Published: 15 December 2021
Location: London, UK
The last Daily Busines News of 2021 from us will be Friday this week, 17th December. We will resume bulletins on Monday 7th January 2022.
Prime Minister Boris Johnson’s “Plan B” was passed by parliament yesterday, although he had to rely on support from the Labour benches to get the controversial measures through. He faced the largest revolt on his own backbenches since taking office. The vote on whether to introduce covid passports for nightclubs, unseated indoor venues with more than 500 people, unseated outdoor venues with more than 4,000 people, and any venue with more than 10,000 people, passed by 369 votes to 126, but with 101 Tory MPs voting against the measure, and several more – including Chancellor Rishi Sunak and former PM Theresa May - abstaining. Plans to force NHS staff to get the covid vaccine as a condition of employment also passed by 385 votes to 100, after another Tory revolt. The move could lead to some 123,000 NHS workers being sacked, alongside the 40,000 care home workers already affected. Other measures included in ‘Plan B’ mean you are advised to work from home, if you can, and the wearing of masks becomes mandatory "most public indoor venues", including theatres and cinemas, with exceptions "where it's not practical, including while eating, drinking, exercising, or singing. Anyone who has been identified as a contact of a coronavirus case are also be asked to test themselves daily, but need not isolate, excluding anyone identified as a contact of anyone with the Omicron variant, which means they too must isolate for ten days.
Inflation has soared to 5.1% in the 12 months to November, up from 4.2% the month before, and now sits at its highest level since September 2011. The increase was well above forecasts of a 4.7% increase, the Office for National Statistics (ONS) said. Grant Fitzner, ONS chief economist, said a rise in fuel, energy, clothing and secondhand cars were big factors, together with the increased cost of raw materials. Figures showed petrol prices jumped to the highest ever recorded - 145.8p a litre last month. The jump in inflation, twice the Bank of England's 2% target rate, will intensify debate over whether interest rates should rise.
The International Monetary Fund (IMF) has urged the Bank of England to avoid “inaction bias” ahead of the next Bank of England interest rate vote tomorrow, and said the UK may need to bring back some of the programmes it introduced to help see the economy through the pandemic, including the furlough scheme. The IMF said the UK’s recovery has been faster than expected but also said capacity constraints, rising price pressures and new Covid-19 variants pose risks to the UK's outlook. The IMF expects inflation to peak at about 5.5% in the spring of 2022, before gradually returning to target of 2% by early 2024.
The unemployment rate has fallen to 4.2% in the three months to October, the latest stats from the Office for National Statistics (ONS) show. Employers added a record 257,000 staff to their payrolls in November, bolstering early signs that the labour market withstood the end of the furlough scheme. The jobless rate remains 0.2 percentage points above its pre-pandemic level.
A record number of vacancies in the private sector caused by an imbalance between supply and demand for labour is leading to record vacancies and increases in pay for new recruits, the National Institute of Economic and Social Research (NIESR) has said. Its data showed growth in average weekly earnings including bonuses was 4.9% in the three months to October. The NIESTR now expects weekly earnings annual growth to average 5.7% in 2021 — the highest in two decades, after 1.8% growth in 2020. UK job vacancies hit a record high of 1.21 million for the quarter ending November, an increase of 434,500 from its pre-pandemic level, according to the Office for National Statistics. Record job vacancies were reported in 13 of the 18 industry sectors. Meanwhile, the NIESR report said that after growing at a record rate of 3.9% last year, public sector pay has moderated because of the government’s pay freeze policy.
Energy regulator Ofgem says energy providers will face more robust financial checks from January, following the collapse of 24 mostly smaller suppliers with a total of some 4 million customers, because of an huge increase in the wholesale gas price. Bosses of firms are also to undergo more stringent vetting, the BBC reports. Ofgem says it is also to consult on the future set up of the energy price cap, which has been highlighted as part of the problem.
The joint committee of MPs scrutinising the draft Online Safety Bill have called for paid adverts to be covered by the legislation, to stop fraudsters using the adverts to attract their victims. Evidence put to the committee included attestations that victims of fraud lost £2.3bn over the past year alone, and that 85% of scams rely on the internet. If passed, the new law will "make internet service providers responsible for what’s happening on their platforms, including for serious crimes like child abuse, fraud, racist abuse, promoting self-harm and also against violence against women, for which previously there was little enforceable sanction," the government says.
The Competition and Markets Authority (CMA) says smartphone users are losing out because Apple and Google’s control on mobile operating systems limits choice for consumers, having earlier this year launched an investigation to look at the dominance of Apple’s iOS and Google’s Android operating systems, as well as their app stores and web browsers. Because when consumers buy a mobile device, they enter Apple’s iOS or Google’s Android ecosystem, Apple and Google can control how online content is provided to users and “tilt” the playing field towards their own services, Yahoo Finance UK explains. Apple does not allow any other app store than its own on iPhone and iPads, and its browser Safari coming pre-installed on its devices. Similarly, Google’s browser, Chrome, and app store also come pre-installed on most Android devices. The CMA says this substantial market power needs to be tackled, ideally through CMA’s Digital Markets Unit (DMU), which has been established to oversee a new regulatory regime for the most powerful digital firms. The watchdog also wants the companies to make it easier for users to switch between iOS and Android phones when they want to replace their device without losing functionality or data and make it easier to install apps through methods other than the App Store or Play Store. Apple’s and Google’s browsers account for 90% of browser usage on mobile devices in the UK.
British Airways has set out plans to resume short-haul flights from Gatwick Airport next March via a new subsidiary it says will compete on price with "no frills" rivals. The BBC reports that the carrier, which had suspended European trips from the West Sussex airport in spring last year because of covid restrictions, said tickets were now on sale from £39 each way. Plans for a new Gatwick subsidiary were first floated over the summer though initially ran into turbulence as BA sought agreement with unions for the blueprint, which depends on being able to operate on a lower cost base. It has since ironed out a deal with the British Airline Pilots' Association (BALPA). Flights to 35 destinations including Amsterdam, Athens, Berlin, Faro, Ibiza, Malaga, Santorini, Palma, Nice and Tenerife, will be available.
Stagecoach has agreed to sell Megabus and its shares in two other intercity coach services (Scottish Citylink Coaches and Falcon South West) for £8.75m to head off potential competition barriers to its proposed merger with National Express. The buyer is Singapore's ComfortDelGro, which already owns the remaining stake in Scottish Citylink. The deal comprises £7m cash and a £1.75m loan and is expected to complete at the end of February. Stagecoach has been in talks with National Express since September. Stagecoach is currently valued at around £440m.
UK-based pest control firm Rentokil has agreed a $6.7bn (£5bn) deal to buy US rival Terminix Global.
Tesco has averted another potential strike, having reached a new pay agreement with the Usdaw trade union. According to Reuters, Usdaw has suspended industrial action planned in the week leading up to Christmas Eve, pending a ballot on the "much improved" offer it is recommending to its members. Last week members of the Unite union suspended strike action following an improved pay rise offer.
FTSE 250 cinema operator Cineworld has been ordered to pay Canadian theatre company Cineplex CAD $1.28bn (£751.57m) in damages and lost transaction costs in relation to its proposed yet aborted acquisition of the Toronto-based firm. Cineworld defended and counterclaimed the suit, saying Cineplex had breached a number of its covenants. However, this was dismissed by the Ontario Superior Court of Justice. Cineworld says it will appeal the decision.
Online gambling group 888 Holdings has sold its bingo businesses to the Broadway Gaming group for $50m (£38.8m) on a cash-free debt-free basis, including a potential earnout of up to $4m (£3.02m). The FTSE 250 firm’s bingo business is substantially UK-based.
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