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65% of firms polled say they are expecting to raise prices in the next three months

   News / 04 Jul 2022

Published: 04 July 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight


65% of firms polled by the British Chambers of Commerce (BCC) says they are expecting to raise prices in the next three months. This is up from 62% in the first quarter of the year, a record high, and a 23% rise compared to a year ago. Only 1% of businesses overall expect a decrease in their prices. Four in five (82%) firms cited rising prices as a growing concern after UK inflation hit a 40-year high of 9.1% in the year to May leading profit margins to fall. Expected price rises are being felt most in the retail and wholesale sector, and construction and engineering sector, both at 78%, with production and manufacturing only slightly behind at 77%.
 
More than 7,000 pubs in England and Wales have disappeared in the last decade, the BBC reports. Real estate consultancy Altus Group counted only 39,970 pubs in June, with closures attributed to younger people drinking less, supermarkets selling cheaper alcohol and industry complaints of being too heavily taxed. 2019 figures from the Office for National Statistics suggested the sector was turning a corner, expanding for the first time in a decade, but then covid lockdowns forced pubs to shut or implement strict social distancing rules. Then 400 pubs  closed last year, followed by 200 in the first half of 2022, as inflation started to eat into profits.
Robert Hayton, head of Altus in the UK, said: "Whilst pubs proved remarkably resilient during the pandemic, they're now facing new headwinds grappling with the cost of doing business in a crisis through soaring energy costs, inflationary pressures and tax rises." According to the research, the West Midlands saw the biggest number of pub closures in the first six months of 2022, with 28 shutting.
 
The Food and Drink Federation has warned the current "relentless" increases in the price of food may not hit their peak until next year, as it usually takes 7-12 months for producers' costs to reach shop shelves. The federation's boss, Karen Betts, warned prices would "absolutely" get worse before they get better. "I think the peak could well be into next year and that prices could well rise some way above 10%," she told the BBC. Food and drink price inflationrose to 8.7% in the year to May, according to the Office for National Statistics.
 
Eddie Dempsey, senior assistant general secretary at the RMT, has told the BBC Radio 4 Today Programme that the union is "not in any rush" to call for further strikes in July. Last week's walkouts which caused significant disruption across the UK. The union did not "take these steps lightly," he said. Dempsey is leading talks with Network Rail and said it had been an intense week of discussions between the two sides who are trying to reach an agreement to prevent further strikes.
 
Customer service standards at energy companies have fallen to a record low as households are being hit by soaring bills, Citizens Advice has said. Standards have "plummeted" since June 2021 when several suppliers went bust due to high global gas prices, it said. The average waiting time on the phone to speak to a firm is now about six and a half minutes, compared to just under four minutes the year before. The worst performer was names as challenger supplier Utilita, while EDF Energy was ranked the best performer. Citizens Advice called for improvements before bills rise again in the autumn. Between January and March 2022, Citizens Advice said its consumer service helpline saw more than 70,000 cases related to energy issues - a 63% increase on the same period the previous year.
 
The UK Infrastructure Bank has 44 potential deals in the pipeline worth £5bn, according to the National Audit Office (NAO). The state-owned bank, which has been allocated £22bn of public funds, will pump cash through equity investments, loans, and guarantees to support infrastructure projects. The NAO report said the bank has already started handing out investment despite some of its functions not yet going live. The bank was launched last June by the Treasury, in part due to the loss of the European Investment Bank infrastructure funding following the UK’s decision to leave the EU. It invests taxpayer money alongside private finance and is focused on clean energy and “levelling up” local economies, specifically companies and initiatives that have trouble securing private financing. By the end of last month, the bank had entered into five deals whereby it handed £311.5m to firms through loan investments. The bank It is headed up by former HSBC CEO John Flint and has a target of an annual return of between 2.5% and 4% on its equity investments by 2025-26. Gareth Davies, head of the NAO, said: “There is more work to do before it is fully operational." “The UK Infrastructure Bank was set up quickly, and there is more work to do before it is fully operational and is able to support the government’s aims in achieving net zero and supporting local economic growth," he added.
 
It has been revealed that on Thursday, Russian President Vladimir Putin signed a decree to take charge of the Sakhalin-2 oil and gas project in which Shell has a 27.5% stake. The project supplies about 4% of the world's current liquefied natural gas (LNG) market and is 50% owned and operated by Gazprom. The decree said a new firm would take over all rights and obligations of Sakhalin Energy Investment but allows Gazprom will keep its stake. Other shareholders, however, must ask the Russian government for a stake in the new firm within one month. The government will then decide whether to allow them to keep a stake. Shell said: "We are aware of the decree and are assessing its implications." The oil giant already said in February that it would sell its stake in the Sakhalin 2 facility, along with other Russian investments, due to the conflict in Ukraine, taking a £3.8bn hit in the process.
 
Budget airlines Ryanair and Wizz Air have reported increases in passenger numbers. Ryanair said this morning it has seen a 203% jump in June traffic, with numbers growing to 15.9m from 5.3m in June 2021. Ryanair’s load factor - which gauges how full the planes are - rose to 95% from 72%. Ryanair said it operated more than 88,500 flights in June. Meanwhile, Wizz Air says it has seen almost trebled passenger numbers last month.  It carried 4,340,115 passengers, a 179% increase year on year, at a load factor of 86.1%, up 22.1%.
 
BT Sport has lost its exclusive rights to screen Champions League football in the UK and will now share a deal with online giant Amazon, which will broadcast one game a week from 2024. The British broadcasting arms of BT group will keep the majority of games across the Champions League, Europa League and third-tier Conference League. BT Sport has held exclusive rights since outbidding Sky in 2013, Sharecast News reports. The company is in the process of merging with Eurosport, with the deal being probed by the Competition and Markets Authority.
 
FTSE 100 thermal energy management and engineering specialist Spirax-Sarco Engineering has entered into exclusive negotiations to buy Vulcanicfrom French private equity group Qualium for €261.7m (£225.5m).  Vulcanic provides equipment for the electrical industrial heating and cooling of liquids, gaz and solids, including temperature measurement, control and power supply.
 
A family-run industrial group is to change hands for £400m, Sky News has learnt. Triton Partners is on the verge of an agreement to acquire O'Connor Utilities Group, which is based in Manchester and run by brothers Tim and Tom O'Connor. An industry source told the broadcaster a deal could be announced as soon as this week. Triton owns a number of businesses in the UK, including Chevron Traffic Management, Pharmanovia and Clinigen.
 
Slug & Lettuce and Be at One owner Stonegate Group is reportedly exploring the sale of a 75-strong portfolio that could fetch up to £100m. According to Sky News, Stonegate has hired advisers to gauge potential buyers' appetite for the pubs, which are located mainly in London and south-east England. City sources said that Eastdil, the real estate investment bank, and Sapient Corporate Finance had been engaged to work on the deal.
 
Advanced technology products group Chemring said on Friday that the Serious Fraud Office (SFO) had closed its investigation into the activities of its Chemring Technology Solutions subsidiary and associated persons. Chemring stated it had "co-operated fully" with the SFO throughout the investigation, which was initially launched back in January 2018, and said it was "pleased" that the matter was now closed. The FTSE 250-listed company added that it remained committed to conducting business in "an ethical and responsible manner" and in full compliance with all applicable laws and regulations.
 
Oxford Biomedica has signed a new three-year deal to make AstraZeneca's Covid-19 vaccine beyond this year when the original agreement expires, the company said on Friday. The Oxford-based gene and cell therapy group said it expected to record about £30m in revenue from the contract in the current financial year. Under the new deal, manufacturing of vaccines at Oxford manufacturing facility, Oxbox, will be available to AstraZeneca on an as-needed basis beyond 2022.
 
London-listed AO World shares have plummeted almost 15% this morning following a report that the online electricals retailer is facing a cash crunchsince a leading credit insurer cut cover for suppliers following a deterioration in its finances. The Sunday Times cited market sources as saying that Atradiushas slashed cover for suppliers to AO, which sells everything from washing machines to TVs and fridge-freezers. Credit insurance is a vital part of the retail supply chain, protecting suppliers against the risk of customers going bust between the point of accepting an order and payment being made. When cover is not available, suppliers tend to demand payment upfront, damaging a retailer's cash flow. In its annual report last year, AO said it was "heavily reliant" on its suppliers and their insurers maintaining limits at existing levels.
 
Builders merchants Grafton said today that CEO Gavin Slark is to step down after 11 years in the role. He will continue in his roles until 31 December. The FTSE 250-listed group said a process to appoint a successor will commence immediately.
 
Citigroup is reportedly in talks with several local buyers over a potential sale of its operations in Russia. According to the Financial Times, the US bank is in talks with privately-owned Russian companies including Expobank and insurance company Reso-Garantia about plans to offload the consumer and commercial businesses. It was also understood that Rosbank has expressed interest in a deal, but that's been thrown into doubt after the UK sanctioned its owner Vladimir Potanin this week.
 
The European Union (EU) has announced plans to rein in the “wild west'' of the crypto sector by governing crypto assets. The legislation has been dubbed the Markets in Cryptoassets (MiCA) directive and will regulate the crypto sector with common rules across all 27 member states. It is the first time globally that politicians have attempted to supervise the industry on such a scale and the new rules are expected to come into force around the end of 2023, Yahoo Finance reports. The intention is to prevent market abuse and manipulation. However, non-fungible tokens (NFTs) offered to the public at a fixed price will be exempt from the new rules. Cryptocurrency firms will also be required to provide information regarding the environmental impact of their assets. A recent decline in cryptocurrency prices has seen the total value of the market nosedive from $3tn last year to less than $900bn.
 
Sri Lanka's energy minister said yesterday that the nation only had enough petrol left for less than a day. The BBC reports that Kanchana Wijesekeraalso said the next petrol shipment was not due for more than two weeks. Last week, Sri Lanka suspended sales of petrol and diesel for non-essential vehicles.  He also warned that the country does not have enough money to pay for planned fuel and crude oil imports and that the country owed $800m to seven suppliers for purchases made earlier this year. The island nation of 22 million people is facing its worse economic crisis since gaining independence from the UK in 1948. Last Thursday, an International Monetary Fund team concluded a fresh round of talks with Sri Lanka over a $3bn (£2.5bn) bailout deal.


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