Published: 16 November 2022
By Suzanne Evans, Director, Political Insight
Rising energy bills have helped push inflation to highest level since 1982, with the latest Office for National Statistics (ONS) data putting the Consumer Prices Index (CPI) in the month to October 22nd at 11.1%, an increase from 10.1% in September. Food was cited as the other major contributor to the rise, with food prices rising at the fastest annual pace since 1977, the ONS said. The ONS has also highlighted how rising energy and food costs are affecting low-income households in particular – an issue which also came up at the G20 meeting in Bali yesterday, and one with G20 leaders pledged to tackle through "temporary and targeted" fiscal spending. Because a greater proportion of expenditure is spent on essentials by low-income households, the inflation gap between them and high-income households is the largest since March 2009, the ONS concluded. Consumer Prices Index including owner occupiers' housing costs (CPIH) annual inflation was 10.5% for low-income households and 9.1% for high-income households in the year to October 2022 – a gap of 1.4 percentage points. Overall, CPIH rose by 9.6% in the 12 months to Oct 2022, up from 8.8% in Sept.
Several media outlets said yesterday that plans being drawn up by Prime Minister Rishi Sunak and Chancellor Jeremy Hunt will push the average Council Tax bill to over £2,000. The two are believed to be allowing local councils to put up the levy by 4.99% without holding a local referendum, whereases under the current rules, councils responsible for social care are allowed to increase their bills by 2.99%, including a 1% levy for social care without a plebiscite. Such a move would mean millions of households in Band D face paying up to £100 extra, taking annual bills above £2,000 for the first time, while homeowners in the most expensive Band H could end up paying as much as £200 extra, with their bills exceeding £4,000. Because Council Tax bills also include precepts from other authorities such as fire brigades, police forces and parish councils, bills could be increased even further. The likelihood of rejection at the ballot box means that the cap is in effect a maximum-allowed increase, the Telegraph said, adding that only one referendum has been held on increasing council tax above the current 2.99% threshold, when the Bedfordshire police and crime commissioner suggested a 16% increase in his part of the council tax bill. The proposal was rejected by voters.
The pound hit three-month highs against the US dollar yesterday, after last month's US producer inflation rose less than expected, although there was a degree of caution among sterling investors ahead of the UK government's budget this week, Reuters says. The pound is currently trading at 1.188 against the US dollar, and 1.141 against the euro.
The Financial Conduct Authority (FCA) yesterday called on parliament to support its decision not to grant licences to scores of crypto exchanges like FTX, which collapsed into bankruptcy earlier this week. 85% of licence applications from crypto trading firms have either been rejected or withdrawn, FCA CEO Nikhil Rathi told the House of Lords Industry and Regulators committee, meaning they cannot operate in Britain, as they don't have FCA approval for their anti-money laundering controls. However, as part of new legislation in the proposed Financial Services and Markets Bill, which is currently progressing through parliament, the FCA is required to focus on keeping Britain a globally competitive financial centre, and to bring cryptoassets – currently unregulated in Britain - under the regulatory net, giving the FCA powers to protect consumers. "We have taken quite a bit of heat from people saying we are allowing this innovative activity to move to other jurisdictions, and that other jurisdictions are stealing a march," Rathi said, standing by his decisions to ban such platforms, and adding: "That does require I think to have parliamentary support and political support when we take some of those robust decisions". The FCA has no information on how much money UK consumers have put into cryptoasset platforms operated overseas, he said. "If they want to, they can go all around the world and deposit money by credit card that we don't track, and we have no means of tracking it".
Since trouble emerged regarding cryptocurrency exchange FTX, investors have removed large quantities of bitcoin and ethereum from centralised cryptocurrency exchanges such as Coinbase, Binance and Crypto.com, as trust in them falls to an all-time low, and speculation mounts as to which high-profile crypto company will be next to fail. Data from cryptoquant.com reveals that more than $3.4bn (£2.86bn) in bitcoin and $1.8bn (£1.51bn) in ethereum has been withdrawn since the drama surrounding FTX began, Yahoo Finance reports. One major crypto-lending platform called Blockfi has since announced it will pause customer withdrawals; Blockfi has exposure to the beleaguered FTX exchange in the form of a $400m (£366.55m) credit-line extended in July, together with an option to buy it for up to $240m (£202m). “There are now worrying parallels between recent events and the fall-out from the Terra/Luna crash in May of this year, when crypto-lending platforms first paused customer withdrawals. However, this pause quickly developed into a total collapse and customers are still waiting to retrieve their assets,” Yahoo says.
The Civil Aviation Authority (CAA) said this morning that it has issued its first spaceport licence to Spaceport Cornwall, putting Britain one step closer to becoming the first country in Europe from which satellites can be launched into orbit. The CAA said the base in Newquay had demonstrated it had met the appropriate safety, security and environmental requirements to become a spaceport, and added that it was also in "very advanced stages" with Virgin Orbit, Richard Branson's small satellite service provider, for additional licences needed for the launch itself. The UK Space Agency's deputy chief executive, Ian Annett, said in a CAA statement that the first UK launch is expected before the end of the year, tallying with Branson’s comment back in October that Virgin Orbit would carry out its first launch from European soil within six weeks. Britain’s space industry employs 47,000 people and builds more satellites than anywhere outside the USA. Government estimates claim adding launch capabilities will boost the economy by £3.8bn over the next decade. The CAA is also processing applications from a range of other spaceports and operators, it said, and has started an environmental consultation for SaxaVord Spaceport in the Shetland Islands.
Water regulator Ofwat has ordered Thames Water and Southern Water to repay nearly £80m to customers after missing key performance targets. Thames Water has been ordered to pay back more than £50m, and Southern Water will have to return nearly £30m because of missed targets on water treatment works compliance, pollution incidents and internal sewer flooding across 2021 and 2022. Ofwat CEO David Black said: "Too many water companies are failing to deliver for their customers. The poorest performers, Thames Water and Southern Water, are consistently falling beneath our expectations and those of their customers. "They need to take immediate action to improve their performance and rebuild trust with the people they serve. We will continue to hold companies to account for their performance and we will make sure that they raise their game".
The Competition and Markets Authority (CMA) has launched an investigation into the proposed merger between London property firms Shaftesbury and Capital & Counties (Capco), it confirmed yesterday. In a brief statement, the CMA said it had decided to investigate the deal - first announced in June - and invited interested parties to comment by 2 December so it could conclude whether the merger could lead to a "substantial lessening" of competition. The combined company, to be called Shaftesbury Capital, will own some of London's most well-known real estate, including Covent Garden, Carnaby Street, Chinatown and Soho, in a portfolio worth around £5bn. Shaftesbury shareholders will own 53% of the combined entity, and Capco investors 43%.
BAE Systems has been awarded a £4.2 billion contract by the Ministry of Defence to build the next five City Class Type 26 frigates for the Royal Navy, securing more than 4,000 British jobs and work at its Glasgow facilities into the 2030s. Up to £1.8bn of the new order will be spent in the supply chain, including £1.2bn with UK suppliers. “The Type 26 is one of the world’s most advanced warships,” according to BAE’s website, which says it is “designed for anti-submarine warfare and high-intensity air defence, but can adapt its role quickly to transport high volumes of humanitarian aid and house medical facilities”.
Tesco, Britain's biggest supermarket group, was forced to apologise to customers yesterday after they struggled to book Christmas delivery slots on its website. Online slots for grocery deliveries from 12-24th December opened at 0600 GMT for customers who have paid for "Delivery Saver" plans, but they took to social media to complain that even though they had paid for priority access, they found themselves in a queue behind thousands of other shoppers and, when they did get to the front after waiting hours, they were kicked off the site.
Asda is limiting customers to two boxes of eggs, citing a shortage because of Avian flu among birds. Other supermarkets are also reporting egg shortages for the same reason. However, the British Free Range Egg Producers Association (BFREPA) said the increased cost of producing eggs since Russia's invasion of Ukraine was the main factor impacting supply. "Farmers are basically losing money because the price that's being paid in the supermarket isn't being passed back down the supply chain to farmers," a BFREPA spokesperson said. “A huge number of them are losing a significant amount of money and can't afford to produce eggs anymore," they added, explaining that the industry is down 743,350 egg-laying chickens this season.
Lloyds Banking Group (LLOY.L) has appointed HSBC's head of strategy Chirantan Barua as CEO of Scottish Widows and its wider insurance, pensions, and investments business. Barua will join current Lloyds CEO Charlie Nunn, his former HSBC colleague, at the British bank from next year.
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
