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UK inflation has exceeded the Bank of England’s target of 2%. Business, Media & Marketing News London.

   NEWS / 16 Jun 2021

Published: 16 June 2021

By Suzanne Evans, Director, Political Insight


UK inflation has exceeded the Bank of England’s target of 2%, jumping 2.1% in the year to May, as the opening up of the economy from lockdown fuels a rise in consumer spending. The Consumer Prices Index measure of inflation rate rose from 1.5% in April, according to the Office for National Statistics, driven by the rising cost of fuel and clothing. Inflation is now at its highest since before the pandemic and will inevitably spark debate about whether or not interest rates should go up.
 
As expected, the UK government announced its agreement in principle on a future trade deal with Australia yesterday morning. The government heralded the deal as a ‘post-Brexit win, and the biggest trade deal agreed from scratch since the UK's exit from the European Union. It also outlined benefits of the deal such as "slashing red tape" and cutting costs for British consumers, as well as a boost for the services industry. Headlines from the proposed deal include cutting tariffs on imports of Australian wine, exports of whiskey, and the relaxation of rules around working visas for young people. The deal also pledged to support quotas on tariff-free agricultural imports into the UK from Australia for 15 years as part of the agreement. The UK was Australia’s fifth largest trading partner in 2019. The text of the agreement in principle will be published in the "coming days" the government said.
 
Not everyone has welcomed the Australian Trade Deal: in a letter that garnered cross-party support, campaign group Best for Britain warned that offering a tariff-free, zero quota access to the UK agricultural market risks undercutting British farmers, adding that "the importing of products derived from conditions, agricultural practices and hormone treatments banned in the UK is not acceptable." The group’s letter to parliament called for the ability scrutinise the finalised text of the agreement before it is signed and ratified, warning that “the deal must command the support of all four nations of the UK.” It also demanded that detailed impact assessments are carried out looking at how the deal will affect regions and nations of the UK and sectors such as farming. The British Chambers of Commerce (BCC) pointed out that trade with Australia represents only around 1.2% of the UK’s total it will "not offset the ongoing issues with trade to the European Union. William Bain, head of trade policy at the BCC. Said: "bosses remained concerned about the lack of opportunities to properly scrutinise trade deals including this one," he said. "There needs to be more in-depth industry consultation, particularly in sectors considered sensitive, to better analyse UK’s offensive and defensive strategic interests and the impact on other agreements." The chair of the International Trade CommitteeAngus Brendan MacNeil MP promised that the group would "hold the government to account" on promises made on farming. "No one wants an agricultural industry left stuck in the mud," he said. Trade Secretary Liz Truss says the deal will not harm British farmers' livelihoods.
 
Giving evidence to the Transport Select Committee yesterday, Ryanair CEO Michael O’Leary said the diversion of a Ryanair flight to Belarus, allowing a prominent critic to be arrested, was a “premeditated breach of all the international aviation rules”. He said the flight crew were told by Minsk air traffic control that they had received “a credible threat that if the aircraft entered Lithuanian air space, or attempted to land at Vilnius airport, that a bomb on board would be detonated”. O’Leary explained the captain asked Minsk air traffic control “repeatedly” to provide an open line of communication back to Ryanair’s operations control centre in Warsaw, but was told: “Ryanair weren’t answering the phone”, which was “completely untrue”. The captain was put under “considerable pressure” to land in Minsk, he said, and after the plane did land, “a number of unidentified persons boarded the aircraft…carrying video cameras…and repeatedly attempted to get the crew to confirm on video that they had voluntarily diverted to Minsk”, but the crew “refused to confirm that”. In response to the incident, aviation regulators in the UK and the EU banned Belarusian airline Belavia from operating in their airspace and ordered UK and EU airlines not to fly over Belarus. O’Leary said it is “not in our long-term interests as an industry or in our passengers’ best interests” for those policies to continue permanently.
 
EasyJet has moved aircraft from the UK to Germany in response to the countries’ differing approaches to coronavirus travel restrictions. A number of planes due to take holidaymakers from the UK to Palma on the Spanish island of Mallorca are departing from Berlin instead, the airline said. Removing Portugal from the UK Government’s green travel list means people returning from every major viable tourist destination must now self-isolate on their return home. Travellers returning from amber locations must take a pre-departure coronavirus test, plus two post-arrival PCR tests costing around £100, and self-isolate for 10 days. EasyJet said in a statement: “With 50% of easyJet’s flying intra-Europe, we are seeing European governments are progressively opening up using frameworks in place which enable travel and much of it restriction-free…Europe is demonstrating that a safe reopening of travel is possible and so we continue to urge the UK Government to do so urgently so our customers can reunite with loved ones or travel for a much-needed break.”
 
The EU and US have announced they are ending a 17-year dispute over aircraft subsidies that involved Boeing and Airbus in a deal that will see the suspension of “harmful tariffs” worth $11.5bn (£8bn). In a joint statement they said that the tariffs “that hurt companies and people on both sides of the Atlantic” will be suspended for five years. US President Joe Biden described as being "a major breakthrough" and European Commission president Ursula von der Leyen said: “We have taken a major step in resolving the longest trade dispute in the history of the WTO.” Yahoo Finance says the deal comes as both parties look to curb China's rising economic influence: "We also agreed to work together to challenge and counter China’s non-market practices in this sector that give China’s companies an unfair advantage," said Biden. The deal means both parties have agreed not provide research and development funding or specific support like tax breaks to their own producers in a way that would harm the other side.
 
The European Court of Justice has ruled that the data watchdogs of any EU member nations can take action against big tech firms like Apple, Facebook and GoogleYahoo Finance reports. Yesterday’s ruling was part of a long-running case between Belgian authorities and Facebook in which Belgium’s data protection watchdog wanted to stop Facebook for placing tracking cookies on user's browsers without consent. Facebook argued however that under EU GDPR rules only one national data protection authority has the power to handle cases involving data complaints — a system known as “one-stop shop.” Reuters quoted the European Consumer Organisation's director general Monique Goyens as saying: "Most big tech companies are based in Ireland, and it should not be up to that country’s authority alone to protect 500 million consumers in the EU, especially if it does not rise to the challenge.” Ireland’s regulator has often been criticised for taking too long to act. Analysts seem to agree, however, that the ruling will not have major implications for big tech giants.
 
Several advertisers have pulled adverts from GB News following a concerted campaign from left-wing pressure group Stop Funding Hate. Ikea, Octopus Energy, and cider firm Kopparberg are among the brands concerned. GB News launched on Sunday evening. Greg Jackson, founder of Octopus Energy, said the company does not advertise on "platforms whose primary purpose is the distribution of hate" and said it would only run adverts on new channels after watching their output for a period of time. The Open University and Ovo Energy also said they were pausing advertising, which they said had been placed by a media partnership without their knowledge. GB News has pledged to fight "cancel culture" and challenge the "echo chamber" of the "metropolitan" news.
 
Sky News has learnt that REEF Technology, which counts Japan's SoftBank and an Abu Dhabi state fund among its backers, has lodged a joint offer for NCP on Tuesday alongside Bain Capital Credit. The bid, which is understood to include a £150m unsecured loan to shore up NCP's finances, comes less than 48 hours before the car park operator's creditors are scheduled to vote on a controversial restructuring plan which has infuriated a number of landlords. A City source said on Tuesday that Bain Capital Credit and REEF Technology were confident that their joint proposal was "demonstrably better for landlords and NCP than the current plan" being considered by creditors.
 
Capita says it has signed a £528m four-year contract extension with an unnamed major European telecoms provider it has worked with for the last 20 years.
 
Fintech Wise could make its debut on the London Stock Exchange as early as this week via a direct listing in a move that could value it at up to £9bn, according to Sky News. The company is known for its "instant, super-cheap money transfers". Wise declined to comment on the listing. Because of the direct listing, when companies sells shares directly to the public without getting help from intermediaries, it is harder to have a sense of the valuation than it would be in the case of a normal IPO, but Sky sources said it would be at least £5bn.
 
The boss of US investment bank Morgan Stanley has issued a warning to employees reluctant to return to work. Chief executive James Gorman said: "If you can go into a restaurant in New York City, you can come into the office." Speaking at a conference, Mr Gorman said he would be "very disappointed" if US-based workers had not returned by September. Morgan Stanley is not yet setting a minimum number of days that US staff will be required to be on-site, he said, but that may change if employees do not return by Labor Day, a US public holiday on 6 September.
 
Microsoft says it will stop supporting Windows 10 in 2025.
 
Bloomberg reports Airbnb paid an Australian tourist $7m (£5m) after she was allegedly raped at knifepoint at a rental property in New York City on New Year's Eve in 2015. The victim and her friends are said to have picked up the keys to the property from a nearby shop but the suspect, 24-year-old Junior Lee had made a copy of them. He has pleased not guilty to predatory sexual assault but remains in custody. After the attack, Airbnb put the victim in a hotel, offered to pay for costs such as counselling and flew her mother overseas from Australia. Bloomberg reports that as part of the settlement, reached two years’ ago, the victim cannot blame or sue Airbnb or the apartment host where the incident took place.
 
BlackRock chief Larry Fink has come out of this year’s Glassdoor Employee Choice Awards, with an approval rating of 99%. The CEOs of tech companies Microsoft,  Salesforce and investment banks Morgan Stanley and UBS also made it to the top 20 list by Glasssdoor, which provides reviews and insights for more than 1 million companies around the world. Only one woman made it to the list, Yahoo Finance reports: the British Heart Foundation's Dr Charmaine Griffiths came in at number five, with a 98% approval rating.


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