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young people will see their careers benefit if they work in the office

   NEWS / 03 Aug 2021

Published: 03 August 2021

By Suzanne Evans, Director, Political Insight


Chancellor Rishi Sunak says young people will see their careers benefit if they work in the office rather than at home. He told LinkedIn News he doubted he would have done as well if he had started his working life virtually. Sunak worked previously in finance, including at banking giant Goldman Sachs and said he said he still talked to his early mentors, saying: "I doubt I would have had those strong relationships if I was doing my summer internship or my first bit of my career over [Microsoft] Teams and Zoom." The government has recommended a gradual return to work in England since restrictions were lifted on 19 July. However, the Scottish government wants people to keep working at home until at least 9 August, where possible.
 
The National Institute of Economic and Social Research (NIESR) is predicting consumer price inflation will hit 3.9% next year, almost double the Bank of England's target rate, before falling back to 2% in 2023 following a bank interest rate hike. If NIESR’s predictions come to pass, this would be the highest rate of inflation since late 2011. The think tank also revised their growth forecast for the UK up by 1.1%, to 6.8%.
 
One in ten hospitality venues including pubs, clubs, restaurants and visitor attractions represented by UKHospitality have been forced to shut as the ‘pingdemic’ coincided with nightlife reopening.  UKHospitality chief exec Kate Nicholls told BBC Radio 4's Today programme yesterday: "In the last month one in 10 of our businesses have had to close their sites and more importantly one in five have had to significantly adjust their offer or services in order to cope with the pandemic." She added: "The pingdemic has hit at the same time as the reopening, they haven't had time to rebuild cash reserves and so they are in quite a fragile state and the hit to revenues as a result of the pingdemic is running at about 15 to 20% of revenues for those businesses that are affected, so it is a significant suppression just at the point in time when these businesses needed to start recovering from about 16 months’ worth of closure and restrictions."
 
British factory output grew at almost its fastest rate ever last month. The IHS Markit/CIPS Purchasing Managers' Index (PMI) reading for July was 60.4 and marks the 14th consecutive month of growth. Although output was down from 63.9 in June, the index beat economists’ forecasts of 57. 1. Any score above 50 on the index indicates growth. However, it was not all good news: with demand outstripping supply because of covid-driven supply chain pressures and Brexit, average input costs rose at a near survey-record pace, with over 72% of manufacturers seeing an increase. “As manufacturers begin to lose faith in just how transitory these inflationary pressures will be, these increased costs are being passed on to their customers to relieve dwindling margins," said James Brougham, senior economist at Make UK. "It’s now all but certain that we will now see these inflationary pressures in the production industry pervade further into consumer inflation in the coming months.”
 
Hellenic Dynamics, a Greek medical cannabis cultivation company is to launch on the London Stock Exchange via UK SPAC Plc, a London-listed shell company that yesterday said it had agreed a reverse takeover deal valuing Hellenic at £45m. Yahoo Finance UK says the transaction combines two of the hottest trends in public markets over the last few years: SPACs and cannabis. Both corners of the market have attracted huge amounts of investor attention, as well as some concerns about hype and froth. Hellenic Dynamics was founded in 2019 and is currently building a 200,000sqm cannabis cultivation factory in Northern Greece. The company hopes to start selling medical grade cannabis oils and flowers by early next year and has already signed two term sheets for distribution deals.
 
FTSE 100 engineer Smiths Group has agreed to sell its medical division to US private equity firm TA Associates for $2.3bn. The company expects to receive net cash proceeds on completion of $1.8bn (£1.3bn). This will be used to return cash to shareholders and "to support investments in growth". Smiths said the sale simplifies and positions the group for focused growth in its core industrial technology business. As part of the deal, Smiths will also receive a 30% equity interest in Trulli Topco - the new holding company of Smiths Medical - valued at $0.2bn.
 
Outsourcer Capita has announced it renewed its learning services contract with a "major" UK financial services client on 1st July. Capita said it provides a broad range of learning services, market insight and thought leadership to the unnamed firm. The deal is worth up to £124m over five and a half years.
 
Direct Line reported higher interim earnings this morning on the back of lower motor claims as lockdowns kept drivers off roads for a major part of the year. The owner of the Churchill, Green Flag and Darwin brands reported a £370m operating profit for the six months to June 30, up from £265m a year ago.
 
Building products manufacturer Forterra is to invest £27 million upgrading its brick factory in Wilnecote, Staffordshire. The investment will modernise the 30-year old facility, a move which is expected to boost product output by 20%. The redevelopment will include a new kiln, dryers and handling equipment, and allow the factory to create a wider array of high-quality brick products, including increasing production of the famous Staffordshire Blue Brick.
 
Greggs says it expects to create 500 new retail jobs in the coming months as part of the chain's plans to open around 100 net new stores by the end of the year. The bakery chain also reported profits of £55.5m for the six months to 3 July, compared with a £65.2m loss a year earlier as stores were forced to shut because of covid lockdowns.
 
Oil Giant BP is to give shareholders a £1bn windfall through share buybacks and a 4% annual dividend increase up to 2025 after predicting a short-term increase in global oil prices before a quicker than expected shift to low-carbon energy, the Guardian reports. Rising global oil prices helped BP make an underlying profit of $2.8bn for the three months to June, up sharply from a loss of $6.68bn in the same quarter last year when Covid-19 brought the oil industry to a standstill.
 
Some of the world's biggest financial institutions are working on a plan to speed the closure of coal-fired power plants in Asia, the BBC has been told. The initiative was developed by UK insurer Prudential, is being driven by the Asian Development Bank, and includes major banks HSBC and Citi. The aim is for the plan to be ready for the COP26 climate conference in Scotland in November. Under the proposal, first reported by Reuters, public-private partnerships will buy coal-fired plants and shut them far sooner than their usual operating lifespan.
 
Goldman Sachs has increased salaries for younger bankers, after complaints of long working hours. First-year investment bank analysts globally will get a pay rise this year to $110,000 (£80,000) from a previous $86,000, excluding bonuses. Basic pay will rise to $125,000 in the second year. Meanwhile, a top banker has criticised graduate recruits in his industry as "entitled". Xavier Rolet, who ran the London Stock Exchange for eight years, said the younger generation of bankers should stop complaining about long working hours or find another job. He suggested banks should hire "poor hungry kids who managed to put themselves through college" instead of "entitled" graduates. In his LinkedIn post he said he would regularly work 130 hours a week, seven days a week in the 1980s.
 
Twitter creator Jack Dorsey’s payments business Square is to buy Australia’s consumer credit company Afterpay (known as Clearpay in Europe) for AUD 29bn. A ‘buy now pay later’ model, Afterpay allows consumers to split retail purchases into four instalments, and charges fees to both consumers and retailers for using this credit facility. It does not charge interest – hence its advocates say it is safer than using a credit card - but does charge for late payments. Afterpay currently has more than 16m consumers and nearly 100,000 merchants signed up, however the company has yet to make a profit. The deal is expected to close in the first quarter of next year.
 
China is back on the warpath against tech and games companies. Shares in two of China's biggest online gaming firms – Tencent and NetEase - - fell more than 10% in early Hong Kong trade after a state media outlet called them "electronic drugs," suggested they would ‘destroy a generation,’ and likened them to "spiritual opium".  Investors are increasingly concerned about Beijing cracking down on firms. In recent months authorities have announced a series of measures to tighten their grip on technology and private education companies.


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