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IKO NINI BWANA SEED

AVOID THESE INVESTMENT MISTAKES – THEY WILL COST YOU!

Investing can be a smooth sail and very beneficial if you know your way around it and you have adequate support. However, it can be a nightmare if you make mistakes that would not only cost you your money, but also the security of your financial future.

In today’s episode, I am discussing investing mistakes that we need to avoid.

Guess what else there is? A private Masterclass that I will be running, that you can sign up for to learn how to build an investment portfolio that works for you! Find the registration link here: https://thelegacyhub.co.ke/money-talk/

MARRIAGE IN KENYA IS WITHIN 6 REGIMES

Currently, one can be in a legally recognized marriage under any of 6 regimes:
1. Christian
2. Civil
3. Customary
4. Hindu
5. Islamic
6. Other religious
Under the first 5 headings, a marriage certificate must be issued for marriages celebrated once the current Marriage Act, 2014 became effective. Marriages under the 6th heading are not issued with a Government certificate recognising the marriage, but must nevertheless be registered in the public place of worship in which such marriage was celebrated, to be legally recognized.
Christian, civil and Hindu marriages are monogamous, while customary and Islamic marriages are potentially polygynous. A customary marriage, involving only one wife, can be converted into a monogamous marriage by registration under the Christian or civil headings. One in a legally monogamous marriage cannot convert it into a potentially polygynous one. Such a marriage has to end before the man can enter into a potentially polygynous marriage.
If you are planning a marriage in Kenya, the Registrar of Marriages in Nairobi is the best starting point for information and current requirements. Non-Kenyans are able to marry Kenyan citizens and to live in the country on a spousal work permit, called a dependent pass. Minor children are also eligible for the dependent pass. Please see below for an overview of marriage requirements in Kenya.
Legal requirements
For a Kenyan citizen to legally marry a non-Kenyan in Kenya, both parties must register with the Registrar of Marriages, which must be done at least 21 days prior to the ceremony. Both parties will need to provide documentation, including:
Original passports and birth certificates
Passport photos, colour
Official proof of divorce or death, if you have been previously married. A solicitor or notary must also provide a signed affidavit that the non-Kenyan party is legally eligible to be married.
The non-Kenyan party will also need to provide proof of visa, or a return ticket to leave the country
Dependent passes
If you have recently married a Kenyan citizen, you may be eligible for a dependent pass, which gives you permission to live and work in the country, including any children who are under 18. A dependent pass is the first step in obtaining Kenyan citizenship, which can only be applied for after seven years of marriage. Passes can also be obtained by de facto partners, even if they are not legally married.
To apply for the pass, a range of documents will be required, including evidence that your relationship is genuine and ongoing. Any documents not in English will need to be officially translated into English before applying. This includes:
Completed application – Form 26, Dependent Pass
Passport photographs in colour (2)
Copies of both the applicant’s and the sponsor’s passport
Proof of income while living in the country
Evidence of any medical conditions
Proof of the relationship (consult application forms and/or an immigration lawyer for more detail about these requirements)
Your work permit application, if you wish to work. This is separate from the dependency pass application, although they can be applied for simultaneously.
The pass application fee, consult the Department of Immigration for current costs
Good to know: The pass can be applied online, via the Kenyan e-visa portal.
Kenyan wedding traditions
A wedding in Kenya may be very modern, similar to western weddings, or may be very traditional. This is dependent on the wishes of the bride, groom, and their families. You may find that even modern weddings incorporate traditional aspects into the ceremony and celebrations, to honour family and culture, and to keep traditions alive.
Kenya has over 40 tribal groups, each with unique ways of celebrating marriage. Kikuyu, the largest group, has many ways of honouring marriage. In Kikuyu culture, this may start with meeting the parents and setting intentions, in which the groom visits the bride’s family, offers gifts, and asks for the marriage to go ahead. A dowry may also be paid. The actual wedding ceremony and reception is a day of fun, traditional games, and plentiful food and drink.
Good to know: Many couples set up a wedding registry, as in many other countries, so a gift from the registry is a good idea if you are invited to a Kenyan wedding.
Essentially, in Kenya, one should think ahead before jumping into a particular type of marriage. A woman who cannot stomach being in a polygynous marriage, should only marry under the monogamous categories. A man who isn’t a one-woman man should not marry under the monogamous categories.
So Kenya accommodates both monogamous and polygynous marriages, and both civil and religious marriages. In fact, if you are keen on planning your marriage and post marriage life, just get in touch with a good lawyer well versed in these matters. An informed lawyer can even customize your marriage contract to suit your needs – all under Kenyan law.

Man killed in Mirema ‘kept a harem of drug queens’

Samuel Mugo Mugota who was shot six times by unknown assailant in Mirema, Kasarani on Monday.
Samuel Mugo Mugota, the man who was shot in broad daylight in Mirema, Kasarani, on Monday afternoon, not only recruited women to spike revellers’ drinks in clubs, he also recruited unsuspecting young men promising them jobs with the government.
He would tour a remote village and gather about 50 young jobless men and ask them to register new SIM cards, open three accounts at Equity, Cooperative and KCB banks saying that they are needed by Treasury for payments processing.
Once back in the city, he would deposit cash stolen from his victims into these accounts and disappear.
The Directorate of Criminal Investigations yesterday unravelled the other side of Mugota. Records paint the picture of a man who loved women and used them to get his wealth from unsuspecting revellers.
From being arrested 30 times in the last 11 years for stupefying and stealing from his victims in clubs with the help of beautiful women, the DCI defines Mugota as a rogue millionaire whose wealth was amassed from swapping ATM and SIM cards stolen from his victims.
“He operated like a mafia criminal organisation, was a multi-millionaire with several real estate properties scattered across the city, a fleet of vehicles and seven wives …” the directorate said.
One of the alleged wives who identifies herself as Mary Meddih Wa Jesu on Facebook, eulogised him a day after news of his death broke.
“The noble man who made me a mother has been killed in cold blood … I don’t know how our son will grow without you but I will keep your legacy through him …May your killer never know peace …” she posted. The post has since been deleted.
According to the DCI, Mugota’s life of crime began in 2011, when he would steal ATM cards in various banks by hanging around ATM machines offering to assist customers who had difficulties, mostly in the evenings.
He would collude with rogue banking officials who would jam the machines once a client inserted their ATM card, then Mugota would approach the client, offering to assist. Detectives said he had a preference for Co-Operative Bank ATMs.
“He would insert the clients’ card then pretend to be facing away and ask the client to key in his password and confirm the balance before withdrawing.
However, since the machines eject the ATM card first, he would get hold of the card as the unsuspecting client waited for the cash,” the DCI said.
In one incident in 2018, at an ATM in Kayole, the DCI said he transferred Sh700,000 in a single transaction through Pesalink from the account of a woman he was assisting.
The woman had walked into the ATM booth to check whether a loan she had applied for had been deposited in her account.
“When she learnt of what had happened, she collapsed and died,” the DCI said.
Mugota would then gradually expand his “business” to stealing from politicians, senior civil servants, pastors and top businessmen with the help of beautiful women, rogue bankers and policemen who would tip him off whenever an ambush was laid for him. He would make more than Sh1 million in a day.
Despite getting charged in almost all the courts in Nairobi and Kiambu, Mugota would reach a deal with the complainant, offering to pay them back, and get back to business.
By the time of his death, he had employed more than 50 beautiful women that he deployed as drinks-spiking agents at various high end entertainment spots on Kiambu road, Ruaka-Kamiti road and Roysambu, all the way to Zimmerman. The joints include Whiskey River, Switch Annex, Oklahoma, Cascada, Red Lion, Aroma and Dragon.
“That has led to broken marriages, left many men admitted in hospitals and others dead from an overdose of a stupefying drug only identified as ‘Tamuu’ supposed to be administered to patients suffering from mental disorders,” the DCI added.
The DCI believes Mugota was killed in a deal gone sour after one of his women-employees sold him out. – nation.africa

Traders are lining up to short the British pound with a possible recession on the horizon

Bank of England Governor Andrew Bailey has warned of an “apocalyptic” outlook for consumers as a recent survey also showed that a quarter of Britons have resorted to skipping meals.
LONDON — Traders are increasingly taking short positions against the British pound as the U.K.’s cost of living crisis begins to bite.
Inflation came in at an annual 9% in April, a 40-year high, as food and energy prices continued to spiral after the U.K. energy regulator increased the household energy price cap by 54% at the start of the month.
Bank of England Governor Andrew Bailey has warned of an “apocalyptic” outlook for consumers as a recent survey also showed that a quarter of Britons have resorted to skipping meals.
Sterling has fallen almost 8% against the dollar year-to-date and hovered just below $1.25 as of Friday morning, slightly above a recent two-year low.
The Bank of England faces the unenviable task of raising interest rates in a bid to anchor inflation expectations while avoiding tipping the economy into recession, a balance that appears to be growing ever more difficult to strike. The Bank expects GDP to slump in the final three months of this year and sees a “very sharp slowdown” ahead but not a technical recession — two straight quarters of contraction.
Sam Zief, head of global FX strategy at JPMorgan Private Bank, told CNBC on Wednesday that although sterling is “awfully cheap” at the moment, investors looking to lock in recent gains on the dollar would be better off looking at euros than pounds.
“The ECB is just coming out of negative rate territory and we think there are non-linearities to doing that, where the BOE is already in positive rate territory — we don’t think they can really hike all that much further,” Zief said.
“So even though we do think sterling recovers a bit against the dollar come the end of this year, we have really been trading sterling short on the crosses, so long commodity-sensitive currencies, growth-sensitive currencies or even the euro against sterling. It’s really not one of our favorite currencies in the G10.”
According to the most recent Commodity Futures Trading Commission data on May 10, asset managers and institutional investors held more than 128,000 short positions against the pound, against just 32,000 long positions.
Short-selling is an investment tactic where a speculator borrows a financial instrument or asset, such as a stock, and sells it in the hope of buying it back later at a lower price, thereby making a profit.
Short sterling against Swiss franc
In a research note Tuesday, Goldman Sachs currency strategists said sterling underperformance is the Wall Street giant’s strongest G-10 foreign exchange conviction at the moment.
“While the U.K. faces a similar trade-off as other major central banks between slowing growth and well-above-target inflation, the BoE has chosen to place a relatively bigger weight on the growth outlook while still relying on supply-side factors to bring inflation down to target,” Goldman Sachs Co-Head of Foreign Exchange Strategy Zach Pandl said.
“While the merits of this approach are subject to debate, what matters for markets is that it is de facto a weak currency policy. In light of the BoE’s differing policy trajectory, we are again revising down our forecast for GBP/USD to 1.19, 1.22 and 1.25 in 3, 6 and 12 months (from 1.22, 1.26 and 1.31 previously).”
Goldman has already recommended investors go long on the euro against the pound, with a target of £0.87, and this week also launched a short position on the pound against the Swiss franc, with a target of 1.18 and a stop at 1.24.
Strategists anticipate that the Swiss National Bank will take a harder line against inflation exceeding its target and take steps to prevent real currency depreciation.
The European Central Bank has struck a more hawkish tone in recent weeks and is now tipped by the market to begin hiking interest rates in July, in between SNB meetings in June and September.
“A preemptive hike in June, an intermeeting hike, or balance sheet action cannot be ruled out. Given the variety of potential policy tools, we think this trade is better in FX than rates which should be a more direct approach to the policy goal,” Pandl said.
“Our main motivation for this trade is to isolate the policy differential, but it is also negatively correlated with risk sentiment. We think that is appropriate, but it is also the key risk to the trade, in our view.” – cnbc.com

Britain’s biggest-ever lottery winners reveal their identities after scooping £184m

Joe Thwaite, 49, and Jess Thwaite, 46, from Gloucestershire celebrate after winning the record-breaking EuroMillions jackpot of £184M from the draw on Tuesday 10 May, 2022, at the Ellenborough Park Hotel, in Cheltenham, Gloucestershire. Picture date: Thursday May 19, 2022.
A couple who scooped the biggest-ever lottery win have said they have “been ready to win for years”.
Joe and Jess Thwaite, a couple from Gloucester, have revealed their identities after winning £184m on the EuroMillions last week.
Mr Thwaite, who bought the ticket, said: “Generally my luck is pretty terrible, to be honest with you.”
They went public at a news conference today, telling of their disbelief at the win and how they planned to spend their winnings.
Mrs Thwaite said: “The win gives us time to dream which we haven’t had before.
“We’ve had one week to think about this and we now have time to share lots of experiences and go on adventures with our family and friends.”
Mr Thwaite, 49, is a communications sales engineer, and Mrs Thwaite, 44, runs a hair salon with her sister.
They have been married for 11 years and have two young children.
Mr Thwaite revealed that he let his wife sleep in last Wednesday morning after discovering they had won.
He said that on Tuesday he thought he “better buy a ticket” because he was aware of the jackpot.
The next morning he got up as usual at 5.15am before checking his phone and seeing an email from the National Lottery saying, “Good news, you’ve won a prize”.
Joe Thwaite, 49, and Jess Thwaite, 46, from Gloucestershire celebrate after winning the record-breaking EuroMillions jackpot of £184M from the draw on Tuesday 10 May, 2022, at the Ellenborough Park Hotel, in Cheltenham, Gloucestershire. Picture date: Thursday May 19, 2022.
“I saw how much and I didn’t know what to do,” Mr Thwaite said.
“I couldn’t go back to sleep, I didn’t want to wake Jess up, so I just laid there for what seemed like forever. I spent some time searching for property with no budget limit, which was a novelty!”
As Mrs Thwaite struggled to wake up to her alarm, he told her: “I’ve got a secret, I’ve got something to tell you.”
Her first reaction was to assume the National Lottery app was wrong or that it was a joke.
She decided that it wasn’t worth getting too excited about as it probably wasn’t true and got up to make coffee and start their normal morning routine.
Mrs Thwaite admitted she had been worried about going public, but said she wants to “enjoy” the prize with her friends and family.
She recalled telling her mother about the win in the car park of where they both work, as she said: “‘I’ve got something to tell you, a secret to tell you but you have to promise not to tell anybody’.
“She was like: ‘OK’, and then she was like: ‘Are you pregnant?'”
Mrs Thwaite said she told her mum: “It’s better than being pregnant.”
Mrs Thwaite added: “She just literally screamed in the car park and burst into tears because even though it’s wonderful and exciting, it’s also a massive relief for everybody that’s been struggling with all their bills and all their things for all this time.”
She also said she is not materialistic and that the family will have to buy suitcases because they “never go on holiday”.
They might also buy a new car, she said.
Mr Thwaite said he wanted to take his children to a rugby game.
“I’d love to watch Gloucester or England rugby live with the kids but we have only really been able to watch on TV,” he said. “I’d love us all to get on a plane and go on a holiday, somewhere sunny.
Joe Thwaite, 49, and Jess Thwaite, 46, from Gloucestershire celebrate after winning the record-breaking EuroMillions jackpot of £184M from the draw on Tuesday 10 May, 2022, at the Ellenborough Park Hotel, in Cheltenham, Gloucestershire. Picture date: Thursday May 19, 2022.
“It’ll be great to spend more time with my brother. We both work really hard and rarely see each other, it’ll be amazing to now be able to spend time together.”
Mrs Thwaite said: “Our two children have always talked about going to Hawaii, I’ve no idea why but we can now make that dream come true.
“They have always wanted a horse box for our ponies rather than the run-down trailer we use. Just to see their faces when we can make these things come true will be worth every penny.”
She revealed that she was more prepared for the win than many, thanks to her father, saying: “My dad played the National Lottery all his life and constantly dreamed of winning.
“He would always ask us what we’d do when we won, how we’d spend it, who we’d treat. It was a regular conversation and I feel like he was preparing us. Maybe that is why I seem so chilled, as I’ve kind of been ready to win for years.”
When her father died seven years ago, her husband took over playing the lottery.
Mr Thwaite said: “The family always ask me if I have a ticket for the big draws. While I don’t play every week, I do a Lucky Dip when there is a big jackpot. Although I don’t feel like I’ve had a lot of luck in the past.”
The winning EuroMillions numbers were 3, 25, 27, 28 and 29 – plus the Lucky Star numbers 4 and 9.
Their total win was £184,262,899.10.
The record was previously held by an anonymous ticket-holder, who won £170m in 2019. – skynews

The euro is nearing parity with the dollar 

As of Wednesday afternoon in Europe, the euro was hovering just above $1.05, having been in steady decline for almost a year, down from around $1.22 last June.
The euro is nearing parity with the U.S. dollar for the first time in 20 years, but currency strategists are divided on whether it will get there, and what it will mean for investors and the economy.
As of Thursday morning in Europe, the euro was hovering around $1.05, having been in steady decline for almost a year, down from around $1.22 last June. The common currency slid to just above $1.03 earlier this week.
The dollar has been strengthened by risk aversion in markets as concerns about Russia’s war in Ukraine, surging inflation, supply chain problems, slowing growth and tightening monetary policy have driven investors toward traditional “safe haven” assets.
The narrowing between the two currencies has also been driven by divergence in monetary policy among central banks. The U.S. Federal Reserve earlier this month raised benchmark borrowing rates by half a percentage point, its second hike of 2022, as it looks to rein in inflation running at a 40-year high.
Fed Chairman Jerome Powell said on Tuesday that the central bank will not hesitate to continue raising rates until inflation comes down to a manageable level and repeated his commitment to bring it closer to the Fed’s 2% target.
The European Central Bank, by contrast to the Fed and the Bank of England, has yet to raise interest rates despite record high inflation across the euro zone. However, it has signaled the end of its asset purchase program and policymakers have struck a more hawkish tone of late.
ECB policymaker Francois Villeroy de Galhau said on Monday that excessive euro weakness threatens price stability in the bloc, increasing the cost of dollar-denominated imported goods and commodities and further fueling the price pressures that have driven euro zone inflation to record highs.
What would it take to get to parity?
Sam Zief, global head of FX strategy at JPMorgan Private Bank, told CNBC on Wednesday that the path to parity would require “a downgrade in growth expectations for the euro area relative to the U.S., akin to what we got in the immediate aftermath of the Ukraine invasion.”
“Is that possible? Sure, but it’s certainly not our base case, and even in that case, it does seem like euro at parity becomes your worst case scenario,” Zief said.
He suggested that the risk-reward over a two to three-year period — with the ECB likely escaping negative rate territory and fewer fixed income outflows from the euro area — means the euro looks “incredibly cheap” at present.
“I don’t think there’s many clients that are going to look back in two to three years and think that buying euro sub-$1.05 was a bad idea,” Zief said.
Why is the dollar so powerful?
He noted that the Fed’s aggressive interest rate hiking cycle and quantitative tightening over the next two years are already priced into the dollar, a view echoed by Stephen Gallo, European head of FX strategy at BMO Capital Markets.
Gallo also told CNBC via email that it’s not just the prospect of material policy divergence between the Fed and the ECB that will affect the EURUSD pair.
“It’s also the evolution of the EUR’s core balance of payments flows, and the prospect of additional negative energy supply shocks, which are also dragging the currency lower,” he said.
“We have not seen evidence of a large build-up in EURUSD short positions on the part of leveraged funds in the data we track, which leads us to believe that the EUR is weak because of a deterioration in underlying core flows.”
A move to parity between the euro and the dollar, Gallo suggested, would require ECB “policy inertia” over the summer, in the form of rates remaining unchanged, and a full German embargo on Russian fossil fuel imports, which would lead to energy rationing.
“It would not be surprising to see ECB policy inertia continue if the central bank is faced with the worst possible combination of higher recession risk in Germany and additional sharp rises in prices (i.e. the dreaded stagnation),” Gallo said.
“For the Fed’s part in all this, I believe the Fed would become alarmed by a move to the 0.98-1.02 range in EURUSD, and this extent of USD strength vs the EUR, and I could see a move to this area in EURUSD causing the Fed to pause or slow its tightening campaign.”
Dollar ‘too high’
The dollar index is up around 8% since the start of the year, and in a note Tuesday, Deutsche Bank said the “safe haven” risk premium priced into the greenback was now at the “upper end of extremes,” even when accounting for interest rate differentials.
Deutsche Bank Global Co-Head of FX Research George Saravelos believes a turning point is close. He argued that we are now at a stage where further deterioration in financial conditions “undermines Fed tightening expectation” while a great deal more tightening remains to be priced in for the rest of the world, and Europe in particular.
“We don’t believe Europe is about to enter a recession and European data – in contrast to the consensus narrative – continues to outperform the U.S.,” Saravelos said.
Deutsche Bank’s valuation monitor indicates that the U.S. dollar is now the “world’s most expensive currency,” while the German lender’s foreign exchange positioning indicator shows that dollar long positions against emerging market currencies are at their highest since the peak of the Covid-19 pandemic.
“All of these things give the same message: the dollar is too high,” Saravelos concluded. “Our forecasts imply EUR/USD will go back up to 1.10 not down to parity in coming months.”
The case for parity
While many analysts remain skeptical that parity will be reached, at least persistently, pockets of the market still believe that the euro will eventually weaken further.
Interest rate differentials vis-à-vis the U.S. shifted against the euro after the Fed’s June 2021 meeting, in which policymakers signaled an increasingly aggressive pace of policy tightening.
Jonas Goltermann, senior markets economist at Capital Economics, said in a note last week that the ECB’s recent hawkish shift has still not matched the Fed or been enough to offset the increase in euro-zone inflation expectations since the turn of 2022.
While Capital Economics expects the Fed’s policy path to be similar to that priced in by markets, Goltermann expects a less aggressive than discounted path for the ECB, implying an additional shift in nominal interest rate differentials against the euro, albeit a much smaller one than that seen last June.
Deteriorating euro zone terms of trade and a global economic slowdown with further turbulence ahead – with the euro more exposed to financial tightening due to the vulnerability of its periphery bond markets – further compound this view.
“The upshot is that – contrary to most other analysts – we forecast the euro to weaken a bit further against the dollar: we expect the EUR/USD rate to reach parity later this year, before rebounding toward 1.10 in 2023 as the headwinds to the euro-zone economy ease and the Fed reaches the end of its tightening cycle,” Goltermann said. – cnbc.com

Minister says UK deportation flight removes seven despite 112 expected onboard

A UK deportation flight to Jamaica removed just seven of the 112 people expected to be onboard, the Government has said.
Some Tory MPs could be heard shouting their disbelief at the total after it was announced in the House of Commons by Home Office minister Tom Pursglove.
He blamed “last-minute claims” from specialist immigration law firms and MPs for the low number on the Wednesday morning flight.
In a statement to the House, Mr Pursglove said: “The offences committed by the individuals on this flight include rape of a minor, sexual assault against children, firearms offences, dealing and importing controlled drugs and other violent crime, such as actual bodily harm.
“Between them they had a combined total of 58 convictions for 127 offences.”
Mr Pursglove, who earlier said more than 10,000 foreign national offenders have been removed from the UK since the start of 2019, added: “This flight to Jamaica makes up just 1% of total enforced returns in the year ending September 2021.”
He went on: “However many more criminals could have left the UK today.
“What we have seen over the last 24 hours is more last-minute claims facilitated by specialist immigration law firms, as well as representations from MPs to stop this flight from leaving.”
Conservative MP William Wragg (Hazel Grove) asked: “How many dangerous foreign national offenders were due to be on the deportation flight this morning and how many actually left owing to appeals?”
Mr Pursglove replied: “I can confirm that the manifest originally had 112 individuals on it, in the end only seven left our country on that flight.”
Tory MP Peter Bone (Wellingborough) could be heard exclaiming: “How many? Seven?”
For Labour, shadow Home Office minister Stephen Kinnock said: “The Home Office must deport dangerous foreign criminals who have no right to be in our country and who should be returned to the country of their citizenship.”
He added: “But the Home Office also has a responsibility to get its deportation decisions right.”
Conservative MPs lined up to criticise the opposition, with claims Labour and the SNP supported “lefty” immigration lawyers over the British public.
Stoke-on-Trent North MP Jonathan Gullis claimed his constituents were “flabbergasted that the woke, wet and wobbly lot opposite are on the side of their lefty woke warriors, who are making sure these rapists and paedophiles remain in this United Kingdom, rather than standing up for the British people and their safety”.
Sleaford and North Hykeham MP Dr Caroline Johnson said: “The SNP spokesman (Stuart C McDonald) said it may be very cruel to deport these criminals, criminals who are paedophiles, murderers and rapists, but I tell you what is very cruel – the suffering of victims, their families and any future victim and their families.”
SNP MPs could be heard shouting: “Withdraw that! Withdraw that! That is not what he said.”
The SNP’s Anne McLaughlin (Glasgow North East) later said: “Can I say how disrespectful I find it the way members on those benches keep talking about lawyers, who are after all simply protecting people under the laws of this country?
“It is childish in the extreme when every time we mention it all we hear is ‘lefty lawyers, lefty lawyers’. Who cares what their politics are? They protect people according to the law.”
Mr Pursglove replied: “I of course think that it is right and proper that people have access to legal advice and of course the legal profession, and due process is absolutely crucial to ensuring that these matters are handled sensitively and appropriately and correctly in accordance with the law, but what we can’t continue to have is this completely unbalanced situation where we do see abuses of the system.” – yahoo.com

British nears five-year low amid stagflation worries

The pound slipped 0.7% against the dollar following April’s red-hot inflation data.
The pound sank on Wednesday, falling back near a five-year low, over stagflation fears after stark data on inflation, jobs and the slow growth of the UK economy in March.
Official figures from the Office for National Statistics showed UK inflation rose to 9%, the highest level in 40 years, indicating the Bank of England could be forced to take a more dovish stance when hiking rates.
The latest gauge falls in line with BoE predictions. The central bank forecast inflation to rise as high as 10% this year, warning this could tip the economy into recession. Analyses by think tanks already point to UK’s poorest households facing nearly 11% inflation.
It comes as economic activity slowed sharply during the first quarter of 2022, with the UK economy suffering its worst bout of stagflation – weak growth alongside high inflation.
“With the spectre of stagflation looming, there are expectations that the Bank may be forced to take more of a softly-softly approach,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Sterling (GBPUSD=X) slipped against the dollar in afternoon trading following April’s red-hot inflation data. It dipped 0.7% to $1.240. It was up 0.4% at 84p against the euro (EURGBP=X).
Wednesday’s drop reverses most of the gains the pound made the day before when it touched its highest level since 5 May, having jumped 1.4% after data showed the unemployment rate had dropped to its lowest since 1984.
Danni Hewson, financial analyst at AJ Bell, said: “The pound’s taken a pummelling as UK inflation soars to a 40-year high suggesting the British consumer will be forced to reign back even harder, dragging the economy as a whole further towards that recession cliff edge.
“Yesterday’s jobs figures suggested the Bank of England might have quite a bit of wiggle room when it came to rate rises but considering how hot prices are running already there’s real concern that any further moves it makes will only serve to cut back consumer spend and business investment.
“The fact the UK has shot past US inflation numbers is just adding to the mix, strengthening the dollar as investors consider the Fed is in a stronger position to hike rates faster and higher than its UK counterpart.
“It’s all a balancing act but one that’s leaving many households teetering on the brink of real hardship and there’s expectation the UK government will have to loosen its purse strings to help people through the next difficult months.”
Brexit-related risks around changes to the Northern Ireland protocol and the potential for a trade war with the European Union is another major downside risk for sterling, according to analysts at ING, who expect it to trade at mostly below $1.2500 versus the dollar during the summer.
“The oversold pound has faced a strong rebound this week, recouping some of its recent sharp losses as global risk appetite improved,” ING said. “While the good GBP momentum may continue as equities find some stability in the coming days.” – yahoo.com

UK inflation hits 40-year high of 9% as cost of living squeeze intensifies

UK inflation: Surge in energy and food prices have hit households hard.
UK inflation soared to a more than 40-year high in April thanks in part to rising food, energy and fuel prices and the war in Ukraine as the economy deteriorates and people have less to spend.
According to the latest data from the Office for National Statistics (ONS) on Wednesday, the consumer price index (CPI) measure of inflation rose to 9%, the highest since it started being calculated in 1997.
ONS estimates that CPI hasn’t been higher since 1982 when it peaked at nearly 11%.
This is up from a 30-year high of 7% in March, while economists polled by Reuters forecast inflation to hit 9.1%.
Core CPI, which strips out volatile food and energy components, rose 6.2% in a sign that inflation has become embedded across Britain’s economy.
Renewed COVID lockdowns in China and Russia’s invasion of Ukraine have deepened supply chain issues, which were only just recovering from the havoc wrought by the pandemic, sending global prices rocketing.
This trickled into household bills, with Ofgem lifting the price cap on energy bills by 54% in April and the Bank of England (BoE) now sees a further 40% increase in October.
Around three quarters of the increase in the annual inflation rate this month came from utility bills, Grant Fitzner, chief economist at the ONS said.
Read more: How to cope with bills out of the blue when you really can’t afford it
Motor fuel prices soared to record highs, driving inflation higher after the Ukraine crisis lifted oil prices. Petrol jumped 28.9%, electricity 53.3% and gas 95.5%, according to the ONS.
RAC figures show the average price of diesel rose to a record 180.32p, while petrol climbed to 166.8p, taking it closer to the all-time high of 167.3p set in late March.
Food prices also rose sharply in the year to April, with the war driving up the cost of cereals, cooking oil and meat.
Food inflation and non-alcoholic beverages increased to 6.7%, the fastest rate since 2011. This includes double-digit rises for some products such as pasta (+10.4%), lamb (14.3%), beef and veal (+10.2%), poultry (+10.1%), oil and fats and milk (+14.5%).
The retail price index, to which some government bonds and train prices are linked, jumped to 11.1% from 9% the previous month.
Factory gate prices also jumped 14%, a key indication that further price rises is in the pipeline as firms pass on costs to customers.
Chancellor Rishi Sunak, said: “Countries around the world are dealing with rising inflation. Today’s inflation numbers are driven by the energy price cap rise in April, which in turn is driven by higher global energy prices.
“We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action.
“We’re saving the average worker £330 a year through reducing National Insurance Contributions, changing Universal Credit to save over a million families around £1,000 a year, and providing millions of families with £350 each this year to help with their energy bills.”
BoE governor Andrew Bailey warned of “second-round effects” from inflation, when a wave of price rises such as the energy bills shock feeds through the rest of the economy with higher wages, pointing to further rate hikes to control inflation.
He said an “apocalyptic” potential rise in food prices as a result of the Ukraine war were a major worry.
The latest gauge falls in line with the BoE predictions. The central bank forecast inflation to rise as high as 10% this year, warning this could tip the economy into recession.
Economic activity slowed sharply during the first quarter of 2022, the UK economy is suffering its worst bout of stagflation – weak growth alongside high inflation.
UK’s inflation rate is currently running at five times Threadneedle Street’s 2% target. Earlier in May, the BoE increased interest rates for the fourth consecutive time, from 0.75% to 1%.
Bailey has implied that he would be prepared to hike rates to stem inflation even if that leads to a recession.
“The latest jump in inflation also marks seven straight months of prices rising at a pace not seen since in a generation and nine months of inflation rising faster than the BoE’s 2% target,” said Myron Jobson, senior personal finance analyst at interactive investor. “Household budgets are crumbling under the crumbling under the pressure of spiralling inflation, driving many to breaking point.”
This adds to analysts’ warnings the tight labour market may force the BoE to lift rates more aggressively in the coming months, raising fears that a dangerous wage-price spiral is taking hold in the economy.
“The labour market has remained stronger than expected even though the economy has been weaker than anticipated,” said Paul Dales, chief UK economist at Capital Economics. “This supports our view that the BoE will have to raise interest rates further than widely expected, perhaps from 1% now to 3% next year.”
ONS data on Tuesday showed average wages continued to fall further behind the rate of inflation in March.
Earnings in the month shot up by 9.9% on the year, regular earnings excluding bonuses fell by 1.9%, although wages excluding bonuses jumped 4.2% in the first quarter. Unemployment was 3.7%, its lowest rate since 1974, while vacancies rose to nearly 1.3 million. – yahoo.com

Companies pile pressure on CBK over dollar crisis

Manufacturing firms have piled pressure on the Central Bank of Kenya to sell more dollars into the market to ease the persistent shortage.
Manufacturing firms have piled pressure on the Central Bank of Kenya to sell more dollars into the market to ease the persistent shortage, which has prompted importers to place advance orders.
The Kenya Association of Manufacturers (KAM), whose members are arguably the biggest importers of goods, say the CBK should “release” the excess dollars above the statutory levels of four months equivalent of import cover into the market.
“We call upon the central bank to release dollars for importers to access to pay specific bills,” KAM told the Business Daily.
“The Central Bank has over five months of import cover as a reserve, and this can help stabilise the market through the current uncertainties. This would create confidence in the market and ease supplies.”
The foreign exchange last week dropped for the third week in a row to stand at $8.37 billion, or an equivalent of 4.98 months of import cover, last Thursday. This is the lowest level since $8.28 billion, or 4.92 months of import cover, on April 14, according to the CBK data.
The data further shows that the reserves hit a recent high of $8.5 billion, or 5.05 months of import cover, on April 21 before they started falling.
The dollar shortage is the product of increased demand being driven by an increased cost of shipments of raw materials and equipment amid persistent global supply chain disruptions and local companies disbursing dividends to foreign investors.
Banks have imposed caps on dollar purchases, making it difficult for some to obtain adequate forex to meet their obligations.
This has forced industrialists to start seeking dollars in advance as the shortage puts a strain on supplier relations and the ability to negotiate favourable prices in spot markets.
“The dollar value of our imports has risen significantly, while that of our exports has remained more or less flat, creating a mismatch in market supply,” said the KAM.
“This is driven by higher demand owing to large dividend payments and higher commodity prices. International financial investors have also been exiting emerging markets in the expectation of rising interest rates in the US.”
Analysts say controls on dollar trade are now “entrenched” in Africa and not limited to Kenya.
This has prompted several central banks on the continent to use their grip on foreign exchange markets to “curb USD outflows and as support to their local currencies”.
“The global tightening stance [raising of policy interest rates] by the Fed [the Federal Reserve or central bank in the US] has led to US dollar gaining strength and subsequently, outflows from emerging and frontier markets such as ours,” said a market analyst for a firm with presence in several countries in Africa.
“The ongoing Ukraine-Russia war has also triggered a pickup in commodity prices, negatively impacting the commodity importer countries as they require more hard currencies.”
Some industrialists have already been hit by shortages which are threatening to strain their relations with suppliers and injure the ability to negotiate favourable prices in spot markets.
Others have, however, managed the shortages with their bankers, but fear they could be hit in coming months if the mismatch persists.
“So far we have not faced the kind of crisis where we were not able to pay our suppliers. But the situation is very bad,” Bamburi Cement chief executive Seddiq Hassani said in an interview on April 28.
“We hope that it will not last for a longer period because then it will be very difficult for us to sustain operations if we are not able to pay our suppliers.”
The manufacturers’ lobby said last month the crunch has been compounded by increased competition for raw materials due to rising demand amid worsening global supply disruptions of key commodities such as steel, fertilizer, crude oil and wheat. – businessdailyafrica.com