Published: 03 June 2021
By Suzanne Evans, Director, Political Insight
The Trans-Pacific Partnership trade bloc has agreed to open accession talks with the UK. A working group is now expected to be set up to discuss tariffs and rules governing trade and investment. The 11-member trade block includes Australia, Mexico, New Zealand and Japan. International trade secretary Liz Truss said in a statement the decision to begin the accession process was "excellent news" that “will help shift our economic centre of gravity away from Europe towards faster-growing parts of the world and deepen our access to massive consumer markets in the Asia Pacific…We would get all the benefits of joining a high-standards free-trade area, but without having to cede control of our borders, money or laws." She said the government would present plans to Parliament "in the coming weeks" before starting negotiations.
New figures from the Bank of England show mortgage borrowing fell back to £3.3bn ($4.7bn) in April, down from a record £11.5bn in March. Mortgage approvals rose slightly to 86,900 and remained above pre-pandemic levels but were well below the peak of 103,400 seen in November.
UK jobs listing site Reed saw the highest number of job postings in May, the best month for vacancies since February 2008, but warned the furlough scheme was making it "harder to recruit" workers. Reed recruitment added 275,000 roles in May alone — a 26% month-on-month increase and a 237% year-on-year increase. All regions across the country saw a rise, with opportunities in the East Midlands increasing by 163%, East of England by 26%, and London by 18%, the company said. Job postings in the capital soared 319% year-on-year. However, chairman of Reed recruitment, James Reed said: "The furlough scheme was a vital weapon in our fight against the pandemic last year but, as time has worn on, it could hinder the economy’s recovery and growth." According to HM Revenue & Customs figures, 4.9 million workers were furloughed as of 31 January 2021, with provisional figures suggesting this had decreased slightly to 4.7 million in February.
Petrol prices have climbed to their highest level in two years according to the RAC, which suggested retailers may be charging more to make up for lower fuel sales during the pandemic. In May 2020 prices fell to a low of 106p as oil prices plummeted and motorists had to abide by travel restrictions. Now the average cost of a litre of petrol is 129.27p, the highest level since August 2019, and the biggest 12-month increase seen for 11 years. Motorists are now paying an average of £8 more for a full tank of petrol than seven months ago.
The boss of Wetherspoons has urged the government to adopt a ‘more liberal’ visa scheme for EU migrants. Tim Martin, the JD Wetherspoon pub chain's founder and chairman, who has consistently campaigned for Brexit, was subsequently forced to deny claims his pub group was facing a shortage of workers because of Britain’s exit from the EU. Martin told the Telegraph: "The UK has a low birth rate. A reasonably liberal immigration system controlled by those we have elected, as distinct from the EU system, would be a plus for the economy and the country…America, Australia and Singapore have benefited for many decades from this approach. Immigration combined with democracy works." Sky News says more than 1.3 million overseas nationals have left the UK in the past year, creating a staffing crisis in sections of the hospitality industry.
Instagram posts by three reality TV stars promising that people in financial trouble could wipe out 85% of their debt by way of an Individual Voluntary Arrangement (IVA) have been deemed to be adverts and consequently banned by the Advertising Standards Authority (ASA). The ASA said the posts, promoting services offered by Debt Slayers, were misleading, failed to highlight the risks of an IVA, and over-simplified the application process. The posts were by Geordie Shore's Chloe Ferry, 25, who has 3.7 million followers on Instagram; Helen Briggs, 25, from Ex On The Beach, (630,000 followers) and The Only Way Is Essex's Myles Barnett, 27, (227,000 followers). Ashteck Media, which trades as Debt Slayers, said it had now stopped using social media influencers for promotions.
British Airways has handed management of pension scheme assets worth more than £21bn to BlackRock, marking one of biggest transfers from a UK corporate pension scheme to an external investment manager. The handover involves the airline's Airways Pension Scheme and New Airways Pension Scheme, two of the UK’s largest corporate defined benefit pension schemes, that manage benefits for more than 85,000 members and beneficiaries. The move comes after BA was forced to delay payments worth £450m to its pension fund in February to conserve cash following the pandemic-induced disruption to air travel. BA is seeking to plug a £2.4bn hole in the scheme, which was uncovered during a valuation in 2018. The airline has paid £1.3bn of that total, including £263m in 2020.
Travel restrictions continue to impede progress of international mobility, according to Barclays Investment Bank Regional Economist Brian Tan. “It’s clearly going to be a very challenging situation still for global travel,” Tan told Yahoo Finance Live. “Last year, air travel completely collapsed all around the world, much more so for the international routes compared to the domestic segment,” he said. Barclays published a report on global mobility and its economic implications last month. The study estimates that total global spending on business travel fell by over 50% year over year in 2020.
European budget airline Wizz Air has plunged to a €576m (£497m) annual loss. The carrier’s revenue fell by 73% in the 12 months to the end of March, the period covering the first year of Covid-19, and it carried 10m passengers, 75% fewer than a year earlier. Wizz still expects to fly only 30% of its usual capacity during the three months to the end of June. Chief executive József Váradi said there needed to be “an accelerated and permanent lifting of restrictions” to prevent Wizz Air from sinking to another net annual loss.
Budget airlines Whizz Air and Ryanair have both seen passenger traffic significantly rise in May. Wizz Air said it carried 833,000 passengers, compared to 126,549 a year prior. Ryanair said it operated over 12,000 flights in May, carrying 1.8 million passengers onboard, up from just 70,000 in May 2020. Ryanair also confirmed it has increased the number of aircraft seats across its network to 1.3 million a week.
Ryanair’s Michael O'Leary has said it is "absolutely imperative" that "big tourist destinations" such as Greece and Spain be added to the UK's green list at the end of this week. "The restrictions should be lifted, we should be allowing British families to travel to the US and Europe, and also to return without having to complete useless PCR forms for people who've already been vaccinated," Mr O'Leary told Sky News. O’Leary also took aim at the ongoing fear campaign: "Nothing is absolutely safe," he said, but "the vaccines are effective against the Indian variant…we've had 18 months of the scientists and the doctors worrying us about scariants and variants and all the rest of it."
Jet2 is strengthening its balance sheet by selling debt, ahead of restarting flying operations on 24 June. The leisure travel operator said it would sell £375m of convertible bonds maturing in 2026 and that it had inked a £150m term loan. The carrier also put its 'own cash', net of advance customer deposits, at £1.06bn, which was twice the amount held at the end of the previous year. Jet2 said the short-term outlook continued to be "uncertain" but added that it was encouraged by bookings for the Winter 2021/22 and Summer 2022 seasons.
Home improvement retailer Kingfisher has entered into a £550m three-year revolving credit facility agreement with a group of its banks. The firm said yesterday that under the terms of its new credit facility agreement, which has the possibility of two one-year extensions, it would benefit from a lower interest rate if it can deliver specific targets related to its "ambitious" responsible business plan. The FTSE 100-listed group stated the linked targets would see it help to tackle climate change, create more forests than what it uses and fight to fix bad housing.
Bloomsbury Publishing has reported record annual profits. The Harry Potter publisher saw sales rise 14% to £185m, while profits were up by more than one-fifth to £19.2m in the year to the end of February. Chief executive Nigel Newton told the BBC that people had "craved intellectual stimulus and comfort" during the pandemic.
Craft and vintage sale website Etsy is to buy Depop, a UK-based second-hand fashion app, in a bid to target younger Gen-Z shoppers. The $1.62bn (£1.14bn) deal was announced yesterday and is expected to go through later this year. Etsy boss Josh Silverman described Depop as "the resale home for Gen-Z consumers". About 90% of Depop's users are under the age of 26, with younger shoppers placing importance on shopping in a more sustainable way. The app, which was founded in London in 2011, lets users buy and sell used clothes through its online marketplace. It now counts about 30 million registered users in total across 150 countries.
Africa-focused Tullow Oil said yesterday that Chairwoman Dorothy Thompson would step down at the end of the summer after nearly three years in the role. Thompson, one of only a handful of women chairing a London-listed company, said it was the right time for her to step back after Tullow last month emerged from a financial overhaul with a $1.8 billion bond and a new business plan under top boss Rahul Dhir. Thompson was the chief executive officer of power company Drax Group before joining Tullow in 2018. She is currently a non-executive director at Eaton Corp and a director of the Court of the Bank of England.
Amazon is to expand its Covid testing lab facilities in the UK, saying the move will benefit employees and UK public health. However, analysts suggest it could also provide business opportunities in the health sector for the company. Amazon recently moved into the online pharmacy business in the US for subscribers to its Prime service, setting up laboratories in Kentucky and in Greater Manchester in 2020 to process employees' PCR tests. The lab in Manchester has processed 900,000 test samples to date. Its coronavirus response efforts have so far cost the company $11.5bn (£8.1bn).
Tom Forte, managing director and senior research analyst at D.A. Davidson, said Amazon could convert staff Covid-19 testing and healthcare clinics for consumer use. "We believe Covid-19 inspired Amazon to accelerate its healthcare-related efforts, by necessity,” he said. “We had long believed healthcare was an attractive opportunity for Amazon given its large market size and chances for the company to both improve the customer experience and lower the costs."
Employees at US-based Amazon warehouses are injured more seriously and at a higher rate than those doing similar jobs at other companies' warehouses, a new report from the Strategic Organizing Center, a coalition of labour unions, has found. Analysis of workplace safety data reported to the US Occupational Safety and Health Administration from 2017 to 2020 found Amazon workers had 5.9 serious injuries per 100 people, almost 80% higher than the rest of the industry, and that workers forced to take time off for injuries were absent for an average of 46.3 days, a week longer than the warehouse industry average. Compared to its largest retail competitor, Walmart, Amazon's overall injury rate was more than double, at 6.5 per 100 employees compared to 3 per 100. The study's organisers blamed Amazon's "obsession with speed" as a main cause of the problem.
The US has announced and then immediately suspended tariffs on about $2bn (£1.4bn) of imports in retaliation for taxes on its tech firms, the BBC reports. The 25% tariffs apply to certain goods from the UK, as well as Austria, India, Italy, Spain, and Turkey. The move comes after a year-long US investigation into digital services taxes put in place by the six countries, which tax tech firms on their revenues, rather than their profits. Washington previously described the taxes as "unreasonable" and "discriminatory." The government said it will approve the threatened tariffs on $887m of UK goods, as well as on $383m of Italian goods and $323m of Spanish products. In addition it will impose tariffs on $118m of goods from India and $65m worth of products from Austria. But it suspended the introduction of the tariffs immediately for up to 180 days as talks on how to tax tech companies with a global footprint continue in the G20 and the Organisation for Economic Co-operation and Development (OECD).
The Wall Street Journal has revealed that tweets from Tesla boss Elon Musk last spring violated the terms of a 2019 settlement agreement made with the US Securities Exchange Commision (SEC). On May 1, 2020, Musk tweeted that Tesla's stock price was "too high", prompting a $13bn decline in the company's market value. The SEC has ruled this was an abdication of duties required of Tesla following a court order in 2018 which stipulated Musk must have a person who revises his tweets about the company before he is allowed to post them. The settlement followed a charge of securities fraud after Musk tweeted that he had "[f]unding secured" to take Tesla private at a price of $420 per share when in fact he had not and had only held preliminary talks with Saudi Arabia to fund such a move. The settlement terms also required Musk to give up his role as chairman of the Tesla board.
Shares in Samsung Publishing, investor of the producer of "Baby Shark", surged more than 10% at one point, settling at 6.29% on Wednesday after Tesla chief executive officer Elon Musk tweeted about the song. Musk tweeted on Tuesday morning Asia time, saying: "Baby Shark crushes all! More views than humans." This is yet another example of Musk's apparent outsized influence, says Sharecast News. Recently, cryptocurrencies such as bitcoin or dogecoin have seen significant price moves after the Tesla CEO commented about them on Twitter.
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