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Today’s top stories
A wave of support for the Republicans failed to materialize in the US midterm elections, but the GOP is still poised to take over the House of Representatives while control of the Senate remains on the razor’s edge. Get the latest from our live results blog. Join FT journalists and veteran commentator Norm Ornstein for an exclusive webinar on November 10th at 1pm GMT/8am EST to discuss the findings. Register for free here and ask your questions in advance.
China’s factory gate prices fell 1.3 percent in October, the first year-on-year decline since December 2020, another sign of the dampening effect of the Covid-19 lockdowns on demand. Factory managers in southern China reported a drop in orders of up to 50 percent in October.
Britain’s Chancellor Jeremy Hunt is considering lowering the threshold for the top income tax rate and targeting inheritance tax as he seeks solutions to the country’s £54 billion black hole in next week’s autumn statement. Plans for low-tax investment zones are to be discarded.
Today’s announcement by Meta of 11,000 job cuts, the largest cut in its history, is a powerful example of how the global economic downturn is hurting big tech.
Last month we reported that the broader tech sector lost nearly $1 trillion in market value over the course of a week, but the most noticeable signs of a slowdown are among social media companies.
Their biggest problem is the abrupt halt to a decade-long boom in social media advertising. According to eMarketer, U.S. advertisers are expected to spend $65 billion on the sector in 2022, up just 3.6 percent year-on-year and about 10 times slower than in 2021.
This causes serious problems for companies like Meta – owners of Facebook, Instagram and WhatsApp – where advertising is the main source of income. E-commerce has declined from its pandemic peaks while competition for eyeballs has increased. Investors can’t share Chief Honcho Mark Zuckerberg’s enthusiasm for the Metaverse either.
One of Meta’s newer competitors, TikTok, is also in trouble. Though the Chinese-owned company is still growing rapidly, it’s struggling with the same issues as its older peers. As we report today, the company has lowered its global revenue targets after undergoing a major leadership change in the US, its largest market. Employees have also been told that parent company ByteDance’s planned IPO in Hong Kong is unlikely to take place this year.
Job cuts are also the order of the day on Twitter, as new “chief twit” Elon Musk scythes at the company’s workforce to address a “massive drop in sales.”
Advertisers, including big brands like L’Oréal, General Motors and Mondelez, are also nervous about Musk’s plans to loosen content controls amid fears the platform will be engulfed in a wave of hate speech and misinformation.
There was also bad news for YouTube, owned by Google parent Alphabet, which reported disappointing ad revenue — which fell for the first time since the company began reporting separately in 2020. Smaller social media company Snap also shed about a fifth of its workforce after reporting slowing growth numbers.
One final sobering thought: The projected growth rate of social media for 2022 is almost the same as that of traditional channels like TV and radio – whose viewership has been shrinking for years.
Good to know: Economy in Great Britain and Europe
Britain plans to review or repeal all of them EU Derived Laws hit a snag by the end of 2023: the ministers have discovered a further 1,400 legal texts.
European Central Bank Officials questioned the idea of a “dovish pivot” and argued for aggressive rate hikes to continue. The ECB will also be on the lookout for signs of a wage-price spiral after a new tracker showed an acceleration in wage growth.
New suggestions from Brussels would step up sanctions against EU members violating the bloc’s fiscal rules as embodied in the Stability and Growth Pact. The rules were suspended during the pandemic, but enforcement will resume in 2024.
Energy crisis at the latest: Economic advisers to the German government said it should consider raising taxes on the wealthy to fund its €200 billion plan to cap gas and electricity prices. The threat of widespread blackouts and rationing is waning, but Europe shouldn’t be complacent about energy security, argues the FT editorial team. The head of the Spanish energy supplier Iberdrola criticized Europe’s reaction, as did the Czech Energy Minister Jozef Síkela.
Good to know: global economy
Chief economic commentator Martin Wolf says faster investment is needed to help poorer countries cope climate change. And stricken nations, many plagued by debt, say they need grants rather than loans. Read more in our special report: Coping with climate change.
Russia has overtaken Iraq and Saudi Arabia to become India’s biggest oil supplier as sanctions force it to slash prices of its crude. Our latest podcast, Behind the Money, discusses how Russia is plundering Ukraine’s grain industry.
Good to know: business
Fears of infection are spreading crypto industry after a storm hit the FTX exchange. Prices have fallen on investor concerns over the possible collapse of Alameda Research, one of its largest traders, which has sought a bailout from rival Binance.
Pioneers in UK retail Marks and Spencer said it expects a “material drop” in customer demand and more business failures over the next year as the cost-of-living crisis deepened. Industry data showed a doubling in the proportion of UK households struggling with their finances each year grocery bills increases by £682.
In the depths of the 2020 pandemic, we spoke to some of the typical ones small businesses which form the bedrock of the UK economy. Two years later we find her almost as dejected.
The working world
An estimated 100 million people suffer from it long covid yet the disease is poorly managed in many workplaces. Listen to the new Working It podcast on a growing global health crisis.
One in five Britons say they have faced it discrimination at work within the past year, according to a new survey. Age discrimination was the most common cause and may be one of the factors contributing to the outflow of older people from the workforce.
layoffs middle management in US companies like Walmart and Ford have fueled fears of a “white-collar” recession. One economist blamed the excess on the rush to snap up professional talent as the economy recovered from the pandemic.
UK companies are quitting office space as energy bills skyrocket, staff are concentrated on fewer floors and services on others are shut down.
Covid cases and vaccinations
Total Global Cases: 626.5 million
Total doses administered: 12.9 billion
Get the latest worldwide picture with our Vaccine Tracker
Some good news
A company based in the north of England provides free emergency plumbing and heating services to the elderly and disabled during the winter months. Depher (Disability and Elderly Plumbing and Heating Emergency Repair), which has been commended for its work by the Prime Minister’s Office, relies on public donations to cover work and materials.
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