Downturn warning as Earth hits record C02

Written by Lori Campbell on 9th May 2022

The UK faces a “sharp economic downturn” with the Bank of England raising interest rates to one per cent, as the Earth’s CO2 levels reach the highest level in human history. Meanwhile, the Ukraine war could see energy giants reap £11.6 billion in extra profits this year from North Sea operations alone, Liontrust’s Sustainable Future funds emit 77 per cent less carbon on average than the markets in which they invest, according to the firm’s annual report, and Lidl trials the UK’s first supermarket ‘smart’ laundry detergent refill station. It’s the Good With Money weekly newsbrief. 

Warning of economic downturn as interest rates rise

The Bank of England has warned the UK faces a “sharp economic slowdown” after it raised interest rates to try to slow the pace of soaring prices.

Rates have risen to one per cent from 0.75 per cent, their highest level since 2009 and the fourth consecutive increase since December. Inflation – the rate at which prices rise – is at a 30-year high of seven per cent and is set to hit 10 per cent by the autumn.

With the cost of living spiralling, households are reining in their spending which is hitting economic growth. Following the latest rise in interest rates, two million homeowners will see an immediate increase in their monthly mortgage repayments.

Bank of England governor Andrew Bailey defended raising rates at a time when the cost of living is increasing, saying that the risk of letting inflation get out of control was greater.

It comes as energy giant Shell has posted its highest ever quarterly profits as oil and gas prices surge around the world.

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Earth’s CO2 hits highest recorded level in human history

Earth’s monthly average carbon dioxide (CO2) levels have reached the highest level in human history.

New data from Hawaii’s Mauna Loa Observatory, released by the National Oceanic and Atmospheric Administration (NOAA), reveal C02 reveals are above 420 parts per million (ppm) for the first time since records began.

Atmospheric CO2, driven higher by the burning of fossil fuels, is one of the major causes of the climate crisis. Levels of C02 fluctuate over the year, with highs around late spring. This is due to the Northern Hemisphere’s seasons – as the northern summer comes in, increased plant growth extracts carbon out of the atmosphere, keeping levels lower.

But emissions from transportation, industry, electricity generation and other sources like deforestation have released vast quantities of CO2 into the atmosphere year-round since the mid-19th century – causing overall atmospheric carbon to increase dramatically over time.

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Energy giants to reap £11.6 billion in wartime profits

The Ukraine war will see energy giants enjoy additional profits of £11.6 billion this year from North Sea operations alone, new analysis predicts.

Greenpeace and Oil Change International say energy firms could see the money they make just from their North Sea fossil fuel operations increase 111 per cent from £10.46 billion to £22.07 billion, after Russia’s war sent energy prices soaring.

Impact of Liontrust’s Sustainable Future funds revealed

The Sustainable Future (SF) funds from positive impact specialists Liontrust emit 77 per cent less carbon than the markets in which they invest, according to its annual review.

The Liontrust Annual Review 2021 also reveals that 22 per cent of the SF funds have investments in companies that offer cleantech solutions to the climate crisis.

In 2021, the firm’s Sustainable Investing team engaged with 153 companies and raised 283 ESG (environmental, social and governance) issues. Over the last five years, the team has targeted 40 companies where gender diversity on the board was lacking and 58 per cent of these have improved to having more than a third (33 per cent) female representation.

Despite a challenging 2021, all Liontrust Sustainable Future (SF) funds with a 10-year track record to the end of 2021 continued to bring returns in the top 25 per cent of their respective sectors. 

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Lidl trials laundry detergent refill station

Lidl is to trial the UK’s first supermarket ‘smart’ laundry detergent refill station.

The six month pilot, in partnership with Chilean sustainability start-up Algramo, could save 2,970 single-use plastic containers from one store alone.

Launching in Kingswinford, West Midlands, customers can buy a 100 per cent recyclable refill bottle filled with a choice of four Lidl own brand laundry detergents for the same price as a standard single-use bottle.

Refills then come with a 20p saving – reducing customer spend as well as plastic, meaning customers will pay less for a more sustainable choice. The refill bottles are fitted with a UK-first smart chip, which allows the machine to register and recognise the bottle.

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