Published: 23 April 2021
By Suzanne Evans, Director, Political Insight
Government borrowing is at its highest level since the end of World War Two, hitting £303.1bn in the year to March, the Office for National Statistics says. Compared to the previous year, borrowing is nearly £250bn higher. Borrowing hit £28bn in March alone - a record high for that month.
Lockdowns have seen the number of UK firms in significant financial distress increase at the fastest pace since 2014, according to a new report by insolvency specialists Begbies Traynor, who warn that a "dam of zombie businesses could be about to break" as UK government's COVID support comes to an end this summer. The firm found 93,000 businesses were significantly distressed in the first three months of 2021, meaning they have minor county court judgments filed against them or a sustained or marked decline in key financial ratios and indicators such as working capital, profits and net worth. Overall, 723,000 companies are suffering, a 42% increase over the past year, the report said.
Glassdoor, which provides information on jobs, salary information and company reviews, has revealed Salesforce to be the highest paying organisation in the UK, with median compensation at £100,000. Investment bank Man Group is in second place. Other companies in the top 25 include Spotify, Facebook, JP Morgan, Credit Suisse and Deutsche Bank.
40% of us have stopped using a landline phone altogether, according to new survey from price comparison site Uswitch. 95% of over-65-year-olds still have a traditional phone, while nearly half of under-25s don't have a landline installed.
UK regulator Ofgem has fined gas and electricity supplier E.ON £650,000 for taking direct debit payments earlier than agreed for 1.6 million of its customers. Payments which should have been taken out of customer accounts in January 2021 were taken on 24 December 2020. “This meant customers may have experienced out of pocket expenses; unexpected overdraft bank charges; difficulty making payments in the run up to Christmas; and other unforeseen circumstances,” Ofgem said.
Irish health minister Stephen Donnelly told the Irish parliament yesterday that the country has joined European Commission plans for possible legal action against AstraZeneca over its "complete failure" to meet delivery and contractual agreements. Under its contract, the Anglo-Swedish pharmaceutical firm is committed to supplying 180 million doses - enough for 90 million people - to the EU in the second quarter of this year - but EU officials have repeatedly accused the drugmaker of under-delivering. No firm decision to take legal action has yet been made.
National Grid Plc has hired the same banks for the sale of a majority stake in its gas grid business as those it hired when it bought PPL’s UK electricity distribution business for £7.8 billion last month as part of efforts to prepare for a low-carbon future, according to Bloomberg. Barclays Plc, Goldman Sachs Group Inc. and Robey Warshaw LLP will oversee the sale, valued at as much as £5 billion. The utility’s gas transmission business is one of the largest in the U.K. and includes a 7,000km pipe network across the country.
There has been a boardroom coup at funeral company Dignity: the chairman has been ousted by the shareholders, triggering a wider boardroom walkout. Shareholders voted 55% in favour of Clive Whiley's removal from the board after a year and a half as chairman. They also voted 61% for Gary Channon, who represents Dignity's biggest investor Phoenix Asset Management, to join as an executive director. Acting chairman Dean Moore two other non-executive directors, Gillian Kent and Paul Humphreys, have quit as a result of the votes.
40% of shareholders voted against estate agency Foxtons’ annual pay report at the company's AGM yesterday, not enough to block the pay plan, but enough to force the board to make a promise to review future pay. Shareholder groups objected to Foxtons taking government coronavirus support yet going on to pay chief executive Nick Budden a short term bonus of £389,000 and more than half a million pounds in shares.
The Co-op has announced a shake-up of its store management structure, involving axing team manager roles. This is expected to affect 2,000 staff, although the store is saying .there will be no compulsory redundancies and staff affected will be offered alternative positions.
Pizza Express is looking to recruit 1,000 new workers as its reopening gathers pace. The firm cut 2,400 jobs last year and has already reopened 118 sites with outdoor seating.
Deliveroo’s share price continues to tumble after its disastrous IPO on 31st March, which saw shares crash as much as 30% on the day, knocking £2bn off its value. The company had sold shares at 390p-a-piece in its IPO; they opened this morning at 229.5p. The food delivery company had been expected to be one of the most successful new listings of the year but suffered advance adverse publicity when major investment firms lined up to say they would not be investing because of concerns about Deliveroo workers’ conditions.
The UK’s largest car manufacturer, Jaguar Land Rover, has announced a “limited period of non-production” at its plants in Castle Bromwich in the West Midlands and Halewood on Merseyside starting on Monday, according to the Guardian. The worsening global microchip shortage is to blame. The company, which is owned by India’s Tata Motors, said it would have to close the plant for at least a week, and will monitor its chip supply before committing to a reopening date. Carmakers are competing directly with tech companies for supply.
British Airways-owner International Airlines Group yesterday committed to powering 10% of its flights with sustainable aviation fuel by 2030, as it aims to achieve net zero carbon emissions by 2050. This equates to a commitment to purchase one million tonnes of sustainable jet fuel each year by 2030, the equivalent of removing one million cars from Europe's roads annually.
Abu Dhabi's Etihad Airways announced on Wednesday it would no longer operate Boeing 777-300ER jets after 2021, its chief executive said. The move comes was part of its plan to become a smaller airline and return profitability in 2023.
Credit Suisse shares were knocked lower yesterday after the investment bank
said it expected to book another 600m Swiss Francs in charges in the second quarter to compensate for $5.5bn in losses sustained when Archegos Capital Management and Greensill Capital defaulted on loans and collapsed, and that it would tap its investors for $2bn in fresh funds.
New York City began legal proceedings against three major oil companies and the top industry trade group yesterday, arguing that the companies are misrepresenting themselves by selling fuels as "cleaner" and advertising themselves as leaders in fighting climate change. The filing in state court said Exxon Mobil Corp, BP Plc, Royal Dutch Shell and industry group the American Petroleum Institute (API) "have systematically and intentionally misled consumers." API's chief legal officer said the suit is "meritless." Exxon said: "These lawsuits have no merit and do nothing to advance meaningful efforts that address climate change." Shell said it was “disappointed" by the suit and BP declined to comment. Earlier this month a federal appeals court rejected the city's effort to hold five major oil companies liable to help pay the costs of harm caused by global warming.
A demand for coffee, dairy products and pet food sent sales at Nestle soaring to its strongest quarterly growth in a decade, Yahoo Finance UK reports. The Zurich-based company, the world’s largest food group, said sales grew 7.7% on an organic basis - higher than analysts had forecast. Volume increases for dairy products were achieved in part thanks to lockdown trends like home baking.
Facebook is to start testing ads on Instagram Reels in India, Brazil, Germany and Australia, with the aim of making money from the short-form video feature – as rival TikTok does – and to capitalize on its popularity in India, a fast-growing social media market, from which TikTok has been banned since last year.
The Tokyo Motor Show has been cancelled for the first time in its 67-year history due to rising coronavirus cases.
Dr Craig Wright, 50, an Australian-born businessman and computer scientist based in Surrey, has launched legal action in London against website Bitcoin.org for copyright infringement. He claims he used the pseudonym Satoshi Nakamoto to publish an academic paper in 2008 entitled “Bitcoin: A Peer-to-Peer Electronic Cash System”, which laid the foundations for the cryptocurrency. The legal proceedings are against Cobra, which operates Bitcoin.org and centres around the website’s decision to publish the academic paper.
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