The British economy’s recovery slowed through the summer, delaying its return to its prepandemic size as supply shortages hampered businesses and exports declined.
Gross domestic product grew 1.3 percent in the third quarter, down from 5.5 percent in the previous three months, the Office for National Statistics said on Thursday. The growth was driven by spending on services, especially in hotels, restaurants and entertainment as the last of the major pandemic restrictions were lifted in July and people vacationed in the country. A return to in-person doctor appointments also boosted the growth data.
But the recovery was weaker in other sectors. Retail sales fell as well as car sales because of the global shortage of semiconductors. Supply chain disruptions and bottlenecks have held back growth in Britain and are expected to last longer than previously anticipated. It’s a problem afflicting other countries, including Germany. There have been backups at Britain’s ports and difficulties distributing goods.
The changes to migration and trade because of Brexit, including fewer European Union workers and a stricter customs regime, have exacerbated the supply bottlenecks, according to the Office for Budget Responsibility, which provides independent forecasts for the British government.
Exports fell nearly 2 percent over the previous quarter, partly because of a decline in the export of transport equipment and machinery.
Britain’s “unique Brexit-related issues,” including additional customs paperwork, food safety checks and hurdles to tariff-free trade with the European Union, its biggest trading partner, “no doubt amplify the port and transport challenges,” Kallum Pickering, an economist at Berenberg Bank, wrote in a note to clients.
The slowing momentum in the world’s recovery from the pandemic has led to downgrades of global and British growth forecasts. The Bank of England said last week the British economy would grow 7 percent this year, reducing its forecast by a quarter percentage point. It cut a whole percentage point off growth for 2022 — to 5 percent — as supply disruptions are expected to weigh on the economy until late in the year and the annual inflation rate is forecast to climb to about 5 percent in the spring.
The Bank of England said it would probably need to raise interest rates in the coming months as prices climb, but it was waiting for more official data on what has happened in the labor market after the end of the government-sponsored furlough program in September. The central bank said more than a million jobs were benefiting from the program as it ended and there might be a small increase in unemployment now that those payments are over. The bank has to balance taming inflation without putting the recovery off course with tighter monetary policy.
As the recovery is expected to continue to slow, the National Institute of Economic and Social Research warned this week that British households would be “painfully squeezed” as prices rise, fiscal stimulus is reduced and tax increases come into force in April. The London-based institution also said the number of households that can’t afford basic necessities could double because of a cut to a major government benefit program.
Europe is facing fresh threats to its pandemic recovery as energy prices surge at a “tumultuous pace” and bottlenecks in the supply chain dampen growth and slow production, the European Commission said Thursday.
In its latest economic forecast, the commission said that sporadic pandemic-related lockdowns in some parts of Europe, together with emerging labor shortages, were adding to the disruptions, while inflation has hit a 10-year high.
Europe’s economy rebounded this year from the pandemic faster than expected, and regained prepandemic levels of growth during the summer. Among the 28 countries in the European Union, economic output is now expected to grow by 5 percent this year, slightly better than a forecast made a few months ago — an unusually robust rebound after pandemic lockdowns shuttered the economy last year.
Growth will slow to a 4.3 percent pace next year and then decelerate to 2.5 percent in 2023, the commission said.
Europe spent hundreds of billions of euros to keep workers furloughed during national shutdowns, and such programs have helped millions of people stay in their jobs and avoid a surge in unemployment, the report said. About 1.5 million jobs were created between April and June of this year, and nearly as many workers exited job retention schemes.
As in the United States and Britain, however, labor shortages have been plaguing industries that were quick to reopen, especially restaurants and parts of the retail sector. At the same time, there are still large numbers of people who are jobless and people who are available to work but not actively looking, the report said.
While the economic rebound has been swift, the surge in inflation is likely to weigh on the finances of Europe’s households and businesses. A jump in natural gas prices has led to higher electricity bills. Altogether, the price of goods, services, energy and food combined jumped 3.4 percent in September from a year earlier, and even without volatile food and energy prices, the inflation rate is the highest in a decade. Inflation is estimated to have climbed to 4.1 percent in October.
But prices have jumped because of post-pandemic reopenings, the commission noted, so such pressures are expected to be largely transitory and fade over the next year, the commission said.
Elon Musk, the chief executive of Tesla, disclosed on Wednesday that he had sold about $5 billion worth of Tesla shares, in part to cover his tax obligations after exercising options on a large tranche of stock.
Mr. Musk sold about 4.5 million shares between Monday and Wednesday, according to filings with the Securities and Exchange Commission. Tesla’s stock closed trading on Wednesday at $1,067.95, which would value the shares at about $4.8 billion, but some were sold for slightly higher prices.
In the filings, Mr. Musk said he had sold about a million of the shares “solely” to cover taxes on 2,154,572 in stock he picked up at $6.24 each. Those shares he acquired, for a total of $13.4 million, were instantly worth about $2.3 billion. Later Wednesday, he disclosed the sale of an additional 3.6 million shares.
Mr. Musk still owns nearly 17 percent of Tesla’s stock, shares worth about $180 billion. Tesla recently passed $1 trillion in market valuation.
Over the weekend, Mr. Musk posted a poll to Twitter asking his followers whether he should sell 10 percent of his stock, referring to a political debate over whether the wealthiest Americans should be taxed according to their wealth rather than their income. He said he would abide by whatever respondents chose, and about 58 percent said to sell.
Regardless of the poll, the disclosures indicated that Mr. Musk had put a plan in place in September to sell shares when buying options. Mr. Musk holds more than 20 million stock options, worth nearly $30 billion, that expire in August. Many of those options are unlikely to qualify for preferential tax treatment, meaning he could owe billions of dollars in taxes if he exercises all of them.
Tesla’s stock slid 16 percent in the two days of trading after his Twitter post, though it gained 4.3 percent on Wednesday before Mr. Musk disclosed his trades. Tesla’s shares were up in aftermarket trading following his disclosures.
Stephen Gandel contributed reporting.
An earlier version of this article misstated the day Elon Musk sold shares to cover tax obligations. He sold those shares on Monday, according to his filings, not Wednesday, the date of the filing and other sales.
China Evergrande has made interest payments totaling nearly $150 million on three bonds that had grace periods set to expire on Wednesday, a spokeswoman for the German clearing house Clearstream said. The payments, which were made as a 30-day grace period on the coupon was set to expire, mean Evergrande has avoided default for now.
The Justice Department and the Securities and Exchange Commission have opened investigations into the embattled Silicon Valley company Ozy Media, according to people with knowledge of the matter.
Federal prosecutors with the Eastern District of New York have in recent weeks been in contact with at least one company that had dealings with Ozy, two people with knowledge of the matter said. In the parallel civil inquiry, S.E.C. investigators have contacted at least two companies that discussed investing in Ozy, two people with knowledge of the commission’s effort said.
The precise focus of the investigations could not be determined. A lawsuit filed last month accused Ozy of misleading potential investors. Companies’ statements to investors are often examined in S.E.C. investigations. READ MORE →
On Wednesday, Disney said its flagship streaming service had added 2.1 million subscriptions in the recent quarter, sharply fewer than analysts polled by FactSet had forecast. After a dazzling introduction in late 2019, Disney+ has encountered numerous headwinds, including a pandemic-related shortage of new shows, an increasingly competitive streaming environment, the delay of Indian Premier League cricket games and difficulties rolling out in Latin America. Slower growth is a concern because it makes it harder for Disney+ to achieve the 230 million to 260 million paid subscribers promised by the company by the end of the 2024 fiscal year. READ MORE →
Singles Day used to be the biggest, most unabashed celebration of consumerism on earth: a 24-hour online retail extravaganza, kicking off with a confetti-filled gala and culminating in stupendous piles of riches for brands, celebrity pitchmen and Alibaba, the Chinese e-commerce titan at the center of it all.
This Singles Day, an annual Nov. 11 tradition, Chinese shoppers are still likely to buy a lot of stuff. But this year’s bash is looking a little more abashed.
The shopping holiday, which Alibaba invented over a decade ago, is evolving for a chastened new era for China’s internet industry, one that emphasizes fairness and responsibility and publicly spurns growth-at-all-costs excess. Past Singles Days were opportunities for Alibaba to showcase its latest innovations in getting people to spend more heedlessly. The big themes this year: green logistics, eco-friendly products and consuming “with care.”
Such are the times for Big Tech in China under Xi Jinping. As Mr. Xi prepares to seek a precedent-breaking third term as the country’s paramount leader, his government has put up new regulatory guardrails around Alibaba and other internet heavyweights, ending an exuberant period of unbridled boom times for the industry.
Alibaba’s co-founder Jack Ma was once a regular sight at the Singles Day evening gala. This year, Mr. Ma has mostly disappeared, prompting nervous speculation about his safety. READ THE FULL ARTICLE →
A sleek animation online shows logos of all Facebook’s apps and products fusing together to form a shimmering vision of the future: a two-tone blue infinity symbol next to the word “Meta.”
To design experts, the change by a scandal-plagued company was the latest example of efforts by corporate America to create brands that are less unique and ultimately less offensive. It was also a reflection of the growing challenge for corporate identities to exist in many different sizes and digital settings at once, from V.R. headsets to smartwatches — a challenge that is magnified for Meta as it tries to establish an identity for something that largely doesn’t exist yet.
“It checks a lot of boxes,” said Michael Evamy, the author of “Logo,” an anthology of corporate brands and logos. “It’s very simple. It’s very visible at all scales. It’s blue.” (Blue, he noted, is historically a color associated with safety and trustworthiness. The infinity symbol, devoid of corners and jagged edges, can be seen as nonthreatening.) READ THE ARTICLE →