Inflation in the eurozone climbed to a rate of 5% in December

By Suzanne Evans, Director, Political Insight

Inflation in the eurozone climbed to a rate of 5% in December, the highest level since the single European currency was created, according to the latest figures from Eurostat. In the wider European Union, prices rose by 5.3% in the year to December, with the biggest drivers being a 25.9% year-on-year increase in energy prices, and food, alcohol and tobacco, up 3.2%. Industrial goods prices also rose 2.9% over the 12 months, and services went up 2.4%, the data shows. The countries with the lowest annual rates were registered in Malta (2.6%), Portugal (2.8%) and Finland (3.2%), while those with highest were recorded in Estonia (12.0%), Lithuania (10.7%) and Poland (8.0%).
 
The latest data from the Office for National Statistics (ONS) shows retail sales volumes fell by an estimated 3.7% in December 2021 compared with November 2021. The fall is attributed to Omicron fears following strong pre-Christmas sales. However, retails sales are still 2.6% higher than their pre-pandemic levels in February 2020. Food sales fell 1% on November, while non-food stores, including retailers such as sports equipment, games and toy stores, reported a monthly fall in sales volumes of 8.9% in December 2021. Such sales are still 6.7% above their February 2020 levels however. Only Clothing stores and department stores - which reported a fall of 8.0% and 6.3% over the month - remain below February 2020 levels, at - 7.2% and - 10.6% respectively.
 
Consumer confidence fell in January amid inflation concerns, rising fuel bills, and interest rates, according to consumer data and an analytics company GfK’s long-running index, which fell four points to -19 this month as the rising cost of living became the paramount consumer concern. The survey was conducted among a sample of 2,000 individuals between 4 and 12 January.
 
The Department for Transport (DfT) has announced it will be getting rid of unnecessary announcements on train journeys. The DfT said it would be working closely with the Rail Delivery Group and passenger groups such as Transport Focus, as well as train operators, to identify how the "vast number" of announcements could be cut or reduced to make carriages quieter for passengers. "The review will take place over the course of this year, with redundant messages identified and starting to be removed in the coming months," a DfT spokesperson said, adding that key safety messages will remain. The BBC says this probably means a reprieve for the British Transport Police's See it. Say it. Sorted announcement, which has been branded "the most annoying slogan of the century".
 
The long-term underpayment of thousands of state pensioners is a “shameful shambles”, according to parliament’s Public Accounts Committee (PAC). Some 134,000 people have had their state pension underpaid to the tune of £1bn, according to a Department for Work and Pensions (DWP) estimate, most of them widows, divorcees and women who rely on their husband’s pension contributions for some of their pension. An investigation from the National Audit Office (NAO) last year found out that nearly 40,000 pensioners may have died without knowing they were owed thousands of pounds, Yahoo Finance UK reports. Dame Meg Hillier, PAC chairwoman, said: “In reality, the DWP can never make up what people have actually lost, over decades, and in many cases it’s not even trying. An unknown number of pensioners died without ever getting their due and there is no current plan to pay back their estates." The committee of MPs also criticised the underlying IT system relied on to manage millions of pensioner records, saying it dates back to 1988 and is heavily manual. The DWP has admitted it might not be able to trace the next of kin for around 15,000 deceased pensioners. Of the 118,000 pensioners it can trace, it estimates the average repayment could be £8,900, yet there is currently no formal plan for contacting the next of kin where a pensioner who was underpaid is dead, the committee said. So far, the DWP has found underpayments of between £0.01 and £128,448.37.
 
The Financial Conduct Authority (FCA) says it is increasingly worried about scam advertisements on social media, as it revealed the Duke and Duchess of Sussex are among a string of celebrities being misused in fake investment ads. The faces of Prince Harry and Meghan have been seen promoting schemes relating to bitcoin to attract investors. The fraudsters also misused images of wealthy entrepreneurs such as Bill Gates, Mark Zuckerberg and Sir Richard Branson. Such fake endorsements have also included made-up interviews, the FCA says, and the logos of news brands such as the BBC, the Guardian, Forbes, the Daily Mail, the Sun, and Good Morning Britain. One fake headline was: “Harry and Meghan shocked everyone in the studio by revealing how they are making an extra £128,000 every month." It falsely claimed that the pair backed investment schemes related to bitcoin and cryptocurrency trading. The number of consumers reporting possible scams to the FCA has risen by more than 400% over the last five years: last year alone there were more than 34,000 reports from consumers with suspicions about possibly fraudulent investment offers, up from just 8,000 in 2016.
 
The exclusive borough of Kensington and Chelsea remains the most expensive place in the UK to live, with East Ayrshire in Scotland showing up as the most affordable, Nationwide Building Society research shows. In Kensington and Chelsea, the typical house price is 14.7 times earnings, as average property prices start in the £1m range. At the other end of the spectrum, East Ayrshire, in Scotland, is the most affordable place to live, with average first-time buyer houses just 2.4 times average earnings. The region covers a large area to the south of Glasgow, but its main towns are Kilmarnock and Cumnock.
 
BT says most of its customers will see bills rise by 9.3% from the end of March following a "dramatic increase" in data usage over the last few years. Affected customers will pay an extra £3.50 a month on average. BT says it has seen a 90% increase on broadband usage since 2018, and a 79% increase on mobile phones since 2019. Working from home, online education and TV streaming has led to more demands on BT's network, Nick Lane, BT's managing director for consumer customer services, wrote in a blog post.
 
Superdry's boss has warned that shoppers should expect higher prices due to rising costs and says the chain will have no more sales in its shops. Julian Dunkerton said it would increase prices on some clothing items by about 2% due to rising inflation. It hopes to offset price rises by cutting the number of items it puts on sale online.
 
The Gym Group reported a 31.7% jump in full-year revenues this morning, saying it ended the year with income of £106m. It company also said performance in January has been encouraging. Despite Omicron concerns briefly impacted gym visits in December and early January, visits per member per week have since returned to normal pre-Covid levels. By 18 January, total membership had increased 8% from the end of December to 776,000. Gym Group also announced that chief financial officer Mark George is leaving to take up the same role at Wickes in July.
 
Britishvolt has secured £1.7 billion in funding from Abrdn, Tritax and the government’s Automotive Transformation Fund to build a new battery manufacturing plant in Northumberland. The gigafactory is expected to create 3,000 direct jobs.
 
One of Unilever's top 10 shareholders has raised the prospect of replacing chief executive Alan Jope and accused management of putting the company through a "near-death experience" with an aborted £50bn bid for GlaxoSmithKline's (GSK) consumer arm. The Telegraph reports that Terry Smith said the company must fix fundamental problems of its own instead of seeking a mega-deal in a letter to the board. He accused executives of spouting "corporate gobbledygook" and said that trying to pin down certain details on the planned GSK takeover felt like being "a dentist pulling a back tooth". Smith, who manages the £29bn Fundsmith Equity fund has previously attacked Unilever's bosses for a "ludicrous" focus on sustainability, arguing the firm had become "obsessed" with its public image. At the time, he said: "A company which feels it has to define the purpose of Hellmann’s mayonnaise has, in our view, clearly lost the plot."
 
Netflix shares fell almost 20% in after-hours trade yesterday, as the firm's 2022 forecast predicted it would add just 2.5 million members in the three months to March - far lower than analysts had expected. The number of Netflix subscribers grew to 222 million last year, but the surge of interest it saw during the pandemic is now fading. Overall, Netflix added 18.2 million members last year - roughly half the number who subscribed in 2020.

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