Published: 10 December 2021
Location: London, UK
The International Trade Secretary, Anne-Marie Trevelyan, has warned US Commerce Secretary Gina Raimondo that the UK could step up retaliatory measures if punitive tariffs on UK steel exports are not lifted soon. Former Florida Man put tariffs of 25% on steel exports (and 10% on aluminium exports) when the UK was part of the European Union, but while the EU and the US have now concluded an agreement that will see them lifted from 1 January, tariffs on UK producers remain. Trevelyan, who has been in the USA for meetins, said "we had a very frank conversation".
The UK economy grew by just 0.1% in October, official figures show, despite a strong performance by the health sector and second-hand car sales. A fall in people dining out and reductions in oil extraction and gas use meant growth came in lower than expected. The economy is still 0.5% below pre-pandemic levels, the Office for National Statistics (ONS) added, although the services sector has returned to pre-pandemic levels. The slower growth has led to predictions the Bank of England will not put up interest rates next week.
The government’s response to the covid-19 pandemic delivered one of the largest peacetime shocks to the UK economy in history and the largest forecast errors on record, the Office for Budget Responsibility (OBR) said yesterday. In March last year, at the start of the pandemic, the OBR predicted a 0.1% hit to GDP in 2020, but it actually fell by 10% as a whole. This was the largest drop in output since 1921 and almost twice the size of the recession in the wake of the 2008 financial crisis. This was also an 11-percentage point shortfall relative to its expectations, representing the largest year-ahead forecast error on record. The pandemic also resulted in a peacetime record budget deficit of £323bn ($425bn) in 2020-21 (15% of GDP), £268bn higher than the March 2020 forecast, another record forecast error, the OBR’s forecast evaluation report said.
European stock markets tumbled into the red yesterday following the Prime Minister’s launch of ‘Plan B.’ In London, the FTSE 100 closed 0.2% lower, despite a weak pound, while the French CAC dropped 0.2% and the DAX was 0.4% lower in Germany. Leisure stocks, including bars, restaurants, and hotels were especially hard hit by the news.
The government is facing increasing calls to step in to support businesses affected by new Plan B Covid measures, which include working from home guidance and vaccine passports for some venues. Trade union GMB said it backed the reintroduction of a furlough scheme if the new measures threaten jobs. Industry body UK Hospitality has said that anything short of full business rates relief, grants, rent protection and extended VAT reduction "would prove catastrophic".
Public Health Scotland has told people in the country to call off their Christmas parties to protect themselves against the omicron covid variant.
Business optimism in the UK increased for a second consecutive month in November, reaching its highest level since July this year, Yahoo Finance UKreports. According to the latest Business Trends Report from accountancy and business advisory firm BDO, its optimism index rose by 1.49 points last month to reach 104.27 (the 100-point mark represents the long-term average level of business optimism in the UK). The report said the rise was due to an earlier than usual increase in activity ahead of the festive period, as businesses and consumers make purchases ahead of Christmas to mitigate any possible supply chain disruption. However, new government restrictions on businesses because of the Omicron covid variant threaten to derail business confidence, the BDO warned. “For UK businesses, pandemic recovery feels like one step forward followed by another step back. From supply chain disruption to a new COVID-19 variant, it’s clear that businesses aren’t out of the woods just yet,” Kaley Crossthwaite, partner at BDO, said. Meanwhile, according to research completed by the Centre for Economics and Business Research (CEBR) as part of the Business Trends report, the UK’s unemployment rate is now expected to peak at just 4.5% this quarter, before falling next year to take unemployment in the UK below its pre-pandemic level by the end of 2022.
House of Fraser and Waterstones are among more than 200 employers who are the latest to be named and shamed for breaching minimum wage law, Sky News reports. Greencore - which makes sandwiches for retailers such as M&S- and outsourcing giant Mitie - whose work includes managing Covid-19 test centres - were also on the list. The Department for Business, Energy and Industrial Strategy (BEIS) said 208 employers had fallen short by a total of around £1.2m owed to their workers in pay under the rules, leaving around 12,000 out of pocket. This latest list of employers named - in what has become a regular exercise by the government - were the subject of investigations by HM Revenue and Customs which concluded between 2014 and 2019. Companies named ranged from multinationals and big high street names to smaller firms and sole traders. BEIS said they had all had to pay back what they owed and would also face fines of up to twice the amount that was owed. Frasers Group said the breaches dated back to previous ownership of the department store chain.
The number of students seeking extra money because of financial problemsdoubled in 25% of English universities in the last academic year, the BBCreports. More than 75% of universities that responded to a Universities UK(UUK) survey said had seen an increase in requests for hardship funding, which are made directly with universities or colleges, and that students relying on part-time work were most likely to have been affected as they were unable to work during lockdowns. The government said it had made an extra £85m available for students "in the greatest need" in 2020-21.
Parcel firms will be expected to improve how they handle complaints under new proposals aimed at improving customer service. Regulator Ofcom said nearly two-thirds of customers it surveyed in January had suffered problems with deliveries despite parcel deliveries being "increasingly important" to people's daily lives. "We're planning to strengthen our rules to make sure people are treated fairly by delivery firms," said Lindsey Fussell, Ofcom's networks and communications group director.
Citizen’s Advice is accusing energy regulator Ofgem of making mistakes and missing opportunities for over a decade which have left the market in a "precarious" position. Citizen’s Advice alleged there were multiple instances in which Ofgem did not act on evidence of rule-breaking by companies, and scaled back enforcement activity, a decision the charity says led to a culture of non-compliance, with some suppliers even reliant on customer credit balances for working capital. The charity's chief executive, Dame Clare Moriarty, demanded an independent review of the market and new rules to protect consumers from paying a price for industry failure again. Shen warned the collapse of 26 energy companies - a third of UK household suppliers - has left consumers footing a £2.6bn bill, with the average household facing additional costs of around £94 each. This calculation was based on additional burdens placed on stronger companies, including paying for energy for the new customers and protecting credit balances, which are recoverable via a levy. Citizens Advice said it was the culmination of a failure by Ofgem to act against unfit energy suppliers for almost a decade.
Market research and data firm YouGov have announced the acquisition of Swiss market and social research agency LINK Marketing Services for CHF 26.4m (£21.7m) payable upfront in cash, and funded through YouGov's internal cash reserves. The AIM-traded company said LINK, founded in 1981 in Lucerne, was "well-regarded" in the region with a focus on innovation and social research capabilities.
Shares in transport operator Go-Ahead plunged yesterday as the company scrambled to calculate the fallout from "serious errors" which led to it being stripped of the Southeastern rail franchise, Sky News reports. The group lost a quarter of its value after revealing it would have to suspend its shares soon because counting the cost of the scandal will mean it misses a deadline to publish results. Southeastern was taken over by the government in September after it found the network operator - 65% owned by Go-Ahead - failed to declare £25m of taxpayer funding it should have returned. The Department for Transport (DfT) is considering issuing a fine over the episode, but Go-Ahead - which is one of the UK's biggest rail and bus operators - said it was difficult to know how big this would be.
HS2 has signed a £2bn contract with Hitachi and Alstom to design and build its new fleet of 225mph high speed trains at their factories in County Durham and Derby. The deal is for 54 trains which will support or create 2,500 jobs.
Whitehall's Advisory Committee on Business Appointments (ACOBA) has banned senior Treasury official Katharine Braddick from lobbying the government for two years when she takes up the role of director of public policy at Barclays bank. ACOBA also recommended she be barred from taking up the position for between three and six months. Braddick has been director-general for financial services at the Treasury since 2016.
New Zealand is to ban the sale of tobacco products to its next generation, in a bid to eventually phase out smoking. Anyone born after 2008 will not be able to buy cigarettes or tobacco products in their lifetime, under a law expected to be enacted next year. "We want to make sure young people never start smoking," Health Minister Dr Ayesha Verall said.
Sales of Spam have hit a record high for the seventh year in a row. Hormel, the company that makes the iconic brand of cooked meat, revealed the continued success of the wartime staple as it also posted record sales of $3.5bn (£2.65bn) in the three months to the end of October. The firm's boss said it will expand its range of Spam products next year.
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