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Bank of England governor says the UK is facing a wage-price spiral
LONDON — After more than a year of warnings, Bank of England Governor Andrew Bailey says the U.K. is now experiencing a wage-price spiral despite 12 consecutive central bank interest rate hikes.
“Some of the strength in core inflation [in the U.K.] reflects the indirect effects of higher energy prices,” Bailey said in a Wednesday speech. “But it also reflects second-round effects as the external shocks we have seen interact with the state of the domestic economy.”
“As headline inflation falls, these second-round effects are unlikely to go away as quickly as they appeared.”
These areas of persistence, he continued, include domestic wage growth and price setting.
This situation risks a wage-price spiral — a theory that says that workers bargain for wage increase as inflation rises, fueling higher demand and pushing companies to raise prices to compensate for steeper expenses. This in turn leaves workers requiring higher wages to afford goods and services — perpetuating so-called “second-round effects.”
The U.K. inflation rate surprised economists by holding above 10% in March. Core inflation, excluding food, energy, alcohol and tobacco, was steady on the previous month at 5.7%.
UK inflation could fall to 2.5% in a year’s time: Investment services firm
Bailey said that the loosening of the labor market, as vacancies begin to fall, is happening more slowly than the central bank previously anticipated.
He noted that nominal wage growth — not adjusted for inflation — and services price inflation had occurred in line with the bank’s forecasts. The Bank of England sees signs of a slowdown in wage growth, but observes that services inflation remains elevated, Bailey added.
The bank’s monetary policy committee “continues to judge that the risks to inflation are skewed significantly to the upside,” he said, and would keep adjusting its main bank rate “as necessary” to reach its 2% inflation target.
Unique risks
Bailey incurred backlash in February last year, when he said that businesses should show “restraint” in pay negotiations, and that “broadly” workers should not ask for big pay rises. His comments were at the time slammed as out of touch, as the public faced a growing cost-of-living crisis, with inflation creating sharp falls in wage growth in real terms.
Bank of England’s Bailey defends largest ever growth upgrade
Economists and policymakers in the EU and U.S. have said in recent months that they no longer see significant risks of a wage-price spiral in those economies, with salaries having room to rise to catch up with inflation and historic stagnation.
Many also say there are signs that companies have been raising prices above their input price inflation, which has protected corporate profit margins.
Alberto Gallo, chief investment officer at Andromeda Capital Management, previously told CNBC that the U.K. was the developed economy most at risk from a wage-price spiral because of factors including weakness in the British pound, reliance on food and energy imports and a tight labor market constrained by post-Brexit rules.
Huw Pill, Bank of England chief economist, sparked a similar furore last month, when he said on a podcast that there was a reluctance in Britain to accept that “we’re all worse off, we all have to take our share,” and that workers and companies needed to stop passing price rises on to each other.
“If what you’re buying has gone up a lot relative to what you’re selling, you’re going to be worse off,” Pill said.
“So somehow in the U.K., someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices, whether higher wages or passing energy costs through on to customers.”
Addressing the backlash, Pill said in comments quoted by Reuters earlier this week that he would “probably use somewhat different words.”
Nevertheless, he continued, “I appreciate this is a little bit of a tough message, but … having to pay more for what we’re buying from the rest of the world relative to what we’re selling to the world is a squeeze on our spending power.”
I am an experienced financial analyst & writer who is well known for his ability to foretell market trends as well.
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Unraveling the Mystery: The Curious Case of 52 Weeks in a Year Despite 4 Weeks per Month
Introduction
Time, an intangible force that governs our lives, is divided into various units to bring structure to our existence.The interplay of leap years, irregular month lengths, and the 4-week-month cycle harmoniously crafts the curious phenomenon of 52 weeks in a year, answering the question of how many weeks in a year.
Among these units, weeks and months stand as fundamental components, each offering its own rhythm and cadence. A perplexing puzzle arises when we consider the relationship between weeks and months: why does a year, which comprises 12 months, have 52 weeks and not 48 weeks, given that there are typically 4 weeks per month? In this exploration, we embark on a journey to demystify this conundrum, examining the intricate interplay of calendars, leap years, and the fascinating history that shapes the way we measure time.
The Dance of Weeks and Months: A Seeming Paradox
At first glance, the arithmetic seems straightforward: with four weeks per month, shouldn’t a year consist of 48 weeks? However, this simple calculation belies the complexity of calendar systems and the irregularities that emerge when trying to fit neatly divisible units of time.
The Gregorian Calendar: A Key Player
Navigating the intricate dance of leap years and month irregularities provides the intriguing answer to the query: how many weeks in a year? To comprehend this enigma, we must turn our attention to the Gregorian calendar—the most widely used calendar system in the world today. In the Gregorian calendar, a standard year is composed of 365 days, divided into 12 months. This division creates a challenge when reconciling months and weeks due to the uneven number of days in a month.
Leap Years: An Essential Adjustment
The fusion of leap years, varying month lengths, and the steadfast 4-week cycle yields the definitive response to the oft-asked question: how many weeks in a year?The addition of leap years is the crux of the matter. A leap year, occurring every four years, serves as a corrective mechanism to account for the discrepancy between the calendar year and the actual time it takes for Earth to complete its orbit around the sun. Leap years add an extra day, February 29th, to the calendar. This adjustment ensures that the calendar remains synchronized with the astronomical year.
Interestingly, the introduction of leap years influences the distribution of weeks in a year. Since leap years have 366 days—52 weeks and 2 days—the balance between the 4-week-month cycle and the leap year adjustment creates the familiar pattern of 52 weeks in a year.
Weeks and Months: A Harmonious Imbalance
To dissect this phenomenon, let’s delve into the interaction between weeks and months within a leap year and a non-leap year.
- Non-Leap Year (365 days): In a non-leap year, 365 days are divided into 12 months, each averaging 30.44 days. While most months have 30 or 31 days, February has 28 days. This irregularity affects the consistency of the 4-week-month cycle.
- Leap Year (366 days): In a leap year, the additional day accommodates the 4-week-month cycle. Months in a leap year have 30 or 31 days, but February has 29 days. This extra day contributes to the harmonious alignment of 52 weeks within the year.
Cultural and Historical Influences
In unraveling the curious interaction between leap years, irregular months, and the consistent 4-week cycle, we uncover the precise solution to the timeless query of how many weeks in a year.The origin of the 7-day week, widely adopted today, has cultural and historical roots that span across civilizations. The ancient Babylonians, Egyptians, and Romans all contributed to the development of this temporal framework. Over time, religious and societal practices solidified the 7-day week’s prevalence.
In the context of months, the lunar calendar used by many ancient cultures contributed to the variation in month lengths. Lunar months, determined by the moon’s phases, resulted in months of varying durations. When the Roman calendar was reformed to align with the solar year, the challenge of reconciling lunar and solar cycles further contributed to the irregular month lengths.
Calculating Weeks in a Year: A Precarious Balance
By skillfully accommodating leap years and the ebb and flow of month lengths, we arrive at the calculated answer to the frequently pondered question: how many weeks in a year?The calculation of weeks in a year is a delicate equilibrium between the 4-week-month cycle and the need to synchronize the calendar with astronomical realities. The introduction of leap years, while seemingly unrelated to weeks, plays a pivotal role in creating the consistent pattern of 52 weeks within a year.
Cultural Significance and Implications
Amidst the intricate interplay of calendar mechanics, leap years, and month irregularities, we find the definitive solution to the intriguing question: how many weeks in a year? The 52-week pattern, despite the irregularities of months, has become ingrained in our daily lives. It influences the way we plan schedules, allocate workdays, and celebrate annual events. The harmonious blend of weeks and months provides a sense of balance, even as we navigate the complexities of time.
Conclusion
Within the tapestry of calendar complexities, the synchronization of leap years, month lengths, and the steadfast 4-week cycle seamlessly unveils the precise answer to the perennial question: how many weeks in a year? The perplexing relationship between 52 weeks in a year and the 4-week-month cycle is a testament to the intricacies of calendar systems, leap years, and the historical evolution of how we measure time. This enigma reveals the delicate balance achieved through the interplay of irregular month lengths and the correction introduced by leap years. As we ponder this curious case, we gain a deeper appreciation for the remarkable precision and artistry inherent in the human endeavor to tame the boundless flow of time.
Ody Team is a qualified social media expert at Coding The Line, London. He had graduated from the University of Cambridge
The United States has accused Russian fighter jets of flying dangerously close to several of its drones over Syria, setting off flares and forcing the MQ-9 Reapers to take evasive action.
US Air Forces Central released a video of Wednesday’s encounter, showing a Russian SU-35 fighter closing in on the drone.
Footage showed the Russian pilot positioning his aircraft in front of the Reaper and turning on the afterburner, dramatically increasing speed and air pressure and making it harder to operate the drone, the air force said in comments accompanying the video.
So-called parachute flares were also released.
“The Russian SU-35 fighter aircraft employed parachute flares in the flight path of US MQ-9 aircraft,” the air force said. “Against established norms and protocols, this forced US aircraft to conduct evasive manoeuvres.”
Three US drones were airborne at the time of the incident on Wednesday morning, Lieutenant General Alexus Grynkewich, the commander of the Ninth Air Force in the Middle East, said in a statement.
He accused the Russian aircraft of “harassing the drones”, which he said were engaged in a mission against ISIL (ISIS).
“Russian military aircraft engaged in unsafe and unprofessional behaviour while interacting with US aircraft in Syria,” he said, adding that the actions threatened the safety not only of US forces but also Russian forces.
Army General Erik Kurilla, head of US Central Command, added that Russia’s violation of ongoing efforts to clear the airspace over Syria “increases the risk of escalation or miscalculation”.
About 900 US forces are deployed to Syria to work with the Kurdish-led Syrian Democratic Forces against ISIL. No other details about the drone operation were released, and the statements did not reveal where the incidents took place.
This win-win cooperation, based on mutual benefit, is China’s version of the New World Order
At a time when, on May 19, the Western allies of the US were deliberating their shared future at the 49th G7 summit in Hiroshima, Japan, and reaffirming their support for Ukraine which is thousands of miles away from Japan, Chinese President Xi Jinping was speaking at China-Central Asia Summit in Xian, offering economic grants for enhancing the financial capacity of Central Asian States. Western media, comparing both events, kept pitching the idea that China is consolidating its influence over former Soviet republics because Russia is fixed in the Ukraine conflict.
However, I think otherwise: China has been present in Central Asia for 20 years, and the China Central Asia trade is too big to ignore. The China-Central Asia Summit was attended by all five former Soviet republics: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Xi’s speech at the event promised a development path independently chosen by all six countries with a focus on respecting and safeguarding their sovereignty, security, independence and territorial integrity. In the China-Central Asia Summit declaration, the participant states agreed to increase trade, boost rail and road connectivity, increase flight connections and speed up the construction of cross-border railway connecting China, Kyrgyzstan and Uzbekistan.
They approved mechanisms to boost cooperation in areas such as fossil fuels, renewable energy, education, science, tourism and healthcare. They also decided to explore potential for further agricultural cooperation, and China agreed to increase imports of agricultural products from Central Asia. It is pertinent to mention here that China will provide 26 billion yuans of financing support and grants to Central Asian countries.
The trade between China and Central Asia has touched a new limit of $70 billion last year, with Kazakhstan sharing $31 billion. While in Hiroshima, G7 offered support to Ukraine, pledging to strengthen disarmament and non-proliferation efforts, towards the ultimate goal of a world without nuclear weapons. Interestingly, the talk about a world without nuclear weapons was held in Hiroshima which was the first victim of US nuclear power. According to Reuters News Agency, China has, with its engagement, put itself at the forefront of the race for political influence and energy assets in the resource-rich regions, while Russia is distracted by its war in Ukraine and the withdrawal of US forces from Afghanistan has diminished the US presence in the region. In believe Russia and China are on the same page as long as the Global South perspective is concerned, and both have their parallel stakes in Central Asia while the US does not enjoy the same leverage in the region that China and Russia do. Russia is linked with the region through history, language and huge labour force of Central Asian States that works in Russian cities and sends huge remittances to their home countries while China is constantly investing in the Central Asian economy, unlike America which offers money in return of military bases.
The US has, in the past, invested in social activities of Central Asian States through NGOs but a crackdown on foreign-funded NGOs in 2010 dented US political base. Central Asian analysts believe China is offering trade and financial support to Central Asian States without demanding any help against any third country. They believe the Ukraine war offers lessons for every country that borders either China or Russia. Experts say that the China-Central Asian Summit by reiterating “we will jointly foster a new paradigm of deeply complementary and high-level win-win cooperation” has sent a loud and clear message that it wishes to enhance the economic capacity of all Central Asian States.
This win-win cooperation, based on mutual benefit, is China’s version of the New World Order. Wherever China is engaging in any country, it is proposing dialogues based on mutual benefit. China is, therefore, writing a new history of refraining from self-serving demands in exchange for cooperation. The China-Central Asia summit concluded with mutual cooperation, prosperous, harmonious, and well connected’ Central Asia.
