Average pay rose 7.3% in the three months to May compared to a year earlier, up sharply from a 5.7% increase in the three months to April. However, the ONS said pay looked strong due to the comparison with a weak period a year earlier.
The UK economy has gradually reopened from coronavirus lockdowns, with the government loosening restrictions in steps. In May, indoor hospitality at places like pubs and cinemas was allowed to resume, underpinning the economy.
June’s payroll figures were boosted by an increase of 94,000 in accommodation and food jobs, the ONS said.
England’s government is set to end almost all restrictions on July 19, despite soaring cases of the delta COVID-19 variant. Northern Ireland, Scotland and Wales are being somewhat more cautious, although have still loosened lockdowns.
The pound was roughly flat against the dollar after the data was released, at $1.386. FTSE 100 futures were down 0.4%.
Prices across the UK economy rose at the fastest rate in three years in June, official data released Wednesday showed, as Brits spent on clothes and meals out as the economy reopened.
The UK consumer prices index rose 2.5% in the year to June 2021, from 2.1% in May. It was the highest reading since August 2018 and above economists’ expectations for a 2.2% increase.
Britain’s Office for National Statistics said prices rose in particular for food, second-hand cars and clothing in the year to June, as well as for eating and drinking out and motor fuel.
“Some of the increase is from temporary effects, for example rising fuel prices which continue to increase inflation, but much of this is due to prices recovering from lows earlier in the pandemic,” Jonathan Athow, deputy national statistician at the ONS, said.
When looked at month-on-month, CPI inflation rose 0.5% in June 2021 compared to 0.6% in May.
The pound was up 0.3% after the figures were released at $1.385, while London’s FTSE 100 was fell 0.44% at the open. Yields on 2-year government bonds rose 2 basis points on the day to 0.12%, nearing their highest in three weeks.
The stronger-than-expected inflation figures pose a challenge for the Bank of England which, like many central banks around the world, has insisted strong inflation will be temporary.
On Tuesday, data showed US inflation rose by more than anticipated to a 13-year high in June, with prices across the economy jumping 5.4% year-on-year.
Paul Dales, chief UK economist at Capital Economics, said June’s UK inflation figures came as a surprise. But he added: “We think this surge in inflation will be temporary, which means the Bank of England won’t tighten policy in response.”
Dales said: “We suspect CPI inflation could climb towards 4% around the turn of the year, which would be higher than the 3% peak expected by the Bank and most forecasters.
“But this will probably be a temporary spike related to reopening effects and the previous gains in commodity and component costs. As such, we are not expecting the Bank to respond by tightening policy in either 2021 or 2022, and probably not 2023 too.”
A top policymaker at the Federal Reserve has said the fast-spreading delta COVID-19 variant poses a risk to the rebound in global growth, and said the central bank should be patient in supporting the US recovery.
“I think one of the biggest risks to our global growth going forward is that we prematurely declare victory on COVID,” Mary Daly, the President of the Federal Reserve Bank of San Francisco, told the Financial Times in an interview published Friday.
She said countries around the world need to increase their vaccination rates, or COVID could continue to spread and act as a “headwind on US growth.”
Policymakers around the world are bracing for the delta variant to spread further, after sending cases soaring in the UK. Transmission of the coronavirus has started to rise again in 14 US states, the Institute for Health Metrics and Evaluation told Insider. About 60% of COVID-19 cases across the US are due to the delta variant, researchers at Scripps have estimated.
Daly, who is a voting member of the Federal Open Market Committee, struck a cautious tone on the topic of when the US central bank should cut back its support for the economy. This currently consists of $120 billion a month in asset purchases and interest rates near zero.
She said the Fed is committed to both price stability and full employment. She added that it should “really be patient enough and persevere enough to deliver on those commitments which we’ve made to the American people.”
Daly said: “I think there’s always this excitement that ‘Oh my gosh: look, the vaccinations are working, this could be the end’. But it would be premature to say that we’ve achieved a victory here.”
Global stocks fell on Thursday and bonds rose as investors worried that economic growth could be slower than initially expected. Concerns were driven in part by the rapid spread of the delta variant around the world.
Minutes from the June meeting showed that there is a lively debate going on inside the Fed about when to cut back on support. Daly told the FT that the debate was a healthy sign that decisions aren’t being made in an echo chamber.
The UK economy undershot expectations to grow 0.8% in May, as bottlenecks in the manufacturing sector offset rapid growth in the hospitality industry, official data showed on Friday.
That month-on-month growth in gross domestic product was well below the 1.7% uptick economists had been expecting. It compares with a 2% rise in April, revised down Friday from 2.3%. Overall, UK GDP was 3.1% smaller than before the pandemic in February 2020.
Transport equipment manufacturing suffered the most, falling 16.5% in May compared with April as global microchip shortages disrupted car production. The decline is a clear indication of the impact that supply-chain bottlenecks are having on economies.
However, growth of 0.9% in the services sector helped the UK economy expand overall. Accommodation and food service activities were up 37.1%, as restaurants and pubs welcomed customers back indoors after the government eased COVID restrictions further.
The pound was down 0.05% after the data was released, at $1.377. The UK’s FTSE 100 was up 0.54% after a sharp fall on Thursday.
The UK government has had to delay the final stage of unlocking pandemic restriction, as a result of a sharp rise in coronavirus cases driven by the delta variant. But it is set to end almost all restrictions on July 19, in the hope that vaccinations will keep hospitalizations low.
“It’s great to see people back out and about thanks to the success of the vaccine rollout, and to see that reflected in today’s figures for economic growth,” said UK Chancellor Rishi Sunak. He added that the government was keeping up its support through the furlough wage-subsidy scheme.
Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said: “May’s weaker-than-expected increase in GDP underlines that the recovery to its pre-COVID levels will be drawn out.”
He added: “Growth in GDP likely will slow further over the summer… This probably partly reflects the fading of some initial enthusiasm when businesses reopened. Rising COVID-19 infections also appear to be prompting some people to work from home again and to visit shops and services venues less frequently.”
The rotation into so-called value stocks in the US has further to run as rapid economic growth pushes up bond yields, a JPMorgan strategist has said, despite signs that the trade has cooled in recent days.
Hugh Gimber, JPMorgan Asset Management’s global market strategist, told Insider that companies in the financial and consumer-focused sectors stand to gain, thanks to Americans unleashing pent-up savings and wages rising as the economy bounces back.
“I do expect US value to outperform US growth,” Gimber said. “It’s about the laggards from last year having more scope to catch up to the rest of the pack because of the environment that we’re in.”
The first half of 2021 in financial markets has been marked by a “reflation trade“. It has seen investors pivot away from the fast-growing tech stocks that did so well in 2020, toward sectors such as energy and financials that are likely to perform better as growth and inflation pick up.
However, recent signs that the US Federal Reserve may be more concerned about inflation than previously thought have knocked the trade’s popularity. The tech-heavy Nasdaq index is up more than 5% over the last month, while the more industry-heavy Dow Jones is down around 1%.
Yet Gimber said he expects strong growth and higher inflation to push up bond yields in the second half of the year.
“You have consumers with pent-up demand, cash in their pockets, that can now get out and spend, driving a very strong outturn for growth.”
Higher market interest rates would likely make the earnings of so-called growth companies – whose full potential is often far in the future – look less attractive to investors.
The JPMorgan Asset Management strategist said rising wages would boost Americans’ spending power, benefitting companies in consumer-discretionary sectors such as luxury goods, vacations, and cars.
He said: “A healthy consumer tends to be helpful for financials, coupled with the latest news on buyback prospects for the financials and the rising yield environment, all of which bodes well for that sector.”
The UK economy grew 2.4% in March as business and consumer optimism grew as COVID-19 cases fell and the vaccination drive picked up speed, according to the latest estimates released on Wednesday.
Britain’s gross domestic product shrank 1.6% in the first quarter compared to the previous three months, a downward revision by the Office for National Statistics from the initial 1.5% estimate. The drop was driven by a bigger-than-expected fall in consumer spending.
However, figures released earlier in June showed that UK GDP grew 2.3% in April. That left the economy around 3.7% smaller than before the COVID-19 pandemic in February 2020, although those figures may also be revised.
The pound was down 0.11% against the dollar at $1.383 on Wednesday. Britain’s FTSE 100 stock index was 0.1% lower.
“Today’s GDP release cemented the fact that growth contracted in Q1, but this is fading fast in the rear-view mirror as recent monthly data points to a much rosier picture for the UK economy,” Jonathan Sparks, UK chief investment officer at HSBC Private Banking, said.
Paul Dales, chief UK economist at Capital Economics, said: “GDP rose in each of February, March and April.” He added: “The further reopening in the economy since then means a lot of that gap will have been closed in May and June.”
Britain has been one of the fastest countries in the world to vaccinate its population against coronavirus. More than 65% of people have now received at least their first dose, according to Our World In Data.
It also has one of the highest death tolls from COVID-19 in the world, with over 128,000 fatalities.
The vaccine rollout has allowed the government to gradually reopen parts of the economy, although rising cases caused a delay in June. However, ministers now hope that the final restrictions can be lifted in July.
The Bank of England said in May that it expects UK GDP to grow 7.25% in 2021, up from a prediction of 5% growth made in February.
With COVID-19 vaccines working and restrictions lifting across the country, it’s finally time for those now vaccinated who’ve been hunkered down at home to ditch the sweatpants and reemerge from their Netflix caves. But your brain may not be so eager to dive back into your former social life.
In a national survey last fall, 36% of adults in the US – including 61% of young adults – reported feeling “serious loneliness” during the pandemic. Statistics like these suggest people would be itching to hit the social scene.
So how can people be so lonely yet so nervous about refilling their social calendars?
Well, the brain is remarkably adaptable. And while we can’t know exactly what our brains have gone through over the last year, neuroscientists like me have some insight into how social isolation and resocialization affect the brain.
Social homeostasis – the need to socialize
Humans have an evolutionarily hardwired need to socialize – though it may not feel like it when deciding between a dinner invite and rewatching “Schitt’s Creek.”
From insects to primates, maintaining social networks is critical for survival in the animal kingdom. Social groups provide mating prospects, cooperative hunting, and protection from predators.
But social homeostasis – the right balance of social connections – must be met. Small social networks can’t deliver those benefits, while large ones increase competition for resources and mates. Because of this, human brains developed specialized circuitry to gauge our relationships and make the correct adjustments – much like a social thermostat.
Social homeostasis involves many brain regions, and at the center is the mesocorticolimbic circuit – or “reward system.” That same circuit motivates you to eat chocolate when you crave something sweet or swipe on Tinder when you crave … well, you get it.
So if people hunger for social connection like they hunger for food, what happens to the brain when you starve socially?
Your brain on social isolation
Scientists can’t shove people into isolation and look inside their brains. Instead, researchers rely on lab animals to learn more about social brain wiring. Luckily, because social bonds are essential in the animal kingdom, these same brain circuits are found across species.
One prominent effect of social isolation is – you guessed it – increased anxiety and stress.
Another important region for social homeostasis is the hippocampus – the brain’s learning and memory center. Successful social circles require you to learn social behaviors – such as selflessness and cooperation – and recognize friends from foes. But your brain stores tremendous amounts of information and must remove unimportant connections. So, like most of your high school Spanish – if you don’t use it, you lose it.
Several animal studies show that even temporary adulthood isolation impairs both social memory – like recognizing a familiar face – and working memory – like recalling a recipe while cooking.
So, human beings might not be roaming the wild anymore, but social homeostasis is still critical to survival. Luckily, as adaptable as the brain is to isolation, the same may be true with resocialization.
Unfortunately, studies like these are still sparse. And while animal research is informative, it likely represents extreme scenarios since people weren’t in total isolation over the last year. Unlike mice stuck in cages, many in the US had virtual game nights and Zoom birthday parties (lucky us).
So power through the nervous elevator chats and pesky brain fog, because “un-social distancing” should reset your social homeostasis very soon.
Reopening my restaurants felt as if we’d all suddenly been released from a year-long cage, and now everyone is trying to make up for lost time.
The Hamptons are filled with people who aren’t used to hearing ‘no.’ With much fewer restaurants, bars, and clubs than places like Manhattan or Miami, the demand has skyrocketed beyond belief, and people are going to greater lengths to get in and be seen. I’ve never seen anything like it.
On a typical weekend at 75 Main, we serve between 1,200 and 1,400 people a day, and still manage to have a packed bar and a line out the door.
Reservations are filled weeks in advance for 75 main, and at Blu Mar every weekend all summer is already fully booked. Walk-ins can try their luck and hope for a cancellation – some people wait for over an hour for the chance to score a table.
For the first time ever, I’m telling servers to not even suggest coffee or dessert unless the party specifically requests it. I’ve also instructed servers to drop the check off shortly after the entree comes out on weekends to speed up turnover.
These days everybody claims to know me – women come in and pretend they’re my sister or girlfriend.
Strangers come to the door and insist they’ve been coming here forever. Sometimes I’m standing right there, and they don’t even know it’s me because they have no idea what I look like.
I have a code with the staff. If I give them a thumbs up, they can let them in but if I raise two fingers, it’s a no. Let’s just say there’s more raised fingers than thumbs up this season.
One of the more creative ruses to get into Buddha Lounge at Blu Mar happened recently when a guy approached the doorman, showing him a fake text conversation supposedly between me and him along the lines of “Skip the line and tell the doorman I said to let you know in to VIP, no cover charge.”
It worked, but later that night the doorman pointed out my so-called friend and I’d never seen him in my life. I walked up, introduced myself, and said while I was impressed with his resourcefulness and he was free to enjoy his night, he should never come back again.
While making up stories and offering tips to gain entry is nothing new in hospitality, people are taking it to a bold new level this season.
People have gone so far as to ask staff for their Venmo handle to send them money, or ask what their favorite store is and then drop off a gift card to curry favor.
I had a gentleman come into 75 Main one weekend and request a table for four for dinner. The dining room was completely packed, so I told him he could wait at the bar for a table to open in an hour or so.
He asked if he bought the most expensive bottle of wine we had, which was $1,500, could I find a way to seat him right away? I wasn’t sure he was serious, but he purchased the wine and no sooner did we uncork the bottle than a table opened up. I cut the line and gave him the table. Everyone was happy.
Flashing cash is just the tip of the iceberg – we have one diner who regularly gives our hostesses vintage jewelry she no longer wears.
Other guests have offered private helicopter rides, jaunts on million-dollar yachts, and even weeklong stays in lavish guest homes.
When it comes to our regulars, I’ll do anything I can to accommodate them. When they get served and I get paid, it’s a win-win. I want to ensure my loyal customers are happy because at the end of the day, we’re planning on sticking around for the long haul.
The portal asks Californians to enter some personal information, including age and date of birth. If the information matches the official records, the user will receive a text or email with a link to their digital record, which has a QR code that can be scanned to show authenticity.
The digital vaccine cards are not “vaccine passports,” the state says. They contain only the same information as the CDC paper cards, and California will not make them mandatory. The digital version is just “one of the options to show proof of vaccination” for the coronavirus, the state says in the FAQ section.
California officially reopened on June 15, dropping requirements for physical distancing, capacity limits on businesses, and a tier system that varied the requirements by county. The nearly 20 million vaccinated residents of the state can use the new system to prove their vaccination status at businesses that require it, though most are not verifying vaccination.
The pass will alleviate issues for people who lost their vaccine cards, but some might have issues accessing their information. Not all records include contact information, and some of it may be outdated, according to Rick Klau, California chief tech innovation officer.
The dramatic slide in lumber prices has further to go, as speculators pull out of the market and supply catches up with demand, Saxo Bank’s chief commodity strategist has said.
Lumber prices have fallen more than 42% since May’s record high of over $1,700 per thousand board feet, although they remain more than 150% higher for the year.
Ole Hansen, head of commodities at the Danish bank and a leading authority in the field, said a number of factors meant prices likely have further to drop.
“Something like lumber has been very much a pandemic-driven spike,” he told Insider. He said a lack of mill capacity and “people going crazy in their backyards, redoing their houses or buying a bigger house” had caused prices to soar.
Skyrocketing prices had sucked in speculators such as hedge funds, who are now pulling out of the market as prices dip, Hansen said.
“Some of that activity is bound to slow [and] supply is starting to meet the demand,” he said.
Hansen said the curve for lumber futures contracts is sloping downwards, showing that “the market is looking for quite some weakness as we head into the autumn and winter months.”
Hansen also said copper could drop another 10% from its current level over the summer, before rebounding later in the year. Copper is down roughly 10% from May’s high of around $10,750 per ton.
One reason for this is that investors think the chances of a dangerous rise in inflation have died down, he said. That means they are moving away from commodities like copper, which are seen as good stores of value at times of rising prices because they’re widely used in industry and technology.
Paul Donovan, chief economist at UBS Wealth Management, told Insider that commodities prices can be taken as a barometer of wider forces in the economy.
He said soaring home prices had cooled down some of the “frenzied” buying in the market, weighing on lumber. And he said peoples’ spending in many other areas had cooled after an initial splurge when economies first reopened.