China's economic slowdown has accelerated as Covid-19 lockdowns hit its factory sector hard, consumers slashed their spending, and unemployment rose. Retail sales and factory output both plunged at the fastest rate since early in the pandemic, with analysts warning of no quick recovery. Retail sales fell by 11.1% in April from a year ago, almost twice as bad as the 6.1% fall expected by economists. It is the biggest slump since March 2020, with many consumers either under restrictions, or worried about the economic outlook. Industrial production dropped by 2.9% in April, year-on-year, dashing hopes of a rise of 0.4%. That’s the biggest fall in industrial production since early 2020, as the ‘zero covid’ strategy forced factories to suspend operations and disrupted supply chains. China’s labour market took a hit too, with the nationwide jobless rate rising to 6.1% in April, up from 5.8%. That’s the highest rate since February 2020, early in the pandemic. The data shows the rising economic cost from the tough restrictions brought into quash outbreaks of the pandemic, such as lockdowns in Shanghai, and mass testing and quarantine centres in Beijing, where some businesses such as gyms, malls, and cinemas were closed in its largest district. The slowdown will add to concerns that the world economy could be weakening. Last night, former Goldman Sachs chief executive Lloyd Blankfein warned there was a “very, very high risk” that the US economy was heading towards a recession. Blankfein, now Goldman’s senior chairman, told CBS News’ Face the Nation that companies and consumers should prepare for a recession as the Federal Reserve lifts interest rates to tackle inflation, but added that it’s not ‘baked in the cake’ yet: “If I were running a big company, I would be very prepared for it.If I was a consumer, I’d be prepared for it.” European stock markets are set to open a little lower, having ended last week with a strong rally. But despite that bounce, global stocks sank for a sixth consecutive week, the longest losing streak since the middle of 2008. The European Commission is set to cut its prediction for 2022 euro-area growth and almost double its estimate for inflation, when it releases its latest economic forecasts today. Draft documents seen by Bloomberg and the FT show that the eurozone is seen growing by 2.7% this year, and 2.3% next year, down from 4% and 2.7% forecast in February. Inflation is expected to rise over 6%, as consumers and businesses are hit by the energy crisis following the Ukraine war. Bank of England governor Andrew Bailey faces a grilling over the UK’s surge in inflation, when he appears before the Treasury Committee. Conservative MPs are expected to criticise Bailey’s handling of inflation, which is expected to hit 10% later this year. One cabinet minister has told the Telegraph that the Bank has been failing to “get things right”, with another saying government figures were “questioning its independence”.
The agenda • 10am BST: European Commission publishes spring forecasts • 3.15pm BST: Treasury committee hearing with the Bank of England We’ll be tracking all the main events throughout the day ... |
... we have a small favour to ask. Guardian newsletters offer an alternative way to get your daily headlines, dive deeper on a topic, or hear from your favourite columnists. We hope this curated format brings something different to your day or your week, and you’ll consider supporting us today. We’ve been publishing since long before email’s existence - last year we celebrated the Guardian’s 200th anniversary. For more than two centuries, readers have been turning to us for independent, trustworthy reporting on world events, people and power. Now, we’re proud to say we have more than 1.5 million paying supporters in 180 countries. As a reader-funded news organisation, this support is vital. It protects our editorial independence, so we can remain free of shareholders or a billionaire owner. We can continue to produce fearless, factual journalism that’s always free from commercial and political influence. And, we keep our reporting open and free for everyone to read. Greater numbers of people can keep track of important events and understand their impact. We believe open, independent journalism is essential for democracy, for fairness and to demand better from the powerful. If you share in our mission, and value this newsletter, we hope you’ll consider supporting our work today. From just £1, you can make a difference. If you can, please consider selecting a regular amount to give each month or year. Thank you. | Support the Guardian | |
Manage your emails | Unsubscribe | Trouble viewing? | You are receiving this email because you are a subscriber to Business Today. Guardian News & Media Limited - a member of Guardian Media Group PLC. Registered Office: Kings Place, 90 York Way, London, N1 9GU. Registered in England No. 908396 |
|
|
|
| |