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The IMF has upgraded its forecast for Britain's economic growth this year

   NEWS / 28 Jul 2021

Published: 28 July 2021

By Suzanne Evans, Director, Political Insight


The International Monetary Fund (IMF) has upgraded its forecast for Britain's economic growth this year, after a largely successful vaccine rollout led to a stronger-than-expected bounce back. The IMF published its latest forecasts of growth rates around the globe in its World Economic Outlook yesterday. The report now expects the UK economy to expand by 7% in 2021, a significant upgrade on April's forecast of 5.3%. Yahoo Finance UK says the UK's Covid-19 vaccination programme has accelerated since April, and that economic activity has been solid since reopening. The new IMF projection means the UK is on track to record the joint strongest growth among advanced economies this year, on a par with the US. The strong bounce back follows one of the sharpest slumps of any major economy in 2020, as COVID-19 battered the UK's dominant services sector. The UK economy contracted by 10% last year, its biggest drop in 300 years.
 
Bloomberg says the government is set to allow visitors from the US and the EU to travel to England without needing to quarantine on arrival if they have been fully vaccinated. People familiar with the matter said Prime Minister Boris Johnson and his senior team are said to be due to discuss and finalise details of the policy at a meeting later today, adding that the change in policy could come into force as soon as next week.
 
Zinfandel Rosé and Grenache Rosé are among the grapes at risk of disappearing from UK supermarket wine stocks, says Yahoo Finance UKhighlighting moves by the government to slap a potential 25% tariff on all wine imports from the US. Trade and hospitality group Wine Drinkers UK has warned against the proposal, saying they could wreak havoc, as 100 million bottles of US-sourced wine were sold in supermarkets and off licences last year, drunk by 32% of households.  However, the move is being considered by Trade secretary Liz Truss as part of an ongoing conflict caused by the Trump administration imposing a 25% levy on steel imports in 2018, prompting retaliatory measures from the EU on goods such as whiskey, motorcycles and tobacco. Apparently, the government believes tariffs on wine will put pressure on key Democratic politicians, such as vice-president Kamala Harris and speaker Nancy Pelosi, who have wine producers in their states.
 
The Transport Select Committee has said people must be protected from excessive pricing at public electric car charging points. Charging an electric car at home is much cheaper than using public charge points and this could put pressure on people who are less able to afford it, the MPs said. The government also needs to make charging infrastructure accessible and reliable, and make sure people in rural areas have equal access, they added. The UK plans to ban the sale of new petrol and diesel cars by 2030, and hybrids by 2035.
 
A plan has been brokered to cut down on aggressive debt collection by bailiffs as warnings of a post-pandemic surge in debt problems intensify, the BBC reports. The agreement should see a new independent new body - the Enforcement Conduct Authority - set up to ensure unfair treatment is stamped out, after the Centre for Social Justice think tank brought together bailiff firms and advice charities to create the after rising complaints about bailiff enforcement. The new agency will be funded by the bailiff industry and will not be compulsory.
 
Tesco is offering lorry drivers who sign up before 30th September a £1,000 joining bonus amid a chronic shortage of drivers in the industry. Morrisons also says it is working on schemes to train staff to become lorry drivers. The Road Haulage Association has estimated there is a 100,000 shortage of HGV drivers across the UK and that 30,000 HGV driving tests did not take place last year because of the coronavirus pandemic. It added a "historic" shortage in drivers had been exacerbated by changes to rules following Brexit and more recently, because drivers are being told to self-isolate after being notified by the NHS Covid app.
 
British American Tobacco (BAT) says more than a third of its UK revenues now come from vaping, as it released details of an 8.1% rise in half-year revenues to £12.18bn. The tobacco giant also said it is running a pilot of a new cannabidiol (CBD) vape product in Manchester, saying it was focused on "building a better tomorrow" by encouraging more people to switch to nicotine alternatives. BAT has also seen its fastest gain in new customers, with users of non-combustible products jumping 2.6 million to 16.1 million. BAT's chief executive Jack Bowles told BBC Radio 4's Today programme that the firm is looking to "accelerate" its transformation by "reducing the health impact" of its business. In March, the tobacco giant took a 20% stake in Canadian medical cannabis maker Organigram and signed a deal to research a new range of adult cannabis products, initially focused on CBD.
 
Barclays unveiled bumper half-year profits yesterday, reporting a pre-tax profit of £5bn on net income of £12bn in the first six months of 2021. Profits were nearly quadruple the £1.1bn made in the first half of 2021. Yahoo Finance UK says the profits were buoyed by surging activity at its investment bank and equities business.
 
Santander has announced the departure of another senior leader at its UK business as part of a shake-up in leadership and operations, saying that deputy UK chief executive Tony Prestedge had stepped down from the bank's board and executive committee and would be leaving the business shortly. His exit follows news of UK chief executive Nathan Bostock's departure. The bank said in April that Bostock was leaving to take up the new role elsewhere within Santander overseeing investments and reporting to group chairwoman Ana Botin.
 
Wizz Air shareholders have voted in favour of the budget airline's plan to pay chief executive Jozsef Varadi a bonus of up to £100m dependent on the achievement of certain targets. The company said yesterday that 33.2% of votes cast at its annual meeting were against the remuneration policy, while 67.6% were in favour. A number of shareholder advisory groups had urged investors to oppose the proposal. Glass Lewis said the "value creation plan" for Varadi and other senior executives could lead to "excessive payouts" and Institutional Shareholder Services said the maximum payout was excessive and that "no compelling explanation" had been provided to justify the amount.
 
Asset manager Sanne has acquired the European fund administration business of PraxisIFM Group for £54m. Sanne said this morning that PraxisIFM's funds business was "one of the leading players" in the European listed funds administration sector, which had consistently delivered double-digit revenue growth in recent years. The transaction will add over 80 employees and more than £25.0bn of assets under administration to Sanne, with offices in Guernsey, Jersey, London, Luxembourg and Malta. The FTSE 250-listed firm will fund the acquisition entirely from existing resources.
 
UK-based new gardening platform Sproutl has received $9m (£6.5m) in seed funding from Index Ventures with participation from Ada Ventures. It is hoping the cash injection will help it offer inspiration and straightforward advice, making gardening accessible to everyone. Sproutl is just one of a number of new companies hoping to capitalise on the booming interest in gardening over lockdowns, says Yahoo Finance UK. Earlier this year contemporary Neverland raised $4.7m in the US. Plant delivery platform Patch has also attempted to corner the UK market, having grown its offering of pot plants steadily since its launch in 2016.
 
UK online greeting card company Moonpig has doubled revenue and profits in its maiden results as a listed company, Sharecast News reports. Yesterday it said it had benefited from a slow lifting of Covid lockdowns in its main UK and Netherlands markets as High Street rivals were forced to shutter physical stores. Revenue more than doubled to around £368m in the year to April 30. Pre-tax profit rose 3% to £32.9m after £42m in stock market flotation costs. Core adjusted earnings rose 107% to £92.1m. However, the company said sales were "starting to normalise" from the high levels seen during Covid. Revenue is expected to drop to between £250m -£260m during the current financial year, although still 45% - 50% higher than before the pandemic struck.
 
In the Style has swung to an annual profit in its first results as a public company as the womenswear group's revenue more than doubled in the shift to online shopping during the pandemic. Sharecast News says the firm’s pretax profit for the year to the end of March was £125,000 compared with a £2.16m loss a year earlier as revenue rose 132% to £44.7m. Adjusted pretax profit, excluding the cost of the company's initial public offering, was £2.47m. In the Style has boomed during the pandemic as shoppers have moved online, leading to an oversubscribed IPO in March when it raised £11m for expansion by selling shares for 200p each. The company has a niche selling collections endorsed by so-called influencers such as UK TV personalities Dani Dyer and Stacey Solomon.
 
Toy maker Mattel has told the BBC it will have to raise prices in the run-up to Christmas because of the higher costs of raw materials and shipping, as the global economy recovers from the pandemic, and inflation.
 
Global tech giants are reporting soaring profits because consumers upgraded their devices and sought cloud storage during lockdowns. Apple's profits nearly doubled to $21.7bn (£15.6bn) in the three months to 30 June as customers bought pricier 5G iPhonesMicrosoft saw a $16.5bn profit at the same time - up 47% year-on-year, due to demand for cloud services and games.  Google's parent company, Alphabet, also said yesterday that quarterly sales and profits had surged to record highs.
That was largely down to an increase in spending on online advertising aimed at customers who were stuck at home shopping online due to restrictions. Its video platform YouTube, for example, saw advertising revenue jump to $7bn in the three months ending 30 June, in comparison with $3.81bn the year before. Analysts told the BBC that the figures may lead to calls for tech company curbs.


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