UK inflation increase solidifies expectations interest rates will be kept on hold

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UK inflation increase solidifies expectations interest rates will be kept on hold

2024-12-18 16:39 Last Updated At：16:40

LONDON (AP) — Inflation in the U.K. rose to its highest level in eight months during November, official figures showed Wednesday, a development that has cemented market expectations that the Bank of England will opt against cutting borrowing costs this week.

The Office for National Statistics said consumer price inflation rose by 2.6% in the year to November, up from 2.3% the previous month. It said stubbornly high inflation in the crucial services sector, which accounts for around 80% of the U.K. economy, and an increase in fuel prices was largely behind the overall increase.

The increase, which took inflation further away from the Bank of England's target of 2%, was in line with market expectations.

This is the biggest increase since March, leading economists to rule out any prospect that the Bank of England will cut its main interest rate from 4.75% after its policy meeting on Thursday.

James Smith, research director at the Resolution Foundation economics think tank, said that the “latest data shows the challenge Britain faces in squeezing inflation out of the economy.”

Rate-setters had anticipated a pickup in inflation when the central bank last cut rates in early November as price pressures eased earlier in the year — in September, inflation had fallen to its lowest level since April 2021.

Still, inflation in the U.K. and across the world is far lower than it was a couple of years ago, partly because central banks dramatically increased borrowing costs from near zero during the coronavirus pandemic when prices started to shoot up, first as a result of supply chain issues and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs.

As inflation rates have fallen from multidecade highs, the central banks have started cutting interest rates, though few, if any, economists think that rates will fall back to the super-low levels that persisted in the years after the global financial crisis of 2008-2009.

Recent developments have scaled back expectations of rapid cuts from the Bank of England. Rising wages and stubbornly high inflation in the services sector, the biggest single part of the U.K. economy, have prompted economists to scale back expectations of rapid rate cuts next year.

Critics have argued that the new Labour government's first budget in October will lead to higher inflation than otherwise would have been case. The extra public spending announced in the budget will be largely funded through increased business taxes and borrowing. Economists think that the splurge, coupled with the prospect of businesses cushioning the tax hikes by raising prices, could put upward pressure on prices.

France's Macron says tour of cyclone-devastated Mayotte is a day he won't forget

2024-12-20 03:38 Last Updated At：03:43

MAMOUDZOU, Mayotte (AP) — French President Emmanuel Macron arrived Thursday in the Indian Ocean island of Mayotte to survey Cyclone Chido’s destruction and was immediately confronted with a first-hand account of devastation across the French territory.

“Mayotte is demolished,” Assane Haloi, a security agent, told Macron after he stepped off the plane.

Macron had been moving along in a line of people greeting him when Haloi grasped his hand and spoke for a minute about the harrowing conditions the islands faced without bare essentials since Saturday when the strongest cyclone in nearly a century ripped through the French territory off the coast of Africa.

“We are without water, without electricity, there is nowhere to go because everything is demolished,” she said. “We can’t even shelter, we are all wet with our children covering ourselves with whatever we have so that we can sleep.”

At least 31 people have died and more than 2,000 people were injured, more than 200 critically, French authorities said. But it’s feared hundreds or even thousands of people have died.

Macron arrived shortly after The Associated Press and other journalists from outside were able to reach Mayotte to provide accounts from survivors of the horror over the weekend when winds howled above 220 kph (136 mph) and peeled the roofs and walls from homes that collapsed around the people inside.

In the shantytown of Kaweni on the outskirts of the capital Mamoudzou, a swath of hillside homes was reduced to scraps of corrugated metal, plastic, piles of bedding and clothing, and pieces of timber marking the frame where homes once stood.

“Those of us who are here are still in shock, but God let us live,” Nassirou Hamidouni said as he dug in the rubble of his former home. “We are sad. We can’t sleep because of all of the houses that have been destroyed.”

After touring the devastation by helicopter, meeting people at a hospital and visiting the hard-hit Kaweni slum, Macron said it was a day he would not forget.

“Help the hospital staff, help the hospital,” a woman who worked in the hospital’s psychological unit pleaded as she became emotional. “Everyone from top to bottom is wiped out.”

Macron, who was wearing a traditional red, black and gold Mayotte scarf over his white dress shirt and tie, put his hand on her shoulder as she wiped away tears.

The cyclone battered the island's infrastructure, knocking out power, leaving homes without water and putting a strain on the few places that could still provide essentials. Public health experts are concerned that a lack of access to clean water could lead to disease.

Supermarkets were running low on supplies and some shelves were bare. Throngs of cars and motorbikes packed the streets waiting up to five hours to get to gas pumps still in service. Residents, some who traveled across the densely populated island, stood in lines for hours to fill jugs at water pumps.

“To have a drink," Ramou Madi, a mother of two, said as she explained her quest from her village to get water. “We don't eat. But to drink water is the main thing. You can't go shopping, there’s nothing in the shops, the people are all pushing. I got pushed just trying to get water. But to have water for the kids so they can shower a bit, because they get smelly.”

Macron sought to reassure people that tons of food, medical aid and additional rescuers had arrived with him and more help was on its way in the form of water, doctors and a field hospital to be set up Friday. A navy ship delivered 180 tons of aid and equipment, the French military said.

The visit took a testy turn when Macron was criticized for being out of touch about what was happening on the ground by a man who said people had gone six days in Ouangani without water or a visit from rescue services.

The president said it took the military four days to clear the roads and get a plan in place to deliver aid.

“If you want to continue shouting to get airtime,” Macron said, as he was cut off by the man saying he didn’t intend to shout. “If you are interested in my response, if not I will walk away.”

Macron said about half of the electricity network and water system would be repaired by Friday but it could take several weeks to reach more remote areas.

About 1,200 police officers will be deployed by the end of the week to secure neighborhoods and prevent looting, he said.

Although there's a large population of migrants illegally on the island — a problem he said he plans to later crack down on — he said there must be "no distinction when it comes to saving, feeding, drinking.” He said a doctor had he spoken with saw migrants who risked amputations because they had untreated injuries that got infected.

“It’s likely we’ll see tragic situations that we’re not aware of yet,” he said.

Residents have expressed anguish at not knowing if loved ones were dead or missing, partly because of the hasty burials required under Muslim practice to lay the dead to rest within 24 hours.

“We’re dealing with open-air mass graves," said Estelle Youssoufa, who represents Mayotte in the French parliament. "There are no rescuers, no one has come to recover the buried bodies.”

Macron acknowledged that many who died haven’t been reported. He said phone services will be repaired “in the coming days” so that people can report missing loved ones.

Mayotte, with 320,000 residents and an estimated 100,000 additional migrants, is France’s poorest territory.

It is part an archipelago located between mainland Africa’s east coast and northern Madagascar that had been a French colony. Mayotte voted to remain part of France in a 1974 referendum as the rest of the islands became the independent nation of Comoros

The cyclone devastated entire neighborhoods as many people ignored warnings, thinking the storm wouldn’t be so extreme.

Signs of the disaster and its impact were everywhere.

Families sprawled out on blankets at a school where 500 people were taking shelter. Women washed clothing in buckets of water as children played with the pieces of a giant chessboard.

Alibouna Haithouna, a displaced mother of four, was with her own mother who had been forced to leave a hospital after her son died there. “There was a tragedy. We lost my brother,” Haithouna said, adding that they haven't yet been able to retrieve the body because of required fees and paperwork.

Macron waded into a crowd of people n Kaweni, kissing children and hugging residents who spoke of their hardship. He said he had witnessed emotion and acknowledged some of the anger he faced but said he was impressed with peoples' resilience.

He spoke of passing a special law to hasten rebuilding and will seek to destroy slums and replace tin shacks with more solid buildings.

After a woman described how her home almost collapsed on her children, Macron compared recovery efforts to those needed to reconstruct the recently reopened Notre Dame Cathedral after a disastrous fire.

“If we were able to rebuild our cathedral in five years, it would be a tragedy if we weren’t able to rebuild Mayotte," he said.

Corbet reported from Paris. Associated Press journalist Masha Macpherson in Paris and Brian Melley in London contributed.