Published: 14 July 2022
Location: London, UK
By Suzanne Evans, Director, Political Insight
Jeremy Hunt and Nadhim Zahawi are out of the Conservative Party leadership contest after failing to get the required 30 votes from their fellow MPs yesterday. Six candidates are now left in the race: Rishi Sunak, Liz Truss, Penny Mordaunt, Tom Tugendhat, Kemi Badenoch and Suella Braverman. Another round of voting takes place later today. The candidate with the fewest votes will then be knocked out of the contest.
The head of the International Monetary Fund has said it will downgrade its expectations for global economic growth this month. Its most recent forecast, issued in April, was for 3.6% growth this year and next. Kristalina Georgieva said the war in Ukraine, higher than expected inflation, and the ongoing Covid pandemic are to blame. These are making the cost of living crisis worse for millions, she said, adding that it is the poorest who are suffering the most. Inflation in the US, the world's largest economy, reached 9.1%, the highest in more than 40 years. G20 finance ministers and central bank governors are preparing to meet in Bali this coming weekend, a meeting which Georgieva said offered an opportunity for the world's richest countries to club together to help "provide urgent support" to those most in need, not least because the "risks of social instability are rising" because of concerns over food and energy supplies.
The euro has fallen below the US dollar for the first time in nearly 20 years. A single euro bought $0.998 on the foreign exchange market at 12:45 GMT yesterday, down by 0.4% in the day's trading. Fears that Russia may restrict Europe's supplies of energy have increased the chances of recession in the euro area, the BBC says. The European Central Bank has also lagged other central banks in raising interest rates, further weakening the euro, although it is expected to start increasing interest rates next week. The US dollar, meanwhile, has been strong in recent months, buoyed by the US central bank raising interest rates, and investors seeking the safe haven of dollar assets in times of global turmoil. The euro has fallen almost 12% against the dollar since the start of the year.
The cost of getting a personal loan now stands at its highest level for nearly six years. According to the latest borrowing statistics from the Bank of England, the average rate for a £10,000 loan was 4.11%, the highest since August 2016. In the case of a £5,000 personal, rates rose to 8.2% in June, up from 8.14% in May.
Ofgem has ordered energy suppliers to review the way they charge customers by direct debit after around 500,000 households saw such payments double this year. The regulator has now ordered all energy suppliers to review the accounts of customers whose direct debit was doubled or more between February and the end of April and, where appropriate, to adjust any miscalculations, including making repayments if needed, and consider whether a goodwill payment is warranted. Ofgem also told six suppliers to take "immediate" action to tackle issues with their charging processes: Ecotricity, Good Energy, Green Energy UK, Utilita Energy, TruEnergy and UK Energy Incubator Hub (although this firm is no longer trading). Ofgem’s investigation found they had "moderate to severe" weaknesses, ranging from inadequate charging processes to lacking a structured approach to how to set appropriate direct debit levels.
Average rental asking prices have hit another record high: £1,126 per month outside London, according to Rightmove. Britain's largest property website said the average monthly rent being asked is now 11.8% higher than a year earlier, while the average monthly rent is now 19% or £177 higher than at the start of the pandemic. Asking rents in the capital surged by 15.8% in the last 12 months, pushing the average asking rent there to a record £2,257 per month, Rightmove said. The latest figures, which cover the second quarter of 2022, suggest June saw the highest number of new rental listings coming to market of any month this year so far. Rightmove
Rising rents continue to be driven by high tenant demand – up 6% year-on-year - and a shortage of available rental stock – down 26% compared to last years’ levels - although there have been some recent signs of improvement, Rightmove added.
Railway workers are staging another strike on 27th, the RMT union said last night. Earlier this week, Network Rail made a fresh 5% plus offer but this was rejected by the union as it was “paltry” and depended on workers accepting "modernising reforms". The RMT said it would consult other unions with further mandates for strike action in the coming days.
The Competition and Markets Authority (CMA) says it has "reasonable grounds" to suspect that Sky, BT, ITV, and IMG Media, which includes Premier League Productions, might have broken competition rules by engaging in ‘cartel-like’ behaviour. The regulator said: "The investigation relates to the purchase by such companies of freelance services which support the production and broadcasting of sports content in the UK”. It added: "At this stage the CMA believes it has reasonable grounds to suspect one or more breaches of competition law," but that it has not yet “reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections to any party or parties".
The CMA has also launched a formal antitrust investigation into supermarket Morrisons’ takeover of struggling convenience retailer McColl’s, to see whether it would result in a lessening of competition in the UK groceries market. The CMA confirmed it will launch a formal phase one probe and has invited comments on the move by interested parties. In May, it issued an initial enforcement order to check whether the transaction needed to be probed and, at the time, Morrisons and McColl’s were ordered to continue operating as separate entities until investigators carried out their work. The CMA will decide whether or not to launch an in-depth investigation by 8 September.
Shares in Wetherspoons fell 10% yesterday following an announcement by the pub chain that its annual losses will be bigger than forecast after heavy spending on repairs, marketing, and wages to attract staff. The FTSE 250firm now expects losses of around £30m for the year. It said that although sales were now matching pre-Covid levels, staff costs were far higher than previously, although it is now "with minor exceptions, fully staffed". Regarding repair costs, Wetherspoons says it will have spent about £99m on this in the current year, compared to £76.9m in 2018-2019, due to "catch-up" work since pandemic restrictions were lifted.
Edinburgh-based rocket company Skyrora has opened a new manufacturing and production facility, the largest of its kind in the UK, following on from the opening of its engine test facility in Midlothian. The company is endeavouring to become the first British company to launch a rocket from UK soil with its orbital vehicle, Skyrora XL. The new site means structural and pressure tests on launch spacecraft that previously had to be outsourced overseas can now be done in the UK for the first time.
Uber is being sued in the US by 550 women who were allegedly assaulted by drivers on the ride-hailing platform. The filing includes allegations women passengers "were kidnapped, sexually assaulted, sexually battered, raped, falsely imprisoned, stalked, harassed, or otherwise attacked by Uber drivers". The case was filed at the San Francisco County Superior Court on Wednesday.
Netflix has teamed up with Microsoft to offer a "lower priced ad-supported subscription plan,” the BBC reports. The streaming giant says the service will be an "addition" to its existing plans, which do not include adverts. The company has not yet revealed how much it plans to charge subscribers for the new service. Netflix announced the move after it reported its first subscriber loss in more than a decade and cut hundreds of jobs earlier this year.
Former bosses of the Tokyo Electric Power Company (Tepco) which operated the Fukushima nuclear power plant, have been ordered to pay 13 trillion yen (£80bn) for failing to prevent the 2011 meltdown which was triggered by a tsunami. The court said the executives could have prevented the accident if they had exercised due care. Tepco apologised but declined to comment on the court case. The plaintiffs emerged from the Tokyo court holding banners reading "shareholders win" and "responsibility recognised," the BBC reports. Their lawyers said they believed it to be the largest amount of compensation ever awarded in a civil lawsuit in Japan, and acknowledged the sum in damages was "well beyond" the former bosses capacity to pay, but that the plaintiffs expect the men to pay as much as their assets allow. At the time of the disaster, the Japanese authorities set up an exclusion zone which forced more than 150,000 people to evacuate from the area. A decade later, that zone remains in place and many residents have not returned. The clean-up operation in the area is estimated to take up to 40 years to finish, and has already cost Japan trillions of yen.
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