U.K. Cost of Living Squeeze Underscored by New Inflation Data

 Britain cost-of-living squeeze is hitting the richest and poorest households alike, according to new data that adds to pressure on the government to take action.

Consumer prices grew 5.5% in December for the second-richest 10% of all households and by 5.3% for those in the second to bottom decile, the Office for National Statistics said Friday.

The figures indicated the breadth of pain hitting consumers, who are shouldering higher prices across a wide range of goods and services. Poverty campaigners had said the poorest would be hit hardest because they spend more of their income on essential goods.

Wealthier households are being squeezed because they spend more on items that have seen faster price rises, such as transport, furniture, going out, recreation and health, the ONS said. Poorer households have less to spend on discretionary items and are more exposed to higher prices for staples such as food, energy and clothing.

The government statistics office drew up the report in response to criticism from poverty campaigners including food writer Jack Monroe, who said the headline rates of inflation fail to reflect the experience of poorer households.

“A key point of consumer price indices is to measure inflation as actually experienced by households” said Stian Westlake, chief executive officer of the Royal Statistical Society. “While these changes will go some way to better capture household costs, the issue remains that CPI was never intended for this precise purpose.”

Apple makes easy escape from supply crisis, but others may have to wait

 Reuters - Apple Inc's triumph over the global chips supply-chain shortage has signaled good news amid troubled markets around the world.

Not so fast, say analysts.

The iPhone maker, which had warned three months ago that supply issues would dent its holiday-quarter revenue, on Thursday posted record results largely boosted by sales of its premium phones. It sees an improving situation, if some remaining shortages.

"Most of the supply-constrained issues are over for Apple, but not necessarily for everybody else," said Bob O'Donnell, chief analyst at TECHnalysis Research.

Companies from electric automaker Tesla Inc to wafer fabrication equipment supplier Lam Research have warned again that supply chain issues, which crippled several industries, would continue to limit production this year.

Semiconductor companies tend to give priority to bigger players such as Apple, for its massive buying power, huge demand for its products, and the company's ability to place custom orders for components used in its products. And Apple's high-end chips are costly, an attraction for the chip makers.

This essentially means Apple has an advantage and can procure components relatively faster than rivals.

Still, while Apple got better service for more sophisticated chips, like many others, it faced troubles with some of the older technology chips, Daiwa Capital Markets analyst Lou Miscioscia said.

Chips used in Apple iPads, which saw a 14% drop in revenue, use chips with older technology, and supplies of those older chips were particularly tight, Apple Chief Executive Tim Cook told analysts.

Cook said the constraints on the older chips, or nodes, were very significant in the holiday quarter. "Overall, we do see an improvement in the March quarter in terms of the constraints going down versus what they were in the December quarter," he said.

S&P 500 Futures, Europe Stocks Fall; Apple Gains: Markets Wrap

 Futures on the S&P 500 extended a drop, while those on the Nasdaq 100 gave up gains of as much as 1.4%. Apple rose in premarket trading. Losses in tech and auto shares dragged on European benchmarks, outweighing robust results from luxury firm LVMH SE and retailer Hennes & Mauritz AB.

A dollar gauge ticked up, while Treasuries slipped. A gauge of Asia-Pacific shares rose for the first day in six as gains in Japan offset declines in China.

Global markets have been whiplashed this week by volatility as the Federal Reserve signaled aggressive tightening, while geopolitical tensions and an uneven earnings season added to investor concerns. Also sapping sentiment on Friday, Germany’s economy shrank more than expected.

As investors brace for rising rates, rotating out of frothier equities, value stocks are outperforming.

Money markets are now pricing in nearly five Fed hikes this year after a hawkish stance from Chair Jerome Powell. That’s up from three expected as recently as December.

“Tighter liquidity and weaker growth mean higher volatility,” Barclays Plc strategists led by Emmanuel Cau wrote in a note. The “current growth scare looks like a classic mid-cycle phase to us, while a lot of hawkishness is priced in.”