New data from the Office for National Statistics reports that 82% of transport and storage business are trading – a sizeable gap less than the average operational capacity of 90% for other sectors of the UK economy.
Gold has gained £5.64 per ounce today as a result of the report, pushing it further above the £1,300 milestone. The precious metal peaked at £1,311.01, with the latest surge in demand following an unusual “flash sale” two and a half weeks ago; losses that have since been recovered in full.
Bloomberg warned that the impact of Delta variant cases across Asia had hurt raw material production and the subsequent shipment of these necessary parts across the world, which would inevitably cause a knock-on effect that could “last well into next year”.
At the start of the pandemic last year there was a shortage of delivery drivers for supermarkets, but this time the current HGV driver shortage is believed to be additionally a combination of Covid – forcing isolation of drivers and instructors – as well as Brexit limiting how many EU nationals can work as drivers in Britain. The ONS data breaks down that 8.5% of these firms have paused operations but a staggering 9.1% of these firms have actually ceased trading altogether.
It's no surprise then to read further into the report that 7% of UK firms were unable to obtain the “materials, goods or services” needed within the past two weeks. Construction and manufacturing have been hit the worst, but supermarkets are also reporting concerns – with Iceland's CEO most vocal of all when speaking to the press yesterday.
Tomorrow sees Federal Reserve chairman Jerome Powell speak at Jackson Hole – the Fed's annual fiscal conference. While the Fed don't control UK financial policy, the impact of America's economic planning does have an influence on the Bank of England. Tomorrow's speech will be an interesting affair to see whether the global supply chain difficulties impact on stimulus and other tools used by central banks to sustain economic growth.