Sharp slowdown in UK business activity rings recession alarm

Sharp slowdown in UK business activity rings recession alarm
Sterling fell sharply against the US dollar after the data, and was 0.9 percent down on the day at $1.2480 at 0855 GMT
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Updated 24 May 2022

Sharp slowdown in UK business activity rings recession alarm

Sharp slowdown in UK business activity rings recession alarm
  • Financial markets still expect the BoE to double interest rates to at least 2 percent by the end of the year from 1 percent now

LONDON: Momentum in Britain’s private sector slowed much more than expected this month, adding to recession worries as inflation pressures ratcheted higher, according to a business survey on Tuesday that showed rising pessimism.

S&P Global’s flash Composite Purchasing Managers’ Index (PMI), a monthly gauge of the services and manufacturing industries, fell to 51.8 in May from 57.6 in April, its lowest level since February last year.

The preliminary reading was worse than all forecasts in a Reuters poll of economists, which had pointed to a drop to 57.0.

Sterling fell sharply against the US dollar after the data, and was 0.9 percent down on the day at $1.2480 at 0855 GMT, while short-dated British government bond prices jumped.

“The collapse in the composite PMI in May is the clearest sign yet that demand is faltering in response to the intense squeeze on households’ real disposable incomes,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

Until now, most surveys of British business activity had been fairly robust, despite record-low consumer confidence after inflation hit a 40-year high of 9 percent.

“The latest data indicate a heightened risk of the economy falling into recession as the Bank of England fights to control inflation,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

Financial markets still expect the BoE to double interest rates to at least 2 percent by the end of the year from 1 percent now.

The slowdown was most acute in the services sector, where business optimism about the coming 12 months fell to its lowest since May 2020, during the first coronavirus lockdown.

“Companies cite increasingly cautious moods among households and business customers, linked to the cost-of-living crisis, Brexit, rising interest rates, China’s lockdowns and the war in Ukraine,” Williamson said.

Reports of rising costs paid by businesses were more widespread than at any point since the services PMI started in 1996.

Williamson said there were some signs cost pressures may be peaking, and businesses reported resistance from customers to higher prices and a related reduction in demand.

The flash PMI for the manufacturing sector also fell in May to its lowest level since January 2021 at 54.6 , down from 55.8 in April. New export orders declined at the fastest rate since May 2020.

A number of manufacturers cited Brexit trade frictions as the main reason for the drop. 


MENA Project Tracker —  Edamah requests bids on newest project; KAPP starts bids on IWPP projects 

MENA Project Tracker —  Edamah requests bids on newest project; KAPP starts bids on IWPP projects 
Updated 21 sec ago

MENA Project Tracker —  Edamah requests bids on newest project; KAPP starts bids on IWPP projects 

MENA Project Tracker —  Edamah requests bids on newest project; KAPP starts bids on IWPP projects 

RIYADH: Bahrain Real Estate Investments, known as Edamah has begun its hunt for bids for the 20,717 square meter plot investment project at Hidd within Muharraq governorate in Bahrain.

The development is located alongside Diyar Al Muharraq and Dilmunia waterfronts, near the Khalifa town housing project.

The leading property developer has held Bahrain’s sovereign wealth fund since its establishment in 2006, reported Trade Arabia.

It is also on the search for bids on a similar investment project development — which includes six more plots with a total area of 5,618 square meter at Askar within Southern governorate.

KAPP starts bids on water and power generation

Kuwait Authority for Partnership Projects, known as KAPP, has requested bids to develop Al-Zour North 2 and 3 and Al-Khiran 1 as part of the independent water and power producer projects.

The two plots are expected to generate a net capacity of 4,500 MW of power and 290 million imperial gallons a day of water, reported MEED.

This decision comes amid increased power demand in Kuwait — soaring to a record high of 15.67 Gigawatt last July.

The deadline for submitting project bids is on Aug. 16.


Saudi airline Flynas to operate AlUla-Cairo direct flights from October

Saudi airline Flynas to operate AlUla-Cairo direct flights from October
Updated 25 min 40 sec ago

Saudi airline Flynas to operate AlUla-Cairo direct flights from October

Saudi airline Flynas to operate AlUla-Cairo direct flights from October

RIYADH: Saudi Arabia’s budget airline Flynas announced the launch of its first direct flights between its heritage city AlUla and Cairo, starting from 6th October, according to the Saudi Press Agency. 

The airline will operate two direct flights per week, on Saturdays and Thursdays, between AlUla International Airport to Cairo International Airport.

Located in the north-west of Saudi Arabia, AlUla is one of the key tourist destinations that offers a variety of experiences in heritage, art, culture, recreation and adventure.


Saudi Aramco becomes first-ever MENA firm in Clarivate’s top 100 global innovators list

Saudi Aramco becomes first-ever MENA firm in Clarivate’s top 100 global innovators list
Updated 42 min 25 sec ago

Saudi Aramco becomes first-ever MENA firm in Clarivate’s top 100 global innovators list

Saudi Aramco becomes first-ever MENA firm in Clarivate’s top 100 global innovators list

RIYADH: Saudi Aramco has been named one of the top 100 global innovators by American analytics company Clarivate. 

In its report titled “Top 100 Global Innovators 2022,” Clarivate revealed that Saudi Aramco is the first-ever company from the Middle East and North Africa region to be placed in the list. 

“The regional diversity continues to increase, with the first-ever Middle Eastern list entry via energy firm Saudi Aramco,” wrote Clarivate in the report. 

Apart from Saudi Aramco, other new entrants to the list are China’s Alibaba, Germany’s Continental, US’ General Motors, South Korea’s Hyundai Motors and Kia Motors, US’s Philip Morris International, and UK’s Rolls-Royce. 

Clarivate added that companies have been included in the list based on factors like influence, success, globalization, and technical distinctiveness. 


TASI extends losses on fears of economic slowdowns: Closing bell

TASI extends losses on fears of economic slowdowns: Closing bell
Updated 47 min 6 sec ago

TASI extends losses on fears of economic slowdowns: Closing bell

TASI extends losses on fears of economic slowdowns: Closing bell

RIYADH: Saudi stock markets extended losses as investors worried that the latest central bank efforts to curb inflation would lead to rapid economic slowdowns.

The main index, TASI, fell 0.93 percent to reach 11,358, while the parallel market, Nomu, dropped 1.94 percent at 20,672.

Fawaz Abdulaziz Alhokair Co. led the decliners since the market opened with a 9.99 percent fall, followed by Abdulmohsen Alhokair Group for Tourism and Development which fell 9.92 percent.

Saudi Aramco, the largest player on the Saudi oil market, lost 1.29 percent, while Methanol Chemicals Co. fell 2.57 percent.

In the financial sector, the Kingdom’s largest valued bank Al Rajhi, dropped 0.50 percent, while The Saudi National Bank slipped 1.05 percent.

Among the biggest IT companies, Elm Co. gained 0.56 percent and Al Moammar Information Systems Co. edged down 2.08 percent.

Jadwa REIT Saudi Fund led the gainers with 4.75 percent gain, closely followed by Dar Alarkan Real Estate Development Co. with a 4.56 percent rise.

In the energy sector, West Texas Intermediate crude was trading at $109.69 per barrel and Brent crude was trading at $113.12 per barrel as of 3:24 p.m. Saudi time.


Saudi Arabia to help citizens affected by rise in global commodity prices: Crown Prince

Saudi Arabia to help citizens affected by rise in global commodity prices: Crown Prince
Updated 04 July 2022

Saudi Arabia to help citizens affected by rise in global commodity prices: Crown Prince

Saudi Arabia to help citizens affected by rise in global commodity prices: Crown Prince

RIYADH: Crown Prince Mohammed bin Salman has urged government agencies to think about Saudi Arabia’s neediest citizens in the wake of the increasing cost of some basic needs.

Chairing a meeting of the Council of Economic and Development Affairs, the Crown Prince stressed the important roles of ministries and government agencies in monitoring international developments, the Saudi Press Agency reported.

This includes food supply chains, monitoring markets, product availability and price levels, and protecting and encouraging fair competition, as well as combating and preventing monopolistic practices that affect legitimate competition or the interest of the consumer.

During the meeting held in Jeddah, the Council reviewed a number of economic and development issues, including a presentation on the price levels of a number of products in the Kingdom's markets, submitted by the Ministry of Commerce with participation of the Ministry of Environment, Water and Agriculture, and the Ministry of Economy and Planning.

The Council was also briefed on health developments related to the COVID-19 by the Ministry of Health.

The presentation included an update following the decision to lift the precautionary and preventive measures related to the pandemic, in addition to updates on administering vaccines, the most prominent preparations for this year’s Hajj season, and the state of the epidemiological situation internationally.

The Council also followed up on the periodic presentation submitted by the Ministry of Economy and Planning regarding the analysis of opening economic activities and the impact of the pandemic.

The Council has taken the necessary recommendations on these issues, SPA said.