Interest rates rise again as economic outlook gets gloomier

View this email in your browser

6th May 2022

Bite-sized business news from the UK and beyond

Good morning Yesterday, in the latest chapter of the ‘Elon Musk buys Twitter’ saga, the billionaire unveiled an all-star line up of 18 investors who are collectively stumping up $7bn to fund the $44bn takeover of the social media platform. Musk also announced plans to serve as the temporary CEO of Twitter, in addition to his other day jobs as chief of Tesla and SpaceX.

Today's stories

Interest rates rise again as economic outlook gets gloomier
Channel 4 fights back against privatisation plans

ECONOMY
Interest rates rise again as economic outlook gets gloomier

What happened
Yesterday the Bank of England announced a 0.25% increase in the base rate to 1% - the highest rate since 2009 - as it tries to keep a lid on ballooning inflation. The central bank also warned that the outlook for the UK economy is even worse than it previously thought with the chance of a recession this year rising as energy prices continue to push inflation into double digits.

Some background
Under ‘normal’ circumstances – whatever they are – interest rate increases are usually positive economic signals as they suggest that employment is high, growth is good and inflation is increasing as a result of those positive macroeconomic factors.

This time around however, the – now persistent – inflation problem we are facing is driven by a global economy coming out of lockdown leading to supply chain issues and rocketing demand for energy, not to mention the geopolitical uncertainty caused by the war in Ukraine.

The dreaded ‘stagflation’ is looking more likely
Stagflation – when inflation is high and growth stagnates – could be a reality this year.

It's problematic because raising interest rates is used to tackle rising inflation but this makes borrowing more expensive which doesn’t help economic growth.

Consistent with this, the Bank commentary around the latest rise was really rather pessimistic:

10.25% inflation expected by the end of the year – the highest since the early 1980s and nearly double the previous forecast of 5.75%
Increasing signs that the squeeze on incomes is starting to weigh on households
Consumer confidence is as low as it has been since 2008

Unfortunately persistently high inflation and concerns over economic growth is a global problem
Central banks across the world are walking a tightrope between controlling prices and supporting fragile, post lockdown economies. This week alone central banks in the US, Australia and India have raised their interest rates.

Is there any good news?
Rising interest rates are generally bad for anyone with debt but can be beneficial for savers who have endured years of rock bottom saving rates.

Other stories to keep you in the loop

Shell profits soar to $9.1bn amid calls for windfall tax
Ocado investors rebel over £20m-a-year bonus plan for CEO
Thousands of jobs at risk as convenience store giant McColl's teeters on brink of collapse
Wealthy Russians flee to Dubai to avoid sanctions
Hope on the high street as Next and Sports Direct back stores
Turkey's cost of living soars nearly 70%

MEDIA
Channel 4 fights back against privatisation plans

What happened
A month after the government announced Channel 4 would be going up for sale, the broadcaster has published an alternative plan – titled 4: The Next Episode - to secure its future.

Channel 4 has been publicly owned since launching in 1982. Unlike the BBC it does not receive funding from the TV licence, instead it generates revenue through advertising with any profits made going back into the business. The government believes that the channel would be better funded and would be able to better compete with streaming platforms if it was in the private sector.

The plan to sell Channel 4 has been controversial
There has been criticism from politicians, TV presenters and the broadcaster itself. 96% of responses from the public consultation on the plan were against it. Critics argue that Channel 4 will lose its cultural edge and reputation for covering stories from under-represented groups in the new owner’s pursuit of profit. Analysts estimate that a privatised Channel 4 would face 40% to 50% cuts to its £660m programming budget.

Channel 4 is full of ideas to avoid a future in private hands including:

Selling its London headquarters and doubling the number of staff working outside the capital to become northern-based.
Creating up to 250,000 training and development opportunities for young people who might not otherwise have a career in the media.
Forming a joint venture with an external investor to spend £200m a year on new content and increase its total programming budget from £700m to £1bn a year by 2030.

Channel 4 said its plan would add around £11bn to the UK economy every year and create 13,000 jobs, arguing that those numbers would be lower under privatisation, at around £8-10bn and 9,000-11,500 jobs.

What does the government think?
Channel 4’s alternative plan looks unlikely to change the government’s mind. The government said Channel 4’s plan is based on flawed assumptions and that privatisation is still the best way forward.

Stat of the day

The World Health Organisation says the world’s true pandemic death toll is nearly 15 million, 3 times more than countries official numbers

Interesting links from around the web

Why fruits and vegetables are less nutritious than they used to be
‘A five-day wait for $5,000’: the man who queues for the uber-rich
Warren Buffett’s 3 legendary investing tips

Forward to Friend

Not a subscriber? Join free

How did you like today's email?
Get in touch with any feedback or even just to say hi
hello@marketloop.co

Copyright © 2022 Market Loop, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.

This email was sent to you
why did I get this? unsubscribe from this list update subscription preferences
Market Loop · 16 Great Chapel St · London, London W1F 8FL · United Kingdom

Older messages

Europe ramps up sanctions on Russia

Thursday, May 5, 2022

.... and Fast fashion giant profits plunge 94% View this email in your browser 5th May 2022 Bite-sized business news from the UK and beyond Good morning The saying goes, 'better late than never

BP posts highest profit in over 10 years as calls for windfall tax grow

Wednesday, May 4, 2022

.... and Boris Johnson woos chipmaker to London listing View this email in your browser 4th May 2022 Bite-sized business news from the UK and beyond Good morning How long would work for one company?

Apple Pay anti-competitive says EU

Tuesday, May 3, 2022

.... and Tech's terrible month View this email in your browser 3rd May 2022 Bite-sized business news from the UK and beyond Good morning Welcome back from the long weekend. Today marks the one year

Consumer giants feel the cost of living squeeze

Friday, April 29, 2022

.... and UK vegan chain bags Hollywood investment View this email in your browser 29th April 2022 Bite-sized business news from the UK and beyond Good morning And just like that we've reached

European gas prices spike as Russia starts cutting supply

Thursday, April 28, 2022

.... and Mixed earnings fortunes for Big Tech View this email in your browser 28th April 2022 Bite-sized business news from the UK and beyond Good morning Kellogg's is taking the UK government to

VCs pull back from foodtech

Monday, May 23, 2022

Forecasting investor-protective deal terms; the end of an era for SoftBank; Caribou joins unicorn herd; Inceptor Bio bags $37M Read online | Don't want to receive these emails? Manage your

12 ways to boost Instagram reach without hashtags...

Monday, May 23, 2022

It's finally here, Reader—a new marketplace dedicated to social marketing services and support. If you're looking for a little extra help with a Facebook or Instagram project, look no further

A crash course in responsible addressable media

Monday, May 23, 2022

The future of addressable media is still being decided as the third-party cookie nears its end. Many of the proposed solutions by internet gatekeepers risk falling short when it comes to efficiency,

[EcomCrew Premium] Last chance to sign up for Premium

Monday, May 23, 2022

Registration closes in Hey Reader, Just dropping by to remind you that tonight is your last chance to join EcomCrew Premium for the quarter. We want to make sure all our members get way more than their

50 Video Marketing Statistics to Inform Your 2022 Strategy [New Data]

Monday, May 23, 2022

Ready to take video marketing to the next level? Check out this exclusive data to learn what's trending from a survey of over 500 marketers. HubSpot Marketing Blog May 23, 2022 50 Video Marketing

Is TikTok the Best ToF Channel in 2022?

Monday, May 23, 2022

View in browser Prelo Prospecting Solutions for Entrepreneurs Not just for Gen Z dancing videos... TikTok is a powerhouse for any brand to looking to grow awareness. Why TikTok is a Game Changing ToF

Nick Saban, Jimbo Fisher and 'Airing Grievances'

Monday, May 23, 2022

Saban and Fisher brought attention to themselves instead of their programs in what were ultimately two displays of selfish leadership. May 23, 2022 | Read Online Nick Saban, Jimbo Fisher and '

Dynamic Dynamite💥

Monday, May 23, 2022

A recap on dynamic content strategies and a tool to get it done. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Disney’s Disney+ ad pitch reflects how streaming ad prices set to rise in this year’s upfront

Monday, May 23, 2022

With Disney+, Disney is looking to set a new high-water mark for ad prices among the major ad-supported streamers. May 23, 2022 With Disney+, Disney is looking to set a new high-water mark for ad

Offer Them A Deal

Monday, May 23, 2022

Time to review your consulting offerings. Pragmatic Consulting Club Pragmatic Consulting Club Offer Them A Deal By Danilo Kreimer – 23 May 2022 – View online → The reason why people choose to hire your