that accounted for roughly 4pc of the net revenue in 2021.
03:56 PM
McDonald's beats expectations thanks to higher US menu prices and easing Covid restrictions in Europe
McDonald's - YOSHIKAZU TSUNO/AFP/Getty Images
Higher US menu prices and easing Covid restrictions in Europe helped McDonald's offset troubled markets such as China and Russia during the first quarter.
Revenue rose 11pc to $5.6bn (£4.5bn), topping Wall Street expectations of $5.5bn, according to analysts polled by FactSet.
The Chicago burger giant said US prices were up 8pc in the first quarter compared to the same period last year as it struggled with inflation.
Some consumers appear to be choosing cheaper menu items or ordering fewer items at a time. But McDonald's president and chief Chris Kempczinski said demand is still strong.
03:31 PM
Wizz Air extends halt of flights to Ukraine and Russia through October
Wizz Air extended its cancellation of flights to Ukraine and Russia through the end of October as the war started by Vladimir Putin in February shows no sign of abating.
The move means Eastern Europe’s biggest discount carrier will have scrapped operations to the two countries for the whole of the summer timetable, which this year ends on Oct. 29.
Wizz’s website last week briefly showed flights to Ukraine as available again from July following the end of an initial suspension period. That’s now been rectified and services are unlikely to resume any time soon, the company told Bloomberg.
Four of Wizz’s Airbus SE A320-series planes remain in Ukraine after being stranded there following the start of the invasion. Three are in Kyiv, the capital, and one is in the western city of Lviv. The Budapest-based carrier would like to redeploy them elsewhere over the summer, but that’s currently impossible, it said.
03:00 PM
What is Rishi Sunak's windfall tax and how would it work?
The Chancellor has warned that he can still implement a windfall tax if oil companies fail to ramp up investment.
But what would that mean in practice? Tom Rees looks at similar tax schemes abroad and how one could work in the UK.
Gazprom gas Europe profit - ANATOLY MALTSEV/EPA-EFE/Shutterstock
Russian state energy giant Gazprom has reported its highest ever annual profits as it cashed in on soaring natural gas prices.
The Kremlin-controlled company posted net profit of just over 2 trillion roubles (£22bn) in 2021, up from 135bn roubles the previous year.
Revenues rose 62pc to 10.2 trillion rubles – also the highest ever annual result.
But there could be trouble ahead amid rising tensions over Europe's energy imports from Russia. Gazprom has already halted supplies to Poland and Bulgaria, while other EU nations are facing a showdown over Putin's demand for gas payments in roubles.
02:10 PM
Joe Biden: US economy is 'resilient'
President Joe Biden has insisted the US economy remained strong despite data showing GDP slumped 1.4pc in the first quarter.
He said: "The American economy – powered by working families – continues to be resilient in the face of historic challenges."
The President insisted the headline number was "affected by technical factors".
01:46 PM
Indian tycoon Mukesh Ambani plots Boots takeover
Indian tycoon Mukesh Ambani - CHANDAN KHANNA/AFP
One of India’s richest businessmen is plotting a joint takeover bid for the high street chain Boots.
Laura Onita reports:
Mukesh Ambani, the biggest shareholder and chairman of Reliance Industries, is reportedly working on a potential offer with US buyout firm Apollo Global Management.
If successful, Mumbai-based Reliance would seek to expand one of the UK’s best-known retailers into India, southeast Asia and the Middle East, the Financial Times first reported.
It comes after Boots owner Walgreen Boots Alliance decided to put the chemist up for sale following a review of the business in January, as it renews its focus on the US business.
Under the plan, Reliance and Apollo would own stakes in Boots, which is understood to be valued at £5bn to £6bn, although it was not clear if they would be the same size.
US stocks have opened on the front foot as investors shrugged off a shock contraction in the economy and focused instead on a string of corporate results.
The tech-heavy Nasdaq jumped 1.8pc, spurred on by gains for Meta after Facebook gained more users than expected in the first quarter.
The benchmark S&P 500 rose 0.9pc, while the Dow Jones was up 0.4pc.
01:21 PM
More reaction: US demand likely to slow
Hinesh Patel, portfolio manager at Quilter Investors, says that while US consumer consumption is holding up, a slowdown is likely.
US GDP had a far poorer show than had been anticipated, falling by 1.4pc in the first quarter – a significant drop in comparison to fourth-quarter 2021’s 6.9pc growth and far worse than the 1pc growth many economists had predicted.
While this headline may be a bit of a shocker, price impact is by far the most dominant factor. Without inflation, the economy grew by a monstrous 6.5pc annualised – and that’s including the omicron overhang. As such, it’s little wonder the Fed is forced into its current stance.
While consumer consumption has been healthy, a natural demand brake is likely on the horizon as a result of high prices and rising wages. For investors, the time to buy bonds may well be upon us.
01:18 PM
Twitter admits overstating user numbers for three years
Twitter user numbers - Amy Osborne / AFP
In other news from across the Atlantic, Twitter has admitted it miscalculated daily user numbers for three years.
In what could be its last earnings report before a $44bn takeover by Elon Musk, the social media firm said an error meant it had inflated the numbers by as much as 1.9pc.
It came as the company, which has been embroiled in controversy over the Tesla billionaire's takeover approach, reported revenue and advertising that missed expectations.
Revenue rose 16pc to $1.2bn in the first quarter – the worst rate of growth in six quarters – as supply chain troubles, inflation and the war in Ukraine dent advertising budget.
At the same time, Twitter reported a 16pc increase in daily active users to 22.6m.
The results highlight Mr Musk's challenges in improving Twitter's business to match its influence on news and culture.
01:02 PM
Expert reaction: No, this isn't the start of a recession
Gregory Daco at EY Parthenon is among the economists emphasising the robust demand underpinning those GDP numbers.
He says: "No, this isn't the onset of a recession."
The domestic economy was still robust in Q1.
Here is a better representation of the 1.4% US #GDP decline.
▶️GDP: -1.4% ▶️Final sales (which excludes 0.8ppt inventory drag): -0.6 ▶️Final sales to domestic purchasers (which also excludes net trade drag of 3.2ppt): +2.6% pic.twitter.com/pOeAugTHVK
While the headline 1.4pc drop is shocking, economists have been quick to point out that this number doesn't tell the whole story.
Together, net exports and investors subtracted about four percentage points from headline growth.
But stripping out these elements, GDP actually increased 2.6pc on an annual basis – an improvement on the 1.7pc rate recorded in the fourth quarter.
This suggests consumer demand and business investment were still holding up, corroborating what many bosses have been saying during recent company earnings.
Stripping out those components, underlying growth ("final sales to domestic purchasers") actually accelerated in the first quarter. pic.twitter.com/CBRn4e2IwC
Richard Flynn, managing director at Charles Schwab UK, says the US GDP figures are "likely to cause concern".
The US economy accelerated incredibly sharply as we exited the acute phase of the pandemic and this pace of growth continued until late last year.
Whilst the healthy labour and housing market are positive indicators, today's figures confirm there is now no shortage of headwinds facing the US economy, including the consequences of the Russian invasion of Ukraine, persistently high inflation, and tightening monetary policy.
Consumer confidence is low. We're in a period of counter-cyclical inflation – when high prices put downward pressure on demand and growth. The Fed's eye is on inflation as it tightens monetary policy in a bid to slow aggregate demand and cool price rises.
With high inflation and low growth expectations, it may be difficult for the Fed to raise rates without slowing growth. Economic data has been generally weakening recently, which is likely to persist, increasing the probability of a downturn.
12:19 PM
German inflation hits 40-year high
Consumer prices in Germany rose at their fastest pace in four decades as Russia's invasion of Ukraine spurs energy prices to new heights.
EU-harmonised inflation climbed to 7.8pc in April, up from 7.6pc in March, according to the latest official figures. The number was last higher for West Germany in the autumn of 1981.
EU: Opening rouble accounts to buy gas breaches sanctions
Companies in the EU that open an account in roubles to pay for Russian gas are violating sanctions, the EU has said.
Officials issued the warning amid confusion over Putin's demands that firms open two accounts with Gazprombank. They said the demand was problematic because it involves the country's central bank, which is under sanctions.
European Commission President Ursula von der Leyen urged companies not to comply with Putin's demand, saying that doing so would breach sanctions, but firms have been looking for workarounds.
11:27 AM
HSBC breached retail banking order 11 times, says regulator
HSBC open banking - ANDY RAIN/EPA-EFE/Shutterstock
The competition watchdog has accused HSBC of breaking retail banking rules 11 times by failing to make accurate, comprehensive and up-to-date information available to customers.
In a letter to HSBC, the Competition and Markets Authority censured the bank for the failings, saying they could lead to customers choosing financial products and services that were not best suited to their needs.
The regulator said it was "specifically concerned with the robustness of HSBC’s governance processes, whereby its internal guidance documents were not specific enough to ensure compliance".
In response, HSBC ensured all information was made available through Open Banking.
11:18 AM
Tech stocks set to push Wall Street higher
Wall Street is set to push higher this afternoon, driven by upbeat earnings for tech stocks including Facebook.
Futures tracking the tech-heavy Nasdaq jumped 2pc, led by gains for Meta after its main social media platform added more users than expected.
PayPal and chip giant Qualcomm also rose in pre-market trading following strong results.
The benchmark S&P 500 is set to rise 1.5pc, while the Dow Jones is pointing 0.8pc higher.
11:06 AM
Greece says it will pay Gazprom without breaching sanctions
Greece has said it will pay Russian gas giant Gazprom next month it a way that won't breach sanctions.
The country, which relies on Russian gas for more than 30pc of its annual needs, has a supply contract with Gazprom that ends in 2026.
Energy Minister Kostas Skrekas told local radio that the next payment from Greece's main gas utility DEPA to Gazprom for April's gas supplies was due on May 25. He did not clarify which currency the payment would be made in.
He said: "We will pay in a way which will not violate the sanctions and safeguard our country's energy security.
"Gazprom has proposed a way of payment. This has legal, financial and political aspects. We've been assessing all these aspects."
10:36 AM
China cuts coal import tariffs to prop up supplies
China’s ministry of finance says it will cut import tariffs on coal to zero from May to the end of March next year in an effort to guarantee energy supplies.
Bloomberg reports:
Current tariffs range from 3pc to 6pc depending on the type of coal, the ministry said in a statement dated April 26 and posted to its website Thursday. China’s coal imports are down 24pc through the end of March this year as global prices have soared.
China is the world’s biggest coal importer, and any move that helps boost its purchases will add pressure to prices of the fuel, which surged this month as the European Union and Japan moved to ban imports of the fuel from Russia, further tightening the market.
10:06 AM
Rees-Mogg confirms another delay to post-Brexit import checks
Jacob Rees-Mogg has confirmed that the UK will yet again delay the implementation of full checks on imports.
In a written statement to the Commons, the Brexit opportunities minister said:
British businesses and people going about their daily lives are being hit by rising costs caused by Russia’s war in Ukraine and in energy prices. It would therefore be wrong to impose new administrative burdens and risk disruption at ports and to supply chains at this point. The remaining import controls on EU goods will no longer be introduced this year…
Introducing controls in July would have replicated the controls that the EU applies to their global trade. This would have introduced complex and costly checks that would have then been altered later as our transformation programme is delivered. The challenges that this country faces has underlined that this is not the right thing to do for Britain.
No further import controls on EU goods will be introduced this year. Businesses can stop their preparations for July now.
That news is unlikely to be taken fell by the British ports that have spent ten of millions of pounds building Border Control Posts for checks that will now be unused.
Mr Rees-Mogg set out an ambition to overhaul the UK’s border regime more broadly, saying:
Instead the Government is accelerating our transformative programme to digitise Britain’s borders, harnessing new technologies and data to reduce friction and costs for businesses and consumers. This is a new approach for a new era, as Britain maximises the benefits of leaving the EU and puts in place the right policies for our trade with the whole world.
09:54 AM
Money round-up
Here are some of the day’s top stories from the Telegraph Money:
Mixed picture for activity data as inflation soars
The Office for National Statistics has released its latest round of high-frequency data. It’s a pretty mixed bag, largely as a result of the mixed impacts of inflation and the return to normality as the pandemic fades.
Average system prices of gas fell 22pc in the week to April 24th, while the number of online job adverts fell 7pc – albeit still 30pc higher than a year before.
Card spending was 9 percentage points lower than the previous week, but was two points higher than a year earlier.
08:49 AM
Huawei's profits dive by two-thirds amid US sanctions
Huawei China sanctions profits - AP Photo/James Brooks
Huawei's profits tumbled by about 67pc in the first quarter as the controversial Chinese tech giant continues to grapple with US sanctions.
Revenue fell 14pc to 131bn yuan (£15.8bn) in the first three months of the year, while net profit was around 5.6bn yuan.
While Huawei didn't give a reason for the slump, the company has reportedly been forced to fork out large amount of cash to develop its own tech in the wake of sanctions.
Huawei has allocated 22.4pc of its 2021 sales to develop chips, telecoms equipment and smartphones that evade sanctions, Bloomberg reports.
Ken Hu, Huawei's rotating chairman, said:
We have yet again increased our investment in R&D to harness to momentum of our innovation and create new value for customers. In 2022, we still face a challenging and complicated business environment.
08:36 AM
Pound steadies near 21-month low
Sterling edged higher this morning but was still trading near a 21-month low against the dollar amid mounting expectations of Federal Reserve interest rate rises.
The pound ticked up 0.1pc to $1.25615. It had earlier traded below $1.25 for the first time since July 2020. Against the euro, it was up 0.1pc at 84.07p.
Investors are expecting aggressive monetary policy tightening from the Fed as it battles to curb surging inflation. The Bank of England is also expected to raise rates next month, but it's been softening its tone in recent weeks amid fears of an economic slowdown.
Analysts at Morgan Stanley wrote: "If the BoE once again focuses on the coming growth slowdown and the softer medium-term inflation outlook at market-implied rates, this would reaffirm our view that it will not hesitate to pause its hiking cycle as growth data deteriorate further."
08:20 AM
Turkey raises inflation forecast to 42.8pc
Turkish President Recep Tayyip Erdogan - Murat Kula/Anadolu Agency via Getty Images
Turkey's central bank has raised its forecast for 2022 inflation to an eye-watering 42.8pc, blaming the impact of rising energy costs and a weak lira.
The latest figure is up from previous forecasts of 23.2pc made back in January. The bank's official target is 5pc.
Governor Sahap Kavcioglu warned that food prices – which make up around a quarter of consumer inflation – were rise by 49pc by the end of the year.
He said Russia's invasion of Ukraine had driven energy prices to record highs, while the rising cost of imports in lira along added 5.5 percentage points to the inflation estimate.
Shares in Facebook have leapt 19pc in pre-market trading as investors appeared to breathe a sigh of relief over its latest results.
The social media giant, now known as Meta, posted its slowest ever sales growth for the first quarter. However, user growth on its flagship platform exceeded expectations.
The numbers will stave off fears that the company is losing momentum as a new generation flock to rivals such as TikTok.
Carlsberg beer brewing Russia - REUTERS/Alexander Demianchuk/File Photo
Carlsberg has said it plans to focus on growth in Asia after its decision to withdraw from Russia.
Cees 't Hart, chief executive of the Danish Brewer, told Bloomberg the company would focus on countries including China, Vietnam and India.
He also highlighted opportunities for growth in some European countries and specific product segments such as alcohol-free beer.
Carlsberg last week cut its profit guidance and said it's facing a $1.4bn (£1.1bn) writedown from its Russia exit.
However, the beer giant reported a 24pc rise in revenue in the first quarter, outstripping analysts' expectations. Shares rose 3.3pc in Copenhagen.
07:43 AM
FTSE risers and fallers
The FTSE 100 has made a strong start to trading, pushed higher by a string of major corporate results.
The blue-chip index rose 0.8pc, with Standard Chartered leading the gains. The lender jumped more than 10pc after outstripping expectations with a rise in quarterly profits.
Rival Barclays rose 1.7pc after its fall in quarterly profits was less severe than feared. Premier Inn owner Whitbread was up 3pc after it resumed dividend payments and said bookings were back above pre-Covid levels.
Bucking the positive trend, Sainsbury's slumped more than 6pc after it warned soaring inflation would hit profits in the coming year.
The domestically-focused FTSE 250 rose 0.9pc.
07:32 AM
Gas prices slide as EU buyers bend to Putin's demand
Natural gas prices declined this morning as EU buyers prepared to cave in to Putin's demand for payments in roubles.
Benchmark European prices fell as much as 6.9pc following two days of gains.
European energy firms including Uniper and Eni are preparing to pay into accounts at Gazprombank, allowing them to keep getting supply from Russia without violating sanctions.
The row over payments has been hanging over the market for weeks, and escalated yesterday when Moscow cut off flows to Poland and Bulgaria.
Several European nations are now calling for clearer guidance from the bloc on Russia's payment system, saying the current advice is too ambiguous.
07:19 AM
Standard Chartered shares surge on revenue boost
The picture is somewhat more rosy for Standard Chartered, which has seen its shares surge after it smashed estimates for the first quarter.
The lender posted a surprise 4pc rise in pre-tax profits to $1.5bn (£1.2bn) thanks to a jump in its trading business. It also said revenue growth was set to exceed its previous guidance of between 5pc and 7pc for the full year.
Financial markets revenue rose by a third in the first three months of the year, boosted by its commodity business and easily offsetting declines in wealth management. Net interest income also rose as higher rates widened margins.
Chief executive Bill Winters said: “Our first quarter performance was strong despite the volatile macro environment. We are on track to deliver 10pc return on tangible equity by 2024, if not earlier.”
Shares in Standard Chartered jumped 10pc to the top of the FTSE 100.
07:10 AM
Barclays profits fall as it warns on cost-of-living crunch
Barclays profits cost-of-living - Chris J. Ratcliffe/Bloomberg
The next set of downbeat results this morning comes from Barclays, which reported a 7pc fall in quarterly profits as it warned on tough conditions for businesses and consumers as the cost-of-living crisis deepens.
The bank reported pre-tax profits of £2.2bn in the first three months of the year, down from £2.4bn a year ago.
Barclays booked a charge of £141m for borrower arrears – more than double the £55m a year ago as the cost-of-living crisis begins to hit customers. However, it said arrears would remain lower than pre-pandemic levels due to lower levels of more risky unsecured lending.
Costs jumped to £4.1bn from £3.6bn a year ago as it put aside around £500m for regulatory probes – most recently due to its overselling of products to US investors.
Chief executive CS Venkatakrishnan said:
We remain focused on the impact higher prices are having on our customers and our small business and corporate clients, all of whom are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs.
We will support them through this difficult period wherever we can, and support the wider economy just as we did through the Covid-19 pandemic.
07:02 AM
FTSE 100 pushes higher
The FTSE 100 has started the day on the front foot as global markets staged a modest rally following a tough week.
The blue-chip index gained 0.6pc at the open to 7,466 points.
06:55 AM
Rising raw material costs to dent Unilever's profits
Unilever profits inflation Ben & Jerry's - Tiffany Hagler-Geard/Bloomberg
It's not just Sainsbury's warning on inflation this morning – Unilever has also sounded the alarm.
The consumer goods giant said increases in raw material prices would worsen in the second half of the year due to the war in Ukraine, eating into its profits.
Unilever said it expected raw material cost inflation of €2.7bn (£2.3bn) in the second half, up from €2.1bn in the first half. Underlying operating margin for the full year is set to be at the bottom of its forecast range of between 16pc and 17pc.
However, the Ben & Jerry's maker reported first-quarter sales growth above analyst expectations, showing that so far its price rises haven't put consumers off.
First-quarter sales growth came in at 7.3pc, while the company expects full-year growth at the top end of its forecast of between 4.5pc and 6.5pc, driven by price rises.
06:46 AM
Sainsbury's warns of profit hit as inflation mounts
Sainsbury's has followed its rivals in warning of lower profit over the rest of the year as surging inflation and the cost-of-living crisis take their toll.
The grocer has enjoyed a strong rebound from the pandemic, with profits more than doubling to £730m in the 12 months to March. Revenue rose 2.9pc to £29.9bn.
But this success was overshadowed by its grim outlook for the year ahead. Pre-tax profits for its 2022-2023 year are expected between £630m and £690m – behind analysts' forecasts.
Chief executive Simon Roberts said: "The year ahead will be impacted by significant external pressures and uncertainties, including higher operating cost inflation and cost of living pressures impacting customers' disposable incomes."
So far this month Tesco, Morrisons and Co-op have all warned on the outlook as falling household incomes and supply disruption fuelled by the war in Ukraine weigh on supermarkets.
But analysts have warned that Sainsbury's is more exposed to the economic downturn due to its ownership of Argos, which may suffer more from reduced consumer spending.
06:35 AM
EU firms cave in to Putin
Good morning.
There are signs the EU's unity in the face of Russia's gas blackmail is starting to fray.
Several major European energy firms – including Germany's Uniper, Italy's ENI and Austrian rival OMW – are said to be preparing to make payments for the Kremlin's gas into Russian bank accounts.
That's despite Brussels urging companies not to cave to Putin's demands, saying to do so would breach sanctions.
But there's still uncertainty over a mechanism that allows companies to open two Gazprombank accounts, leaving the Russian lender to convert payments in roubles.
Firms seem to be exploiting this workaround, and the bloc has issued guidelines that appear to encourage that.
On the "Afford Anything" podcast, Suze Orman delivered a pointed critique on the notion of retiring early with a $2 million portfolio. She was direct in her advice, emphasizing the insufficiency of such an amount for early retirement. "Two million dollars is nothing," Orman declared, "It’s nothing. It’s pennies in today’s world, to tell you the truth." Don't Miss: The average American couple has saved this much money for retirement — How do you compare? Can you guess how many Americans successfu
While retiring with a $2 million nest egg might seem rare, it’s closer to what many Americans now believe they need to retire comfortably. A survey from Northwestern Mutual reveals that Americans feel they need $1.46 million for a comfortable retirement, a number that has surged by 53% since 2020. This dramatic increase, influenced by inflation and growing financial pressures, suggests that a $2 million target may not be as far-fetched as it appears, especially for someone who is 60 and plans to
Investment guru Warren Buffett confirmed Wednesday the trimming of his Apple, Inc. (NASDAQ:AAPL) stake and finally shed light on the mystery stock his firm, Berkshire Hathaway, Inc. (NYSE:BRK) (NYSE:BRK), accumulated ahead of the first quarter. Apple, Chevron Trimmed: Berkshire reduced its Apple position by a little over 116 million. The firm now owns 789,368,450 Apple shares valued at $135.36 billion, a 13F filing shows. This is the second straight quarter that the Buffett-led company has dilut
Visa on Wednesday announced major changes to how credit and debit cards will operate in the U.S. in the coming months and years. The new features could mean Americans will be carrying fewer physical cards in their wallets, and will make the 16-digit credit or debit card number printed on every card increasingly irrelevant. “I think (with these features) we’re getting past the point where consumers may never need to manually enter an account number ever again,” said Mark Nelsen, Visa’s global head of consumer payments, in an interview.
Michael Burry, the legendary investor who famously predicted the 2008 financial crisis, has once again made headlines with his latest 13F filing for his hedge fund Scion Asset Management LLC. The first quarter of 2024 reveals a strategic recalibration towards physical commodities and renewable energy, while Burry shifted away from some tech giants. The total market value of Scion's 13F securities increased from $94.6 million to $103.49 million. The fund’s activity included five new purchases, ad
Formerly disgraced FTX CEO and Co-Founder Sam Bankman-Fried was convicted in November of wire fraud, money laundering and conspiracy, and sentenced to 25 years in prison. His high-profile trial marked a significant chapter in the unraveling of FTX, which collapsed under suspicious financial practices, leading to intense scrutiny and legal action. For the first time since his incarceration, Bankman-Fried described his daily life in a detailed interview with journalist William D. Cohan of Puck. Do
