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The Bank of England (BoE) left monetary policy unchanged at its monthly review meeting yesterday

   NEWS / 24 Sep 2021

Published: 24 September 2021
Location: London, UK

By Suzanne Evans, Director, Political Insight


A HEADS UP: I will be on my holidays from Tuesday next week so there will be no daily bulletin. Normal service will resume on Monday 11th October.

The Bank of England (BoE) left monetary policy unchanged at its monthly review meeting yesterday. Although the bank reiterated its expectation that inflation would peak at more than 4% before the end of the year, rising prices took a back seat to concerns about slowing growth and potential job losses. The BoE monetary policy committee voted unanimously to leave interest rates at a record low of 0.1% and by a majority of seven to two to continue with its £895bn programme of government bond purchases. “All members in this [majority] group agreed that the outlook for the labour market, and hence underlying inflationary pressures, was particularly uncertain, and that some of this uncertainty should be resolved over coming months," a statement issued after the meeting said.
 
Environment secretary George Eustice has said the government is considering whether changes could be made to the Seasonal Agricultural Workers' Scheme (SAWS), a quota-based scheme that allows farmers to recruit overseas, to address labour shortages. The SAWS scheme saw 30,000 temporary workers admitted to the UK this year to fill vacancies in agriculture - mostly working on fruit and vegetable farms - helping with the picking and packing of produce, the BBC  says. Speaking on a visit to an agricultural show in Northern Ireland, Eustice admitted that there are "some real concerns about how we'll deal with that spike in demand in the two weeks up to Christmas". The National Farmers' Union (NFU) has called for another emergency visa to allow firms to recruit from outside the UK.
 
Restaurant, café and pub bosses will be banned from keeping tips left for staff by customers, the BBC reports. Under the government’s proposals, which are expected to come into force within the next year, employers who break the rules they can be taken to an employment tribunal, meaning they face a fine and/or a ruling to compensate workers. Labour Markets Minister Paul Scullysaid the plans would "ensure tips will go to those who worked for it". The government said the new legislation would help about two million people working in the hospitality industry.
 
The UK government, Financial Conduct Authority (FCA) and Bank of England (BoE) has this morning issued a long and detailed response to the Treasury Committee’s report into the collapse of London-based finance firm Greenshill Capital. In a nutshell, they have “committed to ensure we learn any wider lesson from this episode” and vowed to introduce closer regulatory scrutiny to spot risks earlier on. These include reducing opportunities for abuse and limiting the scope of the “appointed representatives’ regime” which Greenshill used when it needed to undertake regulated financial activity, as it was not regulated by the Prudential Regulation Authority (PRA) or the FCA. The demise of Greensill Capital, which was once worth around $30bn (£26bn), arguably sparked one of the biggest political crises in a decade, Yahoo Finance UK says. It went bust after losing insurance coverage for a key part of its business. Former prime minister David Cameron and chancellor Rishi Sunak were both dragged into probes over ethics and possible impropriety. Cameron had a commercial interest in the firm and potentially stood to make millions if the business went public.
 
The government has announced a 10-year plan to make the country a global “artificial intelligence superpower”, seeking to rival the likes of the US and China. The so-called “National Artificial Intelligence Strategy” is designed to boost the use of AI among the nation’s businesses, attract international investment into British AI companies and develop the next generation of homegrown tech talent, CNBC reported on Wedneday. “Today we’re laying the foundations for the next ten years’ growth with a strategy to help us seize the potential of artificial intelligence and play a leading role in shaping the way the world governs it,” Chris Philp MP, Parliamentary Under-Secretary at the Department for Digital, Culture, Media and Sport, said in a statement.
 
The government has laid out plans to give employees the right to request flexible working, regardless of their status or time served in a company, in plans to modernise working practices.  Around 2.2 million more people will now get the right to request flexible working.
 
City Executive Andrew Monk has queried government proposals for new staff to have the right to ask to work from home. "People abuse it," and are less productive, at least in financial services, he said, telling the BBC Radio 4 Today programme yesterday that his view is that a lot of people who ask for flexible working want to work part-time but on a full-time salary. “You can't expect to be paid a good salary and then not work hard,” he said, adding that those who are all working from home and say it's all fine are wrong. “It's not fine," he said. Monk is chief executive of investment firm VSA Capital, which employs about 20 people in the City of London.
 
The Advertising Standards Authority (ASA) is to release new guidance on analysing environmental claims made by companies in sectors such as energy, waste and transport to ensure ads don't mislead people, the BBC reports. Recent examples where the ASA found evidence of so-called ‘greenwashing’ include a banned ad campaign by Ryanair in which it claimed to have the lowest airline CO2 emissions, and when food company Gousto was found to have made false claims that their packaging was "100% plastic free and recyclable".
 
BP has had to close some of its petrol stations due to fuel supply issues. A spokesperson for the company told Sharecast News that the closures have been caused by “some delays in the supply chain which has been impacted by the industry-wide driver shortages across the UK.”  The energy giant said it was prioritising deliveries to motorway service areas, major trunk roads and sites with largest demand.  According to ITV, BP's head of UK Retail, Hanna Hofer, said at a meeting organised by the Cabinet Office last Thursday that it was important for the government to understand the "urgency of the situation", which she described as "bad, very bad". Esso has also said that a handful of its petrol stations operated alongside Tesco stores have encountered supply issues. Rod McKenzie of the Road Haulage Association trade body accused ministers of “government by inertia”, allowing the situation to get “gradually worse” in recent months. He has urged the government to relax visa restrictions for foreign workers to ease the driver shortage, but when his comments were put to Transport Secretary Grant Shapps in a BBC interview, Shapps said he did not want UK lorry drivers to "drop out" because of being "undercut" by cheaper EU labour.
 
British Airways has scrapped plans to launch a short-haul low-cost subsidiary at Gatwick Airport because it has failed to reach an agreement with pilots on new contracts. A spokeswoman for the airline told the PA news agency that it was “disappointed” it could not secure a deal with trade union Balpa, saying that “after many years of losing money on European flights from the airport, we were clear that coming out of the pandemic, we needed a plan to make Gatwick profitable and competitive”. Most British Airways’ short-haul flights from the West Sussex airport have been suspended since March 2020 when lockdowns began, and only a small number of domestic services that connect to its long-haul operation will now continue. The airline is now likely to sell or lease its slots at the airport to rivals such as easyJet or Wizz Air or offer them to partner airline Vueling. Ryanair’s Michael O’Leary said almost two weeks’ ago that he didn’t hold out much hope for BA’s “umpteenth” attempt to create a low-cost carrier.
 
The Housing Growth Partnership (HGP), funded by Lloyds Banking Groupand Homes England, has committed £300m equity funding to small and medium enterprise and regional housebuilders. The first HGP fund was announced in 2016, and this £300m commitment will help HGP achieve its target of supporting the development of 10,000 new homes by 2025, it said. In August, Lloyds said it wanted to purchase 50,000 homes by 2030 and recently launched Citra Living, which provides homes for the rental market. The bank has also recently gone into partnership with property firm Barratt Developments.
 
Furniture retailer DFS has reported an end of year pre-tax profit of £99.2m, up from a loss of £81.2m the year before, and 55% higher than its profit before the pandemic in 2019. The company attributes a 47% rise in sales to £1.1bn over the period on people sprucing up their homes after being forced to stay in during lockdowns, and a general shift in consumer spending on the home. However, the company also said revenue was constrained by sector-wide pressures on supply chains, raw materials availability, container shipping delays (including the effects of disruption in the Suez Canal) and covid-related disruption of factory production (the ’pingdemic’), particularly in the final quarter of the year.
 
London-listed French Connection, which put itself up for sale in March, said yesterday it has received a 30p a share takeover approach.  The fashion retailer's shares rose 11.7% to 25.8p on the news. The potential buyers are a consortium including the company's second largest shareholder Apinder Singh Ghura, Amarjit Singh Grewal and KJR Brothers Limited. The firm said it was in talks with the consortium and there was no certainty that an offer would be made.
 
A survey by payments platform Trustly has found that roughly £3.5bn worth of online refunds owed to customers in the UK was “held hostage” by businesses over the past year. Some 40% of respondents said they had to wait three to five working days for money to come back into their account, and nearly half (45%) said slow refunds were making financial planning harder. “When consumers are denied fast refunds from merchants unnecessarily, it impacts on their ability to manage their expenditure. It’s not surprising to find that many are struggling," said William McMullan, director of ecommerce at Trustly. Nearly one third (28%) said their ability to pay bills, rent and mortgage payments was directly impacted because of having money tied up in online refunds, with the younger generation most affected. 29% of 18 to 24-year-olds said they had been impacted in their ability to pay for food, compared to only 5% of those aged 55 or older.


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