Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The UK’s competition watchdog has launched action against British Airways and Ryanair over their refusal to give refunds to people during UK lockdowns, when they were “lawfully unable to fly” due to travel bans and restrictions imposed by the government.
BA offered vouchers or rebooking and Ryanair only the option to rebook. The Competition and Markets Authority started an investigation in December.
It said this morning that it is “concerned that, by failing to offer people their money back, both firms may have breached consumer law and left people unfairly out of pocket. It is now seeking to resolve these concerns with the companies, which may include seeking refunds, or other redress, for affected customers”.
This relates to “periods when it was unlawful in one or more parts of the UK for people to travel for non-essential reasons. It covers flights that were not cancelled, and does not cover any other situations”.
Andrea Coscelli, chief executive of the CMA, said:
While we understand that airlines have had a tough time during the pandemic, people should not be left unfairly out of pocket for following the law.
Customers booked these flights in good faith and were legally unable to take them due to circumstances entirely outside of their control. We believe these people should have been offered their money back.
In China, inflation has increased, stoking fears of rising inflationary pressure in the global economy. The headline consumer prices index rose to an annual rate of 1.3% in May from 0.9% in April.
ING economist Iris Pang explains:
Consumer prices continued to be affected by last year’s high pork prices, which started to come down in May last year. As such the high base effect from now will dissipate, and therefore we will see CPI edging higher from now on.
More eye catching was a 9% annual surge in factory gate prices, up from 6.8% in April and the highest since 2008, driven by ferrous metals. They have jumped since the end of last year when they were falling by 0.4%.
Michael Hewson, chief market analyst at CMC Markets UK, says:
While some of the rise can be attributed to base effects due to the huge slide in commodity prices that we saw in March and April last year which saw producer prices decline 3.7%, there is increasing evidence that various supply side issues are starting to create a situation where rather than being transitory, inflation pressures could become more persistent. It is certainly something Chinese business is becoming more concerned about, along with Chinese authorities given recent steps to curb the recent sharp rise in commodity prices.
This is a situation that central bankers appear to be remarkably relaxed or complacent about, depending on which side of the fence you happen to be on.
Trade figures for Germany just out show a 0.3% rise in exports in April while imports were down 1.7%. Germany exported goods to the value of €111.8bn and imported goods worth €96.3bn, the Federal Statistical Office (Destatis) reports.
Compared with April 2020, exports increased by 47.7%, and imports by 33.2%. This means Germany’s trade surplus improved to €15.5bn compared with €3.4bn a year earlier.
Germany’s exports to the UK jumped 64% to €5.3bn in April, after declines in the previous month, while imports fell by 0.6% to €3.1bn.
Asian stock markets are down, with Japan’s Nikkei losing 0.3% and Hong Kong’s Hang Seng slipping 0.2%. European stocks are expected to open flat to slightly higher while the UK’s FTSE 100 could dip at the open.
- 2.30pm BST: UK Treasury Committee pre-commencement hearings for appointments to the Bank of England’s Prudential Regulation Committee and Financial Policy Committee: Tanya Castell (PRC) and Carolyn Wilkins (FPC)