UK consumer spending rose to £700m in October, up from £300m in September

By Suzanne Evans, Director, Political Insight

According to the latest service sector survey from the Confederation of British Industry (CBI), sentiment for business and professional, and consumer services companies got better in the three months to November, despite costs growing at the fastest pace since records began. However, there were signs of slowing growth, as firms expected volume growth to ease next quarter, Yahoo Finance UK reports. Cost pressures also continued to build during the period, with both consumer services and business and professional services seeing costs grow (to 56% compared to 39%) at the fastest pace in survey history, which began in 1998. Firms in both sectors now anticipate the pace to pick up even further to 70% next quarter, also the strongest expectations on record.
 
UK consumer spending rose to £700m in October, up from £300m in September, as the country continued to recover from the coronavirus pandemic and more households were willing to borrow. According to the latest data from the Bank of England (BoE) yesterday, net borrowing of mortgage debt by individuals amounted to £1.6bn over the period, down from £9.3bn in September, and the lowest since July. Mortgage approvals for house purchase fell further to 67,200 in October, down from 71,900 the month before, thanks to the end of the government’s stamp duty holiday.
 
The Competition and Markets Authority (CMA) said on Monday that it will refer the sale of Grafton's merchanting business to Huw Gray for an in-depth investigation if the two parties do not address competition concerns by next week. Building materials distributor and DIY retailer Grafton announced in July that it had agreed sell its traditional merchanting business to builders' merchant Huw Gray in a £520m deal. Grafton released a brief statement in which it said the transaction is expected to complete on 28 February 2022.
 
The Competition and Markets Authority (CMA) says it has secured "improved commitments" from Alphabet subsidiary Google on its proposals to remove third-party cookies and other functions from its Chrome browser software. The CMA had been investigating Google's proposals since the start of the year in response to concerns that Google's plans could impede competition in digital advertising markets. It said its intervention, and the improved commitments, were designed to ensure that Google's proposals could improve privacy without adversely affecting competition.
 
Which? has released new research showing cold callers are exploiting the vulnerable by mis-selling household appliance insurance cover or extended warranties. The consumer group found that some victims of these scams were charged thousands of pounds to insure appliances they don't even own through costly direct debits. Almost a quarter of Which? members surveyed reported having been contacted by callers who told outright lies, telling them their existing cover is expiring, even though they do not have a policy, or call claiming to be another well-known company. They then pressure selling invisible and easily forgotten products that require a regular monthly charge, before sitting back and hoping the £10 or £20 leaving their victim’s account month after month will not be noticed, Yahoo Finance UK reports.
 
Budget airline easyJet reported a softening of demand in the first quarter of the current fiscal year due to the outbreak of the new Omicron Covid variant, Sharecast News reports. The company reported a better-than-expected annual pre-tax loss of £1.13bn this morning, and said it expected capacity to return to pre-pandemic levels by the fourth quarter of 2022. "Demand is accelerating with key periods such as October half term, ski and Christmas seeing strong performance. We continue to add capacity and expect to fly around 70% of 2019 capacity in Q2 and expect that Q4 summer capacity will be at near 2019 levels," the company said. Airline shares plunged last Friday as news of the new Covid variant emerged from Southern Africa and countries imposed travel bans on six countries from the continent.
 
A further 100 McColl corner shops will become Morrisons Daily stores, after the wholesale partners struck a fresh deal. McColl's will now convert 450 of its locations into the new Morrisons Daily format before November 2022.  
 
Aviation logistics provider John Menzies has announced that its Menzies Aviation division has secured an extension to its long-standing ground services partnership with easyJet at 21 airports across Europe. The London-listed firm said the contract renewals would see Menzies provide full ground handling and de-icing services at Amsterdam, Nice, Stockholm Arlanda, Prague, Budapest and Isle of Man airports, as well as ground handling at Luton and passenger and supervision services at 11 airports across Spain. Menzies will also provide de-icing at Manchester and Gatwick airports and de-icing and cleaning at Edinburgh Airport. Collectively, the contracts represented more than 80,000 'turns', or arrivals and departures, annually, Sharecast News said.
 
Smurfit Kappa, Europe's leading corrugated packaging manufacturer, set to extend its Mold plant as part of a £34 million investment at the North Wales site. The huge expansion will create the largest factory of its type in the UK. 
 
Santander UK has appointed industry veteran Mike Regnier as its new CEO. Regnier joins the bank from Yorkshire Building Society, where he has been CEO since 2017. He has more than 25 years' financial services and retail experience, having held a variety of leadership positions across a range of blue-chip brands including Lloyds Banking Group, TSB, Halifax and Asda.
 
Supermarket chain Lidl’s CEO Christian Härtnagel is stepping down to take up the same role in Germany, replacing Matthias Oppitz. His current deputy Ryan McDonnell will become CEO on 1st February. Härtnagel has been CEO of Lidl GB for more than five years, and been with Lidl for more than 18 years, holding a variety of roles including regional director at Lidl Ireland.
 
Twitter confirmed yesterday that CEO Jack Dorsey is stepping down with immediate effect, to be succeeded by Parag Agrawal, who has been with Twitter for more than a decade and has served as chief technology officer since 2017. Dorsey will remain a member of the board until his term expires at the 2022 meeting of stockholders. Dorsey said: "I've decided to leave Twitter because I believe the company is ready to move on from its founders. My trust in Parag as Twitter's CEO is deep. His work over the past 10 years has been transformational. I'm deeply grateful for his skill, heart, and soul. It's his time to lead." Twitter shares rose on the news. CMC Markets analyst Michael Hewson said this could be explained by the fact that Dorsey, who also runs digital payments firm Square, has previously been accused of being a part time CEO.

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