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Inflation is forcing Americans to spend $709 more per month on everyday goods and services than they did just two years ago, according to the chief economist at Moody’s Analytics.

“The high inflation of the past 2+ years has done lots of economic damage,” Mark Zandi tweeted on Friday following the release of the Consumer Price Index — a closely-watched measure of inflation that tracks changes in the costs of everyday goods and services.

The CPI rose moderately, to 3.2% in July versus a year earlier.

“Due to the high inflation, the typical household spent $202 more in a July than they did a year ago to buy the same goods and services. And they spent $709 more than they did 2 years ago,” Zandi added.

Zandi — who also co-founded Moody’s global economic analysis service, Economy.com — said he sees relief ahead, predicting that inflation is “set to moderate further” as the Federal Reserve approaches its 2% inflation goal.

“Vehicle prices will decline more, so too will electricity prices, and the growth in the cost of housing will slow further. The biggest worry is the jump in oil prices, which bears close watching,” he added in the thread posted to X, formerly known as Twitter.

To be sure, the high inflation of the past 2+ years has done lots of economic damage. Due to the high inflation, the typical household spent $202 more in a July than they did a year ago to buy the same goods and services. And they spent $709 more than they did 2 years ago.

Though gas prices hit an eight-month high late last month, energy unexpectedly rose a mere 0.1%, the latest CPI report showed.

However, over the past month, US West Texas Intermediate and Brent crude futures climbed nearly 10%, to $82.83 and $86.39, respectively.

Zandi concluded his analysis with: “The deeper I dig into last weeks inflation statistics, the more confident I am that inflation will be back to the Feds inflation target by this time next year. And this without more interest rate hikes, a recession, or even much of an increase in unemployment.”

Fed officials have said that they’re also no longer forecasting a recession, though the sentiment opposes that of ratings agency Fitch, which owngraded the US top-tier sovereign credit from AAA to AA+, citing the possibility that the economy will slip into a mild recession later this year.

Consumers, however, have continued to feel reprieve from the central bank’s aggressive tightening regime, with core CPI which excludes volatile food and energy prices only rising 0.2% from a month ago, matching the 0.2% increase in June.

“The trend lines look good,” Zandi said, noting that “the July CPI report was great,” especially when compared to June 2022, when inflation peaked at 9.1% to hit a four-decade high.

Rising housing costs were by far the largest contributor to Julys uptick in prices, accounting for 90% of the advance, the Bureau of Labor Statistics reported, though Zandi didn’t seem too concerned.

When The Post reached out to Moody’s for comment, the financial services firm pointed to commentary from another economist at the company, Bernard Yaros, who said that “the US consumer price index was fully in line with our and consensus expectations in July.”

“Moodys Analytics believes that the Federal Reserve is done with interest-rate hikes for the current tightening cycle, and the July CPI helps cement our near-term view on monetary policy,” he added.

The CPI report fueled questions about whether the Fed will continue to hike interest rates later this year after the Fed decided on a 25-basis-point rate hike in July, taking them to a 22-year high.

Fed Chairman Jerome Powell announced that the advance was a unanimous decision, raising the benchmark federal-funds rate to a range between 5.25% and 5.5%. 

Economists were divided on the pending rate hikes following the release of the CPI report.

Greg Wilensky, head of US fixed income at Janus Henderson Investors, added: If economic conditions continue as expected, we believe we have seen the last hike for this cycle. This makes us more constructive on adding interest-rate risk, particularly at the front of curve.

Meanwhile, Raymond James Chief Economist Eugenio Aleman believes stubbornly-high shelter costs are slated to put pressure on headline inflation going forward.

No doubt the Fed will also look at the Labor Departments hiring report for July as it considers whether its done enough to snuff out inflation.

Last month, US employers added 187,000 jobs, the lowest number since COVID peaked in 2020, though unemployment remained little changed month-over-month, at 3.5%.

The labor market has showed surprising resiliency over the last couple of months, adding 209,000 jobs in June and a robust 339,000 jobs in May.

The US is currently enjoying a 30-month streak of monthly job gains.

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World

Giving up territory would be ‘unacceptable’, says Ukraine’s armed forces chief

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Giving up territory would be 'unacceptable', says Ukraine's armed forces chief

It would be “unacceptable” for Ukraine to “simply give up territory” in any peace deal with Russia, the head of the Ukrainian armed forces has told Sky News. 

General Oleksandr Syrskyi said a “just peace” can only be achieved if fighting is halted along current frontlines and then for negotiations to take place.

Signalling a complete lack of trust in claims by the Kremlin that it wants to end its war, he accused Vladimir Putin of using an attempt by Donald Trump to broker peace talks as “cover” while Russian troops try to capture more land by force on the battlefield.

Ukraine peace talks – latest

General Oleksandr Syrskyi said Russia is using peace talks as 'cover' to grab more Ukrainian territory
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General Oleksandr Syrskyi said Russia is using peace talks as ‘cover’ to grab more Ukrainian territory

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What Ukrainian troops think about giving up Donbas

The rare intervention offers the clearest indication yet of the Ukrainian military’s red lines as Washington tries to negotiate a settlement that – according to an initial draft – would require Kyiv to surrender the whole of the Donbas region in the east of the country to Moscow.

President Volodymyr Zelenskyy, backed by the UK and other European allies, has been trying on the diplomatic front to strengthen Ukraine’s position.

But President Putin has said Russia would either seize the Donbas militarily or Ukrainian troops would have to withdraw.

Europe’s fate at stake

Speaking frankly, General Syrskyi, commander-in-chief of the armed forces of Ukraine, signalled that his country’s soldiers would fight on if diplomacy fails – and he warned that the fate of the whole of Europe is at stake.

In an exclusive interview in the basement of a building in eastern Ukraine – the location of which we are not disclosing for security reasons – he said Ukraine’s main mission “is to defend our land, our country, and our population”.

“Naturally, for us it is unacceptable to simply give up territory. What does it even mean – to hand over our land? This is precisely why we are fighting; so we do not give up our territory.”

A Ukrainian soldier fires a self-propelled howitzer in Kostiantynivka in Donetsk. Pic: Reuters
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A Ukrainian soldier fires a self-propelled howitzer in Kostiantynivka in Donetsk. Pic: Reuters

Rescuers work at the site of apartment buildings hit by a Russian airstrike in Sloviansk, Ukraine. Pic: Reuters
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Rescuers work at the site of apartment buildings hit by a Russian airstrike in Sloviansk, Ukraine. Pic: Reuters

Many troops have died fighting for Ukraine since Russia first seized the peninsula of Crimea and attacked the regions of Donetsk and Luhansk, which comprise the Donbas, in 2014.

Hundreds of thousands of Ukrainian civilians were then mobilised to fight alongside professional soldiers following Putin’s full-scale invasion in February 2022.

Russia well short of original goal

Nearly four years on, Russia occupies almost a fifth of Ukraine, including large parts of the Donbas, but well short of an original goal of imposing a pro-Kremlin government in Kyiv.

Asked whether the sacrifice of those people who gave their lives defending their country would be in vain if Ukraine is forced to hand over the land it still controls in the Donbas to Moscow, General Syrskyi, speaking in Ukrainian through a translator, said: “You know, I do not even allow myself to consider such a scenario.

“All wars eventually end, and of course we hope ours will end as well. And when it does, a just peace must be established.

“In my understanding, a just peace is peace without preconditions, without giving up territory. It means stopping along the current line of contact.”

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Ukrainians not surprised about lack of progress in peace talks

Pic: Reuters
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Pic: Reuters

The commander then broke into English to say that this means: “Stop. A ceasefire. And after that negotiations, without any conditions.”

Switching back into Ukrainian, he said: “Any other format would be an unjust peace, and for us it is unacceptable.”

Ukraine’s contingency plans

While Ukraine’s will and ability to fight are key in confronting Russia’s much larger army, so too is the supply of weapons, ammunition and other assistance from Kyiv’s allies, most significantly the US.

But, with the White House under Donald Trump, becoming less predictable, the Ukrainian military appears to be considering contingency plans in case US aid stops.

Asked whether Ukraine would be able to continue fighting if President Trump did halt support, General Syrskyi said: “We are very grateful to our American partners and all our allies who have been supporting us throughout this war with weapons and equipment.

“We hope they will continue providing full support. But we also hope that our European partners and allies, if necessary, will be ready to provide everything required for our just war against the aggressor.

“Because right now we are defending not only ourselves, but all of Europe. And it is crucial for all Europeans that we continue doing so, because if we are not here, others will be forced to fight in Europe.”

Pic: Reuters
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Pic: Reuters

General’s assessment of fighting on ground

A decorated commander, with the call sign “snow leopard”, General Syrskyi has been conducting combat operations against Russia’s invasion for more than a decade.

He was made military chief in February 2024 after President Volodymyr Zelenskyy sacked the previous top commander. General Valerii Zaluzhnyi is now Kyiv’s ambassador to London.

General Syrskyi offered his assessment of the fight on the ground, saying:

• Ukrainian troops still control the northern part of the fortress city of Pokrovsk in the Donbas and will keep battling to retake the rest of it, contrary to Russian claims to have captured what has been a key target for Moscow for the past 16 months.

• Russia is firing between 4,000 to 5,000 one-way attack drones at Ukrainian positions along the frontline every day as well as 1,500 to 2,000 drones that drop bombs. But Ukraine is firing the same volume – and even more – back. “In terms of drones, there is roughly parity. At the moment, we are deploying slightly more FPV [first person view] drones than the Russians.”

• Russia’s armed forces still have double the volume of artillery rounds of Ukraine’s, but the range and lethality of drone warfare mean it is harder to use artillery effectively. Now, 60% of strikes are carried out by drones.

• More than 710,000 Russian soldiers are deployed along a frontline that stretches some 780 miles (1,255km), with the Russian side losing around 1,000 to 1,100 soldiers a day, killed or wounded “and a majority are killed”.

The Russian army is currently “attempting to advance along virtually the entire frontline,” General Syrskyi said.

Where are the harshest battles?

The fiercest battles are around Pokrovsk, as well as the northeastern city of Kupiansk, in Kharkiv region, the Lyman area, also in the Donbas, and near a small city called Huliaipole, in the Zaporizhzhia region of southeastern Ukraine.

“The Ukrainian army is conducting a strategic defensive operation, aiming to contain the enemy’s advance, prevent them from breaking deeper, inflict maximum losses, and carry out counter-offensive actions in those sectors where we see the enemy is vulnerable,” the commander said.

“Our strategy is to exhaust the Russian army as much as possible, prevent its advance, hold our territory, while simultaneously striking the enemy in the near rear, the operational depth, and… into Russia itself, with the aim of undermining its defence capability and industrial capacity.”

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Peace deal: Russia ‘in no mood to compromise’

He is referring to a capability Ukraine has developed to launch long-range drones, laden with explosives, deep into Russia to strike military targets as well as oil refineries.

The operation is aimed at destroying fuel for the tanks, warships and jets that are attacking Ukraine and – crucially – reducing oil revenues that help to fund Russia’s war machine.

Sea drones crash into Russia’s warships

The Ukrainian military is also deploying explosive sea drones that are smashed into Russian warships as well as tankers used to transport sanctioned Russian oil.

Asked if his forces were ready – and had sufficient manpower – to keep fighting if necessary, General Syrskyi said: “We have the resources to continue conducting military operations.”

Yet Ukraine is suffering from a shortage of troops on the frontline.

Soldiers and wider society are also exhausted and facing another winter of war.

No sign of Moscow winding down war effort

President Putin has an advantage when it comes to troop numbers and firepower over time, which makes continued support to Kyiv from its allies more vital than ever.

General Syrskyi cautioned that Moscow showed no sign of winding down its war effort despite the Russian leader telling President Trump he is prepared to negotiate.

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“So we do everything so that if the enemy continues the war, and you can see that although we want peace, a fair peace, the enemy continues its offensive, using these peace talks as cover,” he said.

“There are no pauses, no delays in their operations. They keep pushing their troops forward to seize as much of our territory as possible under the cover of negotiations.”

He added: “So we are just forced to wage this war… protecting our people, our cities and towns, and our land.”

The commander said this is what motivates his soldiers.

“If we do not do this, we can see clearly what the Russian army leaves behind, only ruins, only deaths.”

As for whether the UK and other European nations should be preparing their people for the possibility of a wider war with Russia, the general said: “Of course, the armed forces of every country ensure reliable protection of their citizens, their children, and their territory.

“With the existence of aggressive states, above all the Russian Federation and its allies, this issue is extremely urgent.

“Everything must be done to ensure the capability to maintain a level of defence, and armed forces modern enough to repel aggression, both individually and in support of the allies.”

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US

Netflix agrees blockbuster $72bn deal for Warner Bros studios

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Netflix agrees blockbuster bn deal for Warner Bros studios

Netflix has agreed a $72bn (£54bn) deal to secure Warner Bros Discovery’s film and TV studios and supercharge its library through rights to top franchises including Harry Potter and Game Of Thrones.

It had been reported that the US streaming giant was in exclusive talks over the deal following a bidding war for the assets.

Paramount Skydance and Comcast, the ultimate owner of Sky News, were the rival suitors for the bulk of WBD that also includes HBO, the HBO Max streaming platform and DC Studios.

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While Netflix has agreed a $27.75 per share price with WBD, which equates to the $72bn purchase figure, the deal gives the assets a total value of $82.7bn.

It will see WBD come under Netflix ownership once its remaining Discovery Global division, mostly legacy cable networks including CNN and the TNT sports channels, is separated.

However, the agreement is set to attract scrutiny from competition regulators, particularly in the United States and Europe.

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Both WBD and Netflix do not see the prospect of the deal being completed until late 2026 or 2027.

The main stumbling block is likely to be the fact that Netflix, which has hits including Stranger Things and Squid Game, is already the world’s biggest streaming service.

Stranger Things is one of Netflix's biggest hits. Pic: Netflix
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Stranger Things is one of Netflix’s biggest hits. Pic: Netflix

Further drama could come in the form of a complaint by Paramount, which had previously made a bid for the whole company.

CNBC reported this week that Paramount had claimed the auction process was biased in favour of Netflix.

Entertainment news provider Variety has also reported that major studios fear an institutional crisis for Hollywood unless the move is blocked.

Ted Sarandos, the co-chief executive of Netflix, said: “By combining Warner Bros’ incredible library of shows and movies – from timeless classics like Casablanca and Citizen Kane to modern favourites like Harry Potter and Friends – with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we’ll be able to do that even better.

“Together, we can give audiences more of what they love and help define the next century of storytelling.”

Netflix shares were trading down more than 3% in pre-market deals but recovered much of that loss when Wall Street opened. Those for WBD were up by more than 2%.

David O’Hara, managing director at the advisory firm MKI Global Partners, said of the proposed deal: “The 12-18 month timeline signals a long antitrust review, but despite the overlap between Netflix and HBO Max, there is a path to approval through possible HBO divestment.

“Netflix would not accept a $5.8bn break fee if it didn’t see at least a small chance of the deal closing.”

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UK

IT issue affects flights at Edinburgh Airport

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IT issue affects flights at Edinburgh Airport

All flights were halted at Edinburgh Airport this morning due to an IT issue affecting its air traffic control provider.

In a post on X, formerly Twitter, the airport later announced service had resumed.

Its post read: “Flights have now resumed following the IT issue with our air traffic provider.

“We thank passengers for their patience and understanding.”

But passengers continue to feel the effects.

A Delta Air Lines flight from New York to Edinburgh was diverted to Dublin after going into a holding pattern over the Scottish capital.

And a live arrivals board on the airport’s website showed multiple flights diverted, delayed and cancelled.

Arrivals board at Edinburgh Airport. Pic: Edinburgh Airport
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Arrivals board at Edinburgh Airport. Pic: Edinburgh Airport

Morven McCall and Cody Stevenson, both 19, were due to fly easyJet from Edinburgh to Amsterdam on their first trip away together.

Morven told Sky News: “We literally just got into the airport and as soon as we walked through the door there was an announcement that it had been cancelled.

“I was ill over the summer and had to cancel two holidays already, this was our first time going away together. We are just gutted and stressed.”

Follow live: Latest updates as flights halted

Arrivals at Edinburgh Airport. File pic: PA
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Arrivals at Edinburgh Airport. File pic: PA

One passenger was on a plane when they found out.

They said: “We boarded our flight and pushed back on time for an 8.45 (am) departure, then sat for a while before the pilot told us what was happening.

“He updated us a couple of times, cabin crew are brilliant at handing out water etc, and I’m surprised that everyone appears to be upbeat. But then you do wonder how long for, just been told we’re hoping to be in the air in 20 minutes.”

Another passenger told us: “The first news was from the airport announcement as we were halfway through boarding, saying the airfield was closed due to air traffic control down.

“No one knew what was going on. We’d already been delayed a bit before boarding, with no reason. I suspect problems started about 9am.”

It comes after an earlier announcement that all flights had been halted.

“No flights are currently operating from Edinburgh Airport,” the previous statement said.

“Teams are working on the issue and will resolve as soon as possible.”

There was no timeframe for recovery initially, Sky News learned.

It’s understood by PA that the issue was not linked to today’s Cloudflare outage.

Edinburgh Trams also posted on X, writing: “If you’re travelling with us to @EDI_Airport this morning, please be aware that flights are not currently operating.”

The airport urged passengers to contact their airline for the latest information on flights.

An average of 43,000 passengers per day use the airport, which is served by 37 airlines flying to 155 destinations.

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