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Office for National Statistics show inflation soared to a 30-year high in the year to December

   News / 19 Jan 2022

Published: 19 January 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight


Statistics released this morning by the Office for National Statistics (ONS) show inflation soared to a 30-year high in the year to December, reaching 5.4%, up from a decade-high of 5.1% in November. The ONS said the increase was due primarily to rising energy costs, housing and household services, transport costs – particularly motor fuels and demand for secondhand cars - and ongoing supply chain disruption. Food prices also grew strongly during the year, as did increases in furniture and clothing prices. Inflation is expected to soar to as much as 6% in April, when energy bills are set to rise. The Bank of England’s Monetary Policy Committee next meets to decide whether to raise interest rates on 3rd February. The current base interest rate in 0.25%.
 
Oil prices are trading at more than seven-year high following a drone attack in Abu Dhabi which set off explosions in fuel trucks and stirred geopolitical tensions in the region. Brent crude futures rose $1.28 (£0.94), or 1.49%, to $87.34 a barrel on Tuesday morning, while US West Texas Intermediatecrude futures jumped $1.20, or 1.43%, from Friday’s settlement to $85.02 a barrel. Overall, oil prices have climbed more than 10% since the start of the year, hitting levels not seen since 2014. Three fuel trucks exploded and a fire broke out near storage facilities of oil firm ADNO on Monday in a drone attack that Yemen’s Iran-aligned Houthi group said was an attack deep inside the United Arab Emirates. Three people have been killed and six are injured, according to local reports.
 
The government is planning to toughen up rules around cryptocurrency adverts. The Treasury says it will make the promotion of qualifying cryptoassets subject to Financial Conduct Authority (FCA) rules to ensure they are fair, clear, and not misleading. Under the Financial Services and Markets Act 2000, a business cannot promote a financial product unless they are authorised by the FCA or the Prudential Regulation Authority (PRA), or the content of the promotion is approved by a firm which is, Yahoo Finance UKsays. The BBC reports that some 2.3 million people in the UK own a crypto asset such as Bitcoin, but these are currently largely unregulated, and investors lack consumer protections. Non-fungible tokens will not be covered by the new rules.
 
The Advertising Standards Authority (ASA) has named six “influencers” it says are "consistently failing to disclose advertising" on Instagram, the BBCreports. The six, who include Love Islanders Jess and Eve Gale and Belle Hassan, have all previously been warned about breaking advertising rules, and so have been listed as repeat rule-breakers on the ASA website. The watchdog is now taking out ads alerting consumers to the rule breaches over a two-week period. Ads are also being taken out against Jodie Marsh, Anna Vakili and Francesca Allen. If the influencers fail to comply, they could be referred to other watchdogs with the ability to fine them. UK advertising rules state that paid posts must be clearly marked with #ad or Instagram's paid partnership feature.
 
As expected, Together Energy has ceased trading. In a statement on its website, the energy supplier said the "sustained increase in wholesale prices and the securities required to continue to forward purchase the energy", made the firm's situation "untenable". The firm’s 176,000 customers will be found a new supplier, Ofgem said this morning. A total of 28 energy suppliers have now stopped trading in the UK since August, affecting millions of customers, because the rise in global wholesale gas prices has made price promises from many suppliers to customers undeliverable. Together is 50% owned by Warrington Borough Council, which ploughed £18m into the firm in 2019, before later lending it a further £20m. The council said it was "disappointed" the firm had gone under but defended its investment decision. However, Andy Carter, Conservative MP for Warrington South, criticised the council who he said "simply should not have made this investment decision"
 
Aldi been named the UK’s cheapest supermarket of the year, according to the latest analysis from consumer group Which? Aldi beat nearest rival Lidl for six of the 12 months and tied with them for one. In January 2021, a basket of 19 staple items cost £18.45 at both discounters. In December, shoppers were paying £23.29 for a basket of 22 groceries at Lidl, 35p less than at Aldi, where the basket was £23.64. The items cost £9 less than the most expensive supermarket, Waitrose, which was charging £32.85 for an equivalent basket of groceries. Asda was the cheapest of the "big four" supermarkets and has been for every month for the last two years. The analysis also revealed that prices had risen significantly over the course of the last 12 months.
 
Aldi has opened its first checkout-free trial supermarket in Greenwich, London. Instead of paying at the till, customers can download an Aldi “Shop&Go” app and be billed automatically for purchases once they leave the store, having been tracked by a series of cameras as they do their shopping. Facial age estimation technology will be used to allow customers to buy alcohol, although people who cannot or choose not to use this system can have their age verified by a member of staff. Tesco, Sainsbury's and Amazon have already opened similar stores.
 
Morrisons has joined the ranks of Ikea, Ocado and Next in cutting sick payfor un-covid vaccinated staff members who are forced to isolate but test negative after being exposed to the virus. They will receive only statutory sick pay of £96.35 a week. Workers who test positive will continue to receive the firm's full sick pay of at least £10 an hour. Morrisons CEO Dave Potts first raised the issue in a conference call with investors in September, according to the Guardian, which says the move was part of a plan to tackle the "biblical costs" of the impact of the coronavirus pandemic and to encourage staff to get jabbed. In England, unvaccinated people must isolate for 10 days if they are exposed to Covid, even if they do not test positive themselves, whereas vaccinated people do not have to isolate, despite still being able to contract and pass on the virus.
 
One of the UK's largest insurance groups is to replace the words "energetic," “innovative,” and "enthusiastic" in its job adverts, saying they put off older applicants. Phoenix Group, which owns Standard Life, said this was not because people's enthusiasm waned with age, but that older workers often ruled themselves out of applying if ads made them felt unwanted.
 
British Steel to invest £26 million in new processing facilities at its Skinningrove plant - the steelmaker's largest investment in its special profiles business for more than 30 years.
 
Ten leading US airlines are warning that the imminent rollout of 5G services could be disastrous, and are calling for two-mile buffer zones eliminating 5G signals to be installed around airports. The BBC reports that because 5G relies on radio signals which use frequencies close to those used by radio altimeters on aeroplanes, interference from 5G transmissions could stop these instruments from working properly and cause safety problems. Currently, the plan is to not allow planes to use radio altimeters in circumstances where there could be a risk of serious interference, but this could restrict the ability of some aircraft to land, for example, in poor visibility. Airlines for America, which represents the 10 major carriers, has warned more than 1,000 flights could be delayed or cancelled in bad weather and mean that at times "the vast majority of the travelling and shipping public will essentially be grounded". It has also suggested a large part of the US aircraft fleet will be "deemed unusable" because of restrictions on their operation. The Civil Aviation Authority says: "there have been no confirmed instances where 5G interference has resulted in aircraft system malfunction or unexpected behaviour" in the UK, stressing that "different national mobile telecommunication strategies may mean that some [countries] have a higher threat exposure than others". However, the UK regulator says it plans to work internationally to gather further data on the issue.
 
Microsoft says it plans to buy major games company Activision Blizzard in a deal worth $68.7bn (£50.57bn). It would be the biggest acquisition in the company's history and is expected to be finalised in 2023.


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