The Bank of England’s Monetary Policy Committee will decide whether to raise interest rates

By Suzanne Evans, Director, Political Insight

The Bank of England’s Monetary Policy Committee will decide whether to raise interest rates to temper rising inflation later this morning. Inflation has climbed to 3.1%, well above the central bank’s 2% target.
 
CNG Energy has announced it is "very sad to say" it has ceased to trade. The energy company had 41,000 domestic customers. It is the 19^th company to fail since the start of September when wholesale gas prices surged.
 
The Competition and Markets Authority (CMA) has ruled that JD Sportsmust sell Footasylum. The CMA said JD Sports is “by far and away” the closest alternative for shoppers at Footasylum and that JD Sports’ £90 million April 2019 takeover of Footasylum will continue reducing competition even after taking into account the growth in online shopping. This is the second investigation by the competition watchdog - JD Sports appealed a previous ruling, saying investigators failed to take into account online sales through Nikeand Adidas in the UK. “Requiring JD Sports to sell Footasylum is the only way to address its competition concerns and protect consumers.” The CMA said, adding it will “oversee the sale and approve the purchaser, in order to ensure that Footasylum will be run as a fully independent competitor.”
 
The Telegraph reports claims lodged in the High Court that Benoit Scheen, a former senior executive of telecoms firm Orange, sought to arrange a call with a rival on untraceable “burner” mobiles as part of an unlawful plot that led to the collapse of the retailer Phones 4U. Alongside Deutsche Telekom, EE, Vodafone and the Spanish owner of O2, Telefonica, Orange is accused of secretly agreeing to cut ties with Phones 4U. Without its mobile phone suppliers, the retailer, owned by the private equity firm BC Partners, collapsed in mid-September 2014 with the loss of thousands of jobs. Scheen allegedly approached Philipp Humm, head of Vodafone at the time, via text message. When Humm replied he was not comfortable with the idea and suggested a competition lawyer should join any call between them, Mr Scheen replied that he did not think that “presence of a lawyer would be suitable”. Although there is no evidence the “burner” phone calls took place, the court documents allege Scheen otherwise gained “sufficient comfort” that if EE pulled out of Phones 4U, then Vodafone would too. In the event, O2 pulled out first in January, followed in September by Vodafone and finally EE two weeks later. The administrator of Phones 4U is seeking damages of more than £1bn over allegations that the rival telecoms operators colluded to force the retailer out of business.
 
The Daily Mail and General Trust has agreed a deal with the Rothermere family to take the company private after 90 years on the London stock markets. The newspaper owner said the deal would comprise of cash, dividends and shares valued at 1,263 pence a share. Shareholders will receive 255 pence in cash, a special dividend of 568 pence and 0.5749 Cazoo shares for each share. This is slightly higher than the indicated price in July and is priced at a 21.5% premium to the closing price of the stock on Tuesday. The deal gives chairman Lord Rothermere, who previously owned around 30%, full control of the group.
 
Online ticket seller Trainline has returned to profit, it said yesterday. For the six months to the end of August, the company posted earnings before interest, tax, depreciation, and amortisation of £15m versus a £16m loss in the same period a year ago. Revenue rose 151% to £78m and net ticket sales were 179% higher at £1bn. Trainline highlighted a particularly strong recovery in the second half, with group net ticket sales recovering to 71% of 2020 levels, the highest since the pandemic onset. The company also saw return to growth in its international markets in France, Italy, Germany and Spain.
 
Royal Dutch Shell plc has entered an agreement with the Landmark group of companies to acquire 248 of the latter’s fuel and convenience retail establishments, Zacks reports. Shell will also acquire supply agreements with another 117 independently operated fuel and convenience sites. The deal is expected to close by the end of 2021. The agreement adds more than 13,000 Shell-branded sites across the United States, owned and operated by wholesalers, dealers and joint venture partners. By 2025, Shell expects to globally service 40 million customers per day at its retail service stations, while having 55,000 Shell-branded retail service stations and 15,000 convenience stores.
 
Japanese-owned Mitsubishi Electric Air Conditioning Systems is investing £15.3 million in its Livingston factory in Scotland to meet the increasing European and UK demand for its low carbon heat pumps. The huge investment will safeguard and create 379 jobs.
 
Ikea is likely to raise prices to mitigate the effects of disruption to global supply chains, following a drop in full-year profit due to higher transport and raw material costs, Reuters reports. Pre-tax profit at Ikea Group, which makes most of its money selling goods to its franchisees, fell 16% in the year to September to €1.7bn (£1.4bn). "Keeping Ikea stores and warehouses stocked has been a challenge. Supply chain disruptions led to a substantial drop in the availability of products that we have yet to recover from. We expect this will continue far into [Ikea's 2022 fiscal year]," a statement said.
 
Kensington Mortgages, which specialises in home loans to the self-employed, is being put up for sale. Sky News has learnt that Morgan Stanley has been hired to oversee an auction of the business.
 
Uber has struck a deal with Tesla to allow its London drivers to access electric vehicles, meaning Uber drivers now have access to a clean air fund to buy or lease a Tesla car. The ride-hailing app began adding a 15p per mile clean air fee in London in January 2019 to help drivers with the cost of switching to greener cars, Sky News reports. So far, this has raised £135m, with funds building up for each driver depending on how many miles they clock up. An Uber spokesman said a typical driver has around £3,500 to £4,000 available to put towards making the switch to an electric vehicle (EV).
 
Some UK meat producers are sending carcasses to the EU for butchering before re-importing them because of a labour shortage, the Financial Timesreports. The British Meat Processors Association (BMPA) says beef is being sent to the Republic of Ireland and pork producers are beginning to send pigs to the Netherlands for butchering and packing. Meat exported in this way cannot be labelled as British pork for UK sale. According to the BMPA, the move will cost an additional £1,500 in transport fees and Brexit customs requirements for each lorry load of carcasses. Staff shortages and lack of capacity at abattoirs have led to the culling of more than 10,000 healthy pigs so far.
 
The average price of diesel across the UK has hit a "scary" new record high, according to the RAC. The motoring organisation said diesel cost on average 147.94p a litre on 31 October, surpassing the previous high of 147.93p set on 12 April 2012. The price of a litre of diesel has gone up 30p a litre in a year, which means filling up a 55-litre tank costs £16 more – going up from £65 to £81. A week or so ago, petrol also exceeded previous highs of 142.48 per litre in April 2012 but has risen again since, last peaking at 144.35p on 31 October.
 
The average house price passed £250,000 in October, an increase of more than £30,000 since the pandemic struck in March 2020, according to Nationwide’s latest house price index. Demand for homes has remained strong, despite the expiry of the stamp duty holiday at the end of September, as have mortgage applications, which numbered 72,645 in September, over 10% higher than the monthly average in 2019. “Combined with a lack of homes on the market, this helps to explain why price growth has remained robust,” said Robert Gardner, Nationwide's chief economist.
 
A survey by online business networking site LinkedIn suggests a new concern in the workplace: proximity bias. As more businesses offer employees greater flexibility around where they work, the worry is that those who are physically in the office will get preferential treatment and be left out of promotion or career decisions. 44% of workers believe people who choose to work from the office are more likely to be favoured by bosses or senior management.
 
Pets At Home CEO Peter Pritchard will step down from his role next summer after 11 years with the business. The company said he will remain "fully engaged" as CEO until late May 2022, to oversee the presentation of the preliminary results and to ensure a smooth transition period to his successor.
 
Thousands of newly retired people are still yet to receive their first state pension payments after a deadline for backlogs in payments remains to be cleared, the BBC reports. Although the Department for Work and Pensions is engaged in a catch-up exercise, 4,900 applicants are still waiting for their claims to be processed.
 
FINANCE DAY AT COP26 YESTERDAY
 
Bank of England governor Andrew Bailey said at COP26 yesterday that the central bank had reached a series of "pivot points" on climate change, but there is "much further to go" in many respects for the financial system. Bailey said he noted the growing importance of climate awareness filtering through to central banks, and that the bank would move from an “enabling approach” to “actively overseeing change” required. The climate crisis "has touched all areas of our organisation – from the way we heat our buildings, to the way that we manage our holdings of corporate bonds for monetary policy purposes," he said. "It is included in all of our remits and embedded in all of our decision-making processes”. The bank had "seen a step change among senior executives and boards at firms" he said, adding that some organisations were "exhibiting genuine ambition" in making steps towards net zero.
 
The Financial Conduct Authority (FCA) is seeking ways to label investment products with sustainability characteristics, so that investors can put environmental, social and governance (ESG) matters “at the heart of their decisions.” The financial watchdog published a discussion paper yesterday to coincide with Finance Day at the United Nations' COP26 climate change conference , inviting views on potential criteria to classify and label investment products according to their impact on the environment. “It is vital that we innovate to support industry’s shift to a more sustainable future. That is why the FCA has been leading from the front,” said Nikhil Rathi, the FCA’s CEO, during his speech at the summit. "Recently, we’ve seen growing scepticism about some companies’ and financial firms’ 'green' claims. We can’t let this greenwashing persist and risk the flow of much-needed capital to help secure our futures. That’s why ESG issues are so high on our regulatory agenda,” he said.  
 
UN climate envoy Mark Carney talked up the fact that as part of the Global Financial Alliance for Net Zero (GFANZ), more than 450 companies from 45 counties are committed to managing their balance sheet totalling $130tn (£95tn) in line with net zero. “Make no mistake, the money is here, the world wants to use it,” the former Bank of England governor said at the COP26summit in Glasgow yesterday. GFANZ has an advisory panel of 20 independent experts and seven NGOs to guide and scrutinise its work, and the alliance will work closely with the official sector to build a global financial system focused on achieving net zero, Carney said. He added that the companies in the alliance will target their "fair share" of the 50% of greenhouse gas omission reduction by 2030 needed to keep the world on track to limit global warming to 1.5 degrees Celsius "using the most stringent science-based scenarios to set out detailed plans".

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