Published: 19 July 2022
Location: London, UK
By Suzanne Evans, Director, Political Insight
Tom Tugendehat was voted out of the Conservative leadership contest yesterday, gaining only 31 votes from his fellow MPs. Rishi Sunak got 115 votes (up 14); Penny Mordaunt 82 (down 1); Liz Truss 71 (up 7); and Kemi Badenoch 58 (up 9). Meanwhile, a planned third candidate debate on Sky News was cancelled when Sunak and Truss refused to take part. Also yesterday in parliament, MPs voted by a majority of 111 that they had confidence in the Government, after the Labour Party tabled a no-confidence motion.
New Chancellor Nadhim Zahawi is expected to say that inflation will be brought back under control by the government in his first major speech as Chancellor at the Mansion House dinner this evening. "Sound public finances" will deliver this, Zahawi will say, adding that despite the "short-term uncertainty" he will focus on providing "stability, reassurance and continuity". He will also set out aims for a post-Brexit shake up of financial services regulation, "so that UK insurers have more flexibility to invest in long-term assets like infrastructure".
Also in his Mansion House speech, Nadhim Zahawi will give his backing to the Capital Markets Industry Taskforce, an initiative designed to shore up London's position as a global destination for major company flotations, Sky News reports. The industry-led body will be chaired by Julia Hoggett, the London Stock Exchange CEO, and its objective will be to build on the foundations laid by reviews published last year by Lord Hill, the former EU Commissioner, and Sir Ron Kalifa, the former Worldpay chief. It intends to make periodic recommendations to government about measures that will augment the City's international appeal. Several top industry figures are being lined up to serve alongside Hoggett, and while it is not a government-commissioned group, the endorsement of Mr Zahawi will represent an important vote of confidence in its mandate, Sky’s sources said. Globally, initial public offering volumes slumped by nearly 50% during the first half of 2022, with London enduring its worst first half since 2009.
Bank of England (BoE) policymaker Michael Saunders has warned interest rates could reach 2% or higher during the next year to curb inflation. Further rate rises in the months ahead are neither “implausible or unlikely” he said as they "still have some way to go" in the attempt to control inflation. UK interest rates currently stand at 1.25%, up from 0.1% in December.
Confidence among British business leaders has dropped to its lowest since at least 2009 as inflation worries worsen, but are still ahead of their European counterparts, according to an index of optimism. Accenture and S&P Global said their net balance measuring whether UK companies expect activity to increase fell to 28% last month from 56% in February. The majority of companies expect profits will fall — a first in the survey’s history. Six in 10 firms expected to pass on higher costs to customers.
Average pay excluding bonuses has dropped 2.8% when rising prices are considered, the Office for National Statistics (ONS) said this morning. This is the sharpest drop since the ONS began compiling records on this in 2001. The ONS has also published its latest quarterly job statistics showing 75.9% employment; 3.8% unemployment; and 21.1% economic inactivity. There were 1.294 million job vacancies on average across April-June 2022, up by 6,900 on the previous quarter, meaning that between March and May, there were more vacancies than unemployed people. The number of employees on payroll continued to grow in June 2022 and is now 561,000 above its pre-pandemic level Total actual weekly hours worked reached 1.046 billion between March and May 2022, up 6.5 million on the previous 3 months, and now only 6.4 million below pre-covid pandemic levels.
UK households cut back by an average of £106.40 a week during the first year of the pandemic, with the lowest earners being hit the hardest, Yahoo Finance reports. Average weekly expenditure for all households dropped from £587.90 to £481.50 in the year to March 2021, according to fresh data from the Office for National Statistics (ONS). The 18% drop in spending exceeds any year-on-year decrease throughout the 2008 economic downturn and subsequent recovery, which averaged only 2%. Across all income brackets, the biggest chunks of spending were on housing, fuel and power(18%), food and non-alcoholic drinks (14%), and transport (13%). “Those on lower incomes and renters spend a huge proportion of their income on the essentials, so at the peak of the pandemic, they saw their spending fall far less spectacularly than those on higher incomes,” Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said. "The pandemic meant we slashed spending on luxuries, like hotels, restaurants, recreation and culture. Higher earners spend a bigger chunk of their income on these things, so when they cut out this spending, their outgoings fell twice as far as they did for lower earners.
More households in Britain are cancelling video streaming subscriptions due to the rising cost of living, the BBC reports. A total of 1.66 million services were canned in the second quarter of 2022, according to market research firm Kantar, with the under-24s the most likely age group to cancel More than a third of cancellations were attributed to cutting costs, with people budgeting for higher prices and energy bills. Younger audiences are turning back to services such as Tik Tok, BBC iPlayer, Channel 4's All 4 and ITV Hub, Kantar's data suggested.
Retail footfall in London dropped 18.1% on Monday morning because of the heatwave, according to figures from Springboard’s “Back to the Office” benchmark, which also showed a nationwide fall of 7.3%. However, high streets in coastal towns saw footfall rise 9%. “Typically, when the weather is hot and sunny, shoppers gravitate to outdoor locations, and so footfall in high streets tends to increase while decreasing in shopping centres,” Diane Wehrle, insights director at Springboard, said. However, UK footfall was 11.5% lower than last week and 16.1% lower in Central London. “The only parts of the UK where high street footfall rose from last Monday were Scotland (0.6%), Northern Ireland (0.6%) and Wales (3.2%) where temperatures, whilst still hot, are lower than in England,” Wehrle added.
The government is considering changing the way the price of electricity is set for households, focussing on offering cheaper energy when demand is low or when the weather means more electricity is produced. Also under consideration is how pricing can be "de-coupled" from gas prices, which have caused higher bills. The Department for Business, Energy and Industrial Strategy (BEIS) published a consultation paper yesterday outlining changes it believes could "cut costs of electricity for consumers," after almost a year of preparations. Energy bills for typical households jumped by £700 to a record £1,971 in April, driven by global gas prices surging following Russia's invasion of Ukraine, and they are set to rise further this year.
The AA says the price of petrol has fallen from record highs, leading to reductions worth £1.50 per tank. The motoring organisation says average pump prices are down to 188.76p per litre for petrol and 196.96p per litre for diesel. At the start of the month, prices were 191.53p for petrol and 199.07p for diesel. the AA says, noting that the falling wholesale costs could lead to savings of £10 off a tank within a fortnight.
Russian government-owned Gazprom, which has a monopoly on Russian gas exports by pipeline, has declared force majeure on gas supplies to Europe, saying it could not fulfil its supply obligations because of "extraordinary" circumstances, Reuters reports. In doing so, Gazprom is shielded from its contractual obligations and compensation payments for disrupted supplies. Dated July 14, Gazprom’s letter said force majeure was retroactively effective from deliveries starting from 14th June, and reportedly covered supplies through the Nord Stream 1 pipeline, a major supply route to Germany and beyond, an unnamed source was cited as saying. The pipeline is currently shut for annual maintenance – supposed to be completed on July 21 - but some of Gazprom's European customers are concerned supplies will not resume. On June 14th, Gazprom had already reduced shipments through the pipeline under the Baltic Sea to Germany, citing the delay of a turbine being maintained in Canada by equipment supplier Siemens Energy. On this issue Gazprom had no immediate comment.
The search for a leadership team for Britain's new "moonshot" scientific research body will conclude this week when ministers announce the appointment of its inaugural chair and chief executive. Sky News has learnt that Business Secretary Kwasi Kwarteng has signed off the recruitment of Matt Clifford, a co-founder of the technology investment vehicle Entrepreneur First, as chairman of the Advanced Research and Invention Agency (ARIA). The Department for Business, Energy and Industrial Strategy (BEIS) will also announce that Ilan Gur, the founder of a US-based organisation which helps scientists and engineers to bring ground-breaking research to market, will become ARIA's CEO. The dual appointment will mark an important step in the development of ARIA, which was the brainchild of Dominic Cummings, Boris Johnson's former chief aide, Sky says.
GlaxoSmithKline (GSK) has spun off its consumer healthcare arm Haleon in Europe's largest listing for more than a decade. The business, home to brands such as Sensodyne, Panadol, Centrum vitamins and Chapstick, starting trading on the main market of the London Stock Exchange at 8am yesterday morning, at 330p, giving it a value of around £30.5bn. It is the biggest listing in Europe since Glencore's £37bn debut in 2011. American depositary shares will start trading in New York later this week. According to Reuters, who quoted unnamed bankers involved in the deal, the debut price was generally in line with market expectations, however the valuation is well below £50bn bid made by consumer goods giant Unilever at the start of the year, which GSK said "fundamentally undervalued" the unit. GSK announced plans to spin out the business shortly after rebuffing the approach. Danni Hewson, financial analyst at AJ Bell, said: "With a market value of approximately £31bn, investors might be wondering why GSK didn't accept the much higher bid from Unilever”.
Shares in Playtech, which provides gambling and sports betting software to big name firms such as Ladbrokes owner Entain, rose 6% to 446.2p yesterday after it emerged former suitor and former Formula One team boss Eddie Jordon was mulling a fresh approach. The Sunday Times said he is now considering making a second tilt at the company, after coming close to tabling an 750p-per-share offer earlier this year. The FTSE 250 lost value last week after TT Bond Partners, a Hong Kong-based consortium, said it would not be making a firm offer after months of interest.
The Financial Reporting Council (FRC) has fined accountants Grant Thornton and one of its former partners in charge of the audits, Philip Westerman, more than £2m for “serious failings” in audit work carried out for Sports Direct International, since renamed Frasers Group. The accounting watchdog said that the adverse findings concerned "basic and important requirements" designed to ensure the quality and effectiveness of an audit”. This meant that the 2016 and 2018 audits of the retailer “failed in their principal objective of providing reasonable assurance" that financial statements were free "from material mis-statement," the FRC added.
There was no criticism of Frasers Group.
Uber has agreed to pay more than $2m (£1.68m) to settle claims brought by the US government that its wait time fees discriminated against customers with disabilities. The firm also agreed to waive charges for disabled users in the future. More than 1,000 people had complained about the fees, which often kick in if it takes more than two minutes to get into the car. Uber said its policy was to refund wait fees for disabled riders and, in resolving the lawsuit, denied any wrongdoing.
Fashion chain H&M has announced it is leaving Russia but will temporarily reopen its shops there to sell off remaining stock. The decision comes after the Swedish firm suspended all sales in Russia in March, shortly after Russian troops invaded Ukraine in late February. H&M is understood to have more than 150 stores and about 6,000 staff in Russia, the BBC says. It has not given a date or timescale for its exit. Prior to it suspending sales, Russia was H&M's sixth-biggest market, accounting for about 4% of group sales in the fourth quarter of 2021.
Russia has fined Google 21.1bn roubles (£301m) for failing to restrict access to "prohibited" material about the war in Ukraine and other content. Roskomnadzor, the country's communications regulator, said the information included "fake" reports that discredited Russia's military and posts urging people to protest. It called the US tech giant a "systematic" violator of its laws. Google did not comment immediately, the BBC says.
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
