The Treasury has borrowed a total of £108.1bn so far this financial year

By Suzanne Evans, Director, Political Insight

The Office for National Statistics (ONS) has released its latest statistics on government borrowing and concludes the Treasury has borrowed a total of £108.1bn so far this financial year. Compared to last year, borrowing fell £7bn in September as the economy continued to recover from coronavirus lockdowns, to stand at £21.8bn. However, this was still the second highest figure for September since monthly records began in 1993. The ONS estimates the government borrowed £319.9bn in 2019/20, which amounted to 14.9% of GDP, the highest rate seen since the end of World War Two. Government debt stood at more than £2.2 trillion at the end of September this year, around 95.5% of the GDP and the highest level recorded since the early 1960s.
 
Travel stocks dipped immediately yesterday when Health Secretary Sajid Javid announced he was calling a late afternoon press conference. By lunchtime in London British Airways owner International Airlines Group was down 4.2%, EasyJet had declined 3.4% and Ryanair had fallen 1.7%. However, Javid said he would not be implementing his ‘Plan B’ to ease any pressures on the NHS “at this point.” It is not clear whether the government moving to 'Plan B' will include restrictions on travel. The government said this week that testing for all travellers will remain in place until the end of the year, despite calls from airlines and lobby groups to relax the testing regimes for fully-vaccinated travellers, bringing the UK in line with European neighbours. Airline share prices have fallen further this morning.
 
Morocco has banned flights to and from the UK due to the higher rates of covid cases here. Flights between Morocco and Germany and the Netherlands have also been suspended. The latest figures from the European Centre for Disease Prevention and Control said that Morocco's weekly rate of reported coronavirus cases on 14 October stood at 10.4 per 100,000 people, compared with 445.5 per 100,000 people in the UK.
 
The UK has agreed a free trade deal with New Zealand. Prime Minister Boris Johnson said the deal will cut costs for exporters and open New Zealand's job market to UK professionals. However, the deal itself is unlikely to boost UK growth, according to the government's own estimates. Less than 0.2% of UK trade is done with New Zealand.
 
It appears the government’s ‘plastic bag tax’ may have made things worse for the environment. The Times reports this morning that the levy imposed has led to manufactures switching to other materials, such as paper, which takes four times as much energy to produce and weighs more, so uses larger quantities of fuel during transportation. Ministers are now said to be supporting an amendment to the Environment Bill to extend the charge to non-plastic bags, after the amendment was supported by the House of Lords.  
 
Keith Anderson, chief executive of Scottish Power, has called for the Energy Cap to be abolished and replaced with a special tariff for people in fuel poverty. The price cap has helped to keep down costs for millions of households, and is a popular idea politically, but it is what has caused a series of smaller energy companies to bust, he said. He also highlighted serious failings by energy regulator Ofgem. "There was a fixation about trying to create more and more competition and get more and more companies into the energy sector," he said. "But it went too far. We ended up with a raft of small, not particularly well-run organisations coming into the retail sector. This crisis has shown this is quite a risky business." He also highlighted how every customer larger energy firms such as his are forced by Ofgem to take on when a smaller company fails, “means £1,000 of cost" and that he estimates a “total cost to the industry of between £4bn and £5bn”. "The risk is that you will end up going back to the big five or the big six," he added.
 
Facebook is facing a £5 million fine issued by The Competition and Markets Authority (CMA), the UK's competition regulator, because the social media giant ignored an order imposed during its investigation into Facebook’s purchase of GIF platform Giphy. It is the largest fine ever imposed by CMA - the previous largest was £325,000 – but the regulator has declined to say how it came to the £5m figure. Facebook bought Giphy, a database and search engine for the ultra-short looping videos known as GIFs, for $400m (£290m) in May 2020. CMA then issued an initial enforcement order (IEO), which it said is standard practice at the start of an investigation into a completed acquisition, to ensure companies continue to compete as they would have done without the merger, and to prevent the companies involved integrating further until the merger investigation is completed. CMA says Facebook failed, however, to comply with its legal requirements to produce regular updates, despite being warned last year by the Competition Appeal Tribunal and Court of Appealabout its lack of cooperation.  "We warned Facebook that its refusal to provide us with important information was a breach of the order but, even after losing its appeal in two separate courts, Facebook continued to disregard its legal obligations," said Joel Bamford, senior director of mergers at the CMA. "This should serve as a warning to any company that thinks it is above the law."
 
Lloyds Banking Group (LBG) is to close a further 48 branches, 41 of them Lloyds’ banks, and seven Halifax branches. Vim Maru, retail director for LBG said: “Like many other businesses, we’ve seen people using our branches less frequently in recent years, and this decline is continuing. “Our branches remain a fundamental part of how we serve our customers but we need to ensure the size of our branch network reflects the number of customers wanting to use them”. Union Unite called the move a “complete betrayal” that will deny thousands of customers access to vital services and cash and could lead to 178 job losses.
 
Shopping centre owner Hammerson reported a "significant" improvement in rent collection for the fourth quarter yesterday. "As with Q3, the UK continues to be the strongest performer, with 74% of rent collected, Ireland stands at 71%, with France at 65%," the firm said. "We remain focused on collecting arrears. We do not anticipate granting future concessions and all avenues to collect rents due are being pursued." Hammerson was forced to cut rents by up to 30% because of covid restrictions on trade last year. It saw £2bn wiped off the value of its property portfolio, and posted a £1.7bn loss for 2019/2020. It sold seven of its retail parks to Canadian private equity firm Brookfield in April this year.
 
Burberry announced on Wednesday that Jonathan Akeroyd, boss of rival high-end fashion label Versace, will be its new CEO and executive director from April next year, replacing Marco Gobbetti who is stepping down to run Italy’s Salvatore Ferragamo. Yahoo Finance UK says Akeroyd's package includes a salary of £1.1m per annum and a share plan worth 162.5% of his annual salary. On top of this he will get a cash and share award worth £6m over the next four years to cover the loss of share and cash incentives at Versace that he gives up.
 
A Brewdog ad campaign claiming customers could win a beer can made of “solid gold” worth £15,000 has been deemed to be misleading by the UK’s Advertising Standards Agency (ASA), with the potential to cause "unnecessary disappointment". In fact, the cans were only gold plated rather than made from gold. Twenty-five people complained to the ASA (one of whom had won a can he had valued at just £500) which has ruled the ad must not appear again in its current form. Initially, BrewDog stood by the valuation, but later apologised for the error, saying on Twitter that it had “messed up” because of a miscommunication between its marketing and social media teams.
 
Storage company Big Yellow says it has secured planning consent for a 90,000 square foot store at its site on the Bath Road in Slough. The firm said construction would commence in Summer 2022 and that it expects the store to open in Winter 2023.
 
BAE Systems has acquired a new factory in Barrow to support its submarine programmes. Last month, BAE was awarded an £85 million contract to develop the next generation of Royal Navy submarines which will eventually replace the Astute class fleet.
 
Historic British motorcycle marque Norton is set to officially open its new factory in Solihull next month following a multi-million-pound investment by its parent company, TVS Motor.
 
A deal to sell a $2.6bn stake in China’s Evergrande, the world's most indebted property firm to a rival company has fallen through. Real estate firm Hopson Development was set to buy a 51% stake in Evergrande’s property services unit, but failure to conclude the deal means the crisis is likely to continue to send shock waves through global markets. Investors have concerns about Evergrande’s  $300bn (£222bn) plus of debt, and total liabilities equal to around 2% of China’s GDP. Evergrande shares have fallen by almost 80% since the start of this year. Both companies halted trading for 17 days but resumed in Hong Kong this morning, with Evergrande stock falling as much as 14% further on opening.

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