The Bank of England is widely expected to raise interest rates

By Suzanne Evans, Director, Political Insight

The Bank of England’s monetary policy committee meets tomorrow and is widely expected to raise interest rates to their highest level in 13 years in a bid to cool inflation. The anticipated 0.25% increase will take the central bank’s base rate to 1%, its highest level since early 2009. The bank has increased the base rate in each of its past three meetings. Inflation hit 7% in March and is expected to rise further.  The US Federal Reserve is also expected to put rates up this week.

An error by a London-based Citigroup trader on Monday triggered a so-called stock market "flash crash" where some European stocks tumbled suddenly, it has emerged. Trading in several European indexes were suspended briefly as stocks dipped just before 8am in London. “Within minutes, we identified the (inputting) error and corrected it," the New York-based bank said. The mistake led to the Stockholm OMX 30 index plunging 8% in five minutes at the start of trading, before recovering most of its losses.
 
UK manufacturing picked up in April. The S&P Global CIPS UK Manufacturing Purchasing Managers' Index reached 55.8, up from 55.2 in March, marking the 23 consecutively monthly rise. However, confidence in the sector tumbled to a 16-month low. Headwinds cited included rising selling prices and lacklustre demand for the European Union due to longer delivery times, custom checks and higher shipping costs post-Brexit, Sharecast Newssays this morning. Foreign demand overall was further subdued by the war in Ukraine. Around 85% of respondents also registered an increase in purchase prices across the broad, including chemicals, energy, freight, metals and timber, among others. Rob Dobson, director at S&P Global, said: "The inflationary situation is getting increasingly fraught."
 
Figures from the British Retail Consortium (BRC) show shop price annual inflation accelerated to 2.7% in April, up from 2.1% in March. "The impact of rising energy prices and the conflict in Ukraine continued to feed through into April’s retail prices," said Helen Dickinson OBE, CEO of the BRC. "This has been exacerbated by disruption at the world’s largest seaport, following Shanghai’s recent lockdown. Food prices continued to rise, though fresh food inflation slowed as fierce competition between supermarkets resisted price hikes on many everyday essentials." The BRC says food inflation increased to 3.5% last month, up from 3.3% the month prior, the highest inflation rate since March 2013. Meanwhile, non-food inflation rose to 2.2% during the period, up from 1.5%. This marks the highest rate of inflation since the data series began in 2006, the BRC said. Non-food products, especially furniture, electricals and books, have seen the highest rate of inflation since records began.
 
Business Secretary Kwasi Kwarteng has accused energy companies of overcharging customers on direct debits. He has announced a crackdown on suppliers following “troubling” reports that some are hiking bills “beyond what is required” saying that industry watchdog Ofgem has launched an investigation and ordered companies to hand over their data within the next three weeks. If suppliers are found to have increased customer bills by more than is necessary, they could be hit with fines worth up to 10% of their turnover, equal to hundreds of millions of pounds.
 
A Trades Union Congress (TUC) report says Network Rail is compromising passenger safety by pressing ahead with cutting some 2,500 maintenance jobs to save £100m a year. The TUC also criticised the Treasury, saying its demand that the Department for Transport (DfT) brings down its annual budget by 10% will disrupt services and leave fewer trains running, leaving commuters “packed like sardines”. Network Rail responded by saying it would not compromise safety and that its ideas for modernisation had “fallen on deaf ears”. Unions are threatening strike action.
 
Inequality in Britain risks being driven up by the biggest boom in City bonuses and pay since the 2008 financial crisis, according to thinktank The Institute for Fiscal Studies (IFS). Its analysis indicates finance workers' mean monthly pay was 31% higher in February than in December 2019 in cash terms, compared to 14% across all sectors. And, as finance accounts for nearly 30% of staff in the top 1% of earnings in the country, pay inflation has deepened overall earnings inequality, the IFS said, as the wages of the top 1% of all employees are rising faster than the rest, in stark contrast to the trend seen between 2016 and 2020, when low-earners saw the biggest increases in pay.
 
Surging house prices pushed more than four million homes into higher stamp duty or equivalent tax brackets during the coronavirus pandemic, according to estimates from property sales’ website Zoopla.  4.3 million homes across the UK have been pushed into a higher bracket since March 2020 - meaning new owners have had to pay higher taxes - because the average property has risen in price by £29,000 since then, Zoopla says.
 
“Buy now, pay later (BNPL)” company Klarna is to report UK customer debts to credit agencies for the first time next month, after facing pressure from MPs and campaigners concerned such companies encourage customers to take on debt they cannot afford to repay. The Swedish company, the leading BNPL provider in the UK with 16 million customers, will start sharing customer data with credit reference companies Experian and TransUnion from 1 June, allowing credit card companies to see transactions and debts when conducting formal checks on potential borrowers. However, debts and repayments will only start affecting customer credit scores after 18 months, meaning the change will not have any formal impact until the end of 2023. BNPL products are currently unregulated in the UK.
 
BrewDog is to give shares to 750 staff over four years and launch the first ever profit-sharing scheme for all bar workers, founder and CEO James Watt has announced. He will relinquish nearly a fifth of his stake in the craft beer firm – some 3.7 million shares or a 5% stake - to salaried employees to mark the group’s 15-year anniversary. Based on the most recent fundraising, which valued BrewDog at around £1.8 billion, this near-£100 million share award will be worth around £30,000 a year over four years to each eligible employee. Watt’s stake will reduce from 24.2% to 19.2% after awarding the shares, which will initially be held in an employee benefit trust. In a first for the hospitality sector, the Scottish brewer is also launching a profit-sharing scheme, allowing its 1,500 hourly-paid bar staff to share half of the earnings from each bar. Based on last year’s numbers, this would pay out an extra £3,000 to £5,000 to each bar worker’s salary. The move comes after controversy last summer when BrewDog was accused of operating a “culture of fear” with “toxic attitudes” towards junior staff, PA Media says. 60 employees published an open letter alleging the business was built upon a “cult of personality” around founders Watt and Martin Dickie, with “growth at all costs” the overarching focus of the company. They claimed a “significant number” of ex-employees suffered “mental illness” because of working for BrewDog and were left “burnt out, afraid and miserable”.
 
Tesco has partnered with Uber Eats to deliver groceries in 60 minutes through the supermarket’s ‘Whoosh’ service. Tesco launched Whoosh in May 2021 and now offers it at 200 of its Express stores, with plans to expand to 600 stores in 2022. 20,000 jobs have been created at the supermarket to meet customer demand for online deliveries since the first coronavirus lockdown. The new partnership with Uber Eats will cover 20 stores.
 
Rolls-Royce has secured an order worth hundreds of millions of pounds from Qantas. The Derby-built Trent XWB-97 engines will power 12 Airbus A350-1000s ordered by the Australian carrier for the launch of its first non-stop flights from Sydney and Melbourne to London.
 
FTSE 250 facilities manager Mitie Group has acquired 8point8, a British design and construction services provider for mobile telecommunications tower infrastructure, for £10m in cash. In addition to the core business, Mitie also acquired two associated businesses, 8point8 Training and Vantage Solutions.
 
Outsourcer Capita plc yesterday completed on the sale of its speciality insurance businesses - Capita Commercial Insurance Services Limited and Capita Managing Agency Limited - to Marco Capital Holdings (UK) Limited. The proceeds will be used to strengthen the FTSE 250 company’s balance sheet and reduce debt. Capita has not disclosed the sale price.
 
East Europe-focused budget airline Wizz Air reported a 542% annual rise in April passenger traffic and said it had added new routes from Cardiff and Luton in the UK. The carrier flew more than 3.6 million passenger last month against 564,634 in April 2021, with a load factor of 83.4% compared with 59.2% a year earlier. Wizz also expanded its network by starting services from Wales.  
 
A court in Leeds has heard that the former son-in-law of Bernie Ecclestone, the Formula 1 billionaire, was allegedly part of a money laundering gang that deposited carrier bags full of “criminal cash” every day. James Stunt, who was married to Petra Ecclestone until 2017, is on trial accused of being part of a £266 million operation which deposited the cash into the account of a family jewellery company and used the proceeds to buy gold.

Why Media is an award-winning design, marketing, digital communications and PR agency offering tailored solutions to companies on a global scale. We have extensive experience in delivering design and marketing services to a spectrum of companies including professional services, property companies, financial institutions and shopping centres. We have offices in London UK, Hertford UK, Finestrat ES & Brescia IT.

Marketing Contact

Name:  Claire White
E-Mail:  claire@whymedia.com
Telephone:  01992 586 507