Published: 02 December 2022
By Suzanne Evans, Director, Political Insight
One in eight British companies suffered disruption in October from strikes which affected public transport, postal services, telecoms and other sectors. The Office for National Statistics (ONS) said 13% of businesses reported some kind of impact from industrial action, with 27% of those saying they were unable to obtain necessary goods for their business because of postal strikes, for example. The impact was typically greatest for small businesses and those in the retail and construction sectors. Just 2.2% of businesses that reported disruption said this was as a result of some or all of their own workforce being directly involved in strike action, however this rose to 7% for companies with 250 or more staff. The ONS survey also shows that 73% of trading businesses said they had some concern for their business for December 2022. The two top concerns are still input price inflation (25%) and energy prices (19%). 32% of businesses with 10 or more employees also said they were experiencing a shortage of workers, with the human health and social work activities industry reporting the highest percentage (54%). The ONS conducted the survey from 14-27th November, asking about conditions in October, and received responses from more than 10,000 businesses.
According to the latest data from S&P Global and CIPS, factories were again hit by falling output, lack of new orders, and staff cuts in November. The purchasing manufacturers index (PMI) came in at 46.5 in November, slightly up from 46.2 in October, but still in contraction territory for the fourth month running. Any reading below 50 indicates contraction. It was one of the lowest readings in the last 14 years. Business sentiment also dipped to its lowest level since April 2020, early in the COVID-19 pandemic, amid reports of recession fears, weak consumer spending and subdued client optimism. New export business contracted at the quickest pace in two-and-a-half years, as demand from several trading partners – including the EU, China and the US – deteriorated. Exporters reported that client hesitancy and subdued global market conditions had contributed to the decrease.
Ofcom has launched an industry-wide probe into how clearly phone and broadband firms explain in-contract price rises. The regulator said it was concerned that providers may not have been upfront enough about the hikes, which are usually applied in March or April each year. Ofcom rules state that if a provider includes potential future price rises in a contract, they have to be set out "prominently and transparently" at the point of sale.
The Payment Systems Regulator (PSR) has fined Barclays bank £8.4m because it failed for three years to provide retailers with full information regarding the costs of its card services. "When paying by card, retailers have to pay fees to accept the payment, and these fees can be passed on to consumers through higher prices," the PSR said. "Barclays' failure meant retailers weren't fully aware of the fees they were paying so could not effectively compare prices of card services, shop around to find cheaper deals, or negotiate the best deal with Barclays - which could have ultimately saved them and their customers' money."
Having reported yesterday that Sky News said The Foschini Group (TFG) was close to securing an agreement to buy the majority of Joules' stores and assets, as talks with Next failed, it appears Next has bought Joules after all. Next has confirmed it has partnered with founder Tom Joule to buy the retailer out of insolvency for £34m in cash, and that it has also bought the current Joules head office for £7m in cash. Next plans to continue to operate a "significant" number of Joules stores - around 100 out of the current 124 - in the UK and Ireland, subject to agreeing terms with landlords. However, 19 stores will be closed by the administrator on Thursday. The clothing and homeware retailer will own 74% of Joules, while Tom Joule will own the rest. Joules will continue to have management autonomy and creative independence.
British airline easyJet is in talks with French trade unions because of demands for higher pay from its workers at French airports who are threatening to strike ahead of the busiest Christmas travel season in three years. They want a raise of at least 8% to compensate for rising inflation as well as a hike in the cost of their healthcare premium, an SNPNC union representative said. French inflation hit 7.1% in November, while easyJet had offered a raise of less than 6%, the representative said. An EasyJet spokesperson declined to confirm its offer. The unions also want a Christmas bonus promised to other easyJet workers around the continent.
Irish budget airline Ryanair, Europe's largest by passenger numbers, has signed a sustainable aviation fuel (SAF) supply agreement with British oil giant Shell, which it says could give it potential access to 360,000 tonnes of SAF from 2025 to 2030. Ryanair has committed to cutting its carbon emissions to net zero by 2050, and to running 12.5% of its flights with the fuel by 2030, although yesterday CEO Michael O'Leary said it would take a "revolution" to hit that target. The Shell agreement could, however, save 900,000 tonnes in carbon dioxide emissions, equivalent to over 70,000 flights from Dublin to Milan, as SAF generally produces up to 70% less carbon than fossil fuels. Ryanair has struck similar deals with Finnish biofuel producer Neste and Austrian oil and gas group OMV. In other news, Ryanair has seen passenger numbers increase. It transported 11.2 million people in November, a 10% increase on November 2021, while the load factor rose to 92% from 87% a year previously. In total, it operated more than 64,100 flights during the month. On a rolling 12-month basis, passenger numbers were ahead 144% at 158.4 million.
London listed low-cost airline Wizz Air also saw passenger numbers jump in November. A total of 3.68 million passengers were booked onto Wizz Air flights last month, a 70% hike on November 2021. Capacity was ahead nearly 47%, at 4.18m, while the load factor increased to 88.1% from 76.1%. On a rolling 12-month basis, Wizz carried 44.12m passengers, a 123% jump, with a load factor of 86.1%, compared to 74.3% as of 30th November 2021.
HSBC bank is to cut as many as 15% of its 2,000 senior operations managers worldwide, Reuters reports. The news agency’s sources say the global job cuts at the London-headquartered bank will fall across several business units and geographical locations and result in the loss of at least 200 positions, mostly with the title of Chief Operating Officer (COO), of which it employs many because of its many country and business lines. HSBC declined to comment.
Sky News has learnt that US bank JP Morgan is among a number of suitors mulling a takeover of Freetrade, a British stock trading app that targeted a £700m valuation during talks with investors earlier this year. Freetrade says it has surpassed 1.3m registered users in the UK and had recorded revenue in 2021 of £15.1m. Neither party wished to comment.
Ford has invested a further £125 million in its Merseyside plant, Halewood, to increase by 70% its capacity to enable its transformation to an electric vehicle (EV) component plant. It is also investing an additional £24 million in the supporting E:PRiME product development centre. The announcement takes Ford’s total investment to almost £380m. Tim Slatter, chairman of Ford UK, said: “This is an all-important next step for Ford towards having nine EVs on sale within two years”. Production capacity at the plant will increase to 420,000 units a year, from 250,000 units, starting in 2024, the Detroit-based carmaker said yesterday.
The European Union has asked its 27 member states to back a $60 per barrel price cap on Russian oil, the Wall Street Journal said yesterday, citing people familiar with the matter. The European Commission, the EU’s executive body, apparently asked the bloc to approve the price cap as it began discussing the proposal yesterday.
Jimmy Patronis, the Chief Financial Officer for the US state of Florida said yesterday that his department will pull $2bn (£1.63bn) worth of its assets managed by BlackRock Inc in opposition to its environmental, social and corporate governance (ESG) policies. "Florida's Treasury Division is divesting from BlackRock because they have openly stated they've got other goals than producing returns," Patronis said in the statement provided by his office.
Although the move will barely dent BlackRock's $8tn (£6.53tn) assets under management, the announcement drew a strong response from the company, which said the action put politics over investor interests. “Nonetheless it underscores how a backlash among many Republican leaders, such as those in Florida, against ESG investing, which they see as promoting a "woke agenda" is gathering steam,” Ross Kerber, Reuters’ US Sustainable Business Correspondent writes.
Elon Musk has said he expects a wireless brain chip developed by his company Neuralink to begin human clinical trials in six months, after the company missed earlier timelines set by him. The company is developing brain chip interfaces that it says could help disabled patients to move and communicate again, with Musk adding on Wednesday it will also target restoring vision. Based in the San Francisco Bay Area and Austin, Texas, Neuralink has in recent years been conducting tests on animals as it seeks approval from the US Food and Drug Administration (FDA) to begin clinical trials in people. The FDA said it cannot comment on the status or the existence of any potential product applications.
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