Published: 19 March 2021
By Suzanne Evans, Director, Political Insight
The government borrowed £19.1bn last month, the highest figure for February since records began in 1993, according to the latest figures from the Office for National Statistics. Borrowing was £17.6bn higher compared with February last year. The figures also show the government spent £3.9bn last month on job support measures alone. Tax revenue also fell, notably from lower VAT, business rates and fuel duty. Money coming in from self-employed tax payments however, rose by £0.9bn on last year.
The Bank of England left interest rates unchanged at 0.1% yesterday. The bank’s monetary policy committee also voted to maintain its programme of bond buying at the current level of £895bn.
The European Union’s Medicines Agency has cleared AstraZeneca's COVID-19 vaccine for use, saying: "Our scientific position is that this vaccine is a safe and effective option." The EMA added that it will continue to monitor side effects and adverse events, noting there were rare occurrences of blood clots in clinical trial data, autopsies and clinical data, especially among young women.
The government has raised £1.1bn selling down its stake in NatWest Group thereby reducing the government's ownership of NatWest from 61.7% to 59.8%. The government acquired the significant stake through a bailout of what was then Royal Bank of Scotland during the 2007/8 financial crisis.
PM Boris Johnson has announced that some 510,000 homes and businesses in rural parts of the UK will get next generation gigabit broadband in the first phase of the government's £5bn Project Gigabit. He said: "This is the rocket boost that we need to get lightning-fast broadband to all areas of the country…and build back better from this pandemic.” Those living and working in Cambridgeshire, Cornwall, Cumbria, Dorset, Durham, Essex, Northumberland, South Tyneside and Tees Valley will be the first to benefit. Available speeds in these areas will be more than 1,000 megabits, or one gigabit per second.
The plug-in car grant will be cut from £3,000 to £2,500 and will henceforth only be available for electric cars costing up to £35,000, the government said, saying it is targeting the grant at affordable models to allow more people to make the switch. The auto industry has criticised the decision, with Mike Hawes, CEO of Society of Motor Manufacturers and Traders, describing it as "the wrong move at the wrong time."
FTSE 100 company National Grid Plc has revealed plans to offload its gas network, and that it will buy Britain’s largest electricity distributor WPD for £7.8 billion, both announcements marking a decisive shift away from fossil fuel power. CEO John Pettigrew said in an interview: “We believe the growth we’re likely to see in the distribution sector is going to be stronger and more certain and longer than other elements of the energy sector.” WPD owns four distribution networks in the Midlands, south-west England and Wales, and made profits last year of £750m. In a separate deal, WPD’s parent company, PPL Corp, is picking up Narragansett Electric Co. from National Grid for an equity value of $3.8 billion. The transactions mean PPL will shed its international unit and can focus on running US utilities.
BP has revealed plans to develop the UK’s biggest hydrogen power plant in Teesside. Dubbed H2Teesside, the plant would produce up to 1GW of “blue” hydrogen by 2030, which is 20% of the UK’s hydrogen target. Blue hydrogen is produced by converting natural gas into hydrogen and storing the carbon dioxide emissions from its production. The oil giant has signed agreements to work with Venator, Northern Gas Networks and Tees Valley Combined Authority. A final investment decision on H2Teesside is expected by early 2024.
Pub chain Wetherspoon declared heavy losses yesterday, swinging to a £52.8 million half-year pre-tax loss, down from a £51.6 million profit a year earlier. The business said it had notched up charges of £7.5 million as it spent to ensure its pubs were safer, among other things, only for the doors to be slammed shut again after the summer end to lockdown. To help get through the crisis, Wetherspoon’s has had to claim some £97m in furlough cash in the past six months, and take two Coronavirus Large Business Interruption Loan Scheme loans. Boss Tim Martin called for "sensible" policies to escape the "mayhem" of lockdown. Pubs cannot fully reopen until June under current government restrictions, despite rapidly falling deaths, case numbers, and the successful vaccination programme.
National Express swung to a pre-tax loss of £444m last year as Birmingham-based travel firm saw an 80% fall in customer numbers due to national lockdowns forcing people to stay at home. Earnings tumbled 64% across the period. The company was also hit by reduced demand for its bus and coach operations in Spain; school buses in the United States; and its German rail services. In the previous year, National Express posted earnings of £187m.
The pandemic “gutted” Gym Group's finances in 2020, reports investment company Hargreaves Lansdowne, resulting in a near halving in profits and forcing it to draw heavily from its financing facilities. Over the 12 months ending on 31 December, the group's sales plummeted by 47.4% to reach £80.47m, flipping into a statutory loss of £36.4m. In 2019, the company had turned a profit of £3.6m.
Halfords has agreed to buy Universal Type and Autocentres, a garage chain in the south east of the UK for £15m, as part of the group's push to expand its motoring services business.
Housebuilders Countryside and Taylor Wimpey could be breaking the law if they continue to include deeply unfair ground rent terms in contracts for new homes, according to the Competition and Markets Authority, which has written to the firms outlining specific concerns over their use of terms that double ground rent every 10 to 15 years. Campaigners have called for leaseholds to be banned on new builds, and the Government has said previously it would work to end the practice, which has been described as the housebuilders’ equivalent of the PPI mis-selling scandal. Investigations into Barratt Developments and Persimmon Homes remain ongoing, the watchdog added.
Goldman Sachs is facing questions over staff working conditions after a leaked internal report showed junior staff complaining of "inhumane" 100-hour work weeks. The presentation titled, "Working Conditions Survey" was posted on Twitter yesterday, and detailed dissatisfaction among junior staff over long hours and unrealistic demands.
Campaigners have called on the government and Financial Conduct Authority to block a rescue plan for Amigo which they say would enrich its directors while denying poor borrowers up to £1bn of compensation. Martin Lewis, the founder of MoneySavingExpert, and Labour MP Stella Creasy oppose the deal, which would limit redress payments to almost a million current and former customers mis-sold unaffordable loans by Amigo, the Guardian said.
Roger Burnely, the chief executive of Asda is to stand down as early as today, just weeks after completing a £6.8bn takeover deal. Sky News has learnt that the former J Sainsbury executive who took the helm at the Leeds-based chain in 2018, has told the new owners that he plans to retire.
British Airways owner IAG yesterday raised €1.2 billion through a bond issue to help see it through a longer than expected pandemic-driven travel downturn. IAG had previously thought it had sufficient liquidity to see it though the crisis. The company is burning through some €185 million euros a week as a result of flying only 20% of its normal capacity.
Shares in Vodafone's Vantage Towers rose on Thursday in Germany's largest stock market debut since 2018, climbing as much as 4.8% from the offer price of €24 euros, meaning Vodafone could earn up to €2.3 billion from the initial public offering. Vodafone has said it will use the proceeds to cut its debt, which totals about 69 billion euros, according to Refinitiv data.
Online gaming group 888 saw revenue surge 52% last year as COVID-19 prompted people around the world to search for entertainment during lockdowns. 888 said it signed up nearly 1.5m new customers last year, a record high, and adjusted profits more than doubled to $116m. Pre-tax profits however dropped year-on-year to $26.7m, due to a $79.9m one-off goodwill impairment charge at 888's bingo business.
Lamborghini had its most profitable year ever in 2020, despite a two-month shutdown of its Italian factory during the pandemic. "We were surprised," said chief executive Stephan Winkelmann. While sales were slightly lower than the previous year, Lamborghini sold more expensive, customised supercars, mostly to the Chinese market, which overtook Germany to become the firms second largest market this year.
Kanye West has become the richest black man in US history, with his net worth reported to have reached $6.6bn (£4.7bn).
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