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The UK government borrowed £16.8bn in December

   News / 25 Jan 2022

Published: 25 January 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight

The UK government borrowed £16.8bn in December, a rise from £16.6bn in November, but less than expected. According to the Office for National Statistics (ONS), this was the fourth-highest December borrowing since the monthly record began in 1993. However, it was £7.6bn less than in December 2020, when the county entered its second national lockdown. Provisional estimates indicate that in the financial year ending 2021 (April 2020 to March 2021), the public sector borrowed £321.8bn, more than double the previous record of £157.8bn in FYE 2010, during the economic downturn following the global financial crisis.
Stock markets around the globe tanked yesterday, primarily because of tensions between the West and Russia over the military build-up on the border with Ukraine. NATO said yesterday that it was putting forces on standby after Russia deployed some 100,000 troops and heavy armour at the Ukrainian border. On Sunday, the situation prompted the US, the UK and Australia to order diplomats' families to leave Kyiv, the Ukrainian capital. The FTSE 100 fell 2.32% and, although US markets subsequently recovered, the S&P 500 initially fell 2.53% - its third consecutive and biggest weekly drop since March 2020; the tech-heavy Nasdaq lost 2.89% and the Dow Jones retreated nearly 3% at one point. The CAC tumbled 3.47% and the DAX was down 3.37%.
Inflationary pressures mean fewer than half of British families think they will be able to save any money this year, according to the Office of National Statistics (ONS). In December, only 46% believed they would be able grow their savings, with two-thirds of families saying their cost of living had already increased. This percentage increased to 76% among those aged over 70, and to 74% among self-employed people. Inflation has jumped to the highest level in 30 years, reaching 5.4% and households are facing a 50% increase in energy bills come April.
Transport Secretary Grant Shapps has announced that from 4am on 11 February, fully vaccinated international travellers (two doses) and under-18s will no longer need to take a lateral flow test two days after they arrive in England. Neither will travellers who are not fully vaccinated have to self-isolate on arrival, or take a test on day eight. However, they will still have to show proof of a negative Covid test taken two days before they travel, and they must still take a post-arrival PCR test. All passengers will still need to fill in a passenger locator form.
Unite is to ballot staff at the Financial Conduct Authority over potential industrial action, the union confirmed yesterday, saying a consultation held with staff over a proposed cost-cutting programme had been “botched”.  Pay cuts of between 10% and 12% and the abolition of bonuses is being proposed, although a proportion of the lowest-paid staff will receive pay rises. The regulator, which currently employs around 4,000 people, also wants to see staff outside of London switched to different pay-scales. Dominic Hook, Unite’s national officer, said: "Experienced employees have been quitting the regulator in droves. More are expected to follow, as a recent Unite survey revealed that 89.8% of staff described their morale as 'low' or 'very low'. Last month, the Financial Times reported that the FCA was hiring private law firms to help process applications after spending almost £1m on headhunters in 2021 as it sought to deal with a wave of departures. FCA chief executive Nikhil Rathi has previously defended the planned restructuring to the Treasury select committee, acknowledging there would be "noise" about the changes for some time to come, but insisting the overhaul was necessary. Trade unions are not yet recognised at the FCA; Unite is pushing to represent staff at the regulator.
Shares in banknote producer De La Rue plunged 27.7% yesterday after the firm issued a full-year profit warning, saying a proposed turnaround plan has been delated because of Covid-related disruptions – particularly to staffing levels – and supply chain issues. The firm now expects to make profits broadly similar to the prior year, of between £36m and £40m, so well below market expectations of around £45m to £47m. "The Omicron and Delta variants have caused substantially increased employee absences in our manufacturing facilities globally, which will result in lower total operational output for the full year," it said. "More recently, the group has also been affected by supply chain shortages in chips and other process raw materials and has experienced a degree of supply chain cost inflation." UK-based De La Rue prints cash for about 140 central banks – including the Bank of England - and employs more than 2,500 people globally.
Just a week after Unilever’s failed £50bn bid for GlaxoSmithKline’s consumer health division, the consumer goods giant is said to be planning to slash thousands of jobs worldwide in a shake-up intended to "drive greater agility, improve category focus, and strengthen accountability". Unilever employs more than 6,000 people in its operations in the UK and Ireland, and some 149,000 people globally. It is not yet clear where the job cuts will fall. It also emerged this week that activist investor Nelson Peltz had acquired a stake in Unilever, probably to push for a major shake-up of the company, as Peltz's New York-based hedge fund, Trian Partners, is known for proposing operational changes at its portfolio companies, which have previously included Procter & Gamble.News of his investment prompted Unilever shares to buck the market trend and rise 6% yesterday.
Grocery delivery firm Getir says it plans to spend £100,000 expanding across the UK and creating up to 6,000 new jobs. The Independent says the Turkish company, which specialises in grocery delivery times measured in minutes, now employs 4,000 people and covers 20 places across the UK, having only launched in London at the start of 2021. The firm has already expanded, acquiring rival Weezy in November. Getir said new workers would all directly employed and paid a "real living wage". Sharecast News says Getir is just one of several names vying for dominance in the newly popular instant grocery delivery space, with London-based Jiffy raising $28m in a series A round in September, just five months after its launch, and German outfit Gorillas signing a massive deal with Tesco in October. Sainsbury's 'Chop Chop' offer, launched in 2016, took off in 2020 as lockdowns saw hugely increased demand for delivery services.
Delivery company AnyVan has secured £125m in expansion funding from Vitruvian Partners, who previously backed JustEat, Skyscanner and Trustpilot, Sky News reports. AnyVan, which was founded in 2009 by Angus Elphinstone and has access to a fleet of about 7,000 vehicles, argues its technology enables it to improve the efficiency of fragmented transportation markets in the UK and Europe that are estimated to be worth approximately £6bn and £30bn respectively. Based in Hammersmith, west London, AnyVan employs 270 people, and saw revenue grow by 80% during the last nine months of 2021. As well as the UK, it operates in France, Ireland, Italy and Spain, and has completed more than two million jobs since it was set up 13 years ago.
Marks & Spencer (M&S) is to begin selling a family-run chocolatier’s Valentine’s Day products after it was accused of copying the much smaller rival’s design. Bath-based chocolate maker Choc on Choc had taken to social media to accuse the retail giant of making a “strikingly similar” box of chocolate matchsticks to those it has produced since 2015. “After posting about the copying on social media on Friday and Saturday, M&S contacted me and said they wanted to resolve this,” said Choc on Choc founder Flo Broughton. “On Sunday lunchtime we had a video conferencing call and came to an agreement…as well as resolving the current situation regarding The Perfect Match product, M&S has also committed to my request to accepting more ideas from small businesses through their small supplier programme.”
Vodafone is reportedly exploring a potential acquisition of rival Three UK andbeen in talks about a potential merger of its Italian business with Iliad.According to the Mail on Sunday, Vodafone has approached Asian conglomerate CK Hutchison, Three’s Hong Kong owner, about a merger, amid rumours the London-listed telecoms group itself could be a takeover target for a predator. Meanwhile, Reuters claims discussions between Vodafone and Iliad are ongoing and both parties are actively studying ways to clinch a tie-up of their respective businesses in Italy, which could make a €6n (£5bn) telecoms powerhouse.
Vodafone is to switch off its UK 3G network by end of 2023, along the same timescale as EE-owner BT. The telecoms firm, which has about 18 million UK mobile customers, says the move will enable the freed-up spectrum to be used to expand its 4G and 5G networks. However, Vodafone admits hundreds of thousands of customers who have 3G-only phones, particularly older owners who have not been enticed to join the smartphone revolution, will be left without coverage. Additionally, some 2.2% of the UK including parts of Cornwall, rural Scotland and north Norfolk still has only have 3G coverage.
James Watt, the CEO of Scottish beer giant Brewdog has been accused of inappropriate behaviour and abuse of power in the workplace by more than 15 ex-workers interviewed by the BBC's Disclosure programme. Brewdog was founded in 2007 by Watt - then just 24 - and his friend Martin Dickie and now has more than 100 bars (including 8 in the USA) and employs more than 2,000 people worldwide. It is said to be worth about £2bn. The BBC ScotlandDisclosure team started investigating the company after almost 300 former and current Brewdog employees signed a letter last year accusing Mr Watt of presiding over a toxic culture of fear. Lawyers for Mr Watt say the allegations are false and he denies behaving inappropriately.
John Lennon's eldest son Julian is selling several pieces of music history from his personal collection. However, he will keep the physical items as each piece of memorabilia will be sold as a non-fungible token (NFT), the BBCreports. Items being auctioned include a black cape worn by his father in the film Help! and handwritten notes for The Beatles song Hey Jude (starting price $30,000 or £22,260). The sale also includes NFTs of the Afghan coat worn by John Lennon in the made-for-television film the Magical Mystery Tour and three Gibson guitars given to Julian Lennon by his father. Each NFT will be offered as an audio-visual collectible, with narration by Julian Lennon alongside imagery of the item. Part of the proceeds from the NFT sale will go to Julian Lennon's White Feather Foundation. The online auction will be held on 7 February.

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