Food and non-alcoholic beverage prices were the biggest driver of inflation in September as they rose by 14.5 percent.
The Consumer Prices Index (CPI) accelerated to 10.1 percent on an annual basis, up from 9.9 percent in August, the Office for National Statistics (ONS) said in a statement.
The September rate matched the level in July and is the highest in 40 years also as a result of sky-high energy bills.
Food and non-alcoholic beverage prices were the biggest driver of inflation in September as they rose by 14.5 percent, the biggest jump since April 1980, according to historic modelled estimates of the CPI.
Hotel prices also increased in September, the ONS said.
“I understand that families across the country are struggling with rising prices and higher energy bills,” Britain’s new chancellor Jeremy Hunt said in a separate statement.
“This government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone.”
The government has been rocked by chaos in markets in the wake of a budget that pledged uncosted tax cuts.
Following widespread criticism over the budget, Truss sacked Hunt’s predecessor, Kwasi Kwarteng, after fewer than six weeks in the role.
Analysts said Wednesday’s data would put pressure on the Bank of England to keep raising its main interest rate by sizeable amounts.
Capital Economics noted that the BoE could hike its rate by as much as one percentage point to 3.25 percent at its next meeting in November.
GM converts CAMI plant in Ingersoll, Ont., to make electric delivery vans – CBC News
A General Motors plant in Ingersoll, Ont., has been converted into an assembly line for electric delivery vans, making it the first full-scale electric vehicle-making facility in Canada.
The first BrightDrop Zevo 600 rolled off the line at the CAMI plant on Monday, marking the reopening of the facility that was temporarily shuttered in May in order to retool itself from making internal combustion engines into one that builds electric vehicles.
“We are fully committed to an all-electric future,” GM Canada president Marissa West told CBC News in an interview. “We’re seeing a really high customer demand.”
Representatives of the provincial and federal governments, which each kicked in $259 million to help the automaker upgrade the facility, were on hand for a media event commemorating the opening. The total price tag for the GM’s upgrades to its facilities in Ontario in Ingersoll and Oshawa was $2 billion, GM has said previously.
BrightDrop is a unit of GM that focuses on building delivery vehicles for commercial customers, not passengers. Prior to the CAMI upgrading, GM made the BrightDrop vans on a very limited basis at another facility in Michigan.
Similarly, other electric vehicles have been made on a limited basis in Canada, but nothing on the scale of what GM has planned with the BrightDrop launch.
Banking on electric future
After decades as a key hub in the North American auto industry, Canada’s status as a car-making powerhouse has slipped in recent years, as the major car companies have slowly cut back production at facilities scattered across southern Ontario.
The last round of union negotiations in late 2020, however, made it clear that both sides see the industry’s future is electric, and Monday’s unveiling is likely the first in what’s set to be a long line of Canadian-made EVs.
“We really believe that we’re at an inflection point where EVs are becoming much more mainstream,” West said.
Though niche right now, electric vehicles are taking up more and more space on Canadian roads. Up to five per cent of all vehicles in Canada are either fully electric or hybrid, and that ratio is expected to increase in the coming years.
By 2035, the government insists that all new vehicles in Canada will be electric, an ambitious target for a little over 12 years from now, but Monday’s announcement brings that one step closer.
According to West, GM has a similar timeline for its operations around the world, with the company forecasting its entire global fleet to be free of tailpipe emissions by 2035.
Jacquie Richards, the quality launch manager at the facility, says the future is now, when it comes to electric vehicles.
The vehicle itself, the BrightDrop Zevo 600, will be used primarily by commercial customers including FedEx, Walmart, DHL, Verizon and others.
“I’m excited to see this vehicle we’re making delivering packages in our neighbourhood,” Richards said.
Production will start slow, with just a few thousand vehicles annually, but that’s expected to ramp up to 50,000 at year by 2025.
After a rough few years for the industry, Mike Van Boekel, chair of Unifor Local 88, which represents the plant’s hourly workers, said it’s nice to be positive about the future again.
He said roughly 700 people who were employed at the CAMI facility have voluntarily retired in the past two years, but the new work means anyone who had a job there before who wants one now can have one.
The plant was idled in May for the refurbishment, but as of Monday, there were about 400 workers on the line — with maybe more to come.
“We’ll actually have to hire for the third shift, which is good news for people looking for work as well,” he told CBC News. If that happens, there could be as many as 1,600 people working at the CAMI plant by the end of next year.
With the GM news and other initiatives about critical mineral mines and battery facilities, Canada’s automotive sector is pinning its hopes on the future on electrification, and automotive consultant Sam Fiorani says that’s a smart move.
Countries like Norway and others are well ahead of North America in terms of electric vehicle adoption, but consumer appetite is growing, the founder of Auto Forecast Solutions said.
“The U.S. Canada, and much of the rest of the world are going to be behind them. But we’ll get there over the next 20 years.”
A big problem facing the industry for now isn’t demand, but supply. “Supply of vehicles has been so tight that dealers can offer whatever they want,” he said. “I’ve walked into dealerships where they tack $5,000 onto the list price of a car; it’s just outrageous at the moment.”
But as inventories slowly build up, there will be more and more vehicles for consumers in the key price range of $20,000 to $40,000, which is when things will really take off. And Fiorani says Canada is poised to make more than its fair share of them.
“With the market in the U.S. moving very rapidly toward EVs, the Canadian industry will be really well-situated for providing a lot of vehicles for the U.S.,” he said. “They’re well-positioned to get more than their share. I think Mexico might be behind at the moment.”
Do you have a question about climate change and what is being done about it? Send an email to firstname.lastname@example.org
Stock market news live updates: Stocks smoked as oil, tech stocks lead markets lower
U.S. stocks sunk Monday as investors digested the first releases in a week full of economic data and mulled what recent data could mean for Federal Reserve policy ahead.
The economic data front provided further bearish signals for stocks, as key indicators came in stronger than expected. Leading the economic calendar for the week was the release of the Institute for Supply Management’s (ISM) services index. The index expanded faster in November than anticipated, at a 56.5 level compared to estimates of 53.5 and above October’s reading of 54.4, painting the picture of a still-strong services industry.
Meanwhile, new orders for U.S.-manufactured goods also beat expectations, rising 1.0% in October.
In a separate report, however, S&P Global’s the Purchasing Managers’ Index (PMI) stood at a 46.2 level in November, down from the October reading of 47.8. New business activity fell at the sharpest rate since May 2020, S&P Global said.
The new data comes on the heels of Friday’s hotter-than-expected jobs report, which sent stocks to a choppy session. The strong job gains and robust wage growth are the opposite of what the Federal Reserve would like to see in its battle against inflation. Friday’s figures showed demand for workers remains out of balance with supply, signaling that Fed policymakers could either take rates higher than previously anticipated or hold them higher for longer in restrictive territory.
New readings on the producer price index (PPI) — which measures prices paid for goods and services before they reach consumers and consumer sentiment — will be out this week.
The narrative from U.S. central bank officials, now in their pre-meeting blackout period, has suggested they would downshift to a half-point hike at their Dec. 13-14 meeting, after four consecutive 75 basis-point increases. Investors are now wondering how much longer will the central bank continue to hold its tightening campaign, how high the federal funds rate will end up, and how long it will stay there.
“It’s fascinating that at the moment the market is focusing squarely on the very strong likelihood that we’ll ratchet down to ‘only’ a 50bps hike next week and extrapolating that level of dovishness rather than focus on any risks that the terminal rate could end up being nearer say 6% than 5%,” Jim Reid and colleagues at Deutsche Bank wrote in an early morning note Monday.
Meanwhile, another batch of third-quarter earnings figures will be out, finishing off the reporting season.
The yield on the benchmark 10-year Treasury note Monday moved back up past 3.5%, while oil prices fell as new sanctions on Russian energy took effect, with WTI crude settling at $77.33 per barrel. On Sunday, OPEC+, or the Organization of the Petroleum Exporting Countries and its allies, including Russia, stayed the course on planned production cuts.
Slack co-founder and CEO Stewart Butterfield is stepping down from Salesforce in January, just a week after co-CEO Bret Taylor announced his resignation. He’ll be succeed by longtime Salesforce cloud executive Lidiane Jones. The news comes less than two years after Salesforce bought Slack for $28 billion. Shares of Salesforce (CRM) closed down more than 7%.
Overseas, Asian equities jumped on Monday after local Chinese authorities downgraded some of their strict COVID policies after public protests last week led to a major shift in Beijing’s commitment to its zero-COVID policy.
Elsewhere, in crypto world, Sam Bankman-Fried said he will testify before the House Financial Services Committee after he finishes “learning and reviewing what happened” in the collapse of FTX, the crypto exchange he founded.
Hoping for a break on your grocery bill next year? Don’t bank on it, new report suggests
Anyone hoping for a break on sky-high grocery bills should brace themselves for a shock in 2023, as the typical family’s food bill for the year is predicted to go up by more than $1,000.
That’s one of the main takeaways of the 2023 Food Price Report, an annual publication by Canadian researchers that looks at factors across the supply chain to attempt to predict what the cost of putting food on the table will be.
Last year, the report predicted that a typical family of four would would spend more than $14,000 to feed themselves for the year — an increase of $966 from the previous year’s level and the biggest one-year jump in the 12-year history of the report.
“Last year we were predicting prices to go up by as much as seven per cent and many, many claimed that those predictions were alarmist,” said Sylvain Charlebois, a professor of food nutrition at Dalhousie University, who headed up the research team. “Yet here we are at 10 per cent.”
While Canada’s overall inflation rate topped out at eight per cent this summer, food prices went well beyond that pace, clocking in at a 10.1 per cent annual gain as of the end of October.
It’s why instead of the $14,767 annual grocery bill forecast a year ago, the typical yearly receipt came in at $15,222.80 for 2022. That means last year’s “alarmist” report was actually undershooting how things would play out by more than $400.
Same issues persist
If those numbers are hard to swallow, prepare yourself for an upset stomach because all the factors that caused food bills to spike last year are expected to stick around into 2023. Charlebois and his fellow researchers say the typical grocery bill is on track to go up by another $1,065 from this year’s record high level.
“There’s absolutely no safe place at the grocery store,” Charlebois said. “You can’t really seek any sort of immunity against food inflation right now.”
According to the report, the typical family of four, with two adults and two adolescent children, can expect to pay $16,288 to feed themselves next year. That’s an increase of up to seven per cent, but some categories will be more expensive than others.
Not all types of food will go up at the same pace. Bakery items, meat and dairy should be in line with the overall rate, while fruit may be a comparable bargain at just five per cent. Vegetables, meanwhile, are expected to go up by as much as eight per cent.
That’s not what Julie Heyland wants to hear. A mother of three in Calgary, she says she couldn’t believe how much her grocery bill ballooned this year, even as the quality and quantity of food she was getting for her money didn’t seem to increase.
She cuts back where she can, but ultimately those ever higher food bills have meant she’s had to change her family’s diet. “In order to stay within our budget now we eat a lot less meat and I definitely shop a lot more sales and plan my menus around what’s on sale,” she told CBC News in an interview. “We’re eating a lot less meat and having more beans and a lot more rice and pasta during the week.”
After a record-setting 2022, meat prices are not forecast to increase at a faster rate than food overall, but consumers should still brace themselves for prices to go up between five and seven per cent next year.
Jeffrey Bloom, a second-generation farmer who raises cattle on a farm in Turtleford, Sask., says he knows as much as anyone that prices for meat have skyrocketed this year, but the amount he gets per pound has barely budged, even as his costs have doubled.
After the record-setting run up in grain prices, cattle feed that might have once cost $300 a tonne is now going for $525, but he knows if he passes on that cost he’ll lose customers. “We’re looking at inflation rates of 75 per cent, which is almost unheard of, and it really cuts into your bottom line,” he told CBC News in an interview.
He recently saw an eight-pound prime rib selling at a meat counter for $200. “Well, $25 a pound is almost unreasonable for people to pay [but] we’re not seeing that kind of price ourselves, there’s a lot of in-between stuff where the inflation happens, with trucking costs and people just trying to make a living.”
If he passed on his cost increases dollar for dollar he’d lose customers, so the challenge for food makers like him is “fighting the growing costs to sell the same products that everybody wants cheaper because they’re paying for it over the counter.”
While some of the factors that pushed up food prices have been lessened by Bank of Canada rate hikes aimed at reining in inflation, a lot of the factors making food more expensive are global in nature, and beyond the central bank’s influence.
The Russian invasion of Ukraine in February sent prices for everything from oil to grain to their highest levels in decades, for example.
The good news, Charlebois says, is that while consumers should brace for high prices to stick around at least into the early part of the year, he is expecting some of those increases to ease in the second half of the year as the global economic situation changes.
“We’re not expecting prices to drop, but we are expecting the food and inflation rate to to stabilize somewhat,” he said.
Supply chain bottlenecks are starting to move again, and the price of gasoline has fallen precipitously, which makes it cheaper to ship food across the country. On the other hand, a slowing economy could push down the loonie, which will hit grocery shoppers hard since so much of what Canadians eat comes from outside the country, especially in the winter months.
But when you add up all the factors at play, Charlebois says the long-term outlook is better than the short-term one. “Eventually all of these discounts up the food chain will catch up to consumers and we’ll see that at the grocery store,” he said.
Those discounts can’t come fast enough for Nisha Shringi and Vineet Saluja. The couple recently moved to Toronto from Burnaby, B.C., with their two children, and while they were expecting their cost of living to increase, the uptick in what it costs to feed themselves has taken their breath away.
“The costs have increased everywhere,” Shringi said. “It’s crazy.”
Where they once might have enjoyed a restaurant meal out two or three times a month, and treat themselves to the odd fancy coffee at a local cafe once in a while, they’ve completely eliminated luxuries like that from their budget, because they need every penny to keep food on the table.
“We have definitely cut down on things that are not necessary,” she said. “We are just sticking to the essential items —absolute basic necessities.”
What can be done?
It sounds counterintuitive, but Charlebois says the spectre of recession might be what it takes to bring prices down, since consumers saying “no thanks” to expensive food items would bring prices down faster than anything else could.
“With an economic slowdown you will see fewer people willing to pay $30 for a steak and that really will help eventually.”
In the meantime, his advice for anyone looking to slash their grocery bill is the same as it was last year: use food apps to scour for sales, clip coupons to be on the lookout for bargains, and always keep an eye out for price cuts on food that’s about to go past its best before date.
“You’re going to have to work for your deals,” he said. “You’re going to have to work for those discounts.”
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