According to figures released late in the summer, the US recession created by the coronavirus shutdown was the shortest on record. It may have lasted a mere two months from the peak in US economic activity seen in February 2020, but it still delivered record losses in employment and production.
Energy costs are continuing to rise. In the US, oil prices finished above $80 a barrel on Monday (11 Oct) for the first time in almost seven years as global supply remains severely restrained by both OPEC and US oil producers.
In the US, gas (petrol) prices are also at seven-year highs and already close to double the low of $1.77 a gallon seen in April 2020, presenting serious political headwinds for President Biden.
Meanwhile, natural gas prices have skyrocketed to such an extent in Europe and Asia that powerplants and factories will be increasingly turning to crude oil in order to keep the lights on. In Europe, natural gas prices have gone from below $2 per million BTU last year to as much as $55 this autumn with analysts already predicting that a severe winter will see Europe “run out” of gas by February.
In China, coal prices have hit record highs amid floods that have closed numerous pits forcing the government to ration electricity and close factories.
On Tuesday (12 Oct) the British Retail Consortium reported that UK retail spending growth lost momentum in September. After gaining 3% in August, it gained just 0.6% in September compared to the year before – the slowest rate of growth since January of this year when the country was still tightly locked down.
Last month saw the panic buying of fuel amid fears of a shortage with a new survey by Barclaycard showing UK consumers increased their fuel spending by 11.1% in September.
Meanwhile, the price of British groceries rose 1.7% (y-o-y) in the four weeks to 3 October according to market research firm Kantar, which has been reporting such increases since August. This means the average UK household had to spend an extra £5.94 on groceries last month, it said.
Amid soaring energy bills, UK consumer confidence is reported as hitting a five-month low while, according to Barclaycard, nine out of 10 Britons are now concerned about the impact of inflation on their household finances.
