Published: 17 June 2021
By Suzanne Evans, Director, Political Insight
The pound jumped yesterday: by shortly after 8am, it was up 0.3% against the euro to €1.1646 and up 0.3% against the dollar to $1.4118, following news that UK inflation sped past forecasts, to 2.1%. Sterling is up 0.24% this morning against the euro at 1.690 but down slightly against the dollar, at $1.3968.
The steep rise in inflation means Bank of England governor Andrew Bailey will now be forced to write a letter to the chancellor explaining why price rises have breached the central bank's target. "For CPI to smash through the Bank of England’s 2% target isn’t just symbolic," Sam Fuller, director of Financial Markets Online, told Yahoo Finance. "It opens the possibility of the Bank stepping in to put a lid on inflation – and the way the Bank tends to do that is by hiking interest rates, which could quickly dampen the consumer spending on which the recovery depends”.
Business secretary Kwasi Kwarteng told business leaders yesterday he was "very sorry" for the one-month delay to 'Freedom Day' but said chief executives had cause for optimism as the UK headed down a path of reopening. "I think there are three reasons why I think 2021 is a year of optimism, a year of hope," Kwarteng said in a keynote address at the British Chamber of Commerce annual conference. He listed progress on vaccines, the resolutions to Brexit, and the government's green agenda as reasons for optimism. Kwarteng said the economy had the opportunity to forge new ground as it bounced back from COVID-19. "I'm very confident on the 19th of July we'll be able to open up,” he said. “The prime minister has said very clearly we have to learn to live with COVID and that phrase suggests, I think, suggests we're going to have to live with it and get on with our normal lives."
A new Infrastructure Bank aimed at helping Britain deliver on climate ambitions, boost jobs and growth opens in Leeds today. Its £22bn of financial capacity will consist of £5bn of equity, £7bn of debt, and £10bn of government guarantees, helping to unlock over £40bn of overall investment.
The bank claims it will help "level up" every part of the country, financing projects across several industries like renewable energy, transport, digital, water and waste, and help cut emissions as the UK transitions to net zero by 2050. "Working in partnership with local government and the private sector, the Bank will harness investment tailored to the needs of specific infrastructure projects, offering a range of financing tools including debt, equity, and guarantees," the Treasury said. Chancellor Rishi Sunak pledged £12bn in the March Budget for the creation of the new UK Infrastructure Bank.
Chief Secretary to the Treasury Steve Barclay told parliament yesterday that the ban on commercial evictions introduced during the covid pandemic will be extended until March 2022, rather than expire at the end of this month as planned. He also said the government will introduce legislation that requires arbitration between commercial landlords and tenants who cannot settle Covid-related debt disputes.
The Food Standards Agency and the Department for Environment, Food and Rural Affairs (Defra) have warned cat owners not to give their pets dry food made by manufacturer Fold Hill Foods because of a potential link to feline pancytopenia, a deadly feline disease. Products under Sainsbury's Hypoallergenic Recipe range and Pets at Home's Ava range are being recalled, Fold Hill Foods said. Applaws products, which are sold by Amazon and other pet food shops, may also be unsafe.
Ryanair, Europe’s largest airline, and Manchester Airports Group, which also runs Stanstead and East Midlands airports, have announced they have launched a High Court challenge against the government’s “traffic light” travel system. The legal action is also backed by several other major UK carriers, according to The Guardian. Court papers due to be filed today will argue the government should explain how it makes decisions on categorising countries, given the "dramatic" impact these decisions have on the aviation industry. Both health secretary Matt Hancock and transport secretary Grant Shapps are expected to be named as defendants. Michael O’Leary, CEO of Ryanair Group, said: “The UK’s traffic light system has been a complete shambles from the beginning. This go-stop-go-stop policy is causing untold damage to the aviation industry and frustrating and upsetting millions of British families when they see their holiday plans and family visits disrupted by the government’s mismanagement of international travel. We call on prime minister Boris Johnson to explain the scientific basis behind this system that the government seem to make up as they go along and to establish a data-driven transparent model that could restore confidence in air travel ahead of the very crucial peak summer months.” Charlie Cornish, Manchester Airports’ chief executive, said: “Recent developments suggest that the government is now unwilling to open up international travel by putting low-risk countries on the green list. For most countries, the traffic light seems to be stuck on amber for no obvious reason, despite having prevalence rates much lower than the UK. “The government is not being open, and we simply cannot understand how it is making decisions that are fundamental to our ability to plan, and to giving customers the confidence to book travel ahead”.
Jet2, Easyjet and Manchester Airport have criticised the government for not putting the Balearic Islands, including Majorca, on the green travel list. While UK travel is severely limited, Germans are flocking to these popular holiday spots. Jet2 and Jet2 Holidays' chief executive Steve Heapy said: "When you take the UK government's own criteria for deciding where holidaymakers can travel to, and apply it to the Balearics, we are left bewildered as to why we cannot fly there".
Ryanair finally took possession of its first Boeing 737 MAX jet yesterday, after a delay of more than two years. The airline told Reuters it would have 12 of the 'gamechanger' aircraft in time for this year's summer peak. Ryanair is the largest European customer for the jet, which was grounded for 20 months after two fatal crashes. It has placed 210 firm orders of the 197-seat MAX200 model.
easyJet is preparing to capitalise on a staycation boom with the launch of 12 new domestic routes to be announced later today, The Daily Telegraph has learnt. Industry sources said that easyJet will fly five times a week between Manchester and Edinburgh. There are also expected to be new services to Newquay from Inverness and Liverpool, and additional flights laid on from Gatwick airport. A spokesman for easyJet said that the details of the new domestic routes were still being finalised.
Beach holiday specialist On the Beach has reported a plunge in half-year revenues. Sales came in at £4.4m in the six months to 31 March, a 79% slump, while the adjusted pre-tax loss was £9.5m, compared to a pre-tax profit of £2.3m a year previously. The firm attributed the half-year performance to "suppressed consumer demand". "While the 2021 full-year was not expected to be a normal year for travel, the industry and the UK population did not foresee an extended lockdown and travel ban for the first six months of calendar 2021," it said. "This has had a material impact on trading performance.”
Addison Lee has closed a deal to acquire the London operations of ComCab, City Fleet Networks and Flightlink International from the ComfortDelGro Corporation, making it London's largest private hire and taxi firm. The new combined company will have 7,000 vehicles in service and will be available to customers through one platform. Addison Lee chief executive Liam Griffin said he was "sure there will be a few raised eyebrows at this deal given that Addison Lee and black taxis [operated by ComCab] were once seen as competitors."
The Competition and Markets Authority has cleared the billionaire Issa brothers' £6.8bn takeover of Asda. The competition watchdog said yesterday it has accepted the brothers' proposal to sell 27 of their petrol stations to alleviate competition concerns. As result, it will not be referring the deal for an in-depth investigation.
Funeral directors and crematorium operators will need to make their prices clearer to customers or risk court action, the Competition and Markets Authority said yesterday. From today, funeral directors must not make payments to incentivise hospitals, palliative care services, hospices, care homes or similar institutions to refer customers to a particular funeral director. They are also forbidden from soliciting business through coroner and police contracts. Then from 16 September, funeral directors must display a standardised price list at their premises and on their website. The list must include the headline price of a funeral, the price of the individual items comprising the funeral, and the price of certain additional products and services. Crematorium operators will also be required to provide specified price information to funeral directors and customers.
Vodafone said yesterday it has partnered with Amazon Web Services to launch "edge computing" services for its UK-based business customers. "Edge computing" uses augmented reality and machine learning to analyse bulk data where it was gathered - whether factory floor, oil rig or office space - before moving it to remote servers in the cloud. To work, it needs fast data transfers of the kind that 5G will provide. The launch follows Vodafone's trials with companies in a range of areas, including sports technology, autonomous transport, biometric security, remote virtual reality, and factory automation. "Edge Compute and 5G is a combination no other service provider can deliver in Europe, which means we can offer something unique to our customers," said Anne Sheehan, business director, Vodafone UK.
Furniture retailer Made.com saw its shares fall 7% as it made its debut on the London Stock Exchange in a move that valued it at £775m. The much-anticipated IPO follows that of companies such as Alphawave and Deliveroo, whose listings went awry on their first day of trading, says Yahoo Finance. Canadian computer chip designer Alphawave saw over half a billion pounds wiped off its value, with shares slumping 20% on its London stock market debut, and Deliveroo's shares plummeted 30% during its IPO, wiping more than £2bn off the company’s value.
UK property prices fell by 1.9% in April compared to March, with the average house falling by around £5,000, the HM Land Registry's latest house price index revealed. The average house price is now £250,772, still up £20,000 in a year.
A Which? investigation has found customers ordering food through delivery apps like Deliveroo, UberEats and Just Eat could be paying up to 44% more than when going directly through the restaurant. Which? found ordering via a takeaway app was on average 23% or £7.14 more expensive than ordering directly from the restaurant. Those ordering through Deliveroo were paying the most - an average of 31% or £9.91 more per order. UberEats cost 25% or £7.93 more on average. JustEat orders were the cheapest of all app just 7% (£1.56) more expensive.
A French court has fined IKEA $1.2m for spying on French staff by improperly gathering and storing their data. 15 people from the French branch of Ingka Group, which owns most IKEA stores worldwide, faced accusations in the trial. Sanctions ranged from a €5,000 fine for a former human resources manager to several suspended prison sentences. The allegations centred on the 2009-2012 period, although prosecutors said the spying tactics began in the early 2000s, when IKEA breached employees' privacy by reviewing records of their bank accounts, using fake employees to write up reports on staff, and paying for access to police files. Worker representatives said the information was in some cases used to target union leaders or to IKEA's advantage in disputes with customers. "IKEA Retail France has strongly condemned the practices, apologised and implemented a major action plan to prevent this from happening again," the Ingka group said.
Apple CEO Tim Cook has said certain regulations being considered in Europe for the tech sector could “destroy” App Store security. Citing the EU Commission’s Digital Services and Digital Markets Act, Cook said: “there are good parts of tech regulation and there are parts that are not in the best interest of the user”. One example of the latter is sideloading on the iPhone, he said, an alternative way of getting apps on the device. This would “destroy its security and the privacy initiatives we have built into the app store like app tracking transparency,” Cook explained. Speaking at the Viva Technology conference in Paris, he went on to say: "I worry deeply about privacy and security and we will constructively take part in the debate”.
The World Bank has rejected a request from El Salvador to help with the implementation of Bitcoin as legal tender, citing concerns over transparency and the environmental impact of Bitcoin mining.
Earlier this month, the Central American country announced plans to become the first nation to formally adopt the digital currency. It aims to use Bitcoin as a parallel legal tender alongside the US dollar. The World Bank's decision could mean the country faces problems in hitting its deadline to ensure that Bitcoin is accepted nationwide in the next three months.
Footballer Cristiano Ronaldo removed two Coca-Cola bottles from the table during a press conference at the Eurocup 2020 football tournament and caused a $4bn fall in the share price of the company. The Portugal captain is a renowned health fanatic. After removing the bottles he held up a bottle of water before declaring in Portuguese: "Agua!", appearing to encourage people to choose that instead. Coca-Cola's share price dropped from $56.10 to $55.22 almost immediately after Ronaldo's gesture, a 1.6% dip, reducing the market value of Coca-Cola from $242bn to $238bn.
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