Businesses across Europe are beginning to buckle | Popgen Tech


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Today’s top stories

  • Gazprom, Russia’s state-backed gas pipeline monopoly, accused Ukraine of taking gas intended for Moldova from lines running through the country and warned it could cut supplies to Western Europe from November 28. Gas prices rose this morning in response.

  • Looser policies and confusing signals from Beijing have fueled a growing Covid outbreak across China, with parts of the population locked down again. Apple iPhone factory workers clashed with police at the Foxconn plant in Zhengzhou in a protest over bonuses.

  • The UK Supreme Court has ruled that the Scottish government does not have the authority to hold an independence referendum without agreement from Westminster, scuppering Edinburgh’s plan for a vote next year. Scotland’s First Minister Nicola Sturgeon has said she will make the next UK general election “a de facto referendum” on independence.

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Good evening

A new batch of surveys and forecasts highlighted the challenges ahead for both the global economy and business under the pressure of rising inflation and a full-blown energy crisis.

Business activity in the euro zone shrank for the fifth consecutive month in November, according to the closely watched purchasing managers’ index from S&P Global, which recorded a score of 47.8, where 50 marks the separation between contraction and expansion. While the overall result was another sign that the block’s output would shrink this winter, there was encouraging news about supply chain problems and cost pressures easing.

However, there were few signs of optimism in a separate survey by the European Round Table for Industry. It showed that a third of the largest industrial companies expect to stop or scale back operations due to record energy prices and slowing demand.

Businesses have also expressed concern that incentives in the $369 billion green technology initiative (also known as the Deflation Act) could divert investment away from Europe.

Line Chart of Eurozone Purchasing Managers' Index Shows Declining Business Activity, Signs Another Recession

The UK PMI score of 48.3, although largely unchanged from October, was the fourth consecutive reading below 50, with new orders falling at the fastest pace in almost two years, pointing to a deepening recession. Survey panelists cited the cost of living crisis, the Ukraine war, rising export challenges, higher borrowing costs and fiscal tightening.

Many respondents cited Brexit-related problems. Cips Chief Economist John Glen said: “The Covid veil, now almost completely lifted, has revealed the challenges still facing exporters struggling with customs and paperwork challenges and other Brexit restrictions putting off overseas customers .”

Manufacturing company Johnson Matthey is the nation’s latest victim of rising inflation and energy prices, announcing cuts of up to 15 percent in its senior management positions today.

The UK PMI result follows yesterday’s forecast from the OECD which said the country would be the worst performer in the G20 bar Russia over the next two years, with GDP falling by 0.4 per cent in 2023.

The headline US PMI reading fell from 48.2 to a three-month low of 46.3 in November, with lower output across both manufacturing and services as demand was hit by inflation, rising borrowing costs and economic uncertainty, suggesting the economy shrinking at an annualized rate of 1 percent.

The OECD expects growth of just 0.5 percent in the US next year and global expansion of 2.2 percent, driven by the more resilient emerging economies.

Need to know: the economy of the UK and Europe

British public loans rose in October as government measures to help households and businesses with energy prices came into force. The Treasury had to bail out the Bank of England for the first losses it has made on its quantitative easing program since 2009, due to increases in official interest rates.

Brussels has told EU member states to limit their spending during the energy crisisarguing that less than 30 percent of support measures in the bloc are “well targeted”, reports our Europe Express newsletter (for Premium subscribers).

Must Know: Global Economy

New Zealand, which has become a “canary in the coal mine” on inflationary pressures, raised its benchmark interest rate by a record 0.75 percentage points. The Reserve Bank of New Zealand said further monetary tightening was needed to bring inflation back within its target range, even as other economies began to scale back.

Saudi Arabia investing in solar and wind power could help the kingdom meet emissions targets — and also pump more crude oil to sell to others. Martin Wolf says global policy makers need to work out how to accelerate the transition to green energy.

argentina, a major player in the global food market, responsible for 8 percent of wheat exports, 18.5 percent of corn and 40 percent of soybean oil and meal, has been hit hard by drought. Farmers are desperate about the lack of help from the government.

The party of Brazil’s outgoing president Jair Bolsonaro contested the results of the run-off election he narrowly lost last month and called for the cancellation of ballots from electronic voting machines with alleged malfunctions.

Covid-stricken Hong Kong lost luxury shopping crown to New York. Manhattan’s Upper Fifth Avenue is now the world’s most expensive street for luxury shopping, according to a new survey, with Hong Kong’s Tsim Sha Tsui district in Kowloon in second place and Milan’s Via Monte Napoleone in third place.

The US Federal Reserve will publish minutes of its November policy meeting at 2pm ET/7pm London. This is expected to provide insight into when the central bank may end its series of jumbo rate hikes. Check back with for details and reaction.

Must know: business

Agricultural machinery manufacturer John Deerean economic bellwether for capital spending in the US, beat earnings expectations and reported an upbeat outlook for next year as strong consumer demand and higher prices boosted revenue.

The Glazer family, American owners of Manchester United football club, said they are seeking outside investment and considering a sale, potentially making it the latest prestigious team in the lucrative English Premier League to go on the market in recent months.

They’re hardly noticeable, but promoted items on digital sales platforms are at the forefront of an industry worth tens of billions of dollars. Our Big Read looks at how retailers is reshaping advertising.

The mood in the global commercial property The market has darkened in recent months as borrowing costs have soared, raising the specter of a credit crunch as lenders pull back and sign off only the safest loans.

Clothing piling up at warehouses in Bangladesh as consumers in the west tighten their belts. Clothing and textile production is by far the country’s largest industry, accounting for 85 percent of total exports.

The World of Work

Retired people are among those being targeted by the UK motorcycle and car parts seller Halfords amid chronic labor shortages. Around 1 million people have given up work since the start of the pandemic, with retirement the most common reason cited by those between 50 and 70.

Employee assistance programs face a swelling tide of complexity mental health problems brought to them by people with nowhere else to turn. What is behind the increase? Sarah O’Connor explores.

Do human resources departments exist to protect employees or the company? Listen to the new Working It podcast.

Covid cases and vaccinations

Total global cases: 630.0mn

Total doses given: 13.0 billion

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Good news

Elusive British artist Banksy is among those who have responded to the war in Ukraine with an explosion of artwork celebrating the resilience and defiance of its people amid the tragedy of conflict, reports The Conversation.

Stenciled image on damaged wall in Ukraine

Banksy posted a video on Instagram last week suggesting he was behind the spray-painted artworks that have appeared across the Ukrainian capital this month © Getty Images

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