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  British airlines have called for the furlough scheme to be extended. Business, Media & Marketing News…

   News / 11 Jun 2021

Published: 11 June 2021

By Suzanne Evans, Director, Political Insight

The UK economy grew 2.3% in April, its fastest monthly growth since July last year. Jonathan Athow, deputy national statistician for economic statistics at the Office for National Statistics said: "Strong growth in retail spending, increased car and caravan purchases, schools being open for the full month, and the beginning of the reopening of hospitality all boosted the economy in April". Despite the surge in activity, the UK economy is still 3.7% below its pre-pandemic peak.
The European Central Bank has kept eurozone interest rates unchanged at 0%.
US inflation rose to 5% year-on-year in May, the highest rise since 2008. The jump was bigger than expected, having been forecast to rise to a 13-year high of 4.7% from a year earlier, up from 4.2% in April. Core inflation, which strips out volatile items such as food and energy, jumped to 3.8% year-on-year, the fastest annual rate since June 1992. The rise on the back of swift economic recovery has inevitably fuel inflation fears.
British airlines have called for the furlough scheme to be extended for aviation workers. In a letter to Chancellor Rishi Sunak, industry body Airlines UK said that while the broader economy was opening up, there were "no markets of any meaningful size on the green list" and with the government advising against travel to amber list countries, it meant carriers were entering "the vital crucial summer season still in effect unable to trade." Chief executive Tim Alderslade said: "The bulk of the government's headline £7.2bn of support for UK airlines has essentially been taken on as new debt, compared to a little over £1bn in director furlough support”. Portugal was the only mainstream holiday destination on the green list but it was moved onto the amber list earlier this week. Travellers returning from amber list countries must quarantine for 10 days.
British Airways announced this morning that it has been forced to put thousands of staff back on furlough because of delays to the restart of international travel. The airline had brought people back to work ahead of foreign travel restrictions easing on 17 May.
French-Israeli billionaire Patrick Drahi now has a 12.1% stake in telecommunications company BT, worth around £2.2bn at Wednesday’s close. His company, Altice Group, has become BT’s largest shareholder after the purchase of 1.2 billion shares through newly-formed Altice UK, which is wholly owned and controlled by the tycoon, Yahoo Finance reports. Drahi, who has an estimated worth of £9.6bn, said he will use Altice’s expertise in rolling out fibre networks to help BT expand across the UK. He holds a similar-sized stake in Deutsche Telekom. Analysts said Altice was likely to want a board seat to influence BT's future direction.
Rupert Murdoch's British newspaper empire, News UK, is considering a bid for The Week, one of Britain's biggest-selling news and current affairs magazines. Sky News says Murdoch’s group is among a number of parties expressing interest in acquiring the title from Dennis Publishing - owned by Exponent Private Equity. Investment bank Liontree Advisors, is overseeing an auction of the magazine, which it is understood is the only title for sale and does not include any other titles in the Dennis’ portfolio, such as Fortean Times, Minecraft World, MoneyWeek and Viz.
Online trading platform CMC Markets reported a surge in full-year profits yesterday. Sharecast News reports that in the year to 31 March, pre-tax profit jumped 127% to £224m, while net operating income rose 63% to £409.8m. CMC Markets said there had been "increased levels of interest in the financial markets from a new wave of clients" during the pandemic. Stockbroking net trading revenue was 72% higher than in 2020 at £54.8m, as client numbers grew 28%. CEO Lord Cruddas has bagged a dividend worth more than £55m after the bumper year. He has just denied there is a link between his £500,000 donation to the Conservative Party just three days after he was admitted to the House of Lords. "This is a regular donation,” he said. I’ve given £3.5m to the Conservatives and £1.5m to the Vote Leave campaign. If people are suggesting there’s a linkage between the [donation and my peerage], well I’ve been donating since 2010".
70% of Morrisons shareholders revolted over executive pay yesterday, voting against the supermarket chain’s remuneration report for its last financial year at its virtual AGM, on the grounds that chief executive David Potts' pay package was not damaged despite annual profits halving to £201m. Potts took home £4.2m in the year to 31 January compared to just under £4m in the previous 12 months and received an annual bonus of £1.7m. Morrisons remained unrepentant in response to the non-binding vote, saying its remuneration committee felt that management should not be penalised for the £290m bill it faced from the covid crisis.
Shares in Auto Trader jumped as much as 7% yesterday, despite the firm reporting a 37% fall in pre-tax profit to £157.4m in the 12 months to 31 March. The reason for this rise was because the new and second-hand car dealer also revealed that UK customers were shifting “dramatically” to online car buying, with website and app visits were up 15% to 58.3 million a month on average. The company also saw record levels of new car buyers as retailer forecourt numbers churned significantly higher than a year ago when people were forced to stay at home to prevent the spread of coronavirus.
Model train maker Hornby is in the black for the first time in nine years, reporting a profit of £345,000 for 2020/21, following a loss of £3.4m in 2019/20. Chief executive Lyndon Davies said the business was now "firing on all cylinders" after a lockdown boost for stay-at-home hobbies helped sales rise 28% to £48.5m for the year to the end of March.
Twitter account Punks for Purpose has published an open letter signed by over 100 former employees of Scottish craft beer maker BrewDog. The letter accuses the company of being “a cult of personality” and details an alleged toxic environment. It said “being treated like a human being” at the firm “was sadly not always a given” and claimed employees were harassed, assaulted, belittled, insulted and gaslighted. CEO and co-founder James Watt was called out by name: “It is with you that the responsibility for this rotten culture lies,” the letter said. Watt told Yahoo Finance the letter was "upsetting, but so important…Our focus now is not on contradicting or contesting the details of that letter, but to listen, learn and act," he said, adding: "We are sorry".
Oatly, the plant ‘milk’ maker backed by Oprah Winfrey, is in a court battle with a Cambridgeshire farm over alleged trademark infringement. Lawyers for Oatly sought a High Court injunction on Thursday to stop Glebe Farm Foods selling its PureOaty brand. Oatly said it contacted the PureOaty makers in early 2020 saying "their branding infringed our trademark". Farmer Phillip Rayner, who owns Glebe Farm, said the PureOaty name was "a nod to the purity of the product".
Which? has found that romance fraud, in which scammers cheat victims out of money by feigning romantic interest, was up by 40% in the year to April 2021. Over 7,500 reported incidents saw victims losing out on almost £74m combined, although Which? says the figure is likely to be higher because many may be too embarrassed to report the crime. The Which? report said as dating without meeting in person became the new normal last year amid national lockdowns, fraudsters were able to take advantage of online daters. They often claimed they needed the money to travel to the UK to build a life together. Which? is now calling for greater bank transfer protections for victims.
Londoners are paying an average premium of £46,800 to live within 500 metres of the nearest tube or train station, according to data from Nationwide. This is a slight increase to 9.7% from 8.6% the year before. Glasgow, which has the largest network of suburban railway lines in the UK outside of London, commands a £11,400 premium for properties with valuable transport links, up from 3.5% last year to 7.2%. Those in Greater Manchester are paying £11,000 on a comparable basis, a fall to 6.2% from 9% in 2019-20.
A top global banking regulator has proposed strict rules for cryptocurrencies that could make them costly for banks, Yahoo Finance UK reports. It has put bitcoin in its highest risk category. The Basel Committee on Banking Supervision believes banks should set aside enough capital to cover losses on any bitcoin holdings in full and has issued a public consultation on proposals for the treatment of banks' cryptoasset exposures. One proposal is to attach a 1,250% risk to a bank’s exposure to bitcoins and certain other cryptos. “In practice, that means a bank may need to hold a dollar in capital for each dollar worth of bitcoin, based on an 8% minimum capital requirement,” Bloomberg explained.

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