Displaying items by tag: Economy

The Bank of England has declared that the base interest rate will remain at 5.25% for at least another six weeks. The bank’s governor, Andrew Bailey, emphasised that there is ‘no room for complacency’ regarding persistently high inflation, and cautioned against thinking about rate cuts too soon. He now anticipates slightly lower inflation for the rest of the year than previously projected. Critics argue that the bank has acted too cautiously, and that, with upcoming events like the general election and declining political popularity, inflation risks are on the rise. The shadow chancellor, Rachel Reeves, considers the Bank's forecasts a ‘damning indictment’ of economic failures by the Conservative Party, highlighting the need for alternative growth strategies.

Left-leaning Luisa González and centrist Daniel Noboa have faced each other in the last debate before the run-off election on 15 October. The debate gave both candidates a platform to address long-simmering issues in the country. The economy remains Ecuador’s Achilles heel: at the end of 2022, debt alone accounted for 57 percent of the GDP. The other major issue facing the candidates is crime. Ecuador, once one of the most peaceful countries in Latin America, is now on track to become the third-most violent country in the region. In August, that violence spilled over with the assassination of presidential candidate Fernando Villavicencio in Quito. Since then, candidates have been wearing bullet-proof vests. Noboa is ahead in the polls, but many Ecuadorians have not yet made up their minds about who to vote for.

The following is for our economy, elections, and transformation. Proverbs 11:14 says that where there is no wise, intelligent, guidance, the people go off-course like a ship without a helm. But with wise and godly counsellors there is victory. We pray wise and Godly counsel for all those making policy decisions at this time, whether in Parliament, the Bank of England, the Health Service or any sphere of influence in our land; for those deciding whether to stand down in the next general election, and also those of God’s people considering standing for the first time; and over the London mayoral elections in 2024. We decree and declare that success is found by those who welcome Godly counsel. Lord God, we ask that across this nation, from the corridors of power to families struggling with issues of finance, children or marriage, the cry for Godly wisdom and advice will arise; and as that cry rises Godly advisors, carrying revelatory wisdom will be positioned in every section of society.

‘We have a low-wage, high-welfare economy, which means people depend continuously on tax credits and all sorts of other welfare help in order to get by. That is not a sustainable situation for millions of households up and down the country’, says Christian economist Professor Adrian Pabst. As the cost of living crisis continues, the prospect of corporations engaging in increasing the cost of items at the shopping till to keep their profits high is facing investigation by the Competition and Markets Authority (CMA) amid ‘ongoing concerns about high prices’. The CMA is looking at whether increases are linked to ‘any failure in competition’. Recently, Tesco’s chairman said it was ‘entirely possible’ that food producers are hiking prices more than necessary. Professor Pabst asks, ‘Do workers deserve a pay rise to match inflation? Christians should be on the side of the dignity of labour, not siding with private profit.’

Independent Christian economist Bridget Rosewell, previously economic advisor to the Greater London Authority, said, ‘I'm expecting the economy to be in an uncomfortable place and we shouldn't lose sight of the long term, in the short term.’ The Bank of England has raised interest rates twelve times in a row and believes inflation will fall slower than predicted as food prices stay stubbornly high. Interest rates take a while to feed through into prices but more stable prices will eventually come through. People with mortgages should expect their interest payments to rise. Pray for people to not overextend themselves or take out loans if they are not sure how they will repay them. Ask God to remove envy and the love of mammon across the UK so that people do not think that they have to have everything that others have. 

The International Monetary Fund (IMF) predicts the UK economy will shrink this year while every other major economy will grow. The Bank of England also forecasts a 2023 recession - albeit shorter and less severe than previously forecast. Forecasts are never perfect. There are many factors affecting economic growth, from geopolitics to the weather. Predictions often miss the mark but can point in the right direction. UK's figures reflect the impact of closed schools, cancelled operations during Covid, as well as disruption due to strikes. The bigger picture, however, remains: the Bank of England and the IMF both expect the UK economy to shrink this year, while other G7 countries are expected to grow. There are ten million working-age people who aren't in a paid job. Nearly nine million of them aren't called ‘unemployed’ because they're not actively looking for work, or available to start a job. Instead they are called ‘economically inactive’.

The International Monetary Fund (IMF) says Britain is the only G7 economy forecast to shrink in 2023 due to higher energy prices, rising mortgage costs and increased taxes. England and Wales have had the most company insolvencies since 2009, UK mortgage approvals have tumbled, and grocery price inflation is a record 16.7%. Britain is the only advanced economy expected to fall into recession this year. The IMF said 2023 would be ‘quite challenging’ for the UK as it slipped from top to bottom of the G7 league table. We can pray for God to strengthen Jeremy Hunt’s mind and spirit as this news puts more pressure on him to balance Britain’s books successfully. Pray also for God to anoint him with heaven's wisdom in preparing strategies for the spring budget as the Bank of England continues to raise interest rates.

The production of opium increased sharply in Myanmar, reaching nearly 795 metric tonnes in 2022, nearly double the production in 2021 - the year of the military coup that plunged much of Myanmar into a bloody civil war that still continues. The UN believes the increase is driven by economic hardship and insecurity that followed the military takeover, and farmers in remote conflict-prone areas have had little option but to move back to opium. The region, where the borders of Myanmar, Thailand, and Laos meet - the Golden Triangle - has historically been a major source of opium and heroin production.

The cost-of-living crisis triggered by the Ukraine war, the energy crunch, surging inflation and the coronavirus pandemic has become the greatest worry for EU citizens, according to a new Eurobarometer showing 45% of respondents are currently having some or a lot of difficulties with their personal income. The poll speaks of a ‘polycrisis mood’ across the continent. Additionally, 46% of Europeans admit their standards of living have already decreased as a result of the mounting crises, while 39% expect to see a decline sometime this year. More worryingly, 30% of respondents struggle to pay their monthly bills ‘from time to time’ and 9% say this is the case ‘most of the time.’

After a wild few months in the UK economy, the Government wants to raise more money to cover a big black hole in its accounts. Jeremy Hunt, the Chancellor, has said everyone must pay more tax. Meanwhile, a group of economists have questioned whether the ‘black hole’ in public finances must be filled with austerity and tax rises. They said that the £50bn hole entirely disappears if debts are calculated differently. When Rishi Sunak was chancellor two years ago, he used a different accountancy rule to arrive at a government debt figure. Changing it back to what it was before the 2021 Autumn Statement completely removes the black hole, according to the economists' analysis, and will put government debt back on a sustainable footing. Pray for Jeremy Hunt and all members of the treasury to be wise regardless of the accountancy rules they choose to follow.