Published: 03 August 2022
Location: London, UK
By Suzanne Evans, Director, Political Insight
Voting to choose Britain's next Conservative Party leader and Prime Minister has been delayed after the National Cyber Security Centre, part of the Government Communications Headquarters (GCHQ), warned cyber hackers could change people’s ballots, The Telegraph said yesterday. However, there was no specific threat, the report added. The Conservative Party will now abandon plans it had made to allow members to change their vote for the next leader later in the contest, the newspaper claims. Postal ballots are yet to be issued to the 160,000 or so party members, which may not now arrive until 11th August. Ballots were due to be sent out from Monday. Meanwhile, a YouGov poll puts Liz Truss ahead of Rishi Sunak by 34 points. The winner is due to be announced on 5th September.
More than 16,000 businesses which took out a government-backed Covid loan have gone bust without paying the money back, the BBC has found. Hundreds of company directors, who got loans they were not entitled to, have also been disqualified. The cost to the taxpayer of these insolvencies could be as much as £500m and is likely to grow as more companies go under. The figures, obtained by the BBC under a Freedom of Information request, have been described as "shocking" by a former head of the Serious Fraud Office. Sir David Green QC describes checks the government required banks to do on bounce back loan applicants as "hopelessly inadequate". A total of 1.5 million loans worth £47bn were handed out to help businesses survive lockdowns, loans that were supposed to be paid back within 10 years. But checks on borrowers were limited. Under the scheme any small company could apply for a loan of up to £50,000, depending on its turnover, and applicants were allowed to "self-certify" the figures. Previous research shows that 45% of successful applicants to two banks showed no evidence of trading at the relevant period, the BBC says.
The number of companies filing for voluntary liquidations in England and Wales hit a record high in the second quarter of this year as businesses struggled without the support available to them during the COVID-19 pandemic, data from the government's Insolvency Service showed yesterday. Total company insolvencies surged 81% compared with the April-June period last year, the bulk of them creditors' voluntary liquidations (CVLs) which were the highest since records began in 1960. Total company insolvencies were 13% higher than in the January-March quarter. The number of compulsory liquidations also rose by 9% in the second quarter and was nearly four times higher than a year earlier but remained lower than levels seen before the pandemic.
One in five households in the UK will be left without savings by 2024 according to the National Institute of Economic and Social Research(NIESR). The think-tank blames spiralling energy and food bills and says average real household disposable incomes are predicted to fall by 2.5% this year – more than during the Winter of Discontent of 1978/79. NIESR says it expects the UK economy to enter a recession in this quarter, where it will remain until the first three months of 2023.
Britain's small and medium sized manufacturing firms expect factory output and orders to fall in the next three months despite easing cost and price growth pressures, according to analysis from the Confederation of British Industry (CBI), which shows production came to a near-halt in the quarter to July and is expected to fall slightly in the next three months to -6%. Total new orders stagnated in the three months to July (2% from 22% in the quarter to April), according to the latest CBI Trends Survey. In the next three months, firms expect total new orders to decline to -18%. The lack of optimism in this survey mirrors yesterday’s data from the S&P Global/CIPS showing factory output and new orders shrank at the fastest rate since May 2020 as the cost of living crisis, inflation, weaker domestic demand, and "lingering" post-Brexit issues weighed.
Petrol prices fell in July according to the RAC, which says it cost nearly £5 less to fill your tank compared to June. Average petrol prices dropped by nearly 9p over the month to 182.69p per litre, while diesel fell by almost 7p to 192.38p per litre, the motoring organisation said. However, the RAC noted prices still don't fairly reflect the fall in the wholesale price of fuel and retailers should be cutting pump prices much further.
Insurer Direct Line announced yesterday that it would hike premiums because of soaring prices for everything from used cars to spare parts. The FTSE 250 firm reported lower first half profits, with operating profit slumping by 47% to £195.5m. Pretax profit fell 32% to £178m but was still above the £155m forecast analysts anticipated. CEO Penny James said the insurer expects motor claims inflation to rise about 10% in 2022, adding "our rate increases ... need to reflect that". Rates rose by 15% in the first half.
One of Purplebricks Group Plc’s major shareholders – Lecram Holdings - called for the removal of Chairman Paul Pindar yesterday, hours after Britain's largest online-only estate agency reported its first annual loss since the pre-pandemic 2019 fiscal year. Pindar has held the non-executive chairman's position since December 2015, when Purplebricks was listed on the London Stock Exchange. "While we are encouraged by the plans of the new CEO and CFO to turn things around and stem the cash bleed, we wonder why it has taken so long to act," Glenn Cooper, chairman of Harrier Capital, advisor to Lecram, said in an emailed statement. "(We) are concerned at the lack of market experience at board level, and the fact that the chairman who presided over this terrible performance is still at the helm on the company," the statement added. Steve Long took over as CFO and Helena Marston as CEO earlier in the year. Lecram is the sixth-largest shareholder in Purplebricks, holding a 4.2% stake.
BP has announced plans to invest up to £50 million in a new, state-of-the-art electric vehicle (EV) battery testing centre and analytical laboratory in the UK. Planned to open by the end of 2024, the new facilities will be located at BP’s existing global headquarters for its Castrol business in Pangbourne, Berkshire. BP has previously announced its intention to invest up to £18 billion in the UK’s energy system by the end of 2030.
Outsourcing and professional services company Capita will sell two real estate and infrastructure consultancy businesses to WSP, Sharecast News reports. The FTSE 250 listed company said it expects to receive proceeds of roughly £69 or the sale of Capita Real Estate and Infrastructure and GL Hearn at completion. Capital said reported revenue and pre-tax profits for the combined businesses were £88.6m and £5.1m in 2021, respectively.
FTSE 100 engine manufacturer Rolls-Royce (RR) said this morning that the Spanish government has approved the sale of its ITP Aero subsidiary to a consortium of investors led by Bain Capital Private Equity. This marks the final sign-off on the deal, as RR has already had approval from all other relevant regulatory authorities. Completion of the transaction, at an enterprise value of approximately €1.8bn (£1.5bn), is expected to take place in the coming weeks. The sale proceeds of approximately €1.7bn (£1.42bn) will be used to help rebuild RR’s balance sheet, in support of its ambition to return to an investment grade credit profile in the medium term, Sharecast News reports.
Two funeral providers have been banned from repeating claims about eco-friendly funeral packages by the UK's advertising watchdog. Golden Leaves and JC Atkinson & Son had advertised "green" funeral packages, misleadingly suggesting that the MDF coffins and funeral plans being offered were more eco-friendly than alternatives, the Advertising Standards Authority (ASA) found.
Golden Leaves told the BBC it did not agree with the findings, saying that claims its funerals and coffins were "green" should be understood as part of a whole funeral plan package. JC Atkinson & Son said it would remove claims that the coffins were "eco-friendly” but added that it believed they could be substantiated.
The number of people driving for Uber has hit an all time high, the BBC reports. Almost 5 million people are now picking up passengers or making food deliveries for the company, 31% more than last year, boss Dara Khosrowshahi said. Uber had been struggling with a driver shortage since the pandemic, leading to longer waiting times for customers, and higher petrol prices now make it harder to earn money on the platform, but Khosrowshahi said interest in driving for the company was accelerating despite those costs. "That's right: more people are earning on Uber today than before the pandemic," he said in prepared remarks for investors to discuss the firm's financial performance. "Against the backdrop of elevated gas prices globally, this is a resounding endorsement of the value drivers continue to see in Uber."
Airbnb says it is in the middle of its strongest peak summer travel season yet, and that demand remains strong, despite concerns about economic slowdown and rising prices. Nearly 104 million nights and experiences were booked on the platform from April to June, a record high for the holiday let hosting platform. Overall, bookings in the period rose 25% from last year to 103.7 million and up 24% from 2019. Higher prices helped lift the company's revenue, which surged 58% from last year to $2.1bn (£1.73bn), leading the company to report a $379m (£311.5m) profit, after a $68m (£55.89m) loss last year. Travel demand remains strongest in North America - where bookings are up 37% compared to 2019, while growth in Europe is lagging.
Tinder CEO Renate Nyborg is leaving the firm less than a year after becoming the boss of the dating app. Her exit was one of a number of management changes at Tinder announced by parent company Match Group, after second-quarter results missed Wall Street expectations. Match Group chief executive Bernard Kim will take up her role until a permanent replacement can be found.
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