Published: 10 May 2021
Service sector confidence soared to its highest level in more than a year last month as the UK’s continued vaccine rollout and the easing of lockdown restrictions boosted optimism. Confidence among businesses in the service sector hit a 14-month high in April after rising 1.36 points to 99.86, according to accountancy firm BDO’s latest services optimism index.
As optimism in Britain's economic rebound grows, companies are expecting to borrow £7bn less than previously anticipated, according to a new study by EY. The firm’s latest ITEM Club Interim Bank Lending Forecast predicts UK firms now expect to borrow just £19bn. In 2020, banks lent businesses £35.5bn in net terms, including COVID-19-related government-backed loans to help them through the crisis. This was a 8% year-on-year increase. With the economy re-opening, growth in lending volumes is set to halve by the end of 2021 to 4%, and slow further in 2022 to 1.6%, EY said. It also expects consumer credit to grow 10.5% this year and 9.1% in the year after as consumer spending rebounds post-lockdown.
Employees’ mental health has been harmed by a year of repeated lockdowns, according to research by Close Brothers. The merchant banking group surveyed 2,000 employees and found that 51% expressed concerns, up from 41% in May 2020, a percentage increase of 24% over the time period. Younger people appear to have suffered most: over the past 12 months, the percentage of 18–34 year olds experiencing mental health worries has risen to 63%, although among those 55+ it has also rocketed by more than a third to 37%.
Vaccine news: Pfizer and BioNTech have started the process to file for full authorisation of their Covid-19 vaccine with the US Food and Drug Administration for use in people age 16 or older. They have also filed for the current emergency use approval to be extended to people age 12 to 15. Meanwhile, the UK government announced on Friday it will offer people under 40 an alternative to the AstraZeneca Covid-19 vaccine, following a recommendation from the Joint Committee on Vaccination and Immunisation. People under 40 will be offered vaccines by Pfizer-BioNtech and Moderna, the only other shots that have clinched approval in the UK, after 79 incidents of blood clotting following the AstraZeneca shot in younger people, 19 of which proved fatal.
The price of a single-use carrier bag is to rise from 5p to 10p and be extended to all businesses in England from 21 May. The 5p levy on plastic bags was introduced in England in 2015. Since then their use has fallen by over 95%. The average person in England now buys just four single-use carrier bags a year from the main supermarkets, compared with 140 in 2014.
The travel industry has expressed disappointment that only 12 countries are on the UK government's travel "green list." Inclusion means travellers returning home from these countries will not be required to quarantine when international travel becomes legal again on 17th May. Andrew Flintham, managing director of holiday firm TUI, said: "While we were expecting to see just a handful of destinations on the green list, this is an overly cautious start." Airlines UK described it as "a missed opportunity" and "a reopening of air travel in name only" which left the UK "at risk of falling behind". Easyjet chief executive Johan Lundgren said: "The decision to put so few European countries into the green tier is simply not justified by the data or the science, and is inconsistent with the approach to reopen the domestic economy." Only four European countries are included on the list and France, Greece, Italy and Spain - normally hugely popular holiday destinations for UK travellers - are not among them. The change in travel rules applies only to England; Scotland, Wales and Northern Ireland have not said when they might ease their strict travel rules.
Rail travel was seriously disrupted over the weekend after Hitachi Class 800 carriages were discovered to have cracks and had to be taken out of service. Great Western Railway is advising against travel today and London North Eastern Railway (LNER) is urging those with bookings to check before they travel.
The Post Office says it will help clear the names of hundreds of former sub-postmasters it wrongly took to court, the BBC reports. They were prosecuted based on evidence from the flawed Horizon system the Post Office installed in branches. It is now contacting 540 former workers with potentially relevant convictions and seeking further information in another 100 cases. Last month, 39 ex-staff had convictions for stealing quashed in court.
Asda has begun trialling unattended delivery boxes, meaning shopping can be delivered within a four-hour delivery window whilst a customer is out. Boxes are installed outside customers’ homes; drivers enter a code that allows them access to the box; then lock it securely for when the customer arrives home.
Lloyds Bank is reportedly about to finalising a £400m deal to buy retirement products provider The Embark Group, according to ‘city sources’ cited by Sky News on Saturday. Embark is one of the largest retirement solutions providers in the UK, offering a range of pension, research and consultancy services. As of February 2021, it had £38.5bn assets under its care and 415,000 individual clients. It also employs around 650 people in the UK and also provides services for other platforms such as BestInvest, Coutts and Moneyfarm.
Having failed to force change at the bank, Sherborne Investors has sold its 6.01% stake in Barclays. Sherbone’s CEO Edward Bramson had been pushing for the bank to reduce the size of its investment bank, which he said was a drain on capital, and called for the resignation of Barclays' chief executive, Jes Staley, over his relationship with Jeffrey Epstein, the dead paedophile financier. Barclays resisted Bramson's demands and last week Staley told Barclays’ AGM that he wanted to expand the investment banking side of the business to capitalise on rivals’ reducing their operations.
St Modwen Properties said on Friday that US private equity firm Blackstone has made a possible cash offer for the group at 542p a share, a 21.1% premium to Modwen's closing share price on Thursday. St Modwen said its board of directors has indicated to Blackstone that the offer "is at a value the board would be willing to recommend unanimously" once firm. Blackstone now has until 4 June to either announce a firm intention to make an offer for the company or walk away.
US fast food chain Wendy's is plotting a return to Britain more than two decades after a failed attempt to enter the market, Yahoo Finance UK reports. Wendy's, known for its square burgers, plans to launch up to 400 outlets nationwide, creating 12,000 jobs in the process, with 30 to 50 employees per restaurant. The company left the UK market 21 years ago after complaining about high costs, but plans to open its first new store in Reading next month, followed by Stratford and Oxford.
BMW reported a sharp rise in profits for the first three months of 2021, and said electric vehicle sales more than doubled in the first quarter, mainly because Chinese sales nearly doubled in the quarter to 230,120 vehicles. Overall sales in the Asia region exceeded pre-pandemic levels. Sales were also up in Europe and the US on stronger demand, but those in its home market in Germany dropped 5%.
The US government issued emergency legislation on Sunday after the largest fuel pipeline in the US was hit by a ransomware cyber-attack. The Colonial Pipeline carries 2.5 million barrels a day - 45% of the East Coast's supply of diesel, gasoline and jet fuel. It was completely knocked offline by a cyber-criminal gang on Friday and is still working to restore service. The emergency status enables fuel to be transported by road.
The Dutch government has granted a consortium of oil companies including Royal Dutch Shell and ExxonMobil around €2 billion in subsidies for what is set to become one of the largest carbon capture and storage projects in the world. Shell and Exxon requested the subsidies in January together with industrial gas suppliers Air Liquide and Air Products for a project which aims to capture CO2 emitted by factories and refineries in the Rotterdam port area and store it in empty Dutch gas fields in the North Sea. The companies involved have been told that their applications will be granted, the port spokesman Sjaak Poppe told Reuters, confirming an earlier report by Dutch public broadcaster NOS.
Copper and iron ore prices surged to record highs on Friday. Spot iron ore broke $200 (£143) a tonne for the first time, while copper, which is seen as a bellwether of the health of the global economy, hit more than $10,200 per tonne in London, rising 1.4% to reach an all-time high of $10,232 (£7,314).
Gary Lineker’s tax affairs are again in the spotlight. The ex-football player and BBC's Match of the Day host has been in a dispute with HM Revenue and Customs (HMRC) for well over a year about a £4.9m tax bill, linked with IR35 legislation. In 2021, Lineker and his wife Danielle set up Gary Lineker Media and used it to channel his earnings from the BBC and his other job with BT Sport. However, HMRC claims that the 60-year-old owes £3.62m in income tax and £1.31m in national insurance as he should have been taxed as a direct employee of the BBC and sports channel BT Sport, where he covers the UEFA Champions League. Lineker disagrees with HMRC and is appealing the bill.
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