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The Liberal Democrats took the pro-Brexit parliamentary seat of North Shropshire

   News / 17 Dec 2021

Published: 17 December 2021
Location: London, UK

By Suzanne Evans, Director, Political Insight


This is the last Daily Busines News of 2021. We will resume bulletins on Monday 7th January 2022. Thank you for reading!
 
The Liberal Democrats took the pro-Brexit parliamentary seat of North Shropshire yesterday, overturning a 23,000 Conservative majority in a byelection with a 34% swing, to win by almost 6,000 votes. The former MP, Owen Patterson, resigned in early November. The seat had been Conservative since 1832.
 
The UK has signed a free trade deal (FTD) with Australia. It is the first post-Brexit deal negotiated from scratch and not "rolled over" from trade terms applicable while we were in the EU. The government estimates the deal will unlock £10.4bn of additional trade by ending tariffs on all UK exports. There is also hope the FTD will boost the UK's bid to join the Trans-Pacific Partnership, one of the largest free trade areas in the world. Australian trade minister Dan Tehan said: "It's a truly historic agreement - it's a true free-trade agreement. Everyone wins". The agreement, signed in a virtual ceremony by International Trade Secretary Anne-Marie Trevelyan, is due to come into force next year. She described it as "a landmark moment in the historic and vital relationship between our two Commonwealth nations".
 
The Bank of England has increased UK interest rates from record lows of 0.1% to 0.25% in a bid to combat soaring inflation. The Monetary Policy Committee voted by a majority of 8-1 to act amid pressure from the International Monetary Fund, who said earlier in the week that the central bank should delay no longer. It also voted unanimously to maintain the amount of quantitative easing at £895bn. Inflation soared to its highest level in more than a decade last month, climbing to 5.1%, according to the Office for National Statistics. This was significantly more than the Bank of England’s 2% target and well above the expectations of 4.5%, thanks to the rising cost of clothing, fuel, and second-hand cars. The Bank said it expects inflation to rise to 6% by next April - its highest level since 1992.
 
The European Central Bank has voted to leave interest rates unchanged at 0%, with it being "very unlikely" to raise rates at all next year, despite inflation rising to record levels across the eurozone.
 
France has tightened restrictions for travellers arriving from the UK, saying that from Saturday, most travellers who are not French residents or citizens must give a "compelling reason" for travel in order to be allowed into the country. While some lorry drivers and students will be able to travel, Brits visiting relatives is not currently listed as an acceptable excuse. Additionally, all UK arrivals will have to provide a negative Covid test less than 24 hours old and isolate for at least two days. French citizens, their partners and children, legal residents, and EU citizens travelling home through France, won't need an essential reason to travel - but must still abide by all other rules.
 
The Office for National Statistics (ONS) says retail sales volumes rose by an estimated 1.4% in November 2021 compared with October 2021. This is 7.2% higher than their pre-pandemic levels and was boosted by both Black Friday and pre-Christmas trading. The ONS says clothing sales were particularly buoyant, as were sales of computers, toys and jewellery. Automotive fuel sales volumes rose by 3.7% over the month to November to reach similar levels to those before the supply disruption in September and October, the ONS said, but they remain 1.9% below pre-pandemic levels in February 2020.

Private sector growth in the UK slowed sharply to a 10-month low in December amid tighter coronavirus pandemic restrictions and increasing business uncertainty. According to new data compiled by IHS Markit and CIPS, its preliminary “flash” survey of purchasing managers fell to 53.2 during the month, down from 57.6 in November. Although any reading above 50 indicates growth, this was much weaker than expected, and the worst month for the UK economy since February this year. A Reuters poll of economists had pointed to a much stronger reading of 56.4, Yahoo Finance UK reports. The report said the services sector - which represents four-fifths of UK output from bars and hotels to law firms and accountants - suffered "negative impact on consumer demand from tighter COVID-19 stringency measures and renewed travel restrictions". Travel and hospitality firms were particularly affected by this negative impact.  

The boss of pub giant Wetherspoon has accused the Government of causing “massive” economic damage over the changing restrictions for his industry. Company chairman Tim Martin called for measures to keep pubs in business as they struggle to cope with the worsening virus crisis. Martin told PA Media: “The Government has caused massive and unnecessary economic damage with a constantly changing series of restrictions for pubs which have no medical basis – curfews, a substantial meal with a pint, table service only (unlike shops) and so on. “If it wants to keep pubs in business – Wetherspoon alone paid one pound in every thousand of tax collected by the Government in 2019 (three quarters of a billion pounds) – it should eliminate VAT on pub food, which it already does for supermarkets, and make that permanent.” “It should also eliminate business rates until Covid restrictions end completely,” he added. “If it does these two things it might preserve one of its biggest sources of employment and tax – namely, pubs.”
 
Marks & Spencer is suing Aldi for allegedly copying its ‘Light Up’ gin just months after the supermarket rivals faced off over caterpillar cakes, PA Media reports. M&S has filed court papers which say that Aldi’s gold flake blackberry and clementine gin liqueurs are “strikingly similar” to the Light Up gin it sold last Christmas and for which it holds a registered design. It is seeking a High Court injunction restraining Aldi from further alleged infringement of its protected designs, an order for Aldi to destroy or hand over anything constituting a potential breach of the injunction and an inquiry into damages arising from the alleged infringement. Both retailer’s gins come in a bell-shaped bottle with a light in the base, which illuminates edible gold flakes in the liquid. The Aldi gin is about £6 cheaper than the basic £20 M&S version.
 
Just Eat Takeaway.com has linked up with Asda to deliver groceries, Bloomberg reports. The Amsterdam-based restaurant delivery company will launch a trial partnership with the major supermarket in the first quarter of next year, covering five Asda stores, according to a person familiar with the matter. Just Eat has been offering hot pizza delivery from Asda since 2019, but this is its first significant move into the UK grocery delivery market.
 
Chinese creditors are suing embattled property developer China Evergrande Group, the FT reported yesterday. Apparently, a Chinese court has accepted 367 civil lawsuits with claims totalling $13.2bn (£9.91bn). The cases were submitted between 24 August and 9 December, which is when Fitch Ratings downgraded Evergrande to "restricted default" following the assumed non-payment of coupons due on two-dollar bonds. Bo Zhuang, an analyst at Loomis Sayles, told the FT: "Creditors are racing to take Evergrande to court so they can be in a better position to get their money back in the event of a debt restructuring". The Hong Kong-listed stock has lost 89% of its value this year since Beijing cracked down on China's property sector to curb consumer speculation and soaring debt. Evergrande borrowed heavily from both domestic and international lenders to build up its property portfolio and has debts of around $300bn (£225.19bn). It owns around 1,300 projects in more than 280 Chinese cities. Bloomberg meanwhile, claimed yesterday that regulators had ordered Evergrande to prioritise payments to workers and suppliers, to head off the risk of potential social unrest ahead of the Lunar New Year holidays, which start on 1 February. Evergrande has around 163,000 employees.
 
McDonald's has settled a lawsuit in which its former chief executive, Steve Easterbrook, has returned equity awards and cash worth over $105m (£78.82m). The fast-food chain found that Easterbrook hid and lied about sexual relationships with three members of staff, which "violated company policy" and showed "poor judgement". Had it been aware of the relationships at the time, it would not have approved his multi-million dollar pay-off, McDonald’s said.


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