Published: 09 February 2022
Location: London, UK
By Suzanne Evans, Director, Political Insight
A Public Accounts Committee (PAC) report claims Brexit has had a "clear impact" on Britain's trade volumes and that new border arrangements have added "costs" to UK business. The PAC also warns of "potential disruption" at the border if cross-border passenger volumes recover as expected in 2022. They have been at a fraction of normal levels due to Covid-19 restrictions. Dame Meg Miller MP, PAC chair, said there is "much more work" the government should be doing in the short term to "minimise the current burden" on companies trading with the EU. She called on the UK government to "address the immediate delivery and readiness risks in introducing import controls, and to have a border in place which is operating effectively without further delays or temporary measures". "One of the great promises of Brexit was freeing British businesses to give them the headroom to maximise their productivity and contribution to the economy — even more desperately needed now on the long road to recovery from the pandemic,” she said. “Yet the only detectable impact so far is increased costs, paperwork and border delays".
The Women and Equalities Committee says pay gap reporting should be made mandatory by April 2023 and should apply to all organisations with 250 or more employees. There is "no excuse" for government inaction on the matter as there is a "clear impetus" to report disparities, the committee's chairwoman Caroline Noakes said. There is currently no legal requirement to disclose pay data for workers of different ethnicities, however the Department for Business, Energy and Industrial Strategy (BEIS) has also suggested it is time to move to mandatory ethnicity pay reporting. The Commons’ committee is also calling for legislation to be put in place to require companies to publish "an accompanying statement and action plan, allowing employers to account for pay gaps and outline steps to be taken to address them".
Ofgem has accepted it should have toughed up financial oversight of the energy market much earlier. Chief executive Jonathan Brearley told the Business, Energy and Industrial Strategy Committee that the regulator had been too focused on increasing competition in the retail energy market rather than the financial resilience of the smaller suppliers entering the market. "We need a retail sector that's more resilient and more able to deal with financial shocks,” he told committee MPs. "To be clear, we accept that, had we done that sooner this would have bene better for customers." While the so-called Big Six - British Gas, EDF, Eon, Npower, SSE and Scottish Power - were able to withstand a huge rise in wholesale energy prices, 29 smaller suppliers, many with weak balance sheets or poor or no hedging strategies, have collapsed in recent months.
Economists at the National Institute of Economic and Social Research(NIESR) say UK inflation could peak at 7% in April this year, a rise that could see the wealth gap between the rich and poor widen as the poorest struggle to make ends meet due to the rise in living costs. NIESR also criticised the Bank of England (BoE) for "creating" an inflation crisis that risks dragging the UK into recession by being “behind the curve by at least six or probably nine months" when it came to rate rises and now "playing catch-up", NIESR deputy director Paul Mortimer-Lee said, adding: "Being too reactive is what has given us this predicament." The thinktank warned that many families would be left £1,000 worse off a year, despite chancellor Rishi Sunak’s pledges to help offset rising energy bills, and that there is a risk that the UK "might need higher rates still to bring inflation down," which could be "very costly" in terms of unemployment.
The Financial Conduct Authority (FCA) expects to have 200 new workers in the first quarter of the year, having launched a recruitment drive to recruit senior positions across supervision, competition, and policy enforcement. In January, 60 people joined the regulator and the FCA expects “similar or increased levels” in both February and March. FCA executive director for markets Sarah Pritchard said the regulator had grown its team as it looked to strengthen the UK’s capital markets. “We will be continuing to build our team of people,” she said.
UK rent prices have hit a 13-year high, according to figures from Zoopla, which shows rental prices standing on average nearly 12% higher than pre-covid, meaning renters are now paying around £62 more per month. The average rent now accounts for 37% of gross income for a single earner, broadly in line with the 10-year average of 36%. Data also shows demand for rental homes increased 76% in January compared to the New Year markets between 2018 and 2021. A major factor fuelling higher rental prices is the fact the supply of rental properties recorded in January 2022 stands 39% below levels typically observed at the start of the year, mainly because of the shrinking stock of homes for rent because of a decrease in buy-to-let investment over the last five years, Zoopla says.
The dominance of traditional retail banks is wavering as digital challenger banks outperform in customer satisfaction, Yahoo Finance UK says. A new survey by consumer group Which? sees Starling Bank, Monzo and Triodosmost highly rated for customer service and mobile apps, in that order. At the bottom of the customer satisfaction table however are traditional retail banks, ranking poorly for service in branches, and receiving mediocre scores across all other categories. Languishing at the very bottom of the list was the Royal Bank of Scotland, followed by HSBC and TSB. RBS has been one of the three lowest-ranked banks for customer score every year since 2014.
TUI says it thinks summer holiday bookings this year will be close to pre-pandemic travel levels. Europe's biggest holiday tour operator said demand for holidays rose by over a fifth since the end of travel measures for vaccinated people, and summer holiday reservations rose 19% compared to the same period in 2019. As of 30th January, TUI said a total of 3.5 million customers had booked a trip for summer 2022, around 72% of the levels seen during the same period in 2019. "We expect a strong summer 2022," said chief executive Fritz Joussen. "The path out of the pandemic is becoming increasingly clear. Demand for travel is high across all markets."
Orbex has applied to the Civil Aviation Authority (CAA) for a launch licence, having completed pre-application meetings with the UK’s new space regulator. The application takes the firm a step closer to launching its small commercial orbital rocket, called Prime, from Space Hub Sutherland in the North of Scotland, the world’s first carbon neutral spaceport and the only spaceport in the UK to have received full planning permission. Construction of the spaceport is due to begin later this year. It will be the first rocket launch platform to be built in the UK in over 50 years.
Indian-owned Piramal Pharma Solutions has announced plans to invest £55 million expanding its production sites in Morpeth - which it bought from Pfizer in 2006 - and Grangemouth.
Sales at Pret A Manger in London’s finance hubs are now at 78% of pre-covid levels as more people return to the office, according to the latest Bloomberg Pret Index. By comparison, the cluster of Pret chains that includes Wall Streetis only trading at 41% of normal levels.
High street bakery chain Greggs has teamed up with fashion retailer Primarkto release a new 11-piece clothing range and open its largest café. The Greggs clothes will be available at 60 Primark stores across the UK from February 19th, and the world’s largest Primark, in Birmingham, will host the world’s largest Greggs cafe, a 130-seat unique concept that will be named ‘Tasty by Greggs’. "Greggs clothing is something our customers have continually asked for, so it’s great that together with Primark we can now make our first official range available across the UK," said Greggs business development director Raymond Reynolds.
Japanese motor industry giant Toyota saw profits fall by 21% in the last three months of 2021 because the global chip shortage hit production. Third quarter operating profit came in at 784.4bn yen (£5bn). The world’s best-selling carmaker also cut its annual production target by 500,000 vehicles to 8.5 million.
The co-founder of embattled fitness firm Peloton Interactive is stepping down as chief executive, it was confirmed yesterday. John Foley, who has led the US fitness specialist since it was founded a decade ago, will be replaced by Barry McCarthy, the former chief financial officer of Spotify and Netflix. Foley will become executive chair. Peloton also announced that around 2,800 global jobs will be cut it looks to achieve around $800m in annual cost savings, following a dramatic slump in the company’s fortunes as pandemic restrictions eased and people returned to the gym. Peloton enjoyed soaring demand for its products during lockdowns.
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