Wages To Outpace Inflation By End of 2015
The Bank of England has declared that wages are set to rise significantly faster inflation by the end of 2015. This will mark the end of the longest pinch on living standards in recent times.
Since the start of 2008 average earnings in the UK have fallen by 7.5 per cent, although accounting for inflation they are no higher than in 2003. Many have felt the squeeze as a result of this despite modest recovery on paper.
The Bank is now forecasting wages to climb at a rate of 3.5 per cent by the end of next year, a good deal higher than the predicted inflation of 1.4 per cent. The interest setting committee of the Bank Of England said it “expects annual real pay growth to pick up from about zero now to about 2 per cent by the end of next year, returning it to normal levels not seen since before the crisis.”
It emerged today that the squeeze on household finances was finally easing after after six years of hardship. Average pay in the third quarter grew by 1.3 per cent compared with the same period last year. Meanwhile, inflation over the same period was at 1.2%, according to the Office for National Statistics.
Bonuses fell by an average of 5.3% per cent over the same period, meaning total pay growth remained below inflation. Wages overall have been in recovery for five consecutive months and grew even more in the month of September.
Rising wages and low inflation will combine for the first time in years to provide a glimmer of hope to UK households. On top of that, oil prices are in decline, pushing down the cost of heating and petrol. The cost of food is also increasing at it’s lowest rate since 2002.
Paul Hollingsworth, expert in UK economics at Capital Economics said: “A recovery in real wages looks set to provide timely support to the economic recovery.”
With the news that 112,000 people found employment in the second quarter of this year, rate of job creation in the country is also encouraging. In the past year almost 700,000 new jobs have been created. Youth unemployment fell from 16.9 per cent to 16.2 per cent.
Despite the encouraging figures, a stark reminder of the state of affairs came from chief economist, Matthew Whitaker: “The depth of the six-year pay squeeze is such that we can’t expect average pay to return to its pre-crisis levels until the end of the decade,”
Gas glut could see household bills fall
People in Britain may soon be seeing the benefits of a glut in global gas supplies, with average household bills falling despite a growing dependence on imported fuel.
The news of falling bills follows on from disastrous week for global stock markets in the energy sector. Brent Crude suffered its biggest financial slump in four years in London yesterday, testing the $80-a-barrel mark. This is more than a 30% fall this year, 15% of which has been in the last month.
While investors have been watching aghast as billions of pounds were lost to market gyrations, a fuel glut and a slowing global economy have driven the oil price down to a level that could save the world $1.8bn a day on everyday fuel costs.
As a result many countries are building facilities for exporting liquefied natural gas (LNG) and Britain has ample capacity to import it at terminals in Milford Haven, Pembrokeshire, and the Isle of Grain, Kent.
According to a report by UK Energy Research Centre claims that Britain is facing rising gas prices because of the decline in North Sea production are unfounded.
“By the early 2020s there might be an oversupply of LNG and in such circumstances the UK is well placed to attract increased supplies,”
The study also highlighted the risk that that Gazprom, the Russian state-owned gas company, could be forced to cut the cost of gas in Europe in response to competition from LNG, particularly from the US, which is converting import terminals to export some of its vast supplies of shale gas.
He said: “There is no reason to just have a scenario where gas prices go up. There is no shortage of gas [globally].”
Switching to burning more gas in power stations will help Britain meet its climate change targets because it has half the emissions of coal, the study found. However, its authors criticise the government for exaggerating the potential for shale gas in Britain.
Ministers have suggested that widespread fracking to extract shale gas could bring down energy prices, improve security of supplies and boost the economy in the northwest of England.
The report says: “Any talk of shale gas making the UK self-sufficient [in gas] again, let alone allowing significant exports, is far-fetched.”
Sophisticated Attacks Over Hotel Wi-Fi exposed
Russian security firm Kaspersky Lab has discovered that criminals have been exploiting the wifi networks of certain luxury hotels in Asia to steal confidential information.
The group, known as the ‘Darkhotel’ hackers modified their code in order to target only the machines of those they wished to infiltrate. This indicates they had advanced knowledge of their victims’ whereabouts and which hotels they would be staying in.
The goal of the hackers seems to have been to gain access to services like Google, Facebook, Yahoo and Twitter accounts for a number of American and Asian business executives. It is also clear that the plan was to snoop on their targets for as long as possible, long after the initial infection.
Kaspersky Lab’s Costin Raiu said “the perpetrators could have had multiple motivations and may have been nation state-sponsored hackers or cyber criminals”.
“So far all victims we have been able to trace are very important people and they make sense in the context,” he said. “Maybe what we have here is the same framework being used by two different groups – one with a focus on other nation states, the other focusing on business interests… it wouldn’t be abnormal.
“I know that at least one of the victims was particularly staying in a hotel because she attended a conference event in that particular city.”
Upon further investigation at the hotel, Kaspersky Labs have found that the attacks date back to at least 2009. The scheme was not restricted to hotels either. Their malware has also cropped up on peer-to-peer file sharing networks like BitTorrent, and as email attachments where the targets appear to have been governments, defence firms and NGOs – lured with relevant topics on nuclear energy and defence capabilities.
These attacks were sophisticated, exploiting zero-day vulnerabilities. This means the methods used had not been seen before, and therefore had not been fixed by software vendors. In addition to this, the code was ‘signed’ with security certificates, designed to prevent exactly this kind of attack.
“This type of targeted attack is uncommon. The steps taken to infect the machines and factors that have to be in place for it to work make it a very specialist type of infection,” said Mark James, security specialist at anti-virus firm ESET.
Richard Cassidy, senior solutions architect at Alert Logic, added: “We are seeing a very sophisticated attack on the target networks by this cell, who have put a great deal of thought into what information they want, who they are targeting and how to write malware that provides the best chance of getting what they’re after.”
Can The Eurozone Really Bounce Back From Recession?
Frankfurt, home to the European Central Bank. Here, they are lagging behind The Bank Of England and the Federal Reserve when it comes to taking decisive action to prompt growth, and less creative in its choice of tools to get the job done.
Germany has just narrowly avoided a triple-dip recession, a great relieft, but expectations for Europe’s two largest economies are still low. Things are looking slightly more rosy in France, with news that the economy had grown by 0.3%. Don’t be fooled though, this growth hides are a more fundamental weakness in the country. This growth was entirely due to the French government’s spending, combined with the accumulation of unsold goods.
It isn’t just France and Germany where things are looking bleak. They aren’t the exception, but rather indicative of the Eurozone as a whole. Unlike the United Kingdom and United States, the eurozone has never really shown convincing signs of recovery from the recession of 2008.
So why exactly has Europe suffered so mcuh? The European Central Bank has been slower than the Bank Of England and the Federal Reserve in taking action to boost their economies. Quantitive easing is now on the horizon for the eurozone, something that the US and UK enacted almost six years ago.
Austerity in the eurozone has weakened domestic demand. Attempting to reduce budget deficits before growth returned was a huge mistake on the part of the German government. With consumers reluctant, or unable to spend, and businesses not investing, Europe has been largely dependant on exports to keep the economy afloat. Slowing growth in the strongest emerging markets has made it harder to sell good overseas. Trade within the Eurozone has also stagnated, adding to the turmoil.
There is, however, some happiness to be found amongst all this doom and gloom. The fall in oil prices will mean lower energy bills and help to boost the disposable income of consumers. The tumbling value of the Euro means exports to the rest of the world are more competitive.
Policy makers must be careful to not confuse narrowly avoiding another recesssion with decisive growth. Clearly, the road ahead is still rocky for the region and there is no guarantee that it will really recover at all. What the eurozone needs is clear action from the European Central Bank and European Investment Bank. Germany will play a crucial role in the recovery, and to do so it must realise that
4G To Receive A Speed Boost In Some UK Cities
The adoption of an improved version of 4G by some UK mobile operators means that many of us could soon be enjoying faster browsing speeds.
Dubbed 4G+ by EE, and 4.5G by competitors Vodafone, the new technology is capable of achieving up to 150 mbps. As we’ve come to expect, it is unlikely customers will actually reach those kinds of speeds. 90 mbps is a more realistic prediction, and still much faster than existing 4G networks.
The rollout will be slow, initially only applicable to two handsets; Samsung Galaxy Alpha and Note 4. EE has stated that 150 sites across central London will be the first to enjoy the new speeds, and the rest of the capital should be upgraded by June 2015. Work to provide similar benefits to Birmingham, Liverpool and Manchester will begin next year.
EE said “on top of our existing 1800MHz spectrum layer, we’ve added a layer of 2.6GHz spectrum and configured our network to enable downlink carrier aggregation. This is the primary feature of LTE-Advanced – and we’re calling it 4G+. Some of Europe’s other top operators, like Swisscom, SFR and Bouygues, as well as Optus in Australia, are already using the term 4G+ for this first stage of carrier aggregation.”
Vodafone began to rollout the new 4G technology in October across three cities – London, Birmingham and Manchester. A spokesperson said that more cities will be added throughout 2015. Despite the select few handsets capable of fully utilising the new technology, it has been revealed that other 4G customers should see improved browsing speeds as a knock on effect of expanding the network’s general capacity.
Mobile expert at USwitch, Ernest Doki said “We may eventually see the same tech deliver speeds faster than the fixed line broadband in the UK, which could be a life-changing concept for those people stranded by a painfully slow rural rollout”.
The announcement comes as welcome news after recent research damned UK mobile networks for their poor coverage, and heavy reliance on old 2G networks, particularly in rural areas.