Published: 15 November 2022
By Suzanne Evans, Director, Political Insight
Chancellor Jeremy Hunt is planning to increase the national living wage from £9.50 to £10.40 per hour, and give 8 million households cost-of-living payments worth up to £1,100, The Times reported yesterday.
The Office for National Statistics has published headline indicators for the UK labour market for July to September 2022, showing that unemployment rose unexpectedly, and job vacancies fell for a fifth report in a row, with an increasing number of employers citing economic pressures as a factor in decisions to hold back on recruitment. Employment stood at 75.5% in the period, with 52,000 people falling out of the jobs market. Unemployment was at 3.6%; and economic inactivity was at 21.6% - a slight 0.1 percentage point fall. There were 1.225 million job vacancies on average across August to October 2022, down 46,000 on the previous quarter, and the lowest number since late 2021. The biggest falls in vacancies were in hospitality, followed by retailing and wholesaling. Wages rose by 5.7%, their highest annual growth rate excluding the coronavirus pandemic period. However, after taking inflation into account, average pay including bonuses fell by 2.6% in the year to July to September2022. Excluding bonuses, it fell by 2.7%.
More than a third of British pubs and restaurants have shortened their trading hours over the last three months to keep a lid on soaring energy costs, the Office for National Statistics (ONS) said yesterday. Some 6% of pubs, cafes and restaurants had decided to close an extra two days a week; 7% were open one day less; and 21% had reduced opening hours but not the number of days they were open. Such reduced hours were far more common in the hospitality sector than in other parts of the British economy, where just 7% of businesses reported this, the ONS said. Venues also reported reduced demand because their customer are feeling the pinch. However, more food and drink businesses plan to stay open in the run up to Christmas, according to the ONS survey, which showed 4% of the companies were planning to reduce their opening hours by one day a week, versus 7% which did so in the past three months. Last month, trade body UKHospitality said over a third of the sector risked going bust early next year due to the rising cost of energy and other bills, as well as falling consumer spending. Staffing was a challenge too, it added.
Paris has nudged marginally ahead London as Europe’s largest stock market, as judged by the combined market capitalisation index of its major share exchanges compiled by Bloomberg. Domestic-focused UK shares have slumped this year, while French luxury goods-makers like LVMH and Gucci owner Kering have recently been boosted by optimism over a potential easing of China’s zero Covid policy. Currency movements have also helped Paris, with sterling down 13% against the dollar this year, while the euro has only lost 9%. Bloomberg added that the market cap gap between the UK and French stock markets has been narrowing from about $1.5tn (£1.27tn) since the Brexit vote in 2016. UK equities are now worth about $2.821tn compared with about $2.823tn for French equities, by Bloomberg’s calculations.
London residential rents hit a new average weekly high in October, according to estate agents Foxtons, which says tenants in the capital are now paying £571 a week, up from the previous high of £553 per week seen in September 2022. Foxtons said there were 22 renters competing for every new property in October 2022 — the stiffest competition since 2018.
Vodafone has announced a new cost savings target of over €1bn (£877m) to 2026 focused on “streamlining and further simplifying the Group” because of rising costs. CEO Nick Read said the FTSE 100 firm would also be taking “pricing action” across Europe. Last week, Vodafone agreed a €32-a-share deal to move its 81.7% holding in Vantage Towers, its phone mast business, into a private equity joint venture with KKR and Global Infrastructure Partners. The deal valued the firm at €16.2bn (£14.3bn).
Madame Tussauds, Alton Towers, and London Eye owner Merlin Entertainments has recruited Scott O’Neil, a former boss of the Philadelphia 76ers NBA team, to be its next CEO. He will replace Nick Varney who announced in April that he was planning to step down after nearly a quarter of a century in charge of the company in its various incarnations.
Amazon.com Inc is planning to lay off around 10,000 employees in corporate and technology roles beginning this week, a person familiar with the matter has told Reuters. It would amount to its biggest such reduction to date. The cuts, earlier reported by the New York Times, would represent about 3% of Amazon's corporate staff, although the exact number may vary as businesses within Amazon review their priorities, the source said.
A trial to decide whether Tesla CEO Elon Musk's $56bn (£47.3bn) pay package was based on easy to achieve performance targets and that investors were duped into approving it, began yesterday. Tesla shareholder Richard Tornetta hopes to prove during the five-day trial that Musk used his dominance over the electric vehicle maker's board to dictate terms of the 2018 package, which did not require him to work at Tesla full-time. Tornetta has asked the court to rescind the pay package, which is six times larger than the top 200 CEO salaries combined in 2021, according to Amit Batish of research firm Equilar. Musk is expected to testify on Wednesday.
Russian software disguised as being American has found its way into thousands of smartphone applications in Apple and Google's online stores, and has had to be removed from seven public facing apps used by The Centers for Disease Control and Prevention (CDC), Reuters reports. The US Army has also had to remove used by soldiers at one of the country's main combat training bases because of the same concerns around code emanating from Russia. The CDC said it had been deceived into believing the company responsible, Pushwoosh, was based in the US capital, when in fact it is headquartered in the Siberian town of Novosibirsk. According to company documents publicly filed in Russia, Pushwoosh is registered as a software company that also carries out data processing, and pays taxes in Russia. It employs around 40 people and reported revenue of 143,270,000 roubles (approximately £2m) last year. However, on social media and in US regulatory filings, Pushwoosh presents itself as a US company, based at various times in California, Maryland and Washington, D.C., Reuters found. On its website, Pushwoosh says it does not collect sensitive information, and Reuters found no evidence Pushwoosh mishandled user data. Russian authorities, however, have compelled local companies to hand over user data to domestic security agencies. Pushwoosh's founder, Max Konev, told Reuters in a September email that the company had not tried to mask its Russian origins. "I am proud to be Russian and I would never hide this." He said the company "has no connection with the Russian government of any kind" and stores its data in the United States and Germany.
Japan's economy shrank unexpectedly for the first time in a year in the third quarter, with data translating into a quarterly decline of 0.3%, versus a forecast of 0.3% growth. The world's third-largest economy has faced intensifying pressure from global inflation, sweeping interest rate increases worldwide, a weakened yen, higher import costs, and the impact of the Ukraine war. GDP fell an annualised 1.2% in July-September, official data showed, compared with economists' median estimate for a 1.1% expansion and a revised 4.6% rise in the second quarter.
Several reports from international news agencies say the Beijing government has stepped into shore up China’s ailing real estate sector, sending property stocks soaring. The People's Bank of China and the China Banking and Insurance Regulatory Commission have written to financial institutions outlining 16 specific steps intended to support the sector, including allowing real estate firms to defer repayment of some loans, and the extension of a looming end-of-year deadline for lenders to cap their ratios of property sector loans for an as-yet unspecified time. According to the FT, the ratio of outstanding property loans to total loans at big banks still needs to be capped at 40%, and outstanding mortgages at 32.5%. But the 31 December deadline has been scrapped, with no new timeframe yet confirmed. Liam Bailey, global head of research at Knight Frank, said the looming deadline had "starved the sector of liquidity". Shares in Hong Kong-listed Country Garden Holdings - the country's biggest developer - adding around 45% and Dexin China Holdings rocketing 110%. The Hang Seng Mainland Properties Index jumped 13.5% to close at a two-month high. China's red-hot property sector was for a long time one of the country's main drivers of economic growth, Sharecast News says, but the sector slowed this year and last after the government moved to curb excessive borrowing, triggering a slew of sales, price falls, bond defaults, and a halt to housing construction.
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