BBC News - Wealth of people in their 30s has 'halved in a decade'

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People in their early 30s are half as wealthy as those now in their 40s were at the same age, a report finds.

Today's 30-something generation has missed out on house price increases and better pensions, according to research by the Institute for Fiscal Studies.

Those born in the early 1980s have an average wealth of £27,000 each, against the £53,000 those born in the 1970s had by the same age, said the IFS.

They will also find it harder to amass wealth in the future, it added.

The think tank found that people born in the early 1980s were the first post-war group not to have higher incomes in early adulthood than those born in the preceding decade.

'Sky-high' rental hotspots revealed

Millennials 'set to earn less than Generation X'

Young suffer as pensioners continue to prosper

This generation's comparatively lower financial wealth was down to a combination of lower home-ownership rates, less access to final salary-type pension schemes, and stagnant wages, experts said.

The IFS included in its definition of "wealth" property owned, financial assets like savings, and wealth held in private pensions - minus any debts a person may have such as student loans or credit cards.

Simon, 32, told BBC Radio 4's Today programme rent was his single largest expense - taking up over a third of his wage - and many people his age felt they could not afford to have children.

He said his sister, who is ten years older, appeared to have benefitted in a way that he had not.

"There is a very sharp divide around the age of 34 or 35 - those I know 34 and younger can't afford to buy a house, whereas those 36 and older [like my sister] can," he added.

'It's a vicious cycle'

Jessica Lucas, 27

A lot of my friends can't find a way to get a deposit for a house. A lot of them are struggling - working full time, sometimes working two jobs - and that's just to rent.

Renting alone is causing us a lot of trouble to save up for a house, so I don't know how we're going to get out of the vicious cycle of renting to then own.

Adam Snape, 36

For pretty much everyone I know around my age it's hard to get a house. Everyone was spending on credit cards that were limitless and people could get another one and another one.

People didn't think they needed a plan really.

What is the norm now is renting. It's getting a lot more like Europe. It's becoming a bit of a daydream that people can buy a house.

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Analysis

By Simon Gompertz, personal finance correspondent

It's no surprise to those in their 30s, born in the early 1980s, who've struggled to buy a home, while paying high rents and trying to put something aside for a pension, that their generation has fallen behind.

The stark numbers are that their average wealth including home, savings and pension, is £27,000 each, while those only 10 years older had wealth by the same stage in their lives of £53,000.

Fewer stepped on to the housing ladder early on if at all, so they've missed out on gains in house prices, and fewer have generous company pensions building up.

Which means that the outlook for this group isn't promising either.

The squeeze on pay has hit them harder: they're the first generation since World War Two to have lower incomes than those who came before.

And in old age they're likely to end up with less to live on.

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Campbell Robb, housing charity Shelter's chief executive, said: "With sky-high house prices so out of step with average wages, it's no wonder a whole generation are being priced out of a home of their own and left with no choice but expensive, unstable private renting.

"At Shelter we see the impact of our chronic shortage of affordable homes every day, with thousands of people forking out most of their income on rent and left living from one pay cheque to the next."

But Liberal Democrat Treasury spokeswoman Susan Kramer said: "This is what happens when short-term political calculations override the need to build a better future for everyone.

"Year after year, government after government, we are failing to support the next generation, often because the simplest political solution is to focus purely on those more likely to vote. We need to redress the balance between generations."

A government spokesman said that since 2010 real progress had been made in improving people's living standards.

He said 2.7 million more people now have a job and the lowest paid have been given a pay rise with the national living wage

Reuters News - Oil shares lift global stocks, crude dips on doubt over OPEC deal

By Nigel Stephenson | LONDON

An agreement by OPEC members to curb output boosted oil company shares on Thursday, lifted the currencies of crude-producing countries, and drove yields on low-risk government debt higher.

Global stocks were pulled higher by the oil company rally, although Wall Street, which rose on Wednesday after the agreement was struck, looked set to open flat.

Crude prices fell after Wednesday's near 6 percent surge as investors questioned whether OPEC's first deal to limit output since 2008 would restore balance to the oversupplied oil market.

But the surprise agreement boosted investors' appetite for riskier assets and saw the safe-haven Japanese yen fall 1 percent against the dollar at one point.

"Everything you're seeing today is a response to the move in crude and the possible coordination necessary for OPEC to do what it has announced. Even though I think the agreement is probably a bit flimsy, the amount of coordination is part of the reason for the rally in risk," said BMO Capital Markets currency strategist Stephen Gallo.

The pan-European STOXX 600 index was up 0.8 percent, led higher by a 4.4 percent rise in the oil and gas companies sub-index .SXEP.

Among leading gainers, Tullow Oil (TLW.L) rose 9 percent, Statoil (STL.OL) and Royal Dutch Shell (RDSa.AS) rose more than n5 percent and Total (TOTF.PA) added more than 4 percent.

In Russia - a major oil producer - the dollar-denominated RTS share index .IRTS rose 2.3 percent.

Oil companies, and the weaker yen, also lifted Tokyo shares, which closed 1.4 percent higher .N225

MSCI's broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS was up 0.5 percent. The main MSCI emerging market equities index .MSCIEF rose by a similar amount.

However, Indian stocks fell as much as 2 percent at one point .NSEI after New Delhi launched strikes on militants it suspects of preparing to infiltrate into the part of Kashmir it controls. The Indian rupee fell almost 1 percent against the dollar INR=. OPEC, the Organization of the Petroleum Exporting Countries, agreed to cut output to a range of 32.5-33.0 million barrels a day from the group's current estimate of 33.24 million barrels, ministers at the talks in Algiers said.

However, each member's output levels will be decided at the next formal OPEC meeting in Vienna in November, when non-OPEC countries such as Russia could also be invited to join the cuts.

"I'm very sceptical about whether this deal actually means a cut in output, or whether it’s trying to raise the price a bit, because OPEC’s not an effective cartel anymore, it controls less than half the world oil supply," said Malcolm Bracken, investment manager at Redmayne-Bentley.

Goldman Sachs said the deal could add as much as $10 to oil prices in the first half of next year but, given the uncertainty of the proposal, stuck to its year-end and 2017 oil price forecasts.

Brent crude, the international benchmark, was down 25 cents at $48.4 a barrel, after hitting a high of $49.09 on Wednesday.

"We think that OPEC is running a dangerous game if the aim is to push the crude oil price higher from here in the short term as it would just activate more U.S. shale oil production," said Bjarne Schieldrop, chief commodity analyst at SEB.

Oil-producer's currencies, including the Canadian dollar CAD= and the Norwegian crown EURNOK= rose on the deal but gave up some of the gains on Thursday in line with oil.

However, the Japanese yen JPY, often sought when investor appetite for risk is low, fell. It was last down 0.8 percent at 101.43 per dollar, having fallen as low as 100.62.

German 10-year government bond yields DE10YT=TWEB, the euro zone benchmark, rose 3 basis points to minus 0.12 percent. U.S. 10-year yields US10YT=RR rose 1.5 bps at 1.582 percent.

An inflationary rise in oil prices would rattle investors already nervous that an era of central bank stimulus may be coming to an end.

However, given doubts about the deal, BNP Paribas European rates strategist Patrick Jacques said the upward pressure on bond yields would prove temporary.

"Even if there's a 5 percent rise in oil prices, this will not trigger a strong rebound in inflation and at these levels, oil output is still higher than demand so we're unlikely to see a massive rally in oil," he said.

(Additional reporting by Saikat Chatterjee in Hong Kong, Keith Wallis in Singapore, Jemima Kelly, Dhara Ranasinghe, Sujata Rao, Kit Rees and Swetha Gopinath in London; Editing by Jeremy Gaunt)

BBC News - UK car firms 'want to be in EU single market'

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The success of the UK motor industry could be "jeopardised" if the UK leaves the single market following Brexit, a senior industry figure has said.News

The chief executive of the Society of Motor Manufacturers and Traders (SMMT) told the BBC the sector would be under threat outside the single market.

Mike Hawes told BBC business editor Simon Jack that the industry's success came from being in the single market.

The European Union is the UK motor industry's biggest export market.

Mr Hawes, who has warned on previous occasions that the industry's future growth may be hit, was speaking in Paris where he is attending the city's motor show.

He said: "Don't be blinded by the good news that you're seeing not just around our sector but around business in general. We're very concerned that the future state of the automotive industry and the success could be jeopardised if we're not in the single market."

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Analysis: Simon Jack, BBC business editor

The UK car industry kicked off its own Tour de France today in the shadow of the Eiffel Tower on the sidelines of the Paris Motor Show.

Vauxhall, Nissan, Jaguar, Aston Martin, Mini, Toyota and McLaren models were lined up alongside each other.

However, this showroom was not for selling cars, but for issuing the auto sector's starkest warning yet.

It says only continued membership of the European single market can guarantee the success of the UK car industry.

The car industry is particularly sensitive to tariffs, as components and finished products can criss-cross over the Channel several times. Any additional frictional cost can throw sand in the engine of that business and its extended supply chains.

Membership of the single market ensures tariff-free trade, but comes at the price of freedom of movement of people - an unacceptable outcome for most who voted Leave.

UK auto's starkest warning yet

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He added that the growth of the industry would be under threat outside the single market "because the success we've had and the strength of it has been built on being part of the single market".

The UK's membership of the EU's single market means it has free movement of goods, finance and people around the EU, without any tariffs or other barriers, as well as giving it a say on how the EU's rules are written.

While the UK would still be able to export to the single market member countries even if it were not itself a member, it would have to negotiate trade deals, which could involve paying tariffs, customs delays and having to abide by EU rules, over which it would have no say.

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In the first half of the year, 57.3% of UK car exports, a total of 502,647 cars, went to the EU, followed by the US, which had 12.1% of exports.

"It's our biggest export market," Mr Hawes said. "We're an export-led industry and the way that the parts move in and out of different countries, it's a highly complex process. Being part of that single market not just makes it easy but makes it affordable."

His comments were backed up by Hanno Kirner Executive Director of Corporate and Strategy at Jaguar Land Rover. "In the worst case if we were to introduce duties, and if we were to have 10% duties to pay on parts, for instance, that would be something that customers would have to pay, it would potentially affect jobs," said Mr Hanno.

"Also if we export to Europe and become less competitive maybe we would sell less, we would have fewer jobs in the UK. So we are very concerned we believe that maintaining today's freedom of trade is terribly important to all of us," he added.

No guarantees

Mr Hawes was also asked if his hopes of remaining in the single market were unrealistic amid talk of UK government plans to tighten border controls. "The challenge to the government is to ensure that industry, which creates the jobs on which so many people depend, has what it needs for its future success, but also address... concerns about immigration," he said.

European leaders have repeatedly stressed that the UK cannot stay in the single market without accepting the free movement of EU citizens.

Mark Garnier, minister at the Department for International Trade, is also attending the Paris Motor Show. Commenting on the SMMT's remarks on the need to remain in the single market, he said: "We can't guarantee anything, but as I said, we are not going to provide a running commentary on what exit is going to look like.

"But there are elements that are within the SMMT and the automotive sector and indeed any other sector that we need to protect and in the case of the automotive sector, those things we must protect and try to achieve is zero-tariff access to this market of 500 million people in the EU," he added.

Bloomberg News - Eight-Cent Eggs: Grocery Prices Are Plunging

Call it the Great Grocery-Store Giveaway of 2016.

In Austin, Texas, Randalls slashed prices for boneless beef ribs by 40 percent, to $3.99 a pound. Not to be outdone, the H-E-B grocer down the street charged $1 a pound less. Not long ago, Albertsons advertised a deal you don’t normally see on your finer cuts of meat: “buy 1 get 1 free” specials on “USDA Choice Petite Sirloin Steak.”

And what does $1 buy these days? In North Bergen, New Jersey, you could pick up a dozen eggs at Wal-Mart. OK, the price was actually $1.14. A mile away, check out Aldi, the German supermarket discounter, which can actually break the buck -- 12 eggs for 99 cents. A year ago, you would have paid, on average, three times that price.

In a startling development, almost unheard of outside a recession, food prices have fallen for nine straight months in the U.S. It’s the longest streak of food deflation since 1960 -- with the exception of 2009, when the financial crisis was winding down. Analysts credit low oil and grain prices, as well as cutthroat competition from discounters. Consumers are winning out; grocery chains, not so much. Their margins and, in some cases, their stock prices, are taking a hit.

Eggs and beef have have grown especially inexpensive, and it isn’t only an American phenomenon: In England, Aldi recently offered its prized 8-ounce wagyu steaks from New Zealand for about $6.50 -- a little more than the price of a pint of beer.

“The severity of what we’re seeing is completely unprecedented,” said Scott Mushkin, an analyst at Wolfe Research who has studied grocery prices around the country for more than ten years. “We’ve never seen deflation this sharp.”

Mushkin, who researches local markets, recently found that prices of a typical basket of grocery items in Houston, had fallen almost 5 percent over the past year.

He credits, in part, the discerning behavior of shoppers like Manny Sinclair. On a weekday lunch break, the 43-year-old contractor stopped by a Wal-Mart in Secaucus, New Jersey, to pick up turtle food and paper towels.

Patient Shoppers

Sinclair typically buys groceries at his local ShopRite but has recently noticed the steals he now finds at discounters. He glanced at the meat case, where a 12-pack of “Angus steak burgers” fetched $15.82 and grass-fed ground beef could change hands for $4.96 a pound.

Sinclair was intrigued but, in the classic logic of a shopper in an age of deflation, figured he might find even lower prices elsewhere. Along with two Wal-Marts, a Target and an Aldi, the area even offers a Family Dollar that features a small refrigerated section.

“Wherever I find the good deals -- that’s where I’m at,” Sinclair said.

At first, falling prices helped grocers. Low-cost commodities pushed down the tab for meat and packaged food and boosted profits. Now, deflation has turned ugly for the industry. Led by Wal-Mart, retailers are pushing down prices, eating away at their profit margins.

‘Irrational Pricing’

“It starts to border on irrational pricing,” said Jennifer Bartashus, an analyst at Bloomberg Intelligence. “People are lowering prices just to draw traffic, without thinking about their margins.”

Supermarkets are facing competition not just from Wal-Mart Stores Inc. and Aldi but also dollar stores and online retailer Amazon.com Inc. It could get worse. Lidl, one of Aldi’s German competitors, is building three distribution centers on the East Coast and plans to open U.S. stores by 2018. Even Whole Foods Market Inc. -- famously derided as “Whole Paycheck” -- is trying to compete on price through digital coupons and promotions on items such as beer and produce.

In recent years, Kroger Co. -- the largest grocery store chain in the U.S., with nearly 2,800 stores -- cut prices to compete with Wal-Mart and managed to increase its market share and sales. But deflation has been hard on the supermarket chain. The company’s stock has lost more than a quarter of its value this year, as price cuts weighed on profits. Chief Executive Officer Rodney McMullen expressed frustration that many customers don’t even notice.

CEO’s Lament

“The other thing that’s always hard is getting your message out, because it’s fascinating – in our research, most people are saying their basket of goods costs more money,” McMullen said on a call with analysts this month.

The likely reason for McMullen’s lament: Food, on average, makes up only about 15 percent of a consumer’s budget. Except for gas and other energy-related items, prices for most other goods are going up, if only modestly.

At the same time, restaurant food can still be pricey. The situation makes for some strange contrasts: In Chicago, a pound of Dunkin’ Donuts coffee sells for $4.99 at a Jewel-Osco store, less than the cost of a venti pumpkin spice frappuccino at Starbucks. Albertsons Cos. owns Jewel-Osco, as well as Randalls, home of the cheap Texas ribs.

Elena Rosa, a 63-year-old retired health aide, was blasé when she steered her shopping cart past the refrigerator case at Aldi in North Bergen, New Jersey. She paused, noting a dozen eggs for less than $1 -- one of the great food deals of recent memory.

“That’s a good price,” she said, before moving on without buying a carton.

by Craig Giammona

BBC News - Fed points to US interest rate rise by end of year

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Minutes from the Federal Reserve's September meeting show the majority of policy-makers expect a rise in US interest rates by the end of the year.

At its meeting, the Fed opted to hold rates between 0.25% and 0.5%.

But three officials opposed the decision - the most dissents since December 2014.

The Fed said: "The case for an increase in the federal funds rate has strengthened," but said it would wait for more evidence of economic progress.

Doug Duncan, chief economist for Fannie Mae, said: "There's a pretty big dissent. There seems to be a pretty big discussion about the direction on rates.

"It's clear they want to raise rates in December if things don't deteriorate."

Risks 'roughly balanced'

The Fed said US economic activity had picked up and job gains were "solid" in recent months.

The US central bank said it saw near-term risks to the economy as "roughly balanced." It was the first time it has used that wording since late last year, when it most recently raised rates.

The Federal Open Market Committee had decided against raising rates "for the time being," until there was more evidence of progress towards its employment and inflation objectives.

The committee said it expects inflation to remain low in the near term, "in part because of earlier declines in energy prices", but that it would rise to the Fed's 2% target over the medium term.

Policymakers have been divided when the next rate rise should be, with stock market volatility, China's slowing economy, and Brexit among its concerns.

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Analysis: Andrew Walker, BBC economics correspondent

The wait continues. Still, there were signs that the committee is closer to being ready for its next rise in interest rates.

For one thing, Janet Yellen said the case for an immediate increase was stronger than it was, though not strong enough for her to be ready just yet.

The number of dissenting members who did vote for an immediate move has increased. This time there were three. In July it was just one.

All that is evidence that the committee thinks the economy is continuing its gradual return to normal.

But we also discovered that the Fed's thinking about what "normal" is has weakened further.

Their view of the economy's long term growth prospects has edged down from 2% to 1.8%.

The level they think interest rates will settle at has also dropped slightly. In other words, growth and rates will fall even further below where they were before the financial crisis.

"Normal" is not what it used to be.

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Federal Reserve chair Janet Yellen said: "We judged that the case for an increase has strengthened but decided for the time being to wait for further evidence of continued progress toward our objectives."

She said the decision to keep rates on hold "does not reflect a lack of confidence in the economy."

"Conditions in the labour market are strengthening and we expect that to continue," she said.

Luke Bartholomew, an investment manager for Aberdeen Asset Management, said: "It was pretty much a done deal that we weren't going to get a rate hike today."

He said the meeting had been about "setting the stage" for a hike in December.

But he added: "A December hike is by no means inevitable though. We've been in the situation before where the Fed has aligned their guns only to baulk at the last minute."

BBC News - EU Commission refuses to revise Canada CETA trade deal

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Image captionProtesters held aloft a CETA "Trojan horse" outside the European Commission in Brussels

The European Commission has ruled that a controversial EU-Canada free trade deal - CETA - cannot be renegotiated, despite much opposition in Europe.

"CETA is done and we will not reopen it," said EU Trade Commissioner Cecilia Malmstrom.

Ms Malmstrom was speaking as EU trade ministers met in Slovakia to discuss CETA and a similar deal with the US, TTIP, which has also faced criticism.

A draft CETA deal has been agreed, but parliaments could still delay it.

Thousands of activists protested against CETA and TTIP in Germany on Saturday and thousands more in Brussels - outside the EU's headquarters - on Tuesday.

Activists fear that the deals could water down European standards in the key areas of workers' rights, public health and the environment.

Concern over new courts

There is also great anxiety about proposed special courts where investors will be able to sue governments if they feel that legislation hurts their business unfairly.

Critics say the mere existence of such courts - an alternative to national courts - will have a "chilling" effect on policymakers, leading to slacker regulation on the environment and welfare.

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Image captionUS President Barack Obama is a strong supporter of TTIP

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At a glance: CETA

• Negotiations began in 2009 and ended in August 2014;
• The deal aims to eliminate 98% of tariffs between Canada and EU, making it the EU's most comprehensive trade deal to date;
• Signing is expected on 27 October, after which it requires ratification by the European Parliament and national parliaments;
• It includes: the new Investment Court System (ICS); harmonised regulations; sustainable development clauses; and access to public sector tenders;
• The deal is opposed by various groups, including environmental activists, trade unionists, and Austrian Socialists.

Would CETA be a good model for the UK?

European Parliament briefing on CETA

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At a glance: TTIP

• Negotiations began in 2013 but obstacles mean a deal is very unlikely by the end of 2016;
• TTIP would create a vast EU-US free trade zone, covering 850 million people;
• It would be modelled on CETA, but the more significant EU-US differences make it more complicated;
• The secrecy of the talks behind the deal has been heavily criticised and fewareas of negotiation are at an advanced stage;
• It has been criticised by the same groups as CETA, but also by French, German and Austrian politicians, and Donald Trump in the US
• Other governments including the UK, Spain and Italy have declared support for the deal.

TTIP: The EU-US trade deal explained

Are US-Europe TTIP trade talks tanking?

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Ms Malmstrom said CETA would dominate Friday's meeting in Bratislava. The Commission hopes the deal can be signed with Canada at the end of October, so that it can then go to the European Parliament for ratification. But it will also need to be ratified by national parliaments across the EU.

"What we are discussing with the Canadians is if we should make some clarifications, a declaration so that we can cover some of those concerns," Ms Malmstrom said.

She acknowledged fears in some countries that politicians might see their "the right to regulate" diluted. "Maybe that [right] needs to be even clearer in a declaration," she said, admitting that the CETA negotiations were still "difficult".

Karoline Graswander-Hainz, an Austrian Socialist MEP, said the EU's top court - the European Court of Justice - must first examine the proposed Investment Court System (ICS) to check its legality.

CETA holds "great risks" for Europe, she warned, adding that some of her fellow MEPs thought likewise.

TTIP in trouble

German Vice-Chancellor and Economy Minister Sigmar Gabriel called CETA "a model for future deals".

But he was pessimistic about TTIP. "The Americans were not prepared to make Europe offers that Canada made, and so there will definitely not be a [TTIP] deal this year," he said.

Supporters of CETA and TTIP say such deals could set global trade standards, warning that failure could mean China setting the standards.

CETA and TTIP promise to remove tariffs and non-tariff barriers, boosting growth on both sides of the Atlantic, free trade advocates say.