Good morning.
The UK could be pushed into a recession as rampant inflation threatens to dampen economic growth.
KPMG has become the latest organization to sound the alarm, saying there was about a 50% chance of Britain falling into a “slight recession”.
He warned that the UK was especially vulnerable to a recession if a cut in Russian gas supply caused a contraction in the eurozone economy or if aggressive US interest rate hikes caused a recession there.
KPMG predicted that the UK economy will slow to 3.2% this year from 7.1% in 2021, before stopping at almost 0.7% next year.
5 things to start the day
1) The world is at the “turning point” of permanently high prices Inflation runs the risk of embedding itself in leading economies and being difficult to control, warns the Bank for International Settlements
2) French energy giants are asking households to ration supplies before the impending winter shortage. Households called for “immediately” limiting energy consumption to preserve gas reserves
3) Jaguar Land Rover’s Battle to Prevent Dealers from Selling in China The carmaker has strict rules for its dealers who want a highly lucrative market share
4) Train operators responded to RMT assault on “big cat railroad heads” Railroad chiefs say annual profits average a third of what Mick Lynch claimed
5) Thousands of PwC staff to achieve a wage increase equal to inflation PwC raises the salary to help attract staff amid warnings of wage increases that fuel inflation
What happened overnight
Asian markets rebounded this morning, building on last week’s gains and after good performance on Wall Street, as speculation that inflation could have met temperate expectations about rate hikes of interest from the central bank.
Hong Kong rose more than 2% thanks to the strong performance of Chinese technology companies. Indications that China’s crackdown on the sector could be coming to an end add to the city’s optimistic mood.
Tokyo, Shanghai, Seoul, Singapore, Sydney, Manila and Wellington were also very high.
Arrive today
Corporate: No updates scheduled
Economy: Durable Goods Orders, Non-Defense Capital Goods Orders, Outstanding Home Sales (USA)