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Port Strikes Threaten Supermarket Supplies, China Tries To Revive Borrowing

Updated on
  • Port strike could lead to months of disruption and fewer items on supermarket shelves
  • The People’s Bank of China lowered its key loan prime rates for the second time, in an effort to revive borrowing demand
  • FTSE 100 opens lower following tough Asian and US trading sessions
  • Potential Iranian supply boost keeps Brent crude prices subdued at $96 a barrel

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Port Strike Interrupts Supplies For Supermarkets

Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown:

“The Port of Felixstowe is an essential lynchpin in the UK’s trade operations, and an eight-day strike is likely to result in interrupted supplies for supermarkets as well as exports. I

t’s a possibility that industrial action could march on through to Christmas, too.

This is the latest unwanted twist in our weekly food shops, with high prices already making the experience more difficult for many shoppers.

From an economic standpoint, a disruption to trade is the last thing the UK needs right now.

There are already far-reaching productivity problems which keep a lid on economic growth, with an avoidable blip such as port strikes adding insult to an existing injury.

Loan Prime Rates have been lowered for the second time this year by The People’s Bank of China, as the board seeks to ramp up borrowing demand following rolling Covid outbreaks and a teetering property market.

The 5-year Loan Prime Rate, which influences the pricing of home mortgages, was cut to the tune of 15 basis points to 4.30%.

The move comes after a data set in July highlighted the Chinese economy was slowing down.

This latest tactic isn’t entirely a surprise, but it should act as a further indicator that the global economic stage is losing light.

Wider concerns about economic growth, plus a distinct lack of macro of corporate news to change the direction of sentiment, means the FTSE 100 has opened up slightly lower – down 33 points.

Specifically, this comes after lacklustre US and Asian trading sessions, although we’re not looking at a market meltdown at this point.

Brent crude is trading at around $96 a barrel, with declines extended from last week. Traders are chewing over the prospect of more Iranian supply following US President Joe Biden’s discussions with European allies about reviving the 2015 nuclear deal.

Extra supply is meeting a wider sell off which has been in motion since June, which was triggered by increased concerns over a global slowdown, which would dent demand for the black stuff.”

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