The cost of living crisis hits the middle classes

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Good night. With Darren on vacation, I’m here to navigate us through these disruptive times.

The cost of living crisis has hit the British middle classes with a jump in housing costs. According to an analysis by the Institute for Fiscal Studies, 1.4 million UK homeowners will see their monthly payments increase. This is in addition to stubbornly high inflation, stuck in double digits.

London’s skyrocketing property costs are forcing young families to leave the capital, according to analysis by the FT’s John Burn-Murdoch. London households earn around 15 per cent more than the rest of the country, but subtracting housing costs, a household in the capital is no better off than the national average.

Chart showing median household income in London is the highest in the UK, but almost all of that premium is now wiped out by exorbitant housing costs

The situation is more difficult for younger families. For people ages 25 to 39, the top demographic for first-time homeownership, housing costs amount to 36 percent of net household income, nearly double the cost burden for the same group aged 30 years earlier.

The result is that, as London’s population continues to increase, people of typical age to buy a house and raise a family become a smaller percentage of the total. London has aged faster than any other part of the UK since 2015, with its median age rising three times faster than the UK average.

Meanwhile, Tesla has increased the price of its premium models S and X in the US after shares fell on fears over its price-cutting policy. The electric car maker missed earnings expectations for the first three months of the year due to price cuts.

I need to know: UK and European economy

United Kingdom retail sales fell 0.9 percentt in March, below forecasts, according to the Office for National Statistics today. Bad weather was blamed for deterring many shoppers from venturing onto the high street. Department stores, clothing stores and garden centers fared particularly poorly, according to Darren Morgan, the ONS’s director of economic statistics.

However, consumer confidence it appears to be slowly recovering in the UK, reaching its highest level since Russia’s invasion of Ukraine in February 2022, according to the GfK research group. Its consumer confidence index rose 6 points to -30 in April.

This seems to reflect cautious optimism more broadly. Although investors expect UK interest rates to rise further Following better than expected employment and inflation data, the Bank of England continues to suggest that it is nearing the end of its tightening cycle.

Across the Channel, economists expect the European Central Bank to raise interest rates further in May after strong business activity in the eurozone driven by high demand, easing price pressures and rapid employment.

In a dispute challenging Switzerland’s reputation as the world’s most reliable and politically stable financial center, investors representing $4.5 billion in Credit Suisse bonds have disappeared. filed a lawsuit against the Swiss banking regulator Finma. This comes after Credit Suisse was accused of “dishonest conduct” in the High Court in London by Jersey-based investor Loreley Financing.

Honey in syrup from China is flooding the €2.3 billion EU honey market and driving down prices. Twenty EU countries, led by Slovenia, want to tighten regulation against what one EU official called “honey laundering.”

I need to know: global economy

United States and Europe stocks fell yesterday after worse-than-expected first-quarter earnings reports. Wall Street’s benchmark S&P 500 Index fell 0.6 percent, while the tech-heavy Nasdaq Composite fell 0.8 percent. Tesla shares plunged nearly 10 percent after the electric carmaker reported that price cuts had squeezed its profit margin even below pessimistic forecasts.

In San Francisco, homelessness and addiction issues, as well as increase in office vacancies since the pandemic they leave town feeling emptied.

Line chart of vacancy rates is almost double the peak reached after the 2008 financial crisis and shows that San Francisco offices emptied during the pandemic

Alphabet is ending a longstanding internal rivalry between its London and Silicon Valley-based groups. DeepMind and Google Brain AI combining the two groups in an attempt to get ahead in generative AI against Microsoft and OpenAI.

The generative AI market is booming and becoming increasingly competitive. Less than five months since the launch of ChatGPT, the largest tech companies are competing to mark your territory in industry sections.

Meanwhile, the researchers are divided on how to maintain control of the threats posed by recent advances in generative AI. Ultra-intelligent machines like Open AI’s GPT-4 and Google’s Bard have the potential to boost economic productivity and enhance human creativity, but researchers are cautious about what it could mean when humanity loses control of the machines we’ve created. .

I need to know: business

The future of the CBI looks uncertain with a wave of membership terminations and a second allegation of rape in the UK employers’ body. Insurers Aviva and Phoenix, the People’s Partnership pension scheme and PwC are following the British Insurance Brokers’ Association trade body in cancel their CBI memberships. Aviva said: “The CBI can no longer fulfill its primary role – to be a representative voice for business in the UK.”

This comes after the CBI said yesterday that he had provided the police with “additional information relating to a serious crime complaint”.

The UK banking sector is marking the fifth anniversary of open banking, a government-backed initiative under which the Markets and Competition Authority forced banks to hand over current account transaction data to third-party providers. The CMA ruled in January that Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander have implemented the open banking roadmap.

Deloitte is the latest of the Big Four accounting firms to respond to a slowdown in the consulting side of its business with plans to cut 1,200 US jobs representing 1.5 percent of its US workforce.

The Financial Conduct Authority seeks established to protect tenants from excessive insurance costs charged by brokers and paid in large sums to homeowners, pledging to clamp down on brokers who overcharge.

BuzzFeed News has become the latest victim of the digital media crashcutting its workforce by 15 percent and resulting in 180 employees losing their jobs.

science abstract

After its first orbital launch Monday’s test was cancelled, from spacex The Starship rocket took to the skies yesterday. But not by much. The nearly 400-foot-tall rocket built by Elon Musk’s company mined before staging in, what SpaceX called “an unscheduled quick teardown.”

Launch Space X's Starship rocket

Starship took off yesterday but exploded shortly after © Abraham Pineda-Jacome/EPA-EFE/Shutterstock

Stress-tracking technology meant to help people manage their well-being in the workplace could be manipulated by bosses looking to check those who thrive under pressure, and those who don’t.

some good news

an innovator new study published in the journal Nature could have figured out what causes human hair to turn gray. As people age, Melanocyte Stem Cells or McSCs lose their ability to move between growth compartments in hair follicles, thus affecting hair color. Could gray hair one day be a thing of the past?

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