Tausi Insider

Pedestrians pass a souvenir shop on Oxford Street, in London, on Nov. 11. Kirsty Wigglesworth/The Associated Press Britain’s economy shrank in the three months to September at the start of what is likely to be a lengthy recession, underscoring the challenge for finance minister Jeremy Hunt as he prepares to raise taxes and cut spending next week. Economic output shrank by 0.2 per cent in the third quarter, less than the 0.5 per cent contraction analysts had forecast in a Reuters poll, Friday’s official data showed. But it was the first fall in gross domestic product since the start of 2021, when Britain was still under tight coronavirus restrictions, as households and businesses struggle with a severe cost-of-living crisis. Britain’s economy is now further below its pre-pandemic size – it is the only Group of Seven economy yet to recover fully from the COVID slump – and is smaller than it was three years ago on a calendar-quarter basis. The Resolution Foundation think tank said that ...

British Finance Minister Jeremy Hunt, in London, on Nov. 17. Alastair Grant/The Associated Press Millions of people across Britain face higher taxes and energy bills after the government on Thursday announced an emergency budget focused on restoring the country’s financial credibility and bolstering an economy battered by soaring inflation. Treasury chief Jeremy Hunt unveiled a £55-billion ($86-billion) package of tax increases and spending cuts designed to demonstrate that Britain is committed to paying its bills after his predecessor spooked financial markets by proposing tax cuts without saying how they would be paid for. Mr. Hunt sought to cushion the blow by pledging to protect the most vulnerable, announcing that he would increase welfare benefits and state pension payments in line with inflation and help low-income residents with their energy bills. The government will also maintain investment in energy and infrastructure projects to boost economic growth, he said. Even so, th...

People shop for Black Friday deals in Pico Rivera, Calif., on Nov. 25. FREDERIC J. BROWN/AFP/Getty Images Cautious shoppers hunted for the best deals at stores and online as retailers offered new Black Friday discounts to entice consumers eager to start buying holiday gifts but weighed down by inflation. Due to elevated prices for food, rent, gasoline and other essentials, many people were being more selective, reluctant to spend unless there was a big sale. Some were dipping more into savings, turning to “buy now, pay later” services that allow payment in installments, or running up their credit cards at a time when the Federal Reserve is hiking rates to cool the U.S. economy. Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland early Friday looking for a deal on a coffee maker. To save money this year, she said the adults in her family are drawing names and selecting one person to shop for. “Everything’s going up but your paycheck,” said Diggs, who manages medical records at...

New data from TransUnion shows Canadians leaned on credit cards and other forms of debt more in the third quarter as high inflation persisted. TransUnion says 27.9 million Canadians held a combined outstanding balance of $2.29-trillion on active credit products during the third quarter of 2022, up 7.9 per cent from last year. The agency says the number of consumers with an active credit account reached a record high in the third quarter of 2022, with participation growing the fastest among those born between 1995 and 2010 at 20.9 per cent year over year. TransUnion says more generation Z consumers entering the credit market likely helped drive the generation’s participation up, while credit participation among consumers on the older end of the spectrum actually declined. It says nonmortgage debt such as credit cards and credit balances increased by two per cent from last year as the higher cost of living led consumers to rely more on credit. Millennials saw their nonmortgage balances...

Amazon.com Inc and Apple Inc are planning to resume advertising on Twitter, according to media reports on Saturday. The developments follow an e-mail sent by Twitter on Thursday to advertising agencies offering advertisers incentives to increase their spending on the platform, an effort to jump-start its business after Elon Musk’s takeover prompted many companies to pull back. Twitter billed the offer as the “biggest advertiser incentive ever on Twitter,” according to the email reviewed by Reuters. U.S. advertisers who book $500,000 in incremental spending will qualify to have their spending matched with a “100% value add,” up to a $1 million cap, the email said. On Saturday, a Platformer News reporter tweeted that Amazon is planning to resume advertising on Twitter at about $100 million a year, pending some security tweaks to the company’s ads platform. However, a source familiar with the matter told Reuters that Amazon had never stopped advertising on Twitter. Separately, during a ...

More than half of Chinese say they will put off travel abroad, for periods from several months to more than a year, even if borders reopened tomorrow, a study showed on Tuesday, a sign that consumer recovery from COVID-19 measures will take time. Mainland China retains some of the world’s most stringent measures on PCR testing and quarantine for international travellers, despite some domestic easing of curbs after last month’s unprecedented COVID-19 protests. Fear of infection with the disease was the top concern of those saying they would postpone travel in a survey of 4,000 consumers in China by consultancy Oliver Wyman, with worries about changes to domestic re-entry guidelines in second place. “People have become cautious,” said Imke Wouters, a retail and consumer goods partner at the firm. “So even when they can travel, we don’t think they will come back right away.” As many as 51 per cent of those surveyed plan to delay international travel. And when they do, short-haul destina...

Equifax Canada says an increase in borrowers helped push total consumer debt to $2.36-trillion in the third quarter for a 7.3 per cent rise from last year, even as mortgage volumes decline. It says average non-mortgage debt rose to $21,183 for the highest level since the second quarter of 2020, with early signs of strain starting to show in auto loans and credit cards. Overall non-mortgage debt came in at $599.9-billion for a 5.3 per cent climb from last year, and up 1.9 per cent from the third quarter of 2019, as the number of borrowers rose by 3.1 per cent. Rebecca Oakes, Equifax Canada’s head of advanced analytics, says the rising debt stems from a combination of growth from immigration, pent-up spending, as well as increased borrowing as consumers feel the strain of higher living costs. Credit card spending in the quarter was up 17.3 per cent from last year to an all-time high for the time period. Average spending put on credit cards was almost $2,447, a 21.8 per cent jump from t...

The federal government’s spending on COVID-19 support programs forced the Bank of Canada to aggressively raise interest rates, Bank of Nova Scotia economists say in a new report. Sean Kilpatrick/The Canadian Press Although the federal government’s spending on COVID-19 support programs has made only a small contribution to the run-up in inflation, it has forced the Bank of Canada to raise interest rates in a more aggressive fashion than would otherwise have been needed, Bank of Nova Scotia economists say in a new report. As Canada has grappled with the highest inflation rates in nearly four decades, there has been a great deal of debate about what is causing price growth, including the role that government spending has played. About half of the increase in core inflation beyond the Bank of Canada’s 2-per-cent target since the end of 2019 can be attributed to global factors, such as lofty U.S. inflation, changes in currency exchange rates and higher commodity prices, the Scotiabank rep...

Lululemon Athletica Inc LULU-Q said on Thursday inventories surged in the third quarter as consumers pulled back on spending. The athleisure apparel maker’s shares were down 10 per cent in extended trading. The company, however, raised its full-year revenue and profit forecasts, signalling strong demand from affluent U.S. consumers for its high-priced yoga pants, running shorts and belt bags. Consumers at the higher end of the income rung who have been undeterred by decades-high inflation have shrugged off a hit from price increases from companies like Lululemon, helping consistent demand for its comfortable sportswear. The yogawear maker like many other U.S. companies had been raising prices on selective products to offset higher freight and manufacturing charges driven by lingering industry-wide supply chain challenges and the Ukraine war. The company now expects full-year 2022 revenue between $7.94 billion and $7.99 billion, up from prior forecast of $7.87 billion to $7.94 billion...

F-2 fighter of Japan Air Self-Defense Force at Tsuiki base, Fukuoka, Japan, in March 2010. The Associated Press Japan announced Friday that it will jointly develop its next-generation fighter jet with the U.K. and Italy as Tokyo looks to expand defense cooperation beyond its traditional ally, the United States. The Mitsubishi F-X fighter jet will replace the aging fleet of F-2 that Japan previously developed with the United States. Japan’s F-X and Britain’s Tempest, a successor to the Eurofighter Typhoon, will be combined into the next-generation combat aircraft for deployment in 2035. The deal will give Japan greater support in countering China’s growing assertiveness and allow Britain a bigger presence in the Indo-Pacific region. Friday’s fighter jet announcement came four days after Prime Minister Fumio Kishida announced spending targets aimed at building up Japan’s military capability, including a huge boost in defense spending over the next five years. To meet the five-year spen...

Finance Minister Chrystia Freeland and Prime Minister Justin Trudeau bump elbows after the federal government unveiled COVID-19 spending plans. Sean Kilpatrick/The Canadian Press Jason Clemens and Jake Fuss are economists with the Fraser Institute. An Auditor-General’s report recently cited billions in questionable spending in Ottawa’s management of handouts related to COVID-19. But while the report certainly raises questions (again) about competence, it should not mislead Canadians into believing that such failure is unique to the Trudeau government. We’ve seen much of the same from previous administrations. This is a larger problem of systemic government failure . This new assessment is damning indeed. Auditor-General Karen Hogan found $4.6-billion in overpayments to ineligible recipients, and recommended that the government investigate the nature of another $27.4-billion in spending. The AG also criticized Ottawa for failing to require social insurance numbers for workers in fi...

People shop at a mall in Arcadia, Calif., on Nov. 25. FREDERIC J. BROWN/AFP/Getty Images U.S. retail sales fell more than expected in November, but consumer spending remains supported by a tight labour market, with the number of Americans filing for unemployment benefits decreasing by the most in five months last week. The biggest decrease in retail sales in 11 months reported by the Commerce Department on Thursday was likely payback after sales surged in October as Americans started their holiday shopping early to take advantage of discounts by businesses desperate to clear excess inventory. Economists also noted that goods prices tumbled in November, which could have weighed on retail sales last month. The discounts by retailers were also probably a drag on the dollar value of sales. Retail sales are mostly goods and are not adjusted for inflation. “It is hard to know at this point if the November weakness represented a fundamental change in the trend or reflected some inevitable c...

While it’s encouraging to see Ottawa backing the natural resource sector, the question now is if the mining sector is still interested in pursuing projects in Canada. Francis Vachon/Tausi Insider Heather Exner-Pirot is a senior fellow at the Macdonald-Laurier Institute. Canada’s long-awaited critical minerals strategy, released last week by Natural Resources Minister Jonathan Wilkinson, puts a plan behind the $3.8-billion the government previously announced to support critical minerals development and generally accelerate mining projects. But while it’s encouraging to see Ottawa backing the natural resource sector in a big way, the question now is if the mining sector is interested in pursuing projects in Canada. Calling a mineral “critical” is a purely political distinction, describing those resources that the government believes are strategic, limited or concentrated, and thus deserving of state oversight. That term has no geological significance. Canadian investment on mining expl...

People shop for clothing at a Costco store in Monterey Park, Calif., on Nov. 22. FREDERIC J. BROWN/AFP/Getty Images U.S. consumer spending barely rose in November, while annual inflation increased at its slowest pace in 13 months, but demand is probably not cooling fast enough to discourage the Federal Reserve from driving interest rates to higher levels next year. Slowing economic activity heading into 2023 amid rising borrowing costs was also flagged by other data from the Commerce Department on Friday showing a modest gain in orders for locally manufactured capital goods last month. The U.S. central bank is trying to slow demand for everything from housing to labor as it fights to bring inflation back to its 2 per cent target. “The economy is moving in the right direction from the Fed’s perspective, but not quickly enough,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. Consumer spending, which accounts for more than two-thirds of U.S. economic act...