Markus Andrews

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailThe Bank of England is under mounting pressure to cut interest rates to help homeowners after a surprise fall in inflation gave consumers “an early Christmas present”. Falling petrol prices helped curb inflation to 3.9 per cent, the lowest rate in two years and well below Rishi Sunak’s target of 5 per cent by the end of the year.But leading economists told The Independent that although “the bulge has made its way through the snake”, much of the “low hanging fruit” has been picked – and the central bank will struggle to reach its longstanding target of 2 per cent.They also warned that many homeowners coming off fixed rates now face “a very different world”, while Britain’s slowing economy and higher mortgage costs mean living standards will “remain pretty desperate”. Signalling a change in the political tide, work and pensions secretary Mel Stride said the inflation fall could allow the Bank to ease interest rates and aid those struggling with mortgage costs. Most economists had been expecting a dip to 4.3 per cent last month.While he emphasised its independence, the cabinet minister said that the faster-than-expected fall in inflation “does take some pressure off [the Bank] in terms of keeping interest rates higher, which of course in time and in turn feeds into mortgage rates”.Falling prices at the pumps helped push inflation to a surprise low, which the prime minister hailed as “good news for everyone in this country”.Inflation also slowed on things like food, air travel and the cost of a second-hand car. With just days to go before Christmas, Simon Pittaway, senior economist at the Resolution Foundation, said that “politicians and the public can all cheer this festive surprise”. But the rampant inflation of recent years means prices are around 20 per cent higher than they were in 2020, and economist Laith Khalaf of AJ Bell warned that food price inflation remains at a “pretty concerning” 9 per cent.Shoppers on London’s Oxford Street on Wednesday as the inflation figures were announcedDespite the latest figures, Mr Khalaf warned that UK consumers are still “heavily under the pump” – with mortgage holders set to come off fixed deals next year “facing a different world”. “It’s almost like another leg of the cost of living crisis,” he told The Independent. “It started off with fuel and heating, it then moved onto food. There’s rising interest rates, and don’t forget taxation as well, where over the next five years the tax burden is expected to rise to highest since the Second World War.”Suren Thiru, economics director at the Institute of Chartered Accountants, said that the “dramatic” fall in inflation showed there was light at the end of the tunnel. But they added that “living standards will remain pretty desperate as this boost is largely offset by a squeeze on incomes from higher mortgage costs and a slowing economy.”Labour warned that more than a million people face higher mortgage payments “after the Conservatives crashed the economy”.Following last week’s decision by the Bank of England to hold its base rate for a third time at 5.25 per cent, economists suggest the markets are pricing in interest rate cuts by May – and perhaps as early as March – as pressure intensifies on the central bank.“The first 25 basis point cut is now fully priced in for the Bank’s May meeting, with a decent chance of a start to cuts in March,” said Matthew Ryan, from financial services firm Ebury, while James Smith of ING bank said: “Markets are right to be pricing a number of rate cuts for 2024 … starting in May.”Shadow chancellor Rachel Reeves with party leader Sir Keir StarmerYael Selfin, chief economist at KPMG, told The Independent that, while the new inflation figures were good news “the Bank of England is likely to be quite cautious in cutting rates”.Echoing these concerns, Rob Morgan, chief analyst at Charles Stanley pointed to the soaring prices of recent years as he said: “We’re sort of coming down the other side of [high inflation], so the bulge has made its way through the snake.“Our worry is you’ve had the easy wins because you’ve had the energy bills coming down, fuel prices coming down quite a lot lower. It’s difficult to replicate that kind of disinflation going forward,” he added.Citing looming increases in the national living wage and state pension, with borrowing costs and mortgage rates also starting to fall, Mr Morgan said: “It makes it difficult to get that last little bit of inflation out of the system. The low-hanging fruit for the Bank of England has been picked.”Responding to the inflation figures, the chancellor Jeremy Hunt said the economy was back on the path to “healthy, sustainable growth”. But he acknowledged that “many families are still struggling with high prices so we will continue to prioritise measures that help with cost of living pressures”. Shadow chancellor Rachel Reeves said the fall in inflation would come as a “relief” to families. “However, after 13 years of economic failure under the Conservatives, working people are still worse off,” she added. “Prices are still going up in the shops, household bills are rising, and more than a million people face higher mortgage payments next year after the Conservatives crashed the economy.” More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailThe UK government has criticised Ireland’s plans to sue the UK in the European Court of Human Rights over its offer of immunity for Troubles-era crimes. The row risks plunging Anglo-Irish relations to their worst point in decades.Ireland’s deputy prime minister Micheal Martin said the UK scheme was opposed by many who had been affected by Northern Ireland’s deadly decades-long conflict, “especially the victims and families”. But the UK government hit back, effectively accusing its Irish counterpart of hypocrisy. “The Irish government should urgently clarify the number of criminal prosecutions brought in Ireland since 1998 relating to Troubles cases,” secretary of state for Northern Ireland Chris Heaton-Harris said. Describing the case as “unnecessary”, he said the UK government “profoundly regrets the decision taken by the Irish government”. Designed in part to protect former British soldiers from prosecution, the Irish will argue the change in the law is incompatible with the UK’s obligations under the European Convention on Human Rights (ECHR).As well as inflaming international tensions, the move risks reigniting the row within the Conservative Party over the ECHR and the Strasbourg court, which enforces the convention. Earlier this month, sacked home secretary Suella Braverman warned Rishi Sunak he must ignore ECHR and other human rights laws to get his failed Rwanda deportation scheme under way – or face “electoral oblivion”.The Troubles legislation has faced widespread opposition from political parties and victims’ organisations in Northern Ireland. Micheal Martin said his government’s decision was taken after “much thought and careful consideration”.He added the legislation would “shut down existing avenues to truth and justice for historic cases”.Micheal Martin: ‘This legislation is opposed by people in Northern Ireland’ “I regret that we find ourselves in a position where such a choice had to be made,” he said, and accused the British government of pursuing legislation “unilaterally”, saying it had “removed the political option, and … left us only this legal avenue”.Amnesty International said the Irish government was “doing the right thing” for victims of the Troubles. Aspects of the new law include that those who cooperate with the new truth and reconciliation commission will have a limited form of immunity from prosecution. The new act will also halt future civil cases and legacy inquests.Multiple victims and family members are supporting a legal challenge against aspects of the act at the High Court in Belfast.Mr Martin said the incorporation of the ECHR was a fundamental requirement of the 1998 Good Friday Agreement. “Serious reservations about this legislation have also been raised by a number of international observers, including the Council of Europe’s commissioner for human rights and the UN high commissioner for human rights.“Most importantly, this legislation is opposed by people in Northern Ireland, especially the victims and families who will be most directly impacted by this act.”Mr Martin added: “Even in cases in which immunity is not granted, reviews by the proposed body, the Independent Commission for Reconciliation and Information Recovery [ICRIR], are not an adequate substitute for police investigations, carried out independently, adequately, and with sufficient participation of next of kin.” Conservative MP Sir John Hayes, the leader of the Common Sense Group of MPs, said the legal action “reinforces again the argument we have to look at this again”. “It is a really good example of ECHR being used in a perverse way,” he said. “The ECHR has to be radically reshaped or we have to leave. And it is unlikely to be radically reshaped.” SDLP leader Colum Eastwood described the challenge as “welcome” and “utterly necessary”.But DUP leader Sir Jeffrey Donaldson accused Dublin of “double standards”. He said his party opposed the amnesty plans “but I don’t think the Irish government are in a very strong position to point the finger … for years effectively there has been a form of amnesty in the Irish Republic because they have not actively pursued those responsible for these crimes.”Downing Street has been approached for comment. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster email Ireland’s government said Wednesday it will take legal action against British authorities over a controversial law that gives some immunity from prosecution for offenses committed during three decades of sectarian violence.Irish Deputy Prime Minister Micheál Martin said that “after much thought and careful consideration,” his government is launching a legal challenge against the Legacy and Reconciliation Bill, which critics say shuts down access to justice for victims and survivors. The law, passed in September, stops most prosecutions for alleged killings by militant groups and British soldiers during “the Troubles” — the three decades of violence in which more than 3,500 people died.Those who cooperate with the new Independent Commission for Reconciliation and Information Recovery — loosely modeled on South Africa’s post-apartheid Truth and Reconciliation Commission — can be granted immunity from prosecution. The new law also halts future civil cases and legacy inquests.It was passed despite strong opposition from political parties and victims’ organizations in Northern Ireland and the Irish government.The 1998 Good Friday peace accord largely ended the decades of violence, and former British Prime Minister Boris Johnson, who proposed the new bill, said it would enable Northern Ireland to “draw a line under the Troubles.”But those who lost loved ones at the hands of Irish republican and British loyalist militias and U.K. troops say the new law will airbrush the past and allow killers to get away with murder.Martin said his case would argue that aspects of the law are incompatible with the U.K.’s obligations under the European Convention on Human Rights. Ireland’s government has repeatedly made its concerns known and urged the British government to pause the legislation, he said. “I regret that we find ourselves in a position where such a choice had to be made,” he said, adding that the immunity provisions would “shut down existing avenues to truth and justice for historic cases.”“Even in cases in which immunity is not granted, reviews by the proposed body, the Independent Commission for Reconciliation and Information Recovery, are not an adequate substitute for police investigations, carried out independently, adequately, and with sufficient participation of next of kin,” Martin said. U.K. veterans’ groups are among the few organizations to have welcomed the legislation, which lifts the threat of prosecution from troops who served in Northern Ireland.Amnesty International was among groups who welcomed Wednesday’s news. “The U.K. government doggedly pursued this legislation which shields perpetrators of serious human rights violations from being held accountable. It’s important that the Irish government takes this stand,” said Grainne Teggart, of Amnesty International U.K.“This challenge is vital for victims here and around the world who face the prospect of similar state-gifted impunity,” Teggart added. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster email Bangladesh Prime Minister Sheikh Hasina formally kicked off her ruling Awami League party’s campaign Wednesday amid an election boycott by the country’s main opposition party.Addressing a massive rally in the northeastern city of Sylhet, Hasina strongly criticized the Bangladesh Nationalist Party for refusing to participate in the Jan. 7 general election. She also blamed the party, which is led by former Prime Minister Khaleda Zia, and its allies for recent acts of violence.Hundreds of thousands of Awami League supporters cheered and raised their hands when Hasina asked if they would cast their ballots for the ruling party’s candidates, the United News of Bangladesh agency reported.The prime minister denounced the party of her archrival Zia after the country’s railway minister alleged that arson and sabotage caused a fire on a passenger train that killed four people Tuesday. Hasina joined the minister Wednesday in accusing the Bangladesh Nationalist Party of being behind it. “They thought that with some incidents of arson the government will fall. It’s not that easy,” United News of Bangladesh quoted her as saying. “Where do they get such courage? A black sheep sitting in London gives orders and some people are here to play with fire. … Their hands will be burned in that fire,” Hasina said in an apparent reference to Zia’s son, Tarique Rahman, who has been in self-exile in the United Kingdom since 2008. Rahman was convicted of various criminal violence charges, including a 2004 grenade attack on an opposition rally when his mother was prime minister and Hasina was opposition leader. He is the acting chief of the Bangladesh Nationalist Party in the absence of the ailing Zia, who was convicted of corruption and sentenced to 17 years in prison. On Wednesday, the party urged Bangladeshis to join a non-cooperation movement against the government by refusing to pay taxes.Ruhul Kabir Rizvi, a senior joint secretary-general of the party, also urged citizens and government workers not to cooperate with Hasina’s administration in running the country and holding the election next month in which is the prime minister is seeking a fourth consecutive term. Zia’s party has intermittently calling for transportation blockades and general strikes while demanding Hasina’s resignation. The party says more than 20,000 opposition supporters have been arrested since Oct. 28, when a massive anti-government rally turned violent. Authorities blamed the Bangladesh Nationalist Party for an attack on the official residence of the country’s chief justice and the death of a police officer on the day of the rally. Hasina’s critics say her administration has used the police and other agencies to silence them.Bangladesh is a parliamentary democracy with a history of violence, especially before and during elections. Campaigning for next month’s vote began across the country on Monday with about 1,900 candidates, including many independents, running for parliament seats in 300 constituencies.Zia’s party’s call to boycott the polls came after its demands for a caretaker government to conduct the election were not met. The party accused Hasina of rigging the 2018 vote and said it did not have any faith the coming election would be fair. The boycott means voters have little choice but to reelect Hasina.The government has denied accusations of targeting the opposition but warned that any “acts of sabotage” or “attempts to create chaos” in the country would not be tolerated.The United Nations, the United States and the European Union earlier urged all sides to refrain from violence and work together to create conditions for a free, fair and peaceful election. A call for political dialogue got no response from the two major parties. More

Sign up to our free Brexit and beyond email for the latest headlines on what Brexit is meaning for the UKSign up to our Brexit email for the latest insightRishi Sunak should consider a ranger of side and supplementary deals with the EU to ease ongoing trade friction after Brexit, business leaders have warned.Almost two-thirds of UK exporters say selling to the EU has become even harder in the past year, according to the British Chambers of Commerce (BCC).The leading business group called for a series of agreements with Brussels – on carbon taxes, VAT arrangements and food checks – to soften the impact of Boris Johnson’s trade deal.A Brexit report by the BCC found that 60 per cent of British firms trading with the EU say it is now more difficult than a year ago. Only 18 per cent of exporters to non-EU countries say it had got harder.The new study – The Trade and Cooperation Agreement: Three Years On – also warns of “significant” new red tape headaches approaching, as yet more UK and EU regulations diverge.The business chiefs called for a new supplementary deal with the EU which either eliminates or reduces the complexity of forms required of small firms to export food.The BCC also called on Mr Sunak to consider a VAT deal like Norway’s, that exempts smaller firms from the requirement to have a fiscal representative for the tax inside the bloc.And with the EU move to bring in a carbon border tax regime – which requires importers to provide data on carbon usage – the government was also urged to merge its carbon pricing schemes with Brussel to avoid red tape.Dover has seen continued disruption since Brexit checks were introduced More than 80 per cent of small and medium-sized firms surveyed by the BCC were unaware of the impact of the EU’s carbon border adjustment mechanism.And 70 per cent are unaware new UK checks on food imports from the EU, finally set be implemented from February 2024 after several delays.“There are lots of things we can do to make our current trading arrangements better, but a growing worry is how we handle further changes coming down the track,” said Shevaun Haviland, director general of the BCC.“EU businesses have been largely able to carry on importing goods into the UK as they did before Brexit, but that will change next year, and could lead to significant new disruption.”Mr Haviland added: “The rules and regulations governing trade aren’t static. Both the UK and EU will be making significant changes in the next few years that could have big repercussions.”“We need to take a smart but flexible approach to how we handle these alterations to keep their impact to a minimum. It is in no-one’s interests to damage our trading relationship further.”One small construction and engineering firm in Glasgow told the BCC report that they had “continued difficulties” trying to supply to long-standing EU customers. “The government’s stated efforts for further away trade deals does not help, but distracts attention from unresolved problems.”A spokesperson for the government said British businesses “are thriving”, adding: “In the year to June, we exported over £360bn worth of goods and services to the EU, an increase of 17.1 per cent in current prices on the previous 12 months.”The government also said the UK economy had grown faster than German and France since Brexit, before acknowledging “issues” with trade friction.“We acknowledge there remain some issues and we are listening to businesses and acting on their concerns by working closely with the EU on solutions,” the spokesperson added. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailForeign secretary David Cameron has held talks with leaders in Jordan as pushes the UK argument for a “sustainable ceasefire” in the Israel-Hamas war during a trip across the Middle East.Making his second trip to the region since joining Rishi Sunak’s government, the former PM is seeking progress on efforts to secure the release of hostages by Hamas and step up aid into Gaza.Lord Cameron, also heading to Egypt for talks this week, has said Britain supports a ceasefire – but “only if it was sustainable” in the long term.The foreign secretary said that, without Israel’s security being guaranteed by removing Hamas, there could be no lasting peace or two-state solution.Lord Cameron is expected to make the argument to Jordanian and Egyptian leaders that allowing Hamas in power in the Gaza Strip will be a “roadblock” to reaching a political solution to the crisis.Mr Sunak has recently started pushing for a “sustainable ceasefire” in a move that appears to underline the West’s hardening attitude towards Tel Aviv’s conduct of the war. Lord Cameron warned at the weekend that “too many civilians have been killed” in Gaza.And US president Joe Biden has warned that Israel is losing international support because of its “indiscriminate bombing” – with almost 20,000 Palestinians killed in the fighting, according to the Hamas-run Gaza health ministry.Posting a photo of himself with Jordan’s foreign minister Ayman Safadi, Lord Cameron said the two countries were “working together to get as much aid to Palestinian civilians in Gaza as possible … We’ll continue to press for an increased flow of aid and fuel into Gaza.”The foreign secretary also said he was “seeking to build” on Israel’s decision to open the Kerem Shalom crossing to ensure significantly more aid and fuel can reach Gaza through as many routes as possible.Ahead of his arrival in Jordan, Lord Cameron said: “No-one wants to see this conflict go on for a moment longer than necessary. But for a ceasefire to work, it needs to be sustainable.”“If Israel is still facing Hamas in Gaza with rockets and terror tactics, not only will a ceasefire not be sustainable, a two-state solution in the longer term will also not be possible,” he added.Lord Cameron will be accompanied by Middle East minister Lord Ahmad. He will then visit the Jordanian Hashemite Charity Organisation, a focal point of Jordanian humanitarian support for Gaza.The Tory peer is also expected to meet Egyptian president Abdel Fattah el-Sisi, who this week won a third six-year term in office, and foreign minister Sameh Shoukry while in Cairo.Lord Cameron has previously met Mr el-Sisi, including in Downing Street in 2015, while serving as British PM.During his time in Egypt, officials said Lord Cameron will visit Al Arish, near the Egypt-Gaza border, to see first-hand how UK aid is being administered.He will hear from the Egyptian Red Crescent about the impact the UK’s aid deliveries, such as wound care packs, are having in Gaza.Lord Cameron last week announced a fresh batch of sanctions, targeting both leaders and financiers of Hamas, while also placing restrictions on Israelis responsible for settler violence in the West Bank.He visited Paris and Rome on Tuesday as part of UK efforts to help co-ordinate the European response to the Middle East conflict and the war in Ukraine.Israel and Hamas have been at war for more than two months following the Palestinian militant group’s deadly raids on 7 October, which saw 1,200 people killed and more than 240 taken hostage.A week-long pause in the fighting saw some 100 hostages released in a Qatar-brokered deal, but an estimated 129 people are thought to still be held captive.The opening of the Kerem Shalom Gaza border point for aide had been called for by Mr Sunak, including during a phone call with Israeli prime minister Benjamin Netanyahu. More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailThe Bank of England is under increasing pressure to help homeowners and cut interest rates after inflation fell to its lowest rate in two years. Latest figures show it has slowed to 3.9 per cent, well below Rishi Sunak’s target of 5 per cent by the end of the year. Work and pensions secretary Mel Stride said the inflation fall could allow the Bank of England to ease interest rates and aid those struggling with mortgage costs.While he emphasised that the bank was independent, he added “if inflation comes down faster than expected then that does take some pressure off the Bank of England in terms of keeping interest rates higher, which of course in time and in turn feeds into mortgage rates.”Falling petrol prices helped drive the larger than expected fall in inflation, which the prime minister hailed as “good news for everyone in this country”.Most economists had been expecting a dip to 4.3% last month.However, the current rate is still well above the Bank of England’s goal of 2 per cent.Prime Minister Rishi Sunak hailed the fall in inflation as ‘good news for everyone in this country’, and Chancellor Jeremy Hunt said the UK economy is ‘back on the path to healthy, sustainable growth’ (Ian Forsyth/PA)Labour warned that more than a million people face higher mortgage payments next year “after the Conservatives crashed the economy”. Economists suggested that markets were pricing in interest rates cuts by May, and perhaps as early as March, as pressure intensifies on the central bank. Matthew Ryan, from financial services company Ebury: “The first 25 basis point cut is now fully priced in for the bank’s May meeting, with a decent chance of a start to cuts in March.”James Smith, developed markets economist at ING bank, said: “Markets are right to be pricing a number of rate cuts for 2024 … starting in May.”Shadow chancellor Rachel Reeves with party leader Sir Keir Starmer (Peter Byrne/PA)Responding to the inflation figures, the chancellor Jeremy Hunt said: “With inflation more than halved we are starting to remove inflationary pressures from the economy.“Alongside the business tax cuts announced in the Autumn Statement this means we are back on the path to healthy, sustainable growth. “But many families are still struggling with high prices so we will continue to prioritise measures that help with cost of living pressures.”Shadow chancellor Rachel Reeves said: “The fall in inflation will come as a relief to families. However, after 13 years of economic failure under the Conservatives, working people are still worse off.“Prices are still going up in the shops, household bills are rising, and more than a million people face higher mortgage payments next year after the Conservatives crashed the economy.” More

Sign up for the View from Westminster email for expert analysis straight to your inboxGet our free View from Westminster emailThe tide turned against inflation.Artificial intelligence went mainstream — for good or ill.Labor unions capitalized on their growing might to win more generous pay and benefits.Elon Musk renamed and rebranded the social media platform Twitter, removed guardrails against phony or obscene posts and ranted profanely when advertisers fled in droves.The American housing market, straining under the weight of heavy mortgage rates, took a wallop.And Taylor Swift’s concert tour scaled such stratospheric heights that she invigorated some regional economies and drew a mention in Federal Reserve proceedings.A look back at 10 top business stories in 2023: RAGING AGAINST INFLATION The Fed and most other major central banks spent most of the year deploying their interest-rate weapons against the worst bout of inflation in four decades. The trouble had erupted in 2021 and 2022 as the global economy roared out of the pandemic recession, triggering supply shortages and igniting prices.By the end of 2023, though, the Fed, the European Central Bank and the Bank of England had taken a breather. Their aggressive rate hikes had brought inflation way down from the peaks of 2022, when Russia’s invasion of Ukraine sent energy and grain prices rocketing and intensified price spikes.In the United States, the Fed’s policymakers delighted Wall Street investors by signaling in December that 2024 would likely be a year of rate cuts — three to be exact, in their expectations — and not rate hikes. The Bank of England and ECB sounded a more cautious note, suggesting that inflation, though trending down, remained above their target.“Should we lower our guard?” Christine Lagarde, the ECB president, told reporters. “We ask ourselves that question. No, we should absolutely not lower our guard.”The Council on Foreign Relations, which tracks interest rates in 54 countries, found that central banks turned aggressive toward inflation in the spring of 2022. Policies remain tight, the council found, but the overall anti-inflation stance has eased. AI GOES MAINSTREAM Artificial intelligence thrust itself into public consciousness this year. But the technology, while dazzling for its ability to retrieve information or produce readable prose, has yet to match people’s science fiction fantasies of human-like machines.Catalyzing a year of AI fanfare was ChatGPT. The chatbot gave the world a glimpse of advances in computer science, even if not everyone learned quite how it works or how to make the best use of it.Worries escalated as this new cohort of generative AI tools threatened the livelihoods of people who write, draw, strum or code for a living. AI’s ability to produce original content helped fuel strikes by Hollywood writers and actors and legal challenges from bestselling authors.By year’s end, the AI crises had shifted to ChatGPT’s own maker, OpenAI, which was nearly destroyed by corporate turmoil over its CEO, and to a meeting room in Belgium, where European Union leaders emerged after days of talks with a deal for the world’s first major AI legal safeguards. WORKERS SCORE GAINS The long-battered American labor movement flexed its muscle in 2023, taking advantage of widespread worker shortages to demand — and receive — significantly better pay and benefits. From Hollywood writers and actors to autoworkers to hotel workers, 510,000 laborers staged 393 strikes in the first 11 months of 2023, according to Cornell University’s Labor Action Tracker.Under its pugnacious new president, Shawn Fain, the United Auto Workers struck the Big Three automakers — Ford, General Motors and Stellantis, the parent of Chrysler, Jeep and Ram — and won pay raises, improved benefits and numerous other concessions. Hollywood writers and actors, as a result of their walkouts, secured higher pay and protection from the unrestricted use of artificial intelligence, among other concessions.The unions’ gains marked a resurgence for their workers after years following the Great Recession of 2007-2009 when union power further dwindled, wage gains languished and employers seemed to have their pick of job candidates. An explosive economic rebound from the COVID-19 recession of 2020 and a wave of retirements left companies scrambling to find workers and provided labor unions with renewed leverageStill, even now, unions remain a shadow of what they once were: As of last year, roughly 10% of U.S. employees belonged to labor unions, way down from 20% in 1983. And back in the 1970s, the United States experienced an average of 500 strikes a year, involving 2 million workers, said Johnnie Kallas, a labor expert at Cornell. MUSK’S X-RATED TRANSFORMATION A little more than a year ago, Elon Musk walked into Twitter’s San Francisco headquarters, fired its CEO and other top executives and began transforming the social media platform into what’s now known as X.Since then, the company has been bombarded by allegations of misinformation, endured significant advertising losses and suffered declines in usage.Disney, Comcast and other high-profile advertisers stopped spending on X after the liberal advocacy group Media Matters issued a report showing that their ads were appearing alongside material praising Nazis. (X has sued the group, claiming it “manufactured” the report to “drive advertisers from the platform and destroy X Corp.”)The problems culminated when Musk went on an expletive-ridden rant in an on-stage interview about companies that had halted spending on X. Musk asserted that advertisers that pulled out were engaging in “blackmail” and, using a profanity, essentially told them to get lost.“Don’t advertise,” X’s billionaire owner said. HOUSING’S MISERABLE YEAR Remarkably, the U.S. economy and job market largely avoided pain in 2023 from the Fed’s relentless campaign against inflation — 11 interest-rate hikes since March 2022.Not so the housing market.As the Fed jacked up borrowing rates, the average 30-year fixed-rate mortgage rate shot up from 4.16% in March 2022 to 7.79% in October 2023. Home sales crumbled. For the first 10 months of 2023, sales of previously occupied homes sank 20%. Yet at the same time and despite the sales slump, home prices kept rising. The combination of high mortgage rates and rising prices made homeownership — or the prospect of trading up to another house — unaffordable for many.Contributing to the squeeze was a severe shortage of homes for sale. That, too, was a consequence of higher rates. Homeowners who were sitting on super-low mortgage rates didn’t want to sell their houses only to have to buy another and take on a new mortgage at a much higher rate. Mortgage giant Freddie Mac says 60% of outstanding mortgages still have rates below 4%; 90% are below 6%. CRYPTO CHAOS (CONTINUED) If 2022 was the year that the cryptocurrency industry collapsed, 2023 was the year of the spillover from that fall.The year’s headlines from crypto were dominated by convictions and legal settlements as Washington regulators adopted a much more aggressive stance toward the industry.A jury convicted Sam Bankman-Fried, the founder and former CEO of the crypto exchange FTX, of wire fraud and six other charges. Weeks later, the founder of Binance, Chengpeng Zhao, agreed to plead guilty to money laundering charges as part of a settlement between U.S. authorities and the exchange. Among the other crypto heavyweights that met legal trouble were Coinbase, Gemini and Genesis.Yet speculation that crypto may gain more legitimacy among investors helped more than double the price of bitcoin. After years of delays, regulators are eventually expected to approve a bitcoin exchange-traded fund. Whether that would prove sufficient to sustain bitcoin’s rally over the long run remains to be seen. BANKING JITTERS Historically, high interest rates benefit banks; they can charge more for their loans. But in 2023, higher rates ended up poisoning a handful of them.The industry endured a banking crisis on a scale not seen since 2008. Three midsized banks — Silicon Valley Bank, Signature Bank and First Republic Bank — collapsed.For years, banks had loaded up their balance sheets with high-quality mortgages and Treasurys. In an era of ultra-low rates, those mortgages and bonds paid out puny interest.Enter the specter of inflation and the Fed’s aggressive rate hikes. As rates jumped, the banks’ bonds tumbled in value because investors could now buy new bonds with much juicier yields. With pressure on the banks mounting, some anxious depositors withdrew their money. After one such bank run, Silicon Valley collapsed. Days later, Signature Bank failed. First Republic was seized and sold to JPMorgan Chase.Investors remain concerned about midsized institutions with similar business models. Trillions of dollars in commercial real estate loans that remain on these banks’ books could become problematic in 2024. GLOBAL MARKETS RALLY From Austria to New Zealand, stock markets rallied through 2023. As inflation eased, stocks climbed despite sluggish global economic growth.A tumble in crude oil prices helped slow inflation. A barrel of Brent crude, the international standard, dropped 14% through mid-December on expectations that the world has more than enough oil to meet demand.An index that spans nearly 3,000 stocks from 47 countries returned 18% in U.S. dollar terms as of Dec. 11. Healthy gains for Apple, Nvidia and other U.S. Big Tech stocks powered much of the gains. So did the 45% return for the Danish pharmaceutical company Novo Nordisk, which sells the Wegovy drug to treat obesity and the 33% return for the Dutch semiconductor company ASML.The bond market endured more turbulence. Bond prices tumbled for much of the year, and their yields rose, over uncertainty about how far central banks would go in raising rates to curb inflation.The yield on the 10-year U.S. Treasury briefly topped 5% in October to reach its highest level since 2007. Yields have since eased on the expectation that the Fed is done raising rates. WORLD ECONOMY’S RESILIENCE Over the past three years, the global economy has absorbed one hit after another. A devastating pandemic. The disruption of energy and grain markets stemming from Russia’s invasion of Ukraine. A resurgence of inflation. Punishing interest rates.And yet economic output kept growing in 2023, if only modestly. Optimism grew about a “soft landing” — a scenario in which high rates tame inflation without causing a recession. The head of the International Monetary Fund praised the global economy for its “remarkable resilience.’’The United States has led the way. Defying predictions that high rates would trigger a U.S. recession, the world’s largest economy has continued to grow. And employers, fueled by solid consumer spending, have kept hiring at healthy rates.Still, the accumulated shocks are restraining growth. The IMF expects the global economy to expand just 2.9% in 2024 from an expected 3% this year. A major concern is a weakened China, the world’s No. 2 economy. Its growth is hobbled by the collapse of an overbuilt real estate market, sagging consumer confidence and high rates of youth unemployment. THE U.S. ECONOMY (TAYLOR’S VERSION) Taylor Swift dominated popular culture, with her record-shattering $1 billion concert tour, her anointment as Time magazine’s Person of the Year and her high-profile romance with Travis Kelce, the Kansas City Chiefs football star.The Swift phenomenon went further yet. It extended into the realm of the national economy. Her name came up at a July news conference by Fed Chair Jerome Powell, when Powell was asked whether Swift’s blockbuster ticket sales revealed anything about the state of the economy. Though Powell avoided a direct reply, Swift’s name came up that same month in a Fed review of regional economies: Her tour was credited with boosting hotel bookings in Philadelphia.Economist Sarah Wolfe of Morgan Stanley has calculated that Swifties spent an average of $1,500 on airfares, hotel rooms and concert tickets to her shows (though it’s perhaps worth noting that Beyonce fans spent even more — an average $1,800)._____AP Business Writers Stan Choe in New York, Barbara Ortutay in San Francisco and Matt O’Brien in Providence, Rhode Island, contributed to this report. More