The Bank of England put up interest rates from 1% to 1.25% on Friday

By Suzanne Evans, Director, Political Insight

As expected, the Bank of England (BoE) put up interest rates from 1% to 1.25% on Friday, the fifth consecutive monthly rise, making rates the highest for 13 years. The increase is an attempt to stem inflation, which stands currently at a 40-year high of 9%. The Bank also updated forecasts to warn inflation could surpass 11% in August, when energy prices rise again, leading BoE chief economist Huw Pill to tell Bloomberg that there will be more aggressive rate hikes if surging inflation shows signs of becoming a permanent feature of the economy. "If we do see greater evidence that the current high level of inflation is becoming embedded in pricing behaviour by firms, in wage setting behaviour by firms and workers, then that will be the trigger for this more aggressive action," he said.
 
The Chief Secretary to the Treasury, Simon Clarke, has also warned that big increases in salaries to meet the rising cost of living could end up in a 1970s style "inflationary spiral". Inflation could become a "self-fulfilling prophecy," he said, telling the BBC that "unrealistic expectations around pay" could "intensify this endless inflation problem". However, the Trades Union Congress (TUC) said: "Energy prices are pushing up inflation - not wages” and claimed Mr Clarke’s comment were "nonsense".
 
Ofgem has announced new plans to help stop energy companies from failing. Among the measures the energy watchdog proposes are a cap on payments billed via direct debit to "ensure [customers’] credit balances do not become excessive" and “used by some suppliers like an interest free company credit card." Ofgem also wants to make energy companies' supply chains more resilient and ensure better oversight over their "key assets". Thirty energy companies have stopped trading in the UK since August 2021, including Bulband Igloo. Around 1.5 million UK households were affected when companies including Avro, People's Energy, Utility Point and MoneyPlus Energyceased trading in September 2021, the BBC says. Ofgem claims the string of closures across the UK cost £94 per household.
 
A scheme offering interest-free loans to the financially vulnerable is being expanded to reach up to 20,000 people. After a successful trial in Manchester the No Interest Loan Scheme (NILS) will be rolled out across the UK from September, the BBC reports. It's backed by the Treasury but will be run by credit unions and other lenders. The aim is to offer emergency loans to people who would normally be turned down, because they can't afford the interest payments.
 
The increase in the state pension age from 65 to 66 has led nearly 100,000 65-year-olds into poverty, according to research by the Institute for Fiscal Studies (IFS), as they were deprived of an income of £142 per week, as the government saved £4.9bn. The absolute income poverty rate for 65-year-olds rose by 14 percentage points, or nearly 100,000 people, to reach 24% by late 2020, the IFS claims. The higher state pension age also encouraged around 9% or 60,000 more 65-year-olds to stay in their job and retire later.
 
The World Trade Organization (WTO) has reached agreement on a waiver for covid vaccine patents and on aims to reduce overfishing. The group of 164 countries spent five days negotiating deals which included pledges on healthand food security, the BBC reports. The partial intellectual property waiver deal for covid jabs will allow developing countries to produce and export vaccines for five years. However, the deal excludes disease treatments and tests. The accord to curb fishing subsidies is only the second multilateral agreement setting new global trading rules struck in the WTO's 27-year history, however the UK International Trade Secretary Anne-Marie Trevelyan said the fisheries agreement did "not go as far as many members wanted". "But it does go some way to delivering what our oceans need and all those that are dependent on them," she added.
 
Justin Gutmann, a consumer rights campaigner, has launched a claim against Apple at the Competition Appeals Tribunal (CAT) in London. His claim aims to compensate some 25 million Apple iPhone users for his claim that Apple secretly slowed down the performance of older phones in a 2017 software update that conversely claimed performance would be enhanced. Apple could be forced to pay damages in excess of £750m ($921m) if Gutmann wins, Yahoo Finance UK says. "If this case is successful, I hope dominant companies will re-evaluate their business models and refrain from this kind of conduct," Gutmann said. Apple denies the claim.
 
Tesco Chief executive Ken Murphy said the supermarket was seeing “some early indications of changing customer behaviour as a result of the inflationary environment” amid “unprecedented” increases in the cost of living. The retailer reported a greater-than-expected 1.5% decline in like-for-like UK sales against strong lockdown trading last year.
 
PricewaterhouseCoopers’ (PwC) 950 partners are to receive one-off six-figure windfalls from the sale of the global accountancy giant's mobility services arm., Sky News reports. They will be handed an average of just over £100,000 each following a $2.2bn deal with the private equity firm Clayton Dubilier & Rice that completed in April. Partners were briefed on the £100m payout by Kevin Ellis, PwC's UK chairman, earlier this month, according to insiders.
 
Waste management firm Veolia says it plans to sell its Suez's UK waste business following concerns raised by the Competition and Markets Authority (CMA). Last month, the CMA said Veolia's acquisition of Suez could reduce competition in the sector and push up prices. "This drastic decision is an effective response to the intransigence of the CMA," Veolia said. "Veolia strongly disagrees with their analysis of the concerned markets and deplores the lack of shared understanding of the issues related to our sectors of activity." "We regret that the CMA's analysis will not allow the Group to deploy the full potential of the ecological transformation in the United Kingdom, but it does not reduce our commitment to this region,” Veolia added. “It does not affect the overall scope of Veolia's project, whose capacity to create value remains intact." Veolia and Suez agreed a €13bn merger last year.
 
AIM-traded Christie Group has instructed its specialist leisure and retail property advisory subsidiary Christie & Co to sell the Trentham Estate - a visitor attraction and leisure-based outlet retail and garden centre property in Staffordshire - on behalf of St. Modwen Properties, which has owned it for more than 25 years. Trentham attracts around 3.25 million people each year, including over 760,000 paid-for visitors, placing it in the top five paid-for garden attractions in the UK. The estate also includes 85 third-party leasehold occupiers primarily located in the Outlook Shopping Village, as well as restaurants, a Blue Diamond garden centre, and a Monkey Forest attraction, a Treetop Adventure high ropes course, and a water sports centre which incorporates the Trentham Canoe Club and the Trentham Boat Club.
 
Funeral services group Dignity says it is "delighted" to have been included on the Financial Conduct Authority's list of authorised funeral plan providersahead of tighter regulatory scrutiny on the sector set to come into effect in late July. "The statutory oversight follows several years of campaigns, government calls for evidence, and formal consultation with the funeral industry," Dignity said. "Dignity has engaged with the FCA throughout its process and supports the regulatory framework implemented across the market." The FCA's new rules include the ban of cold calling and commission payments to intermediaries, ensuring that funeral instalment plan products will always deliver a funeral, and that companies selling funeral plans be subject to full checks on their fitness to operate as part of an effort to improve governance standards and oversight, Sharecast News reports.
 
Investment platform AJ Bell says deputy chief executive and CFO Michael Summersgill will succeed Andy Bell as CEO with effect from 1 October. Bell will remain on the board and will assume the position of non-executive deputy chair with effect from the same date. Summersgill, who has been at the company since 2007, has held the position of CFO since 2011. He will be succeeded by Peter Birch on 1 July.
 
Italy has become the latest European country to report a cut in its Russian gas supply. Italian energy giant Eni said it would receive only half of the 63 million cubic metres per day it had requested from Gazprom on Friday, after experiencing shortfalls for two days. Italy could declare a heightened "state of alert" on gas next week if Russia continues to curb its supplies, two government sources told Reuters. Slovakia reported receiving less than half of the usual volumes through the Nord Stream 1 gas pipeline on Friday, and France said it had received no Russian gas from Germany since 15 June. Austria has also reported big falls in Russian gas supply, and Poland, Bulgaria, Finland, Denmark and The Netherlands have had Russian gas deliveries suspended after refusing demands to pay in Russian roubles. Germany has had its supply halved and has accused Gazprom of attempting to push up energy prices by sharply reducing supplies. Gazprom says repairs to the Nord Stream pipeline are to blame.
 
Russia has become China's biggest supplier of oil, the BBC reports. Official figures show imports of Russian oil rose by 55% from a year earlier to a record level in May. The supply, which includes supplies pumped through the East Siberia Pacific Ocean pipeline and shipments by sea from Russia's European and Far Eastern ports, totalled nearly 8.42m tonnes last month, according to data from the Chinese General Administration of Customs. In February, the two countries said their friendship had "no limits".
 
Cosmetics maker Revlon has filed for bankruptcy in the US. The 90-year old firm says supply chain disruptions have driven up the cost of raw materials for its products, and it has struggled with supplier payments, inflation and labour shortages.

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