Money blog: Best cheap and expensive Christmas wines revealed by experts - including 'seriously delicious' red for £6.75

£5 for a latte? What's driving up the price of coffee - and will it get even more expensive?

As we've reported, coffee drinkers could be about to see costs rise yet again as the price of beans hits a new record.

The world's most popular bean variety - arabica - hit a 47-year high this week, at £2.70 a pound, an 18% increase in just the past year.

Weather conditions in major growing countries like Brazil and Vietnam have driven the surge.

To explain more, Sky News' Business Live presenter Darren McCaffrey has spoken to Steve Wateridge, a vice-president of soft commodities at Expana, a world leader in agri-food market intelligence and price reporting.

"Basically, we've had a succession of poor crops that's associated with climate change in Brazil," he says. 

"The coffee-growing areas in Minas Gerais and Espirito Santo have been warmer and drier for the past four years than the previous ten years, and the previous ten years were warmer and drier than the ten years before that.

"We're now growing coffee in suboptimal conditions, and we have to pay the farmer more to compensate."

Could prices go even higher?

Mr Wateridge says there are plenty of different opinions when it comes to the next Brazilian crop.

"Some are more pessimistic than others," he says. "Our view having people in the field is that some of the more extreme crop estimates on the low side are overdone. 

"But we will find out in due course. If they turn out to be correct, then pricers will go higher."

Shock GDP decline hits pound - but could mean faster rate cuts

Those official figures covering economic growth, or rather the lack of it, have hit the pound this morning.

Sterling is about a third of one per cent down against both the dollar and the euro today at $1.26 and €1.20.

Why? Well, the ONS data could mean we get faster than expected interest rate cuts next year.

The theory goes that a weaker economy will help bring inflation down more naturally, removing the need for higher borrowing costs to choke demand and keep a lid on the pace of price growth.

There's been a slight shift in market expectation on the Bank of England's interest rate decision next week: 87% of market bets are now on a hold, down from 89% on hold.

We'll see.

Elsewhere on financial markets this morning, there has been no great share price shock for Royal Mail's parent firm after the UK business was fined for poor performance.

In what has become an annual event, industry regulator Ofcom imposed a stiff penalty for missing first and second class delivery targets.

Shares in Royal Mail owner IDS were actually 0.1% up.

The FTSE 100 was higher too by the same figure - probably a result of the slightly weaker pound.

Government yet to deliver on promise to turbocharge economic growth

The economy is now 0.1% smaller than it was before Labour came into power. It's been almost six months but the new government is yet to deliver on its promise to turbocharge economic growth.

The chancellor will today urge the public to be patient with her. The message will be: It will take a lot longer than six months to revive an economy that has been stagnating for a decade.

How confident should we be in her plan? 

On the one hand, falling inflation and interest rates should provide a more fertile environment for consumer spending and business investment. The government's plan to increase public investment should also boost demand in the economy and, if successful, lead to longer term sustained growth.

Yet there are a number of risks. 

A big increase in business taxes next year will weigh on employment and growth.  

Pubs, restaurants and retailers are already stagnating and that was before they reacted to the budget, which at the end of October slapped them with a big increase in employers' national insurance contributions.

The latest figures show output in consumer-facing services fell by 0.6% in October 2024, following growth of 0.4% in September 2024. Manufacturing also shrank by 0.6 per cent as, across the economy, businesses went in wait and see mode ahead of the budget. The risk is they didn't like what they saw in the budget.

Then there is Trump and the risk of tariffs. Britain could escape the worst of the cross-hairs but we will have to wait and see. 

If things go against us, it's very possible that the Bank of England could soon start worrying more about weak growth than inflation, possibly a prelude - as we've seen in Europe - to a faster pace of interest rate cuts.

UK economy unexpectedly shrinks in October

The economy unexpectedly shrunk in October, according to official figures covering the month before the government's first budget.

The Office for National Statistics said output fell 0.1% after the 0.1% decline in the previous month.

The figures showed zero growth in the powerhouse services sector, with manufacturing and construction declining at a pace of 0.6% and 0.4% respectively.

The data adds to the picture of a jittery economy during the second half of the year after the general election.

Critics accused the government of an own goal that spooked the public and businesses alike.

Rachel Reeves, the chancellor, admitted the figures were "disappointing" after the government's pledge to grow the economy, but she defended the budget, saying "we have put in place policies to deliver long term economic growth".

Top sommeliers reveal wines you should buy this Christmas - from £7 supermarket bottle to £60 'top-tier pinot noir'

Whether you are buying it as a gift, as a tipple to have with your Christmas dinner or as a little something for yourself, a bottle of wine is a firm festive favourite.

We've spoken to a sommelier and a top restaurateur to get their recommendations on the best budget-friendly bottles. 

Henny Zinzuwadia is the head sommelier at award-winning London-based Indian restaurant Pahli Hill and was named the GQ sommelier of the year in 2022. 

Marko Bajagic is the restaurant manager of the Argentinian grill Zoilo in Marylebone, central London. He's previously won many food and wine awards for his work at the Nautika restaurant in Croatia. 

-SKY NEWS