Macro Snapshot — UK inflation hits 40-year high of 9%; US housing starts fall in April

British inflation surged last month to its highest annual rate since 1982, pressuring Finance Minister Rishi Sunak to offer more help for households and the Bank of England to keep raising interest rates despite a risk of recession. Reuters/File
British inflation surged last month to its highest annual rate since 1982, pressuring Finance Minister Rishi Sunak to offer more help for households and the Bank of England to keep raising interest rates despite a risk of recession. Reuters/File
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Updated 18 May 2022

Macro Snapshot — UK inflation hits 40-year high of 9%; US housing starts fall in April

Macro Snapshot — UK inflation hits 40-year high of 9%; US housing starts fall in April

RIYADH: Britain’s inflation hit a staggering 40-year high as the war in the east continues, while the US’ housing dropped slightly in April and was accompanied by a plunge in building permits which posed a challenge for  entry-level and first time buyers in terms of affordability.

UK inflation 

British inflation surged last month to its highest annual rate since 1982, pressuring Finance Minister Rishi Sunak to offer more help for households and the Bank of England to keep raising interest rates despite a risk of recession.

Consumer price inflation hit 9 percent in April, the Office for National Statistics said on Wednesday, surpassing the peaks of the early 1990s recession that many Britons remember for sky-high interest rates and widespread mortgage defaults.

Britain has the highest inflation of Europe’s big economies and almost certainly in the Group of Seven, with Canada and Japan yet to report April data. Neither are likely to match Britain’s price growth which also looks set to be longer-lasting.

Last month, the IMF forecast Britain in 2023 faced slower economic growth and more persistent inflation than any other major economy.

Soaring energy bills were the biggest inflation driver, reflecting April’s increase in regulated energy tariffs. Knock-on effects from Russia’s invasion of Ukraine mean those bills are likely to jump again in October.

“We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action,” Sunak said.

A Reuters poll of economists had pointed to a reading of 9.1 percent, up from 7 percent in March, and sterling fell.

A survey on Tuesday showed two in three people had kept their heating off when they would normally have turned it on, almost half were driving less or changing supermarkets and just over a quarter say they have skipped meals. 

US housing starts fall in April

US homebuilding fell moderately in April, but a sharp decline in permits pointed to a slowdown in the housing market amid rising mortgage rates, which are contributing to reducing affordability for entry-level and first-time buyers.

Housing starts slipped 0.2 percent to a seasonally adjusted annual rate of 1.724 million units last month, the Commerce Department said on Wednesday. Data for March was revised lower to a rate of 1.728 million units from the previously reported 1.793 million units. Economists polled by Reuters had forecast starts declining to a rate of 1.765 million units.

Permits for future homebuilding dropped 3.2 percent to a rate of 1.819 million units.

A survey on Tuesday showed the National Association of Home Builders/Wells Fargo Housing Market sentiment index dropped to the lowest level in nearly two years in May.

Builders blamed the fifth straight monthly decline in sentiment on soaring prices for building materials as well as rapidly rising mortgage rates, which were squeezing entry-level and first-time home buyers from the market.

Chile’s economy grows 

Chile’s economy expanded 7.2 percent in the first quarter of 2022 from a year earlier, central bank data showed on Wednesday, fueled by growth in the services and retail sectors.

That is below expectations for a 7.9 percent increase, according to a Reuters poll of analysts and economists.

Gross domestic product fell 0.8 percent from the previous three months in seasonally adjusted terms, versus a forecast 0.4 percent drop.

“A large part of the activities registered positive figures, with the biggest gains in service activities — in particular, personal, transport and business — and in retail,” the central bank said.

Mining, agriculture, forestry, and fishing activities all declined, the bank added.

Japan’s economy contracts 

Japan’s economy shrank an annualized 1 percent in January-March from the previous quarter, government data showed on Wednesday, falling slightly less than expected as private consumption showed resilience despite resurgent coronavirus cases.

The gross domestic product figure translated into a quarterly drop of 0.2 percent, compared with a median market forecast of a 0.4 percent contraction, the Cabinet office data showed.

Private consumption, which makes up more than half of the economy, came in nearly flat versus a 0.5 percent fall expected by economists, the data showed.

Spain’s economic outlook

The Spanish economy could grow around 4 percent in 2022, half a percentage point less than expected in April, as rising inflation hurts consumer confidence and international trade slows, the Bank of Spain said on Wednesday.

The lower envisaged growth rate would bring it in line with the downwards revision this week from the European Commission. It had previously forecast a 5.6 percent GDP rise for Spain.

In April, the Spanish central bank had already lowered its economic growth outlook for this year and next due to the impact of inflation stoked by Russia’s invasion of Ukraine and forecast inflation would soar to 7.5 percent in 2022. 

China growth forecast

Analysts at Goldman Sachs said on Wednesday they were lowering their China 2022 GDP forecast to 4 percent from 4.5 percent as a result of pandemic-related damage to the economy in the second quarter of this year.

It was more likely China’s economy would undershoot than overshoot their target, they added.

“Even this lower growth projection embeds the assumption that COVID-19 is mostly under control going forward, the property market improves from here, and the government provides substantial policy offset through infrastructure spending in coming months,” they wrote.

China’s retail and factory activity fell sharply in April as wide COVID-19 lockdowns confined workers and consumers to their homes and severely disrupted supply chains. 

(With input from Reuters) 

 

 


ICT infrastructure in Makkah, Madinah fully operational for Hajj with 41% rise in 5G towers 

ICT infrastructure in Makkah, Madinah fully operational for Hajj with 41% rise in 5G towers 
Updated 10 sec ago

ICT infrastructure in Makkah, Madinah fully operational for Hajj with 41% rise in 5G towers 

ICT infrastructure in Makkah, Madinah fully operational for Hajj with 41% rise in 5G towers 

RIYADH:  The Communications and Information Technology Commission, Saudi Arabia’s digital regulator, on Wednesday announced that communication infrastructure is fully operational in Makkah and Madinah and ready for this year’s Hajj.

The CITC has ensured the functioning of over 5,900 communication towers and more than 11,000 Wifi access points in the two holy cities, according to a statement. 

The number of 5G towers rose 41 percent to reach more than 2,600.

 “The Kingdom’s infrastructure readiness will not only help smooth the passage of fulfilling a lifelong dream,” said CITC Gov. Mohammed bin Saud Al-Tamimi, “it will significantly enhance their (pilgrims) digital experience.” 

 


Saudi Electricity sells entire stake of its subsidiary to the government

Saudi Electricity sells entire stake of its subsidiary to the government
Updated 29 June 2022

Saudi Electricity sells entire stake of its subsidiary to the government

Saudi Electricity sells entire stake of its subsidiary to the government

RIYADH: State-owned Saudi Electricity Co. has transferred its entire stake in the Saudi Power Procurement Co. to the government, the company said in a bourse filing.

SPPC as of today is an independent company wholly owned by the government, following completion of all legal arrangements for sale and transfer of assets, liabilities, and contracts

SPPC and SEC also signed energy conversion agreements, bulk supplies, and fuel supply novations, all effective July 1.

With that, SEC, SPPC and the Ministry of Finance signed a fuel inventory sale agreement, which stipulates that the ministry shall pay SEC its net book value for the fuel inventory.

The sale price shall be calculated based on the book value of SPPC's net assets at the end of the second quarter of 2022.

SEC does not expect the carve-out of SPPC to negatively impact its business since SPPC possesses no material tangible assets.


Red Sea Development Co.’s study reveals diversity of habitats as it calls for responsible tourism 

Red Sea Development Co.’s study reveals diversity of habitats as it calls for responsible tourism 
Updated 29 June 2022

Red Sea Development Co.’s study reveals diversity of habitats as it calls for responsible tourism 

Red Sea Development Co.’s study reveals diversity of habitats as it calls for responsible tourism 

RIYADH: The Red Sea Development Co. has revealed rich diversity of habitats, flora, and fauna in one of the world’s largest environmental surveys of wildlife ecosystems, carried along the Saudi Arabian coast.

The 11-month long study has included a number of endangered species such as the Halavi Guitarfish, Hawksbill Sea Turtle and Sooty Falcon, according to a statement. 

Released at the UN World Ocean Conference in Lisbon, the research has also included an eight-meter-high single coral colony estimated to be around 600 years old. 

Conducted from January through November 2021, it has revealed that many threatened and endangered species inhabit the area, which shows the environmental protection and regeneration efforts in the region. 

“We want to prove to the world, and our peers in the tourism industry, that creating world-class destinations can go hand-in-hand with protecting and enhancing the environment,” CEO John Pagano  said. 

“We’re challenging ourselves and others to do better and be better as global pioneers in responsible development and are issuing a call to action for tourism as an industry to step up when it comes to the impact on wildlife and biodiversity,” Pagano added. 

A lion fish observed by TRSDC scientists (Supplied)

The tourism industry places significant stress on local land and marine areas if action is not taken. 

UN Environment research shows that the growth of tourism and its impact on the environment is growing at an unsustainable rate, with a 154 percent increase in energy consumption, 131 percent increase in greenhouse gas emissions, and 152 percent increase in water consumption expected by 2050 if action is not taken.


Riyadh governor inaugurates $2bn environmental, water projects in sustainability push 

Riyadh governor inaugurates $2bn environmental, water projects in sustainability push 
Updated 29 June 2022

Riyadh governor inaugurates $2bn environmental, water projects in sustainability push 

Riyadh governor inaugurates $2bn environmental, water projects in sustainability push 

RIYADH: Some 93 environment, water and agriculture projects in Riyadh have been inaugurated by Gov. Prince Faisal bin Bandar.

The launch of the projects, worth over SR8.5 billion ($2.2 billion), comes to support water and environmental sustainability in line with the objectives of the Kingdom's Vision 2030, according to the Saudi Press Agency. 

The projects include the Kingdom’s largest water transmission system, the Jubail-Riyadh transmission system, with a capacity of 1.2 million cubic meters per day.

In addition to a dual transmission system, with a total length of 821 kilometers, with a total cost of over SR6.3 billion.

Implemented by the Saline Water Conversion Corp., National Water Co. and  the Undersecretary for Water, and the National Center for Vegetation Cover and Combating Desertification, the projects will contribute to the rising demand for water. 

They will also contribute to raising  operational efficiency in water transportation and distribution, enhancing environmental sustainability and increasing vegetation cover in the region. 

 


MENA Project Tracker: KSA launches Arts Valley project in AlUla; Honeywell, Anchorage to build $2bn petrochemical complex in Egypt 

MENA Project Tracker: KSA launches Arts Valley project in AlUla; Honeywell, Anchorage to build $2bn petrochemical complex in Egypt 
Updated 29 June 2022

MENA Project Tracker: KSA launches Arts Valley project in AlUla; Honeywell, Anchorage to build $2bn petrochemical complex in Egypt 

MENA Project Tracker: KSA launches Arts Valley project in AlUla; Honeywell, Anchorage to build $2bn petrochemical complex in Egypt 

RIYADH: The Royal Commission of AlUla, also known as RCU, has announced the launch of an Arts Valley as Saudi Arabia moves steadily to become a top global tourist destination, a goal outlined in Vision 2030. 

The Arts Valley, which spreads over 65 sq. km, is touted as a cultural asset of the “The Journey Through Time” masterplan launched in April, Trade Arabia reported. 

Noorah Al-Double, the CEO of the General Directorate for Arts and Innovative Industries said that these projects will transform AlUla into a pioneering international destination for arts, heritage, culture and nature by 2030. 

Honeywell and Anchorage to work on Egypt’s $2 billion Suez Canal project

US-based multinational conglomerate Honeywell and Anchorage Investments have signed a memorandum of understanding to construct the $2 billion Anchor Benitoite Petrochemicals Complex in Egypt’s Suez Canal Economic Zone, according to a MEED report.

The agreement entails that Honeywell Process Solutions will be hired as the Integrated Main Automation Contractor. 

HPS also will supply sufficient technologies to ensure operational safety and security to Anchorage Investments. 

Dana Gas halts Iraq oil field project following rocket attack

UAE’s Dana Gas has just pressed pause on its KM 250 oilfield expansion project following 3 rocket attacks near its Khor Mor Block in Iraq’s Kurdistan region, MEED reported. 

Citing a company statement to Abu Dhabi Securities Exchange, Meed reported that two rockets landed very close to the Khor Mor Block on June 24 and 25. 

The report further added that there were no injuries following the attack. 

The Khor Mor 250A project is an asset to Iraqi oil production, as it has shown immense yearly growth of 552 million cubic feet of gas a day in production in comparison to its average of 450 million cubic feet of gas a day. 

Upon talks with the Kurdistan Regional Government and the Iraqi Government, more forces have been deployed to protect the facilities. 

Damac awards $168m contract to Pivot

UAE-based property development company Damac has awarded the $168.2 million construction contract for the Costa Brava cluster within its Damac Lagoons development to Pivot Engineering and General Contracting Co., MEED reported.

According to the report, the scope of work under this contract includes the construction of 976 townhouses for the project.

The project includes villas, townhouses, artificial beaches, and community facilities.