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Oil prices continued to rise yesterday despite the US saying it was releasing 50 million barrels

   News / 25 Nov 2021

Published: 25 November 2021
Location: London, UK

By Suzanne Evans, Director, Political Insight

Oil prices continued to rise yesterday despite the US saying it was releasing 50 million barrels of oil from its reserves to bring down rising energy and petrol prices. Brent Crude was up 0.5% on the day at $82.56 (£61.82) per barrel, extending a 3.3% rise on Tuesday, which was its biggest percentage gain since August. The move also pushed oil giants BP and Royal Dutch Shell higher, which in turn helped to lift the energy sector and the FTSE 100 to a one-week high.
Factory order growth hit a new record last month, jumping to its highest level since 1977, according to the latest monthly Industrial Trends Survey from the CBI. Manufacturers’ monthly orders book balance jumped to 26% this month, up from 9% in October. The survey of 282 manufacturers also saw export order books at their strongest since March 2019. Output growth in the three months to November remained firm, increasing at a similarly above-average pace to October and September 2021. Some 12 out of 17 sectors saw output increase, with growth driven largely by the food, drink and tobacco, electronic engineering, and chemicals sub-sectors. However, price expectations among British manufacturers for the next three months also soared to a 44-year high, adding to mounting pressure for the Bank of England (BoE) to take measures to counteract rising inflation, Yahoo Finance UK reports.
Former Bank of England ratesetter Andrew Sentance took to Twitter yesterday to respond to news of factory order growth, saying: “Manufacturing orders and output surging and inflation at highest since late 70s. Yet the Monetary Policy Committee (MPC) sits on its hands, keeping interest rates at record low levels. A reality check is needed at the @bankofengland”.
The president of the CBI has told the Prime Minister to "stop hiking taxes and focus on boosting investment". Lord Bilimoria’s speech yesterday is being seen as a rebuke over policies such as plans to hike corporation tax from 19% to 25% and put national insurance up 1.25 percentage points for workers plus 1.25 percentage points for employers. Bilimoria – who founded Cobra beer – also said the UK can "look forward to a more confident global future by championing collaboration and competitiveness" and praised "steps in the right direction" such as a "super-deduction" tax break for investment. However, he highlighted "big areas where we must improve", saying Britain lags well behind Germany and the US on research and development spending. "The government have said they want a high-wage, high-growth, high-investment, high-productivity economy. Business agrees," he said, "but right now, we are facing a high-tax economy." Also in his line of fire were business rates, which "still need fundamental reform" and property taxes, the burden of which is four times higher than in Germany and three times above the average in the OECD, he said, concluding that: "Together, this all adds up to the UK having the highest tax burden in 70 years".
Lord Bilimoria’s speech follows what Sky News calls “a stumbling and poorly-received address by Boris Johnson to the same conference earlier this week in which the PM veered into ruminations about Peppa Pig World.” Last night, senior Tory donors also attacked tax rises and some declared their cheque books closed, The Telegraph claims, citing one unnamed donor as saying he feels "deeply, painfully disappointed" by the current leadership as do "four-fifths of my contemporary donors – large-scale donors in their 60s “. Other business leaders who have donated millions of pounds to the Conservatives echoed the cabinet minister Lord Frost's argument this week that Britain must cut taxes to make Brexit a success. City tycoon Michael Spencer, the former Tory party treasurer who chairs the Centre for Policy Studies, argued that "this country has to achieve economic growth and it can’t with a high tax, high spend policy," while Alexander Temerko, the Ukrainian-born businessman who runs energy cable company Aquind, said the Government needs to "lower taxes to stimulate business investment, especially in infrastructure projects. Otherwise, we are going to lose any advantage that Brexit may bring".

A group of 160 MPs and peers, including former Tory leader Iain Duncan Smith, have called for "bold" government action to curb gambling, including limiting online bets to £2, in a letter to the Telegraph. The letter warned that more than 55,000 children aged 11 to 16 are now gambling addicts and called on the government to review betting laws. Promoting the letter on social media, Duncan Smith said: "Limit online bets to maximum of £2. It's time for the Government to live up to the Conservatives' 2019 manifesto commitment to a review of gambling laws, levelling up and social justice." Shares of gambling firms Entain and Flutter fell on the news. 
Nearly 15 million Brits are now believed to be using 'buy-now-pay-later'(BNPL) services such as Klarna and Clearpay.  A new report from credit reference agency Equifax showed a record 28% of the UK adult population (53.6 million) made at least one BNPL repayment in October, up from 23% in December last year. This suggests 14.8 million of us are using the service now, 2.6 million more than at the start of the year. BNPL services allow customers to spread the cost of retail purchases over several weeks or months, often with no additional interest.
As house price growth has exceeded earnings growth in the UK, the latest Nationwide house price index reveals that a typical 20% mortgage deposit is now equivalent to 110% of the pre-tax income of a typical full-time employee, a record high and up from 102% a year ago. In the third quarter of 2021, the UK first-time buyer house price to earnings ratio stood at 5.5, above the previous high of 5.4 in 2007, and well above the long run average of 3.8. London continues to have the highest house price to earnings ratio at 9.0, although this is still below its record high of 10.2 in 2016. Scotland meanwhile remains the lowest house price to earnings ratio in the country at 3.4, closely followed by the North at 3.5.
48 members of the Wine and Spirit Trade Association (WSTA) have written to Transport Secretary Grant Shapps asking him to take urgent action to solve the HGV driver shortage problem and "avoid some of our favourite tipples from disappearing" from supermarket shelves. In their letter, the WSTA members highlight their "mounting concern" after rising costs and "supply chain chaos" continue to hold up alcohol deliveries. They called for the extension of the temporary visa scheme to address driver shortages and for improvements to transport routes to tackle the issues.
Lidl says it plans to open 1,100 new stores across the UK by the end of 2025, creating 4,000 new jobs. The discount supermarket has also just published results for the year to 28 February showing sales rose 12% to £7.7bn while pre-tax profits swung to £9.8m after a loss of £25.2m a year earlier. Lidl currently has some 880 stores and 13 distribution centres in the UK, in total employing more than 26,000 people.
Snap Inc, the owner of photo messaging app Snapchat, has reportedly signed a deal to more than double its London office footprint. According to the Evening Standard, Snap has agreed to take close to 115,000 square feet in a pre-let at a soon-to-be completed building. The Clerkenwell development - called Boom - features offices, terraces, a fitness studio and more than 200 bike spaces, the Standard said. Snap is understood to have a team of around 400 in the capital, but the size of the space Snap is taking could be used to house some 1500 people potentially in the future. Talks for the letting were reported by property news site EG in June, but the deal has only just been inked, according to Standard sources.
A local authority-backed energy supplier to more than 170,000 homes is racing to secure new funding as it plots a path back to profitability amid the industry's deepening crisis. Sky News has learnt that Together Energy, 50%-owned by Warrington Borough Council, is working with advisers at Alvarez & Marsal to raise additional capital. The company is said to be pitching to prospective investors that it is well-positioned to acquire underperforming rivals once wholesale energy markets begin to stabilise. 22 domestic energy suppliers have collapsed since the beginning of August because of soaring wholesale gas prices.
The Indian government is proposing a ban on cryptocurrencies such as Bitcoin and Ethereum. The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 will introduce a central bank digital currency(CBDC) to be issued by the Reserve Bank of India but also “seeks to prohibit all private cryptocurrencies in India” aside from “certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to a bulletin on the Indian parliament’s website.

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