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UK mortgage approvals fall to their lowest level since June 2020

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UK mortgage approvals fell to their lowest level in more than two years in November, as rising rates and higher borrowing costs put pressure on household spending.

According to data from the Bank of England, mortgage approvals to finance home purchases fell to 46,100 in November, down from 57,900 the previous month.

Those numbers are the lowest for mortgage approvals since June 2020, and below the 55,000 estimated by economists polled by Reuters.

The figures confirm the unrest in the UK housing marketwhich was triggered by the “miniature” budget on 23 September of then Prime Minister Liz Truss, which prompted some lenders to withdraw home loans.

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the Bank of England He said the interest rate paid on new mortgages rose 26 basis points to 3.35 percent in November, the highest rate for a mortgage since 2013.

The rise in mortgage costs follows a series of interest rate increases from the Bank of England’s Monetary Policy Committee, as it tries to tackle soaring inflation.

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First: McCarthy is fighting to be Speaker of the House until the fourth day

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good morning. This article is an in situ version of our site FirstFT the news. Subscribe to our site AsiaAnd Europe/Africa or The Americas A release to send straight to your inbox every weekday morning

The competition for the next speaker of the US House of Representatives is scheduled to enter the fourth day, after the deputies voted to postpone the procedures yesterday evening after Historic defeat on the eleventh ballot for Republican Kevin McCarthy Amidst a difficult impasse in Washington.

Despite recent trench attempts by McCarthy To quell dissent and secure the votes he needed to be elected president, 20 Republicans voted against him again and again, depriving him of the simple majority needed to win sledgehammer.

The ongoing stalemate has exposed long-simmering tensions in the Republican Party and raised questions about how lawmakers will be able to chart a path forward.

McCarthy resisted calls for him to step down in favor of another Republican, and Democrats objected to suggestions that they might support McCarthy or work with Republicans to choose another president.

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1. UK signs cancer trials agreement with BioNTech The UK government is partnering with German Covid-19 vaccine maker BioNTech to enroll up to 10,000 patients in clinical trials in order to Advanced cancer treatments. BioNTech said it would open a research and development center with 75 employees in Cambridge and an office in London, and may later consider investing in UK manufacturing.

2. Create Taiwan’s domestic satellite hero to resist China Taiwan is in talks with a number of domestic and international investors to help its space agency Establishing its own satellite communications provider. Inspired by Elon Musk’s Starlink role in the war in Ukraine, Taipei is stepping up efforts to fortify itself against a potential attack from China.

3. The “social tariff” required in Britain with high energy bills to bear Major energy suppliers and fuel poverty campaigners are urging UK ministers to engage in an ‘open and frank’ dialogue on how to do this. Addressing rising energy costs in the coming yearsespecially for the most vulnerable, as analysts warn that wholesale gas prices may not return to “normal” before 2030.

Line chart of pennies per heat showing average monthly wholesale gas prices during the winter

4. Low inflation is unlikely to deter the ECB from further rate hikes Inflation in the Eurozone probably fell to single digits for the first time in three months in December. However, it is also likely to be a ECB ‘will stick to its hawkish rhetoric’ Prices are rising in the near term, said Franzisca Palmas, chief economist for Europe at research group Capital Economics.

5. China’s new renminbi tactics keep traders guessing The Chinese currency fell by nearly 8 percent last year against the dollar, but Beijing has facilitated this decline by using tools such as the so-called “Invisible reserves” held by state banksinstead of its traditionally harsh intervention by the People’s Bank of China.

How good is it to keep up with the news this week? Take our test.

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next day

Putin’s 36-hour ceasefire is set to begin in Ukraine the Ceasefire ordered by Russian President Vladimir Putin Orthodox Christmas is set to begin, despite its refusal by Kyiv, which called it hypocrisy and a propaganda attempt.

Anniversary of the US Capitol attack US President Joe Biden will Giving remarks at the White House On the occasion of the second anniversary of the January 6 uprising. In a final report released at the end of the year, a congressional committee said former President Donald Trump is “central cause” From last year’s attack on the US Capitol. (The Hill, Financial Times)

Eurozone inflation figures In continental Europe, optimism is growing that inflation has peaked. Low inflation in the member states indicates that today’s expected figure at the eurozone level may fall less than expected by 9.7 percent. Read more in our Disrupt Times newsletter.

Returning to its regular January schedule, the World Economic Forum’s 2023 annual meeting will bring together global leaders in Switzerland next week. Join FT Live in Davos for in-person and digital events from 16th to 20th January. View events and register for free here.

What else do we read and watch

Moscow Diaries: Fear, Loathing, and Deep Denial While missiles rain down on Kyiv and villages in Russia’s hinterland, it has lost much of its adult male population to conscription, Putin’s war does not seem to have changed Moscow that much. “Nobody does any self-reflection. What’s the point? If you stop to stop and think about it, it just gets worse,” a Kremlin-linked businessman grumbles to Max Seddon, the Financial Times’ Moscow bureau chief.

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New Year's decorations of the Kremlin star bearing the letter Z at the entrance to Gorky Park
New Year’s decorations of the Kremlin star bearing the letter Z at the entrance to Gorky Park © Getty Images

Ruchir Sharma’s Investor’s Guide: From Peak Dollars to Better TV Ruchir Sharma points out that a sudden change in the price of money is a fundamental break with the past, but many business leaders do not act. As this stage progresses, big businessmen, companies, currencies and countries that thrived on easy money will stumble. Make room for new winnerswith a discriminatory provision shaping the trends of 2023.

🎥 Watch: How India can revolutionize women’s cricket The Indian Premier League has transformed cricket from a game struggling for a future into one of the most valuable sporting assets in the world. While the top men’s players have become millionaires, The female players struggled to make ends meet. The launch of a women’s league could change the game around the world.

Premium subscribers can get more sports business by Register on the scoreboard the news.

What happened to Google search? Google search was once one of the wonders of the internet. Writes Eileen Moore. “Clean, orderly results pages navigated the Internet’s unmanageable information load. That was until it was filled with ads.”

How a drug partnership led to a mutation in breast cancer Often medicine does not receive a warm welcome. When Daiichi Sankyo and AstraZeneca announce impressive breast cancer treatment results, Enhertu, Oncologists rose to their feet to applaud. “It was a shocking moment, sending chills down my spine,” said Susan Galbraith, who leads oncology research and development at AstraZeneca.

Take a break from the news

our Six movies to watch this week Including a pouting Tom Hanks in A man called OttoAntonio Banderas as a killer in a classic car port Christian Bale Meet Edgar Allan Poe In Pale blue eye.

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Tom Hanks and Mariana Trevino in A Man Called Otto
Tom Hanks and Mariana Treviño in A Man Called Otto © Niko Tavernise

Thank you for reading and remembering that you can Add FirstFT to myFT. You can also choose to receive a FirstFT push notification every morning on the app. Send your recommendations and feedback to firstft@ft.com

asset management – Discover the inside story on the movers and shakers behind a multi-billion dollar industry. Participation here

next week Start each week by reviewing what’s on the agenda. Participation here


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Strong US jobs and wage growth expected in December by Reuters

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© Reuters. FILE PHOTO: A pedestrian passes a “help wanted” sign in the door of a hardware store in Cambridge, Massachusetts, US, July 8, 2022. REUTERS/Brian Snyder

Written by Lucia Mutecani

WASHINGTON (Reuters) – The U.S. economy likely maintained a solid pace of job and wage growth in December, but rising borrowing costs as the Federal Reserve battles inflation could slow labor market momentum significantly by the middle of the year.

The closely watched employment report released by the Labor Department on Friday is also expected to show that the unemployment rate was unchanged at 3.7% last month. The job market has remained strong since the Federal Reserve set out last March to raise interest rates at the fastest rate since the 1980s.

Price-sensitive industries such as housing and finance, as well as tech companies including Twitter, Amazon (NASDAQ:) and Facebook (NASDAQ:Meta) have cut jobs, yet airlines, hotels, restaurants and bars are desperate for workers as leisure and industries continue. Hospitality in the recovery from the epidemic.

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The resilience of the labor market has supported the economy by maintaining consumer spending, but it could prompt the Fed to raise its target interest rate above the peak of 5.1% that the US central bank projected last month and keep it there for a while.

“All indications are that the job market remains strong,” said Song Woon-soon, professor of finance and economics at the university.

Loyola Marymount University in Los Angeles. “Entertainment and hospitality employers are not able to get anyone even after the wages go up. This pattern has been going on and will continue for a while, so this is where the rubber hits the road.”

The business survey is likely to show that non-farm payrolls increased by 200,000 jobs last month after rising by 263,000 jobs in November, according to a Reuters poll of economists. That would be the smallest gain in two years.

However, job growth will far exceed the pace needed to keep pace with growth in the working-age population, comfortably in the 150,000-300,000 range that economists associate with narrow labor markets.

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Estimates ranged from the 130,000 to the 350,000 predicted by TD Securities.

Data from payroll-scheduling and tracking company Homebase showed employers retained workers in December, indicating a smaller-than-usual decline in non-seasonally adjusted (NSA) terms.

seasonal boost

“This means that the seasonal factor, which should be adjusted for more than 200,000 declines in the NSA, will add more than the expected number,” said Oscar Munoz, macro strategist at TD Securities. “Seasonally adjusted has added about 430,000 jobs on average over the past five years,” he added.

An ongoing strike by 36,000 teachers in California is seen as straining government salaries. The government will review the seasonally adjusted household survey data, from which the unemployment rate is derived, for the past five years.

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Household workers fell in October and November, leading some economists to speculate that overall job growth was overstated. Some Fed officials also focused on the difference between the two measures.

However, the household survey tends to be volatile and most economists expect household workers to adjust towards non-farm payrolls.

Veronica Clark, economist at Citigroup (NYSE:) in New York. “We wouldn’t be surprised to see a larger rebound in domestic workers in December or over the coming months.”

No significant effect on the unemployment rate was observed from the review of household data. Average hourly earnings are expected to rise 0.4% after rising 0.6% in November. This would reduce the annual increase in wages to 5.0% from 5.1% in November.

Strong wage growth is likely to continue in January, as several states raise minimum wages and most workers across the country receive cost-of-living adjustments. There were 10.458 million vacancies at the end of November, which translates to 1.74 jobs for every unemployed person.

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But the trend in employment growth could slow significantly by the middle of the year. The Fed raised its policy rate last year by 425 basis points from near zero to a range of 4.25%-4.50%, the highest since late 2007. Last month, it forecast at least an additional 75 basis points of increases in borrowing costs by the end of 2023. .

Trust among CEOs is at its lowest level since the Great Recession, according to a recent survey by the Conference Board.

“If they think demand is weakening and revenues will slow, they will likely feel pressure to cut costs to maintain profitability,” said James Knightley, chief international economist at ING in New York. “This suggests that the pace of employment growth is likely to slow very quickly this year, and we could, in fact, start to see some job losses in the middle of the year.”

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China and the Philippines pledge to handle maritime tensions through ‘friendly consultations’

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Chinese President Xi Jinping and his Philippine counterpart Ferdinand Marcos Jr. have agreed to boost economic ties and handle maritime issues in the South China Sea through “friendly consultations,” as Beijing seeks to salvage a relationship undermined by their territorial dispute.

After meeting in Beijing, the two leaders agreed to “continue to properly handle maritime issues through friendly consultations,” according to China’s foreign ministry.

According to Marcos’ office, Xi pledged assistance to the Philippines in areas including agriculture, energy and infrastructure. Marcus said Filipino China should strengthen their partnership to make the two countries stable and strong and keep the region as a driving force behind the global economy.

It comes two weeks after the reports China He had begun building up previously uninhabited landmarkes in the South China Sea, and the meeting – and Marcos’ first state visit outside of Southeast Asia – is seen as a test of whether Manila can boost economic ties with Beijing while strengthening its traditional security alliance with the United States. United.

“The value of the visit for Xi Jinping will be to determine the size of Marcus Jr. – what kind of leader he is, and whether he can accommodate such [his predecessor Rodrigo] “Duterte,” said Jay Patonbacal, director of the University of the Philippines Institute of Maritime Affairs and the Law of the Sea.

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While Duterte took an accommodative stance towards China and suspended the development of the alliance with the United States, Marcos pledged to prioritize the protection of Philippine sovereignty. I have moved to Strengthening the military relationship With the United States through larger joint exercises and talks about new joint bases in the country.

GPS map showing the Spratly Islands, the Philippines, China and neighboring countries

But the Philippine president is also looking forward to Chinese investment, especially to support his priority policy to boost the country’s agricultural sector. China is the Philippines’ largest trading partner, with bilateral trade worth $29.1 billion in the first nine months of 2022.

Xi and Marcos oversaw the signing of a series of agreements, including the establishment of a hotline between their foreign ministries to avoid miscalculations in the South China Sea.

But analysts have dismissed the hotline agreement as largely meaningless. “Channels of communication between the two sides were never obstructed, and hotlines did not prevent accidents,” Patungbakal said, referring to the 2017 hotline agreement between the two countries’ coastguards and to similar arrangements between China and China. Another claimant in the South China Sea States.

Manila said in December it would investigate a Bloomberg report that, according to Western officials, China conducted reclamation operations for four uninhabited areas in the northern Spratly Islands.

Beijing denied the accusation, but according to Philippine officials, Chinese naval militia ships prevent Philippine ships from approaching sandbars and coral reefs, making an investigation on land impossible.

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