Published: 05 May 2022
Location: London, UK
The EU has announced a plan to ban Russian oil imports by the end of 2022. European Commission President Ursula von der Leyen unveiled the proposal yesterday, along with plans to disconnect Russia's largest bank, Sberbank, from the SWIFT bank transfer system.
The US Federal Reserve raised short-term interest rates by 0.50% yesterday and suggested it will raise borrowing costs further throughout this year. The aim is to undo its pandemic-era, easy money policies, Yahoo Finance UK reports. The decision marks the most aggressive increase made in a single meeting for 22 years. Since May 2020, the Fed has opted to raise interest rates only in increments of 0.25%. The policy-setting Federal Open Market Committee also detailed plans on unwinding its nearly $9 trillion (£7.21 trillion) balance sheet.
Scotland’s GDP grew by 1.6% in the last three months of 2021, meaning GDP growth is estimated to have been 7.4% throughout the full year of 2021, following a fall of 10.6% in 2020. Statistics released yesterday show the largest contributor to growth in late 2021 was the health and social work sector, mainly because of coronavirus vaccines and test and trace activities.
Households borrowed another £800m on their credit cards in March, with debt jumping by more than 10% on the year, according to the Bank of England. The rise takes total credit card debt back above £60bn in the month, undoing some of the ‘hard work’ of the pandemic in which households paid down their balances from more than £72bn in February 2020 to a low of £56bn in April 2021. Other consumer loans added another £500m to the debt pile. Households also deposited £6 billion into banks, building societies and NS&I accounts in March, higher than the monthly average of £5.5 billion in the year leading up to the first UK lockdowns.
In a letter to hospital trusts, NHS England has urged retiring and recently retired doctors to continue working part-time or from home in virtual wards to help clear the country’s health backlogs. The letter, seen by the PA news agency, also suggested they could help by training junior doctors. According to the General Medical Council there are 21,000 doctors due to retire in September. NHS has estimated it has a staff shortage of around 110,000. Stella Vig, the NHS’s national clinical director of elective care, said staff had almost halved the amount of people waiting more than two years for treatment in the past two months but, she added: “We know there is still a long way to go.”
British builders are experiencing shortages of both staff and materials despite rising demand, according to a new survey. 84% of respondents to the latest RICS Global Construction Monitor said that availability of materials was a major constraint to current activity in the first quarter of 2022, while 74% said labour and skills shortages were holding them back. 66% are having difficulties in recruiting skilled bricklayers and 63% are struggling to find carpenters. More than half (56%) of respondents identified a problem in sourcing quantity surveyors. 34% of respondents reporting a rise in workloads between January and March, up from 33% in the final quarter of last year.
Mayor of London Sadiq Khan announced yesterday that Transport for London’s (TfL) new Crossrail service, known as the Elizabeth Line, will open to passengers on 24 May, and walked immediately into a political row. Transport Secretary Grant Shapps accused him of breaking electoral law by making the announcement the day before the London local elections to try and garner votes for the Labour Party. “This announcement is an act of breathtaking political cynicism by the mayor…I am therefore immediately referring this breach to the Electoral Commission for investigation,” he told the Evening Standard, adding: “Londoners reading this unscrupulous headline grab might like to know that the Government has poured billions into Crossrail to solve delays clocked up on the mayor’s watch, while propping up a transport system hobbled financially by his chronic incompetence”. The pre-election period (previously known as purdah) prevents councils and other public bodies such as TfL from issuing publicity which may affect public support for a political party. Shapps, however, went on to tweet the opening date himself, using the Conservative Party logo, and saying: “Thanks to £9bn of Government support, [Crossrail] will transform the lives of Londoners for generations to come and deliver a £42 billion boost to the whole UK economy”. TfL said the opening date had to be revealed yesterday for operational reasons so the line could open in time for the Queen’s platinum jubilee weekend celebrations. Crossrail was approved in 2007 (although the original idea dates from the 1940s) and set a budget of £14.8 billion in 2010, but the cost has risen to £18.9bn, of which Londoners and London businesses have contributed about two-thirds, according to business group London First. The scheme was initially due to be completed in December 2018. Eventually, 41 stations will be served by the Elizabeth line. The fleet of 70 specially designed Class 345 trains were built by Bombardier Transportation (now Alstom) in Derby.
Environment Secretary George Eustice has also been rounded on by political rivals and social commentators after saying that shoppers could “contain and manage their household budget” by changing the brands they buy in supermarkets and elsewhere. Labour leader Sir Keir Starmer said it showed how “out of touch and out of ideas” the Government is when it comes to understanding the issues facing those on the lowest incomes. The Liberal Democrats said Eustice was living in a “parallel universe”, while Scotland’s First Minister Nicola Sturgeon said that, for many people, there was “nothing” else they could cut to help make ends meet. Food campaigner Jack Monroe said ministers were in “no position” to hand out monetary advice. On LBC’s Tonight with Andrew Marr programme she said she felt “exasperated” by Eustice’s remarks. “On the one hand I charitably want to think it’s well meant,” she said, but “on the other hand, I think somebody who claims £196,000 in expenses in a single year is in no position to tell other people to get cheaper biscuits.”
Conservative MP, Julian Knight, chair of the Digital, Culture, Media and Sport (DCMS) Committee, has written to billionaire Tesla boss Elon Muskasking him to give evidence to the panel of MPs about his proposed takeover of social media giant Twitter.
Oil giant Shell has announced a huge jump in profits for the first quarter of the year, reporting $9.1 billion (£7.2 billion), up 43% on the final three months of 2021. Shell experienced a hit to headline profits however, which dropped by 38% because of a $3.9bn (£3.12bn) paper loss from the company’s Russian operations since Shell exited investment in Russia in response to the war in Ukraine. Nevertheless, the increase in profits, attributable to soaring oil and gas prices, are likely to fuel calls for a windfall tax on energy firms. A one-off tax on BPand Shell alone could raise £9 billion for the Treasury, the Liberal Democratsestimate. Yesterday, BP also announced a huge jump in earnings to $6.2bn (£4.97bn).
Barclays says it will now invest in new oil and gas projects, reversing earlier decisions to cut back on funding for the industry because of climate changeconcerns. Now, the bank says it will take a "pragmatic" approach to energy projects given supply shortages following Vladimir Putin's invasion of Ukraine. A climate protester glued herself to a chair at the bank's AGM yesterday, and another protested at the AGM of Standard Chartered bank.
Barclays is to pay almost £181m in compensation to around 6,000 customers who were improperly sold timeshares in Malta. The bank is refunding high-interest loans brokered by the now-collapsed Azure Services, plus interest, following accusations of aggressive sales tactics dating back almost a decade. Victims of mis-selling said they were persuaded to attend marketing seminars where they were told the timeshares were good investments which could be sold at a higher price in later life. However, the properties often had little or no resale value, leaving customers on the hook for the costly loans for years and eating up incomes required for retirement and care in old age. This payout follows some £37m paid to around 1,500 customers in June last year related only to loans brokered between 2014 and 2016. A spokesman for the bank said: “We sincerely apologise that this issue has occurred and for the time taken for us to reach these conclusions.”
29% of voting Ocado shareholders said “no” to the company’s overall remuneration policy yesterday, with a similar proportion also rejecting a three-year extension of Ocado’s “value creation plan” under which CEO Tim Steinercan earn up to £100m over the next five years and other executives up to £5m each annually. The Guardian says the extension of the scheme to 2027 is being proposed since the company missed a share price target that would have triggered a £20m bonus for Steiner in March. Ocado’s share price has fallen by more than two-thirds to about 890p from a peak in January 2021, as the surge in online grocery shopping during the pandemic has rapidly unwound. The latest pay proposals had been criticised by the investor advisers Glass Lewis and Institutional Shareholder Services, and had prompted complaints from Ocado’s leading shareholder Royal London Asset Management, which said it was an “example of how poorly designed incentive plans” could “lead to excessive awards for management”. However, shortly after the meeting, Ocado said it was going ahead with the pay plan.
Cineworld said yesterday that it was seeking to delay yet again payments it owes to former Regal Entertainment shareholders, having agreed an extension already in February. The London-listed cinema operator had agreed to pay $170m (£135.82m) to ex-owners of Regal shares in September, disgruntled with the price Cineworld paid for the US chain. Having taken on significant debt when it agreed the £2.4bn acquisition in early 2018, Cineworld them found itself with cash flow problems when cinemas were forced to close for extended periods of time because of covid lockdowns.
A Virgin Atlantic flight to New York was aborted mid-air and forced to return to Heathrow on Monday after bosses discovered tone of its pilots had not completed their training, The Telegraph reports. Virgin Atlantic, majority-owned by billionaire businessman Sir Richard Branson, apologised for the disruption to passengers and blamed a “rostering issue”. Virgin said only internal training protocols - rather than UK aviation or safety regulations - had been breached. The airline said both crew members were fully licensed and qualified to operate the aircraft, but the pilot pairing did not meet the training protocols because the captain did not hold designated trainer status, despite being “highly experienced” with “many thousands of hours of flight time during 17 years at Virgin Atlantic”. The pilot was swapped after the plane returned to Heathrow. The flight subsequently arrived at New York’s JFK airport two hours and 40 minutes late. Pilots complain Britain’s “draconian Covid restrictions” have put airlines’ training systems under strain, the newspaper says.
PwC has told its accountants they can take Friday afternoons off all summer, The Telegraph reports. The move follows a successful pilot last summer involving 6,000 employees, and as the firm scrambles to hire recruits in the current ‘war for talent.’ According to Ipsos, over half of 16 to 34-year-olds considered quitting their jobs or were actively looking at the start of this year, leading to Clifford Chance, one of London's oldest law firms, to consider hiring a 'chief happiness officer,' the newspaper says. Traditional professions such as accounting and banking were on the backfoot even before the pandemic as big tech companies began offering better lifestyle perks and inflated salaries, it adds, noting that major accountants such as PwC are also still rebuilding their reputation following concerns that auditors failed to spot red flags in various audits before disaster struck, notably at Carillion, BHS, Thomas Cook and Patisserie Valerie.
Direct Line says motorists could see an increase in car insurance premiums because of shortfalls in covering claims for increasingly expensive second-hand cars. The average price of a used car has risen for 24 months in a row, according to Auto Trader, adding £4,400 to the cost of an average vehicle. Higher demand has been fuelled by people avoiding public transport during the pandemic, and problems with supply of new cars, first due to factory shutdowns and then because of supply chain issues and semiconductor chip shortages. Higher used car prices impacted Direct Line’s total loss and theft claims in the first quarter of the year, and supply chain disruption delayed the time it took to repair broken down motors.
Aston Martin surprised investors yesterday by announcing the departure of CEO Tobias Moers, just two years after he was appointed to much fanfare, with a brief to turn the luxury car making business around. He is to be replaced by former Ferrari CEO Amedeo Felisa, previously a non-executive director at ‘James Bond’s car maker’. Felisa will be the third CEO to take charge of Aston Martin in as many years.
Joules’ CEO Nick Jones has revealed he will step down in the first half of the next financial year, after three years at the business. His departure comes after the company’s share value tumbled by more than 80% over the past year. Joules said it will start its search for a new boss “immediately” to ensure a smooth transition. Shares feel as much as 30% on the announcement yesterday.
Two senior Just Eat Takeaway execs resigned yesterday, just hours before the start of the company’s AGM. Just Eat’s COO Jörg Gerbig will not seek re-election to the management board following a misconduct complaint against him, and Chairman Adriaan Nühn is also departing following soured relations with shareholders: Just Eat’s share price has dropped 70% since September. Just Eat would not comment on allegations against Gerbig, citing privacy concerns when asked by the Evening Standard.
HSBC and Ping An executives are reportedly planning to meet later this month to discuss the Chinese insurer's proposal that the bank should explore strategic options such as a spinoff of its Asian business. Reuters cites a source familiar with the matter as saying that Ping An - China's largest insurer and HSBC's biggest shareholder - called last week on the bank to look at ways to boost returns. Ping An owns an 8.23% stake in HSBC as of 11th February.
ExxonMobil said on Tuesday that it has agreed to sell its Romanian upstream affiliate to Romgaz for more than $1bn (£800m).
Pfizer has reported well above-forecast first quarter profits after revenues surged 82% to $25.7bn (£20.58bn). The biggest contribution came from Pfizer's vaccines unit, which generated sales of $14.9bn (£11.93bn) compared to $4.9bn (£3.92bn) in the first quarter of 2021.
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