Unemployment has fallen to its lowest level since 1974

By Suzanne Evans, Director, Political Insight

Unemployment has fallen to its lowest level since 1974, to stand at 3.6% over the three months to July. The Office for National Statistics (ONS) said the number of people in employment grew by 40,000 in the period. Regular pay, excluding bonuses grew by 5.2% over the quarter, although when inflation at the current rate of 10.1% is considered, that signifies a real-terms 3.9% year-on-year drop, the ONS says. Total pay including bonuses lifted by 5.5% for the three-month period, falling by 3.6% when inflation is taken into account. The economic inactivity rate - those who are not in work and not looking for work - increased by 0.4% in the quarter to 21.7%, its highest since the three months to January 2017. The ONS attributes this to an increase in people classified as long-term sick as well as students leaving the jobs market. Average regular pay growth for the private sector was 6% in May to July 2022, and 2% for the public sector.
 
The death of Queen Elizabeth II and the resulting additional bank holiday for her funeral next week, could push the UK economy into recession, analysts say. July’s 0.2% rise in GDP followed a 0.6% slump in June, which was triggered by the extra public holiday to mark the Queen's Platinum Jubilee. Grocery giants Sainsbury’s and Aldi have said their stores will be shut on 19^thSeptember, the day of the funeral. Primark and John Lewis have also said they will not open. Sainsbury’s owned Argos will also be shut; however Sainsbury’s says it will open its convenience shops and petrol filling stations during the evening.
 
Discount supermarket Aldi has overtaken Morrisons to become the fourth largest supermarket in the UK for the first time.  Figures from data company Kantar found that Aldi’s market share rose by 1.2% over the last three months as shoppers attempt to mitigate a squeeze on household incomes brought about by rising inflation and higher energy prices. Kantar says grocery price inflation hit a new record of 12.4% in August, adding £571 to the average annual grocery bill. Milk, butter and dog food had jumped up especially quickly at rises of 31%, 25% and 29% respectively. The resulting hunt for bargains has meant people have broadened the range of stores they visit, with the discount grocers benefiting, Kantar says. Aldi’s sales rose by 18.7% over the 12 weeks to 4 September 2022, reaching a 9.3% market share. Meanwhile Lidl grew sales by 20.9% and its market share has increased to 7.1%. Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Back at the start of the 2010s, Tesco, Sainsbury’s, Asda and Morrisons together accounted for over three quarters of the sector but that traditional big four is no more.”
 
Online grocery firm Ocado Retail says it expects a small fall in annual sales despite a rise in the number of shoppers and orders because customers are “shopping smaller baskets and seeking value-for-money items as they respond to inflationary pressures". The value of the average basket fell 6% in the 13 weeks to August 28, to £116, with a greater decline experienced later in the quarter during the peak summer holiday season. The joint venture between Ocado Group and Marks & Spencer also said it expects close to break-even core earnings.
 
Banks have pulled one in ten mortgage deals as they scrambled to raise interest rates for the eleventh month in a row, The Telegraph reports. Lenders have increased prices with such speed in recent days that some deals were only available to borrowers for 24 hours, the newspaper says, publishing research showing that more than 500 mortgages disappeared from the market in the past month, with the total number available falling to 3,890. This is almost 1,500 fewer deals available compared with when interest rates first started to rise in December last year, and the least choice homebuyers have had since the country emerged from lockdown in April last year, according to analyst Moneyfacts. The average two-year fixed interest rate has risen to 4.24%, almost two percentage points higher than in December, when it was 2.34%. This was the highest since 2013. The average five year fixed rate has also risen to 4.33%, up from 2.64% in December last year and the highest since November 2012, according to Moneyfacts. The Bank of England has repeatedly increased the Bank Rate this year in a bid to tame runaway inflation. It is currently 1.75% - up from an historic low of 0.1% at the beginning of December 2021 – and the central bank is expected to raise the rate again next week.  
 
Heathrow Airport passenger numbers rose to 6 million in August 2022, up from 2.2 million in the same month last year, but remain well below pre-pandemic levels. 7.7 million passengers were recorded in August 2019. Heathrow’s daily passenger cap of 100,000 remains in place until the end of October, to prevent overcrowding, cancelled flights, lost luggage and long waits at security because of staff shortages.  
 
The National Crime Agency (NCA) has launched legal action to recover nearly £54m from two Barclays bank accounts. According to City AM, court documents show that the organised crime unit believes that “on the balance of probabilities, the property constitutes the proceeds of crime." Barclays has been named as an interested party only, is not a defendant, and is not being accused of any wrongdoing. Indeed, Barclays launched an investigation into the accounts after they were flagged by both third-party intelligence and internal controls, the newspaper says. The money was then ring-fenced due to the account holder's "inability or unwillingness to provide information as to the provenance of the suspect funds in their account". The account holders have not accessed the accounts since they were ringfenced, the Telegraph said. The court hearing is scheduled for November. Neither Barclays nor the NCA have commented on the reports yet.
 
Australia's financial crimes watchdog has launched an enforcement investigation into FTSE 100-listed Entain Group, the owner of Ladbrokes and Coral, over money laundering concerns. The Australian Reports and Analysis Centre (Austrac) said the probe would assess if the British gambling firm had complied with Australia's anti-money laundering (AML) and counter-terrorism financing (CRT) laws. Nicole Rose, chief executive of the government agency, said: "Reporting entities have a responsibility to ensure they identify, assess and manage risks of money laundering and terrorism financing, develop adequate processes and devote the necessary resources to the AML/CRT Act." In a brief statement, Entain said it was co-operating with Austrac. It also noted that the probe related to the period between July 2016 and June 2020 only.  Entain has around a sixth of Australia's online betting market, according to Reuters. Last month, Entain was fined £17m by the UK's betting regulator, the Gambling Commission, for "completely unacceptable anti-money laundering and safer gambling features".
 
Savile Row tailor Gieves & Hawkes is being eyed up by Mike Ashley's Frasers Group, Sky News has claimed, citing "retail industry sources" as saying that both Frasers, as well as a handful of other parties, were set to lodge revised bids for the brand in the coming week. Gieves & Hawkes was formed in its current iteration in 1974, but its history stretches back to the 1700s. Since 2012, it has been part of Trinity Group, which is itself owned by the now collapsed Shandong Ruyi Technology Group. Before 2012 it was part of another Hong Kong firm, Wing Tai Properties. The other bidders were not identified in the media reports, and Frasers Group has declined to comment.
 
The Hindu newspaper reports that a majority of Twitter Inc.'s shareholders have voted in favour of the company's $44bn (£7.62bn) sale to Elon Musk. A source requested anonymity ahead of an official announcement. Such a result would be no great surprise; Musk made a $54.20 (£46.35) per-share deal for Twitter in April, but a stock market downturn means the social media company’s shares are now hovering around the $41 (£35) mark. However, Musk says he will not go ahead with the acquisition, saying he was misled over the number of spam accounts on the platform. Overnight, Musk has also claimed that Twitter should have notified him before spending $7.75m (£6.63m) in a separation agreement with Peiter Zatko, the company’s former security chief, and the fact he wasn’t further invalidates the deal. Twitter denies this. The two sides are scheduled to battle it out in court next month.

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