BREAKING: US consumer price inflation for April comes in at 4.2% y/y - above average estimate of economists polled by Reuters of 3.6%
Core inflation 3% y/y vs estimate of 2.3%
👇
....Highest rate of inflation in US seen since Sep 2008...
...in response, 10 year US Treasury yields up a couple of basis points to 1.645%...
dollar index spikes...
Suggest markets pricing in possibility of Fed rate hike sooner than expected...
...Manifestly big base effects at work - look at those massive y/y energy price rises (reflecting price slumps at the height of the pandemic/lockdowns)...bls.gov/news.release/c…
...though also true that core inflation (excluding energy prices) also up sharply, highest reading since 1996...
...So the $20 trillion question: should the Federal Reserve/the world be getting worried about US inflation?
Answer: Probably not yet.
Short-term spikes in prices are consistent with supply bottlenecks created by booming economy coming out of severe slump....
...time to worry is when high inflation expectations become baked in among public & Fed shows unwillingness/inability to act in response - no sign of that yet.
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The Conservatives have released a host of adverts about the state pension on Facebook which we at #BBCVerify think are misleading.
Here's why...🧵 1/9
“Remember when Labour increased the state pension by only 75p?” asks the Tory video adverts, contrasting this with a claimed £3,700 increase since the Tories came into government in 2010...2/9
BBC Verify analysis of the ad library data of Meta, Facebook’s parent company, suggests they have run 975 versions of this single campaign message - just changing the name of the town or city being targeted - since 21 June...3/9
The Green party (England and Wales) leader Adrian Ramsay told @BBCr4today:
“We would still be near the bottom off the European league in terms of tax base overall [if we implemented our proposed tax rises]”
Let's look at this...#BBCVerify
OECD data shows tax as a share of GDP in 2021 was 33.5% - certainly below most big EU countries and the average of the EU14 (countries who were members of the EU prior to 2004)...
But, as we know, tax is rising as a share of UK GDP.
And by 2027/28 the @TheIFS estimate it would be 37.7% of GDP - putting us closer to the middle of the European pack...
There was an odd claim this morning by Jeremy Hunt in his media round:
“Living standards have fallen by more [than the UK] in Germany, Austria, or Sweden”...
Brief 🧵...
...He didn't specify over what time period he was talking about, or what measure of living standards he was using, or why he'd selected those countries to compare...
...At Verify, we've been pressing the Treasury for some guidance on all these points.
They've told us the Chancellor was referring to this measure from the OECD called "Real gross disposable income per capita of households"...data-explorer.oecd.org/vis?fs[0]=Topi…
...Second thing to note is HMT using a different figure for defence spending - it's "Nato-qualifying defence spending" which includes items such as the Single Intelligence Account & military pensions etc