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The City View: Michael Hewson on problematic consumer spending growth

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Today Andy Silvester talks to Michael Hewson, Chief Market Analyst at CMC Markets.

They unpick the latest wage and labour figures, analyse Bank of England governor Andrew Bailey’s comments at the Treasury select committee, go through inflation predictions for 2022, and discuss why current consumer spending growth in the US and UK will be problematic in the long run.

Andy also takes us through the headlines: Vodafone revenue in Germany has increased by 1.1%, and UBS has warned potential crypto investors that this is not the time to invest.

Episode transcript (auto-generated)

Andy Silvester 0:08 Good afternoon and welcome to the City View podcast live from the city a am offices in the square mile on what is by some distance the nicest there, the blue skies will be at no necessarily blue skies on the employment data which is out today. I’ll be talking about that with Michael Hewson from CMC markets in just a minute. But first the corporate headlines and it’s sort of good news if solid news all round from some of Britain’s biggest firms today Vodafone confirmed that it was making strides in Germany as well as maximising shareholder returns through growth, pushing forward market consolidation ambitions, they’ve got eyes on deals all of that, of course, with merger talk surrounding them, potential tie up with three allegedly on the cards or at least being considered. Elsewhere. Britvic saw sales shoot up in the last year, but they warned that inflation very much on the way and tech entrepreneur Vin Maria making another run at MNC Saatchi in his long running takeover saga. Now Maria, who is already a minority shareholder at the ad land giant going above the heads of the board, Director shareholders with an offer hoping to secure just enough of those shares that she doesn’t need the board’s recommendation to grab the rest. So interesting corporate work at play. Perhaps more interestingly, though, than all of the corporate news when we think about the wider world and what is to come, UBS this morning issuing a note on the crypto crash saying that investors should not be able to put a bottom on this saying that this is not the moment really to be going into crypto and that we have no idea how far this volatile market might fall. Definitely one to watch, as is the windfall tax Rishi Sunak today up in Parliament, saying that while he was not minded to move in that direction, just yet of whacking a massive tax on ng giant. That wasn’t to say that he wouldn’t in future he says, Look again around June July. Now, of course, that will coincide with yet another quarterly update from BP and Shell amongst others, which will surely grab the headlines again. So that’s one to watch. Man who has very strong opinions on the windfall tax, which we’ve discussed at length before views that I confess, I share Michael Hewson, the chief market analyst at CMC markets joining us as usual for his fortnightly hit, Michael, always pleasure to have you with us.

Michael Hewson 2:30 Yeah, good afternoon.

Andy Silvester 2:32 We are in the midst of a very busy week for the governor of the Bank of England in particular. Yesterday was up in front, the Treasury select committee talking about inflation defending himself really in the bank’s approach over the past, however many months, notably impatient at some of the questioning, I thought, today, we had jobs numbers tomorrow, Wednesday, we’ve got inflation figures, and then more data out towards the rest of the week, which we’ll come and talk about, why don’t we just what let’s start with today. Before we........

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