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UK Inflation Falls to 0.3% on Cheaper Airfares

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UK Consumers

The UK’s inflation rate plunged for the first time in April since September, the Office for National Statistics (ONS) reported.

The inflation fell to 0.3 percent from 0.5 percent recorded in March, much of which is caused by a fall in the prices of airfares, clothing, social housing rents and vehicles.

The ONS said the main causes were falls in the prices of air fares, vehicles, clothing and social housing rents.

The Bank of England said last week that it expected inflation to increase in the second half of the year.

By far the largest downward effect in April came from air transport, with prices falling by 14.2%, compared with a rise of 4.5% between the same two months last year.

This was influenced by the timing of the Easter holidays in March. Fare prices increased dramatically between February and March this year and then fell sharply in April.

The price of clothing and footwear also fell as retailers dropped prices to try to revive sales hit by last month’s cold weather.

An alternative inflation measure, the Retail Prices Index, which is still used to index some rents and pensions, also fell from an annual rate of 1.6% in March to 1.3% in April.

Meanwhile core inflation, which strips out energy, food, alcohol and tobacco, fell to 1.2%, compared with economists’ expectations for 1.4%.

Interest rates

Last week, the governor of the Bank of England, Mark Carney, had to write his sixth letter to the Chancellor George Osborne explaining why CPI inflation was still below the Bank’s 2% target.

In it he said: “The underlying causes of the below-target inflation of the past year and a half have been: sharp falls in commodity prices, the past appreciation of sterling, and to a lesser degree the subdued pace of domestic cost growth.”

The Bank of England’s Monetary Policy Committee (MPC) voted last week to keep interest rates unchanged at the record low of 0.5%. The Bank is not expected to raise rates until at least next year.

Martin Beck, senior economic advisor to the EY Item Club, said: “We are likely to see inflation remain close to current rates until the latter part of the year, when the base effects associated with last winter’s collapse in the oil price will begin to kick in and finally drag the CPI measure above 1%.

Such a benign outlook is likely to stay the MPC’s hand until well into next year.”

In a separate report, the ONS said that there had been a surge in house prices as landlords rushed to buy before higher stamp duty was imposed.

UK average house prices increased by 9.0% over the year to March 2016, up from 7.6% in the year to February 2016.

The pound lost about half a cent against the dollar immediately after the figures were released, but then recovered to stand at $1.4483, a gain on the day of more than 0.5%.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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Economy

Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom

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Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.

The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.

Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.

Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.

“Farmers have been left at the whims and caprice of owners of the means of production.

“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.

“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.

“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.

“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?

“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.

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