From 1h ago 07. 53 Pound drops below $1. 16 Sterling has fallen to its lowest level against the US dollar since the pandemic crash in March 2020, as anxiety over the UK economy rises. The pound has dropped as low as $1. 1565 this morning, as the energy crisis hammers businesses and consumers, hurting Britain’s economic outlook. The selloff comes after the pound racked up its worst month against the dollar since October 2016. The pound vs the US dolar Photograph: Refinitiv Fears that the UK is heading into recession pushed sterling down by 4. 5% against the dollar during August; the dollar continues to strengthen as America’s central bank vows to keep raising interest rates. Naeem Aslam of Avatrade says sterling is getting “absolutely battered” against the dollar, led by concerns over the cost of living crisis. . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Consumers in the UK are squeezed to such a level that we have not seen in nearly a century, and the hope is that the new Prime Minister will deliver some sort of relief package, which should be in billions, to ease off the current crisis. Liz Truss, the most favorite among bookies as the next Prime Minister, has already ruled out any tax hikes for this year or rationing of energy in the coming winter. Her second promise look shaky because the energy crisis is pretty much unavoidable, and it would be highly difficult to avoid energy rationing. Nonetheless, the most important thing which matters for consumers is not energy rationing but, in fact, a support package that can ease off their living standards. Liz Truss rules out energy rationing this winter at final Tory hustings Read more Key events now House prices keep rising in August despite squeeze 18m ago Reckitt shares down as CEO to step down 1h ago Pound drops below $1. 16 1h ago Introduction: UK faces 'frankly terrifying' fall in living standards Filters BETA Key events ( 4 ) UK ( 4 ) US ( 4 ) now 08. 53 House prices keep rising in August despite squeeze UK house prices continued to rise last month, despite the cost of living squeeze hitting households, according to lender Nationwide . Prices rose by 0. 8% in August, much more than expected, as the market continued to defy the economic problems hitting Britain. Instant Info – Nationwide House Price Index pic. twitter. com/JjX4X3afS8 — BuiltPlace (@BuiltPlace) September 1, 2022 The annual rate of growth slowed to 10. 0%, from 11% in July, taking the average price to a new record of £273,751. That means the average house price has increased by almost £50,000 in the last two years. Robert Gardner , Nationwide’s chief economist, predicts the market could slow, as inflation climbs: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} There are signs that the housing market is losing some momentum, with surveyors reporting fewer new buyer enquiries in recent months and the number of mortgage approvals for house purchases falling below pre-pandemic levels. However, the slowdown to date has been modest, and combined with a shortage of stock on the market, has meant that price growth has remained firm. “We expect the market to slow further as pressure on household budgets intensifies in the coming quarters, with inflation set remain in double digits into next year. Moreover, the Bank of England is widely expected to continue raising interest rates, which will also exert a cooling impact on the market if this feeds through to mortgage rates, which have already increased noticeably in recent months. According to @AskNationwide AVG UK house prices defy gravity inc 0. 8% in Aug. This is the 13th successive monthly inc, resulting in an AVG house price of £273,751. Despite annual growth remaining in double digits there is an inevitability in the autumn air that feels chilly pic. twitter. com/5Aw7nDgdcv — Emma Fildes (@emmafildes) September 1, 2022 17m ago 08. 36 European stock markets have hit their lowest level in almost seven weeks, with the Stoxx 600 dropping 0. 9%. 18m ago 08. 35 Reckitt shares down as CEO to step down Products produced by Reckitt Benckiser. Photograph: Stephen Hird/Reuters Shares in consumer giant Reckitt Benckiser have slid 5. 5% after it announced chief executive Laxman Narasimhan is stepping down. Narasimhan will leave at the end of the month, with senior independent director Nicandro Durante stepping in while the board “evaluates and selects the future leadership”. Reckitt , the firm behind Dettol, Nurofen and Durex, told shareholders that: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Laxman has decided for personal and family reasons to relocate back to the United States and has been approached for an opportunity that enables him to live there. Narasimhan has served three years as Reckitt’s CEO, steering the company though the pandemic, and then the economic shock from the Ukraine war, which led to price rises: Victoria Scholar, head of investment at interactive investor says: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Despite significant share price moves in both directions, the stock is little changed since the start of his time as CEO. Having said that, the consumer goods giant has successfully navigated the post-covid challenging inflationary environment by raising prices for shoppers to successfully offset price pressures without denting consumer demand. Double-digit price hikes help Heinz and Reckitt post jump in value sales Read more 26m ago 08. 27 The London stock market has made a weak start to September, hit by concerns over the economic outlook at home, and abroad. The FTSE 100 has fallen to a six-week low, shedding 65 points, or 0. 9%, at the open to 7219 points. Mining companies Glencore (-5%) and Antofagasta (-2. 9%), insurance group Admiral (-3. 5%) and engineering group Rolls-Royce (-3. 3%) are among the fallers, as the slowdown in Asia’s factories worries investors. This follows fresh losses on Wall Street last night, despite a rise in US consumer confidence yesterday. Mark Haefele , chief investment officer at UBS Global Wealth Management , says markets may remain volatile as central bankers try to slow inflation: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} The market reaction underlines our view that investors had underestimated the willingness of central banks to keep tightening. We expect further volatility and tilt equity exposure toward value, quality income, and defensives. ” 27m ago 08. 26 A flurry of downbeat factory surveys from across Asia have shown that activity slumped in August as high costs, economic uncertainty and China’s Covid-19 lockdowns hit firms. Manufacturing activity was weak in Japan, South Korea and Taiwan in a sign that companies, already hurt by supply chain problems, are facing weaker demand too. China’s factories suffered too, with power cuts adding to their difficulties. ???????? Japan’s manufacturers suffered a sharp loss of new orders in August, latest #PMI data signals, decreasing at the quickest pace since October 2020. #Production levels were also down for the second month running. Read more: https://t. co/tpVI8kpaCu pic. twitter. com/42mUetYOFm — S&P Global PMI™ (@SPGlobalPMI) September 1, 2022 The #Taiwan Manufacturing #PMI dropped to 42. 7 in August, indicative of a sharp deterioration in operating conditions that was the worst recorded since May 2020 (1/5) https://t. co/kFOyhNdZXa pic. twitter. com/q2Eey7b6Ad — S&P Global PMI™ (@SPGlobalPMI) September 1, 2022 #Power cuts and factory #closures weighed on business conditions at Chinese manufacturers in August. The #PMI dropped to 49. 5 (Jul: 50. 4) to signal the first deterioration in 3 months, as new work and employment declined. Read more: https://t. co/lIh4iCfJIc pic. twitter. com/0AQrzRfnfg — S&P Global PMI™ (@SPGlobalPMI) September 1, 2022 35m ago 08. 18 UK chancellor Nadhim Zahawi has said nothing is off the table, as the Government assesses how to deal with rising energy prices. Speaking to Sky News, Mr Zahawi said the government is “looking at all the options”, and acknowledged that ‘perfectly' viable’ businesses are at risk of collapse: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “Everything from the chief executive of Scottish Power talking about help where we need to maybe create some sort of a fund for companies to be able to continue to help their customers. All the way through to making sure we target the help to both households and small and medium-size businesses and probably some larger businesses, because one of my concerns is the scarring effect on the economy if perfectly viable businesses in hospitality, in leisure, in high-energy use businesses would actually suffer or no longer exist because of Putin’s use of energy as a weapon. ” Shielding Britain’s households from energy crisis ‘will cost more than £100bn’ Read more 48m ago 08. 06 The pound’s tumble during August “reflects the deteriorating outlook for Britain’s economy”, says the Financial Times , as economic and political uncertainty intensified. It adds: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Philip Shaw , chief economist at Investec in London, said sterling’s rapid fall was “very worrying” as it reflected concerns that if Truss were named prime minister, her government’s policies would diverge from the BoE [Bank of England]. UK government bonds have also sold off this month more aggressively than the debt of other large European peers such as Germany. George Saravelos , global head of FX research at Deutsche Bank , said investors were right to question whether the UK’s mix of fiscal and monetary was appropriate and how it would affect inflation. 1h ago 07. 53 Pound drops below $1. 16 Sterling has fallen to its lowest level against the US dollar since the pandemic crash in March 2020, as anxiety over the UK economy rises. The pound has dropped as low as $1. 1565 this morning, as the energy crisis hammers businesses and consumers, hurting Britain’s economic outlook. The selloff comes after the pound racked up its worst month against the dollar since October 2016. The pound vs the US dolar Photograph: Refinitiv Fears that the UK is heading into recession pushed sterling down by 4. 5% against the dollar during August; the dollar continues to strengthen as America’s central bank vows to keep raising interest rates. Naeem Aslam of Avatrade says sterling is getting “absolutely battered” against the dollar, led by concerns over the cost of living crisis. . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Consumers in the UK are squeezed to such a level that we have not seen in nearly a century, and the hope is that the new Prime Minister will deliver some sort of relief package, which should be in billions, to ease off the current crisis. Liz Truss, the most favorite among bookies as the next Prime Minister, has already ruled out any tax hikes for this year or rationing of energy in the coming winter. Her second promise look shaky because the energy crisis is pretty much unavoidable, and it would be highly difficult to avoid energy rationing. Nonetheless, the most important thing which matters for consumers is not energy rationing but, in fact, a support package that can ease off their living standards. Liz Truss rules out energy rationing this winter at final Tory hustings Read more 1h ago 07. 51 Introduction: UK faces 'frankly terrifying' fall in living standards Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets. Britain is facing the biggest squeeze in living standards for a century, a new report into the challenge facing the next Prime Minister shows. In a desperately worrying forecast, real household disposable incomes are on track to fall by 10% over this year and next. With inflation surging, rising prices mean all the real pay growth since 2003 will have been wiped out. Resolution Foundation fears that the number of people living in absolute poverty is set to rise by three million, to 14 million people in 2023-24. And one in three children could fall into relative poverty, the highest level since the peaks of the 1990s. Resolution warns that Britain faces a bleak winter for living standards – with the living standards crisis set to stretch well beyond this winter into next year and 2024. Real earnings, which are already falling at their fastest rate since the Queen’s Silver Jubilee in 1977, are forecast to continue falling until at least mid-2023, by which time all real pay growth since 2003 will have been wiped out. Without further significant interventions from Government, household incomes are on course to fall by 5% this year, and by 6% next year. This stark two year income fall – equivalent to £3,000 for the typical household – would be the deepest living standards squeeze in a century. pic. twitter. com/QXFLopGLv6 — Resolution Foundation (@resfoundation) September 1, 2022 Lalitha Try, Researcher at the Resolution Foundation, says ‘radical action’ is needed by the next PM: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “Britain is already experiencing the biggest fall in real pay since 1977, and a tough winter looms as energy bills hit £500 a month. With high inflation likely to stay with us for much of next year, the outlook for living standards is frankly terrifying. “Typical households are on course to see their real incomes fall by £3,000 over the next two years – the biggest squeeze in at least a century – while three million extra people could fall into absolute poverty. “No responsible government could accept such an outlook, so radical policy action is required to address it. We are going to need an energy support package worth tens of billions of pounds, coupled with increasing benefits next year by October’s inflation rate. “The new Prime Minister also needs to improve Britain’s longer-term outlook, which can only be achieved by a new economic strategy that delivers higher productivity and strong growth. ” Here’s the full story: UK households’ spending power to drop by £3,000, warns thinktank Read more Also coming up today The latest manufacturing surveys are likely to confirm that UK and eurozone factory activity contracted last month. European stock markets will start September with losses, after finishing August on the back foot. The FTSE 100 fell 1% yesterday, as government bond markets weakened. Worries about the global economy, as inflation accelerates, are hitting stocks and bonds. The last four