House building falls 21% as rate rises bite

By John-Paul Ford Rojas

Updated: 19:05 EDT, 10 September 2023

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Hawaii Governor Josh Green announced Saturday evening that the Maui blazes have become the deadliest wildfires in modern US history, as the death toll rose to 89.  

The disaster surpassed California’s 2018 Camp Fire, which killed 85, and is the worst since the 1918 Cloquet & Moose Lake Fires in Minnesota, which killed 453.

It is also now the deadliest natural disaster in Hawaiian history. Investigators have identified three victims’ remains, but are yet to name them. And they say just three percent of the damaged area has been searched, raising the specter of a much higher final death toll. 

Speaking at a daily evening press conference to update the mounting death toll, Green said fires are already ‘the largest natural disaster Hawaii has ever experienced’, which will ‘take an incredible amount of time to recover from.’ 

At the same press conference, Maui Police Chief John Pelletier said officials are still working to identify the deceased, and would use rapid DNA testing and dental records to expedite the process. 

Multiple law firms have now announced plans to explore legal action against Hawaiian Electric, claiming the state’s largest power supplier may be at fault for the unprecedented wildfires. 

At least one class action lawsuit is reportedly being considered, which could see the company blamed for the disaster that has so far killed at least 89 people and razed over 2,200 buildings to the ground.

‘From what we’ve learned, we believe the Lahaina fires could have been prevented had proper safety precautions been taken,’ said Gerald Singleton, a lawyer involved with the potential legal action, to the New York Times. 

The company has come under fire for allegedly failing to cut power as the wildfires erupted on Tuesday, and a state regulatory filing in April reportedly saw the company name wildfire prevention as its lowest priority. 

As he admitted that ‘none of us’ know how high the number of dead could go, Pelletier said the process was being carried out meticulously. ‘You want it fast, or you want it right? We’re going to do it right,’ he said.

The police chief said the work to locate and identify remains has been challenging due to high heat and humidity on the island, and efforts are still being made to establish IDs. 

‘Every one of these 89 are John and Jane Does,’ he added. 

The same day that the wildfires became the deadliest for over a century, the Federal Emergency Management Agency (FEMA) estimated it could cost upwards of $5.52 billion dollars to rebuild the wildfire-ravaged town of Lahaina. 

A total of 2,200 structures were destroyed – 1,500 of which were residential.  

Experts warned that the recovery could cost more than expected due to the high number of homes on Maui being constructed primarily of wood, making them ‘very vulnerable’ to wildfires that were previously not considered a threat on the islands. 

Reconstruction may involve material which is more durable and less flammable – such as brick – but that will likely increase costs and construction time.  

In the days since the blaze, shocking images have revealed the 12,000 person town of Lahaina – once a popular tourist hotspot – now resembling an apocalyptic wasteland.

As Lahaina residents come to terms with losing approximately 80 percent of their town, former FEMA official Roy Wright stressed that the daunting cost to rebuild it could increase further. 

‘Every estimate we hear during the first week is someone’s best approximation, and it’s wrong,’ he told the New York Times. ‘We just don’t know enough yet.’ 

Part of the reason so much of the town has been devastated is due to the high number of its buildings being made of wood, according to wildfire expert Thomas Jeffery. ‘Many of the residential properties in Lahaina appear to have wood siding, and a number of them have elevated porches with a lattice underneath,’ he said. 

But for locals who have lost their entire homes and livelihoods in the wildfires, Wright said it is expected that insurance claims will soon flood the island – and he felt people should feel confident they will receive a payout.

While Hawaii is far from averse from a natural disaster, if it does it would typically be struck by tropical crises like tornadoes and hurricanes. Wright said the record wildfires could shake up Hawaii’s insurance policies for good.

‘Hurricane is still your primary risk. Wildfire is going to be a secondary peril. It is, but clearly, it’s not a peril we can ignore,’ he said. 

Because Hawaii’s other islands are also littered with flammable, wooden properties, Wright concluded neighboring residents should consider taking steps to protect against potential fires.

‘This risk is real,’ he added. 

When the blazes began on Tuesday, drought-like conditions caused by a summer of high temperatures and little rain – combined with winds from Hurricane Dora – saw the flames spread rapidly.

With many residents and tourists caught off-guard, some resorted to flinging themselves into the ocean in a bid to escape the blistering streets.

On Friday, days after the fires blistered his town of Lahaina, local resident Kekoa Lansford said he worried the cleanup would take ‘years to fix’.

‘This is not even the worst of it,’ he told the BBC as he pointed to the leveled town. ‘(We) still get dead bodies in the water floating, and on the seawall.’

His fears about the monumental task of rebuilding the town were echoed by Hawaii Governor Josh Green – who declined to give his own estimate at a press conference Friday but warned it would cost well into the ‘billions of dollars.’ 

‘When you see the full extent of the destruction of Lahaina, it will shock you,’ he said. ‘All of those buildings virtually are going to have to be rebuilt. It will be a new Lahaina that Maui builds, in its own image, with its own values.’ 

Officials have been scrambling to find solutions to the crisis, which has seen tens of thousands evacuated while authorities shuttle resources from mainland America.

To aid the rescue and recovery efforts, the Hawaii Department of Transportation said Saturday it would close one of the runways at Maui’s main airport to make way for cargo flights ‘assisting in airlifting goods/ necessities.’ 

Officials said the closure would not affect commercial flights, and desperate families have been pictured crowding airports in hopes of catching a plane out. 

Huge evacuation efforts have also taken place in recent days, with around 15,000 people a day being rescued from the island of Maui in recent days. 

Many of those attempting to find safety ended up in shelters, with BBC journalist Max Matza reporting from one of the facilities on Friday that he spoke to residents who encountered bodies floating in the water.

‘I found two bodies floating against my sea wall,’ said one local, who said he was avoiding listening to Governor Green’s updates because he didn’t want to be reminded of the disaster.

The mounting death toll has continued to rise through the week as Governor Green announced Thursday that the rising figure led the wildfires to become one of the deadliest disasters to strike the islands of Hawaii since it became a US state in 1959.

‘In 1960 we had 61 fatalities when a large wave came through Big Island,’ Green said, referring to a tragedy that struck a year after Hawaii became the 50th US state.

‘This time, it’s very likely that our death totals will significantly exceed that,’ he added. At the time, the death toll was 53, and it rose above 61 the following day. 

The governor added the devastated town now looks ‘as though a bomb hit’ it, saying: ‘It looks like total devastation; buildings that we’ve all enjoyed and celebrated together for decades, for generations, are completely destroyed.’

US on the way to curbing inflation: Federal Reserve looks set to hold fire on rate rises

By Calum Muirhead

Published: 17:38 EDT, 10 August 2023 | Updated: 17:38 EDT, 10 August 2023

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Hawaii‘s governor said on Thursday that the death toll from the Maui wildfires was likely to rise substantially, saying that it could eclipse the 1960 tsunami which killed 61 people.

The death toll is currently at 53, and a little earlier, with the toll at 36, Josh Green said it would rise. Officials will provide an update at 9:30pm EST on Thursday.

‘I’ll tell you, by the time this disaster is all described, I’m sure there will be dozens of people that lost their lives and billions of dollars of property that was destroyed,’ said Green.

He told CNN‘s Wolf Blitzer that 1,700 buildings were probably destroyed in the fire.

He said most buildings in Lahaina, a historic town in Maui, are completely gone, some of them still smoldering. 

Only some stone buildings are still standing, he said.

‘We also are only now getting some of our search and rescue personnel into other houses,’ Green said, adding that helicopters are also surveying the area.

The cause of the wildfire remains unknown.

The National Weather Service said dry vegetation, strong winds, and low humidity fueled them. 

Green said it was likely to prove a worse natural disaster than the tsunami of May 1960, sparked by an earthquake in Chile.

That tragedy left 61 people dead.

Hawaii is not immune to wildfires: in 2018, a total of 30,000 acres burnt, with flames fanned by Hurricane Lane.

This time, strong winds were caused by Hurricane Dora, which passed south of the islands. 

Wildfires occur every year in Hawaii, according to Thomas Smith, an environmental geography professor at the London School of Economics and Political Science – but this year’s fires are burning faster and bigger than usual.

Neighborhoods and businesses have been razed to the ground, and vehicles burned to a crisp across the western side of the island as the wildfires cut off most roads out of Lahaina. 

The town is one of Maui’s prime attractions, drawing two million tourists each year, or about 80 per cent of the island’s visitors.

The wildfires took most of Lahaina’s residents and visitors by surprise when they broke out late on Tuesday, forcing some to run for their lives and jump into the ocean to escape the fast-moving inferno.

Nicoangelo Knickerbocker, a 21-year-old resident of Lahaina, had just awoken from a nap on Tuesday evening when he saw the fires burning through his hometown. 

His mother and sister fled, while he and some and friends went to neighbors’ houses, helping people pack belongings and trying in vain to stem the flames with garden hoses.

‘It was so hot all around me, I felt like my shirt was about to catch on fire,’ he told AP from one of the four emergency shelters opened on the island. 

The shelters are housing more than 2,100 people, Hawaii News Now said.

Knickerbocker heard cars and a gas station explode, and soon after fled the town with his father, bringing with them only the clothes they were wearing and the family dog. 

‘It sounded like a war was going on,’ he said.

At least 20 people suffered serious burns, and several were airlifted to Oahu for medical treatment, said Ed Sniffen of the Hawaii Department of Transportation.

More than 11,000 visitors were evacuated from Maui.

Though at least 16 roads were closed, the airport was operating fully, he said.

Most of the roughly 400 evacuees at the War Memorial shelter on Thursday morning had arrived in shock, with an ’empty look,’ said Dr. Gerald Tariao Montano, a pediatrician who volunteered to work a six-hour shift on Wednesday night.

‘Some haven’t fully grasped that they lost everything,’ he said. 

He pleaded for donations of clothes, supplies, food, baby formula and diapers.

The fate of some of Lahaina’s cultural treasures remains unclear. 

The historic 60-foot-tall banyan tree marking the spot where Hawaiian King Kamehameha III’s 19th-century palace stood was still standing, though some of its boughs appeared charred, according to a Reuters witness.

Joe Biden approved a disaster declaration for Hawaii, allowing affected individuals and business owners to apply for federal housing and economic recovery grants, the White House said in a statement.

Wildfires are continuing to ravage large swathes of Portugal with over 1,000 firefighters battling to prevent them spreading further into the popular tourist hub of the Algarve.

Dramatic images from the neighbouring Alentejo region show plumes of smoke rising above poolside sunbeds as infernos raged in the distance, before the hotel was engulfed in flame.

Fires first hit nearby Odemira, a picturesque town which is home to a large community of foreigners, five days ago. 

They then spread south towards the Algarve, helped by scorching temperatures and high winds, with properties said to be under threat last night.

At least 1,500 people have been evacuated over recent days from homes, campsites and holiday resorts.

More than 1,100 firefighters, 360 vehicles and fourteen aircraft were deployed at fires near Odemira on Wednesday morning, according to The National Civil Protection Service.

More than 100,000 Brits are set to visit the Algarve in the coming weeks, it is estimated. 

Holiday companies are continuously monitoring the situation following the devastation caused to resorts by fires on the Greek island of Rhodes last month.

On Saturday, one of Portugal’s top rural hotels fell victim to the most intense fires in the south of Alentejo, not far from the Algarve.

The owner of Teima Alentejo SW laid bare the destruction of her holiday getaway overnight as she criticised authorities’ response to the drama.

Luisa Botelho and her ex-husband Paulo Camacho turned it into an award-winning country hotel after buying the property nearly ten years ago.

Now most of the main house is understood to have been destroyed by flames.

Nearly 10,000 hectares (25,000 acres) have been blackened since Saturday, Vitor Vaz Pinto of the civil protection agency said, adding that the blaze was still spreading ‘on two fronts’.

Local media reported that one home as well as a rural tourist lodging had been destroyed, which had not yet been confirmed by authorities.

Hélder Guerreiro, Odemira’s mayor has described the situation as ‘critical, difficult and complex’.

Nineteen villages, four lots of tourist accommodation and a campsite have been evacuated and roads have been blocked off, authorities said. 

Ana Costa, a farmer in the region, said of the fires: ‘It was terrible, there were flames everywhere and we had to scramble. Nobody was there to help us, thankfully I had three friends who came to help.’

Around 40 people, including 28 fire officers, have been given emergency medical treatment.

A separate wildfire that has already destroyed around 7,000 hectares (17,300 acres) in Leiria, central Portugal, calmed somewhat overnight on Monday.

Across the country, nearly 2,800 firefighters and 16 water-bombers were in action on Tuesday.

Weather warnings remained in place in both Portugal and Spain.

Much of the southern half of Spain was on orange alert on Tuesday, with the weather service saying temperatures were expected to top 44C on Tuesday and Wednesday, which are predicted to be the fiercest days of this heatwave, the third in the country this year.

The Spanish met office (AEMET) issued maximum red alerts for parts of Andalusia in the south, the Madrid region in the centre and the Basque Country in the far north.

More than 1,000 hectares of land were destroyed by flames in Spain over the weekend.

A fourth large wildfire broke out on Monday in Estremadura, central Spain, near the border with Portugal. Firefighters were unable to contain it overnight.

In total, wildfires have destroyed 100,000 hectares of land across the Iberian Peninsula this year, according to preliminary estimates. This is on top of the record 400,000 hectares destroyed last year.

Office space firm CLS slips to a loss as interest rate rises hit valuations

• The company reported a £106.4m pre-tax loss for the six months ending June
• Higher net rental income was offset by the falling value of its property portfolio

By Harry Wise

Published: 09:06 EDT, 9 August 2023 | Updated: 11:43 EDT, 9 August 2023

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

BUSINESS LIVE: Food sales soar amid retail slowdown; SSE to pay excessive payments fine; Primark-owner ABF lines up £48m acquisition

By Live Commentary

Updated: 02:49 EDT, 6 June 2023

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

POPULAR MONEY SECTIONS
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Now that the Senate has signed off on the US’s new debt ceiling and a government default has been averted, a huge uncertainty has been removed from global markets.

In the US, debate is shifting from budgets back to the core obsession of what the Federal Reserve will do when the American central bank next meets on June 13-14.

US labour market data showing wage growth in May moderating, as an unexpectedly large 339,000 jobs were added to the workforce, will be a key indicator for rate-setters. Fears about US core inflation, at 5.5 per cent (lower than Britain at 6.8 per cent), have led to indications from the Fed that there may not be any pause on interest rate hikes.

But views among members of the Fed’s open market committee, which makes rate decisions, are shifting. The president of the Philadelphia Fed, Patrick Harker, suggests the rush to higher rates should be cooled.

Here, the Bank of England has been given carte blanche by Chancellor Jeremy Hunt to raise interest rates even if it plunges the UK into a recession.

That may let Governor Andrew Bailey and the nodding dogs on the interest rate-setting monetary policy committee off the hook about the next decision.

If Bailey really believes that excessive growth in the money supply has not been a factor in the UK’s stubborn cost of living crisis, it makes little sense to keep raising borrowing costs. The upward shift in market interest rates, together with the rise since the last official inflation data, is already having a nefarious impact.

Favourable fixed-rate mortgage deals have come off the table. The Nationwide garnered attention after it reported that house prices are 3.4 per cent lower than in May 2022.

Its data has to be carefully interpreted, as the index is based only on its own customers and excludes buy-to-let.

In any case, it shouldn’t be a cause for panic. If prices are coming down, that could put housing in better reach of those excluded from home ownership.

It is hard to imagine why the Chancellor should think a UK recession is acceptable.

Less than two weeks ago, he stood next to the International Monetary Fund’s managing director Kristalina Georgieva celebrating the fact that the UK’s output projection for this year had been upgraded.

A possible explanation is concern among officials that prices are not coming down fast enough to meet Rishi Sunak’s target of halving inflation this year.

Moreover, he doesn’t want his Treasury to be tarnished by the same kind of gilts market tantrum faced by Liz Truss.

Monetary policy works slowly.

One cannot underestimate the impact of the rise in the bank rate from 0.1 per cent to 4.5 per cent on every aspect of the economy, from ordinary households to debt-laden businesses and the residential and real estate.

The fear must be that central banks, having misjudged prices on the way up, are now missing the time lags in the system.

The Office for National Statistics reports that the average gas price is 48 per cent lower this week than the same week last year and 87 per cent off the peak of August 2022.

The UN says global food prices are 22 per cent below the peak of March 2022.

Bailey and the Bank need to wake up, smell the coffee and hit the pause button on interest rates.

Pet hate

The private equity assault on London-listed companies shows no sign of abating in spite of the surging cost of debt.

The future of veterinary vaccines group Dechra is in danger after it agreed to a discounted £4.5billion buyout by Swedish predator EQT.

Instead of standing up for the independence of life sciences, chairman Alison Platt put down the welcome mat, declaring it ‘a compelling opportunity for shareholders’.

Selling an animal vaccine group, when pet suppliers and veterinary practices are booming, is absurd.

Under private equity control, jobs are axed behind closed doors, research budgets slashed and, as Asda and Morrisons have learned, servicing debt can become a burden which stymies investment.

Incentives for executives to sell are immense, with chief executive Ian Page set to fill his boots.

The Dechra deal flies in the face of the public interest, with command and control over Britain’s sciences industries denuded and the corporation tax base diluted.

This is no more than a shabby betrayal of UK plc.

Shares in Upper Crust owner SSP rose after it swung back into profit and cashed in on a return of passengers jetting off in the skies and hopping on trains.

The FTSE 250 group, which also owns Millie’s Cookies, made a profit of £15.8million in the six months to the end of March, having reported a £2.3million loss during the same period a year ago.

And revenues of £1.3billion were 64.1 per cent higher than 12 months earlier, the firm said.

SSP hailed strong demand in North America, where sales were ahead of pre-pandemic levels, while the UK’s recovery was hindered by rail strikes.

The airline sector was brought to a standstill during the pandemic as strict Covid measures took a toll on the industry.

But with SSP encouraged by the pace of recovery in passengers travelling once again, it now expects its sales and profits for the year to the end of September to be at the top end of forecasts.

The group added that sales in the first six weeks of the second half of its financial year were up 11 per cent on 2019 levels as holidaymakers prepare to jet off for summer.

The company also teamed up with Brewdog to bring the craft brewer’s pubs to railway stations and airports across the UK this year, starting with Gatwick. 

Shares gained 3.1 per cent, or 8.2p, to 272.4p.

The FTSE 100 fell 0.1 per cent, or 8.04 points, to 7762.95 and the FTSE 250 lost 0.3 per cent, or 65.03 points, to 19208.31.

Blue-chip property landlords rallied amid hopes of a recovery in property values.

British Land gained 2.6 per cent, or 9.3p, to 365.7p, Land Securities rose 0.8 per cent, or 4.8p, to 636.2p, Segro added 1.3 per cent, or 10.2p, to 825.2p and Hammerson grew by 2.3 per cent, or 0.58p, to 26.02p.

RS Group took a hit after it warned that trading has been weaker since April.

The electronics distributor’s shares fell 7 per cent, or 59.6p, to 793.2p.

Analysts at Jefferies said private equity predators could now target the company after its chief executive, finance boss, chief operating officer and head of North America all left in under a year.

Retail stocks sank into the red, with B&M losing 5 per cent, or 24.3p, to 465.7p, Next down 1.3 per cent, or 86p, to 6554p and Frasers Group slipping 4.2 per cent, or 31.5p, to 717p.

Liberum analyst Joachim Klement said traders are worried about inflation remaining higher for longer despite expected falls.

Dowlais, the engineering group that was spun out of Melrose (down 0.5 per cent, or 2.6p, to 477.9p) last month, cheered after its revenue rose 9 per cent to £1.9billion in the first four months of the year.

While sales in its automotive division increased by 11 per cent, revenue was flat year-on-year in the power metallurgy business. 

Despite this, the company reiterated its forecasts for 2023. Shares plunged 7.4 per cent, or 10.6p, to 132.9p.

News of water regulator Ofwat’s investigation into South West Water over leaks and usage data saw shares in the utility firm’s owner Pennon slide 2.7 per cent, or 22p, to 800p.

Drax is planning to push into the US market as it looks to take advantage of President Biden’s tax breaks for green energy.

The power generation group – which said the US had created a ‘supportive investment environment’ following the Inflation Reduction Act – revealed it was aiming to build two power plants in the southern US which it estimated would cost £3.2billion and begin commercial operations in 2030. 

Shares gained 2.2 per cent, or 13.4p, to 635p.

Cranswick, one of Britain’s major food producers, reported higher annual profit and revenue despite taking a hit from industry-wide labour shortages. Shares rose 5.4 per cent, or 170p, to 3310p.