the times | Saturday June 11 2022 2GM 47
Business
Emma Powell
American inflation accelerated to a 40-
year high of 8.6 per cent in May,
prompting a renewed sell-off in global
equity markets yesterday.
The unexpected rise in the consumer
prices index reversed a cooling in April,
when inflation fell back to 8.3 per cent
year-on-year. Price increases were
broadly spread, but housing, petrol and
food costs were the largest contributors
to the rise. The energy index increased
by 3.9 per cent in May, while food prices
were 1.4 per cent higher.
Month-on-month, the consumer
prices index rose by 1 per cent after
gaining 0.3 per cent in April. Econo-
mists had forecast a 0.7 per cent rise in
monthly CPI and an 8.3 per cent rise
year on year.
On Wall Street markets fell sharply
on the inflation data and by the close
the Dow Jones industrial average was
down 880 points, or 2.7 per cent, at
31,392.79, 4.6 per cent lower on the
week. The broader S&P 500 was 2.9 per
cent down for a weekly drop of 5.1 per
cent and the Nasdaq was off 3.5 per cent
on the day and 5.6 per cent on the week.
A sell-off on European markets ac-
celerated after the inflation figure was
announced. London’s FTSE 100
fell 2.1 per cent to 7,317.52, taking its
weekly loss to 2.9 per cent, while Ger-
many’s Dax lost 3.1 per cent on the day
and France’s CAC 40 lost 2.7 per cent.
Economists expect the US Federal
Reserve to increase rates by a further
50 basis points when it meets next
week, as well as in July, with increasing
chances of a similar move in Septem-
¤commoditiescommodities currenciescurrencies
$
1.350
1.300
1.250
1.200$£/$
$1.2323 (-0.0194)
140
120100
8036,000
34,000
32,000
30,0001.225
1.200
1.175
1.150£/€
€1.1712 (-0.0040) ¤Gold
$1,875.23 (+37.33) $
2,200
2,000
1,800
1,600FTSE 100
7,317.52 (-158.69)
8,000
7,500
7,000
6,500world markets (Change on the day)
Brent crude (6pm)
$121.13 (-2.10)May 10 18 26 June 7 May 11 19 27 Jun 7 May 12 20 30 Jun 7 May 12 20 30 Jun 7 May 12 20 30 Jun 7 May 13 23 31 Jun 8Dow Jones
31,392.79 (-880.00)The dominance of Apple and Google in
the mobile phones market is facing
further scrutiny from the competition
watchdog.
The giant technology groups “hold
all the cards” when it comes to how
people use mobile phones, the Compe-
tition and Markets Authority has
claimed. After a year-long study into
Google and Apple face scrutiny over ‘stranglehold’ on mobiles
Katie Prescott
Technology Business Editor
Google and Apple’s mobile systems,
the regulator is planning to further
investigate the dominance of their web
browsers and Apple’s restrictions on
“cloud gaming” — streaming games
directly from a website rather than via
an app.
The watchdog’s interim report found
that the companies had an “effective
duopoly on mobile ecosystems that
allows them to exercise a stranglehold
over these markets, which includeoperating systems, app stores and web
browsers on mobile devices”.
The action comes after the Digital
Markets Bill was announced in the
Queen’s Speech, aiming to give the
watchdog more powers to strengthen
regulation of big technology compa-
nies, those so big they are deemed to
have “strategic market status”.
However, there is no timetable for
the bill’s introduction. A digital markets
unit was launched within the authoritylast year to focus on this area, but it
lacks extra powers without legislation.
Miranda Cole, antitrust and com-
petition partner at Norton Rose
Fulbright, the law firm, said: “The CMA
is known to be frustrated that the
legislation for the proposed new digital
regulatory regime is taking longer than
it had hoped, so is pushing ahead with
cases using its existing tools in the
meantime where it identifies potential
concerns in digital markets. In thatcontext, the announcements aren’t too
surprising.”
While phones made by Apple and
Google come pre-loaded with specific
web browsers — Safari and Chrome —
both companies say that other brows-
ers are available for download.
The regulator argues that 97 per cent
of all mobile web browsing in the UK in
2021 happened on browsers powered
by either Apple’s or Google’s browser
Continued on page 49, col 4Consumer prices index hits a 40-year high
US inflation
rise spooks
the markets
ber. Rates are expected to increase to
between 3 per cent and 3.25 per cent by
the second quarter of next year.
Ian Shepherdson, at Pantheon Mac-
roeconomics, the consultancy, said:
“This report kills any last vestiges of
hope that the Fed could pivot to a 25-
basis-point rise in July, but we remain
hopeful for September, on the grounds
that the next two core CPI prints will be
lower than May’s.”
Michael Pearce, at Capital Econom-
ics, said the re-acceleration in inflation
“opens the door” to a larger 75-basis-
point move in the key interest rate at
next week’s Fed meeting.
Yields on ten-year bonds rose in
anticipation, with US Treasuries up 0.1
points to 3.14 per cent and UK gilts
gaining 0.09 points to 2.41 per cent. The
dollar strengthened, pushing the pound
down 1.21 per cent to $1.2340.
Sarah Giarrusso, an investment
strategist at Tilney Smith & William-
son, the wealth manager, said the diffi-
culty for the Fed now was to engineer a
soft landing — increasing interest rates
to bring inflation back down to target
without damaging growth to the extent
that the economy falls into recession.
“The strong labour market and
consumption continue to prop up the
economy,” she said.
This week the Organisation for Eco-
nomic Co-operation and Development
forecast a sharp slowdown in US
growth to 2.5 per cent this year and
1.2 per cent next year, from 5.7 per cent
last year, as real incomes are hit by
higher food and energy prices.
Growing inflation fears step up pressure
on Bank of England, page 52PROCOOKSliced and diced Daniel O’Neill, founder of ProCook, the kitchenware business, saw 40 per cent knocked off the value of the
company yesterday after a profit warning. Sales were said to have weakened amid pressure on household budgets Page 52Chaos to get worse, warn easyJet pilots
Tracey Boles Deputy Business EditorEasyJet pilots have warned that the
worst of the disruption affecting its
operations could be yet to come.
A letter to the airline’s chief executive
written by the easyJet branch of the
French SNPL pilots’ union says that its
members believe disruption to the
airline’s flights this summer has yet to
peak, a situation it describes as a
“frightening prospect”. The letter was
obtained by the i news website.
In the past three weeks more than
1,500 easyJet flights have been can-
celled at an average of 75 per day.
The pilots accused the Luton-based
airline of presiding over “unprece-
dented chaos”, cancelling viable flights
and suffering “operational meltdowns”after it failed to heed warnings that it
could not cope with surging summer
demand.
EasyJet said that it was aware of the
letter issued by SNPL and would
respond directly to the union. A spokes-
man added: “Delivering a safe and
reliable operation for our customers
and crew is the airline’s highest priority
and the evidence from our safety re-
porting system shows no deterioration
in flight safety as a result of the current
operating environment.
“EasyJet continues to operate up to
around 1,700 flights and to carry
around a quarter of a million customers
every day. However, the challenging
operating environment continues to
have an impact, which is resulting in a
small proportion of flight cancella-tions.” While other airlines such as
British Airways and Wizz Air also have
been forced into large-scale cancella-
tions, easyJet appears to have been hit
particularly badly. According to data
from Cirium and RadarBox, the flight
trackers, over the Platinum Jubilee
period easyJet was responsible for two
thirds of all cancelled UK flights.
Johan Lundgren, chief executive, had
been hopeful that easyJet was poised to
turn a corner after weathering the
pandemic. Only three weeks ago he
told investors that the airline was
“building resilience” into its operations.
Last year easyJet received a takeover
approach, said to have been from Wizz
Air. Its shares were down 15p, or 3.2 per
cent, at 452¼p yesterday.
EasyJet stuck on the tarmac, pages 52-53