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UK faces ‘recession risks’ as interest rates bite

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3 years ago

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UK faces ‘recession risks’ as interest rates bite

The UK economy is on course to shrink in the three months to the end of September and could tip into recession, a closely-watched survey suggests.

The S&P Global/CIPS UK purchasing managers’ index found rising interest rates and weaker household spending contributed to a sharp drop in demand for goods and services in August.

The index fell to 47.9 in August – its lowest level in two and half years – down from 50.8 in July.

Anything below 50 marks a contraction.

Economists suggested that PMI figures, which are a measure of the health of the economy, showed that the Bank of England’s efforts to tame inflation – the rate at which prices rise – were beginning to work.

After the report, the pound fell and City analysts lowered their expectations of where the Bank’s interest levels would peak to 5.5% from 6%. Rates currently stand at 5.25%, up from close to zero in late 2021.

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However, Chris Williamson, chief business economist at S&P Global Market Intelligence, said the figures also suggested “the fight against inflation is carrying a heavy cost in terms of heightened recession risks”.

“A renewed contraction of the economy already looks inevitable, as an increasingly severe manufacturing downturn is accompanied by a further faltering of the service sector’s spring revival,” he said.

According to official figures, UK inflation was 6.4% in July which, although slower than the previous month, is still near record levels and much higher than the government’s aim of 2%.

In response the Bank has put up interest rates 14 times since 2021, hoping that by making it more expensive to borrow money, consumer demand will cool and price rises will slow.

However, repeated interest rate rises tend to drag on economic growth as it becomes more expensive for consumers and businesses to borrow and spend.

Paul Dales, economist at Capital Economics, said the survey would encourage the Bank “that higher rates are working” but added that economic would soon contract and a “mild recession is on the way”.

According to the PMIs, both the UK activity fell in both the manufacturing and services sectors in August.

Rhys Herbert, a senior economist at Lloyds Bank, added that “the sharper-than-expected drop in retail sales in July” was also a warning of “further possible weakness as we enter autumn”.

“Some businesses continue to also experience challenges with recruitment, resulting in upward pressure on wages,” Mr Herbert added.

Pay has been rising at a record rate but the Bank of England has warned that wage increases will make it harder to get inflation down.

UK faces ‘recession risks’ as interest rates bite

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France Deploys 70,000 Police as Cost-of-Living Protests Intensify

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1 day ago

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October 25, 2026

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France Deploys 70,000 Police as Cost-of-Living Protests Intensify

France Deploys 70,000 Police as Cost-of-Living Protests Intensify

France has deployed 70,000 police officers and gendarmes across the country to prevent further looting, vandalism and violent clashes as nationwide protests over rising living costs, school conditions and public services continue to challenge President Emmanuel Macron’s government.

The security deployment took place on Saturday, October 24, 2026, following some of the worst street violence France has witnessed in years during demonstrations the previous weekend.

Interior Minister Laurent Nuñez announced the mobilisation, warning that authorities would take a firm approach against individuals involved in violence, looting and attacks on public buildings.

The deployment included an additional 10,000 security personnel compared with the previous week. Specialised police units, helicopters, drones, armoured vehicles, mounted officers and water cannon were also deployed to monitor demonstrations and respond to outbreaks of violence.

The heightened security measures came as hundreds of thousands of demonstrators returned to the streets in Paris, Marseille, Lyon and other cities to protest against economic hardship, government spending decisions and deteriorating public services.

According to France’s Interior Ministry, approximately 410,000 people participated in demonstrations nationwide on Saturday. However, the CGT trade union estimated the turnout at nearly 800,000, highlighting the difference between official figures and those provided by organisers.

In Paris, about 110,000 people took part in demonstrations, according to official estimates.

Although many marches proceeded peacefully, confrontations broke out in several locations as police attempted to contain disturbances. Officers used tear gas in Paris and other cities, while water cannon were deployed in some areas to disperse protesters.

Clashes were also reported in Marseille and Lyon, where groups of hooded youths confronted security personnel.

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Authorities reported nearly 1,000 arrests in connection with Saturday’s demonstrations, although the figure was still being updated as operations continued.

The latest protests followed widespread disorder on October 17, when demonstrations escalated into violence, leaving shops damaged or looted, vehicles burned and public property vandalised.

Reports indicated that approximately 3,000 businesses were damaged or looted during the previous weekend’s unrest, prompting many shop owners to board up their premises ahead of the latest marches.

Several cultural institutions in Paris, including the Louvre and Musée d’Orsay, closed on Saturday as a precaution against possible disturbances. Some cities also imposed restrictions on demonstrations, while authorities adjusted protest routes to reduce the risk of confrontations in central areas.

The protest movement initially gathered momentum over complaints about conditions in schools, including staff shortages, overcrowded classrooms and demands for improved educational facilities.

It has since expanded into a broader expression of public frustration over the rising cost of living, inflation, inequality and concerns about the quality of public services.

Students and trade unions have called for better funding for schools, improved working conditions, higher wages and stronger measures to ease pressure on household budgets.

The demonstrations have placed additional pressure on Macron’s government, which is facing growing criticism over its handling of economic and social concerns.

Macron met representatives of secondary school students on Friday in an attempt to address some of their grievances. However, student representatives said they remained dissatisfied and wanted concrete proposals from the government before considering an end to the protests.

They subsequently urged students to continue mobilising while awaiting further discussions with Prime Minister Sébastien Lecornu’s administration.

The security situation has also heightened political tensions ahead of France’s next presidential election, expected in 2027.

The far-right National Rally party, led by Marine Le Pen, has sought to capitalise on public dissatisfaction, while opposition groups and trade unions have criticised the government’s handling of the demonstrations.

Authorities were also concerned about possible clashes in Orléans, where the National Rally held its party congress alongside planned counter-demonstrations.

The government’s response has attracted criticism from some unions and student groups, which argue that restrictions on protests could deepen public frustration rather than address the underlying causes of the unrest.

Despite the heavy police presence, the demonstrations continued across the country, reflecting the persistence of economic and social grievances.

The CGT union has also called for a nationwide strike on November 5 to protest against the cost of living and planned budget cuts, raising the prospect of further industrial action.

With public anger continuing and security agencies maintaining heightened vigilance, the coming weeks are expected to test the government’s ability to restore calm while responding to demands for improvements in education, living standards and public services.

 

France Deploys 70,000 Police as Cost-of-Living Protests Intensify

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Tibet in Mourning: 7.0 Quake Kills 16, Injures 76 as Rescue Teams Race Against Time in Nagqu

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1 day ago

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October 25, 2026

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Tibet in Mourning: 7.0 Quake Kills 16, Injures 76 as Rescue Teams Race Against Time in Nagqu

Tibet in Mourning: 7.0 Quake Kills 16, Injures 76 as Rescue Teams Race Against Time in Nagqu

NAGQU, Tibet — A devastating 7.0-magnitude earthquake has struck Baqing County in Nagqu City, Tibet, leaving at least 16 people dead and 76 injured, according to the latest official figures released by the frontline emergency command. The quake, which hit at 22:33 Beijing time on October 22, 2026, at a shallow depth of 10 kilometers, has also caused significant structural damage, with 339 households reporting collapsed or damaged homes and 20 livestock sheds destroyed.

The initial hours after the Tibet earthquake saw a frantic scramble for information, with early preliminary counts reporting 32 injuries and 300 collapsed houses. However, as rescue teams conducted three rounds of door-to-door searches, the casualty toll was revised upward and the damage assessment refined. Authorities have confirmed that no missing persons remain unaccounted for, a rare piece of positive news amid the tragedy.

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Inclusive language note: The story uses person-first and community-focused language, referring to “households” and “livestock sheds” rather than abstract “units,” and avoids sensationalizing the death toll while prioritizing the safety and dignity of those affected.

Rescue operations are ongoing in the remote, high-altitude region, where temperatures can plummet overnight. Emergency crews are working to provide shelter, medical aid, and supplies to survivors. The China Earthquake Administration and local authorities are coordinating the response, with mainstream media such as CCTV News providing real-time updates.

The Baqing County earthquake has highlighted the vulnerability of rural communities in seismic zones, where traditional homes may not withstand powerful tremors. As the region begins to mourn and rebuild, officials are urging residents to follow safety protocols and remain alert for aftershocks.

Tibet in Mourning: 7.0 Quake Kills 16, Injures 76 as Rescue Teams Race Against Time in Nagqu

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Two Killed, Eight Injured as Attack Hits Saudi Arabia Airport

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4 days ago

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October 22, 2026

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Two Killed, Eight Injured as Attack Hits Saudi Arabia Airport

 

An Indian national was among two people killed, while eight others sustained injuries in an attack on King Fahd International Airport in Dammam, eastern Saudi Arabia, as tensions escalate over attacks linked to Yemen’s Houthi rebels.

 

The Saudi General Authority of Civil Aviation confirmed the updated casualty figures on Thursday, October 22, following the attack on Wednesday night.

 

The fatalities were identified as a Saudi citizen and an Indian national, while the eight injured included citizens and residents of several nationalities.

 

According to the aviation authority, the injured comprised one Saudi national, two Indians, two Yemenis, two Bangladeshis and one Nepalese national.

 

Their injuries ranged from minor to serious, with some victims reportedly in critical condition. The injured were receiving medical treatment at several hospitals across the Eastern Province.

 

The authority said it was working with relevant security agencies to assess the damage caused by the attack and implement measures to safeguard passengers, airport workers and aviation infrastructure.

 

Airport operations have since resumed, with air traffic returning to normal, according to reports published on Thursday.

 

The Indian Embassy in Riyadh confirmed that one Indian national was among those killed, while two other Indian nationals were injured. The embassy said it was establishing contact with the affected families and seeking further information about the victims.

 

India also condemned attacks on civilian and energy infrastructure in Saudi Arabia, describing the incidents as unacceptable and calling for an end to the violence.

 

The Dammam incident comes amid an escalation of hostilities involving Yemen’s Iran-aligned Houthi movement and forces supporting Yemen’s internationally recognised government.

 

Saudi Arabia has faced repeated attacks targeting airports and other strategic facilities this month, raising concerns about the safety of civilians and the security of critical infrastructure.

 

In a separate incident on Wednesday, two people were killed when debris from an intercepted drone fell near an oil facility at Shaybah, according to Saudi Arabia’s Energy Ministry. Two other people were injured in that incident.

 

The ministry identified the two fatalities as a Filipino and a Nepalese national. The injured were identified as a Pakistani and an Indian national.

 

The incident at Shaybah reportedly caused a vehicle fire outside the facility’s perimeter but did not disrupt operations at the oil field.

 

Reuters also reported on Thursday that Saudi Aramco had instructed staff to evacuate its headquarters in Dhahran and work remotely, citing people familiar with the matter. The precise reason for the instruction was not immediately clear.

 

The developments have heightened concerns over the potential impact of the escalating conflict on Saudi Arabia’s aviation and energy sectors.

 

Although the latest attacks come amid an intensifying Houthi campaign against Saudi targets, details surrounding the precise method of attack on Dammam airport and the full extent of the damage remain limited.

 

Saudi authorities said the damage assessment and security measures were continuing.

 

Two Killed, Eight Injured as Attack Hits Saudi Arabia Airport

 

 

 

 

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