Published: 04 January 2023
By Suzanne Evans, Director, Political Insight
Happy New Year!
Or is it? January 2023 has begun with fresh strikes, notably on the railways, as workers who are members of the RMT walked out on yesterday and today, and also plan to strike Friday and Saturday this week. ASLEF members, meanwhile, will strike tomorrow. The week of strikes will see around 80,000 trains cancelled, and some 16 million journeys affected. RMT General Secretary Mick Lynch blames the government for the strikes, saying there has been “radio silence” from ministers since before Christmas, and that they are refusing to negotiate. The Department for Transport, meanwhile, issued a statement saying: “Inflation-matching pay increases for all public sector workers would cost everyone more in the long term – worsening debt, fuelling inflation, and costing every household an extra £1,000.” "Due to industrial action, there will be significantly reduced train services across the railway until Sunday 8 January," Network Rail said.
The latest monthly survey of the prices of 500 everyday items by The British Retail Consortium (BRC) has found that overall food inflation hit 13.3% in December, up from 12.4% in November, and the highest inflation rate for food on record. The increase was driven by the high cost of animal feed, fertiliser and energy due to the war in Ukraine, the BRC said, with fresh food costs contributing most to the rise, through a 15% hike on an annual basis. However, prices for non-food items such as fashion or homeware eased as retailers offered big discounts to shift stock in the run up to Christmas. Non-food inflation slower to 4.4% in December from 4.8% in November. Britain's official rate of consumer price inflation - which covers a wider range of goods, services and businesses than the BRC survey - hit a 41-year high of 11.1% in October, before dropping to 10.7% in November.
Meanwhile, British Retail Consortium CEO Helen Dickinson is warning that prices may rise still further when the energy bill support scheme for businesses ends in April. The BBC says the Treasury has said the scheme is under review as it is "very expensive," and that it understands Chancellor Jeremy Hunt is to meet with business groups at lunchtime today to brief them on the government's plans for energy bill support when the current package expires. The Federation of Small Businesses (FSB), UK Hospitality, the CBI and the British Chambers of Commerce are all expected to attend to discuss a revised scheme expected to run for 12 months until March 2024. A decision on whether to extend the support had been due before Christmas, but the government postponed it until the new year, a delay Kate Nicholls, CEO of UK Hospitality described as having "a corrosive effect on business confidence".
Supermarket Morrisons says it has invested over £16m slashing the prices of around 130 items in its own-brand Savers range, including bread, cheese and meat, to help shoppers struggling with a “once in a generation cost of living crisis”. “Our Savers range offers customers great value on the products they buy every day. We want to do all we can to help when it comes to the cost of grocery shopping and by investing in the range and cutting the prices further, our customers will see a noticeable impact on their budgets at a time when they really need it,” David Potts, chief executive at Morrisons, said.
47 shops shut down for good every day in 2022, more than at any other point for at least five years, analysis from the Centre for Retail Research (CRR) shows. The year’s closure rate is up nearly 50% on 2021, and also means more than 151,000 retail jobs have been lost in the UK in the past 12 months - including from online retailers - an increase of more than 45,000 on the year before. The CRR survey found that a little over 5,500 of the shops went under, while 11,600 were closed because they were part of a larger chain which had decided to cut costs. Meanwhile, real estate adviser Altus Groupsays retailers and landlords will have to pay close to £1.1bn from April 1st to cover the business rates on empty sites, defined as those that have been empty for three months. Robert Hayton, UK president at Altus Group, said: "Rate-free periods need to be urgently extended to reflect the time that it actually takes to re-let vacant properties.
British manufacturing suffered its worst month for over two and a half years in December 2022, with production falling for the sixth consecutive month, according to the S&P Global/CIPS UK Manufacturing PMI survey. The index delivered a score of 45.3 in December, down from 46.5 in November, reflecting a sharp fall in new orders and ongoing job cuts - the number of people employed by manufacturers also dropped for the third month in a row - the steepest fall since October 2020. Scores below 50 are considered to show that the sector is shrinking. Excluding the lows registered during the first pandemic lockdown, the PMI reading is one of the weakest since mid-2009., with companies mentioning shipping delays, higher costs and other issues linked to Brexit. "The main driver of lost export contracts was weak global economic conditions, while there was also mention of Brexit-related issues, such as shipping delays and higher costs, leading some EU clients to source products elsewhere," S&P Global said.
UK house prices have fallen for the fourth month in a row, marking the longest run of declines since the 2008 financial crisis, according to the Nationwide. The building society claims the average home sold for £262,068 during December, down by a little over £1,700 compared to November. The annual growth rate cooled to 2.8% in December from 4.4% in November, the lowest since July 2020, when it was 1.5%. “Prices fell by 0.1% month-on-month — a much smaller decline than in the previous couple of months,” said Nationwide’s chief economist, Robert Gardner. “However, December also marked the fourth consecutive monthly price fall — the worst run since 2008, which left prices 2.5% lower than their August peak.”
Jaguar Land Rover plans to recruit 300 apprentices across the UK this year. In total, more than 800 young people will join JLR's 2023 early careers programmes - a record intake for Britain's biggest car maker.
Paul Forman, CEO of FTSE 250 essential components manufacturer Essentra stood down from the role on 31st December. He has been replaced by Scott Fawcett, who took up the role on 1st January. No reasons have been given for the change.
Ferrexpo owner Kostyantin Zhevago, who was detained last week by French police, has resigned from the company's board, the FTSE 250 iron ore pellet producer and exporter said yesterday. Shares in the company fell sharply last week after Zhevago was held at a hotel in the luxury French ski resort Courchevel on suspicion of money laundering and embezzling funds linked to his banking business in Ukraine.
Sam Bankman-Fried has entered a plea of not guilty to criminal charges that he cheated investors in his now-bankrupt FTX cryptocurrency exchange. Bankman-Fried is accused of looting billions of dollars in FTX customer deposits to support his Alameda Research hedge fund, buy real estate and make millions of dollars in political contributions, in what prosecutors have called a fraud of epic proportions.
ByteDance, the Chinese parent company of video app TikTok, has laid off hundreds of employees across multiple departments at the end of 2022 as part of a cost-cutting measure, the South China Morning Post said yesterday Tuesday.
South Korea's antitrust regulator says it will impose a 2.85 billion won (approx. £1.85m) fine on Tesla Inc. for failing to tell its customers about the shorter driving range of its electric vehicles (EVs) in low temperatures. The Korea Fair Trade Commission said that Tesla had exaggerated the "driving ranges of its cars on a single charge, their fuel cost-effectiveness compared to gasoline vehicles, as well as the performance of its Superchargers" on its official local website since August 2019 and until recently.
Elon Musk's SpaceX is raising $750 million in a new round of funding that values the rocket and satellite company at $137 billion from investors, CNBChas reported.
And finally, a few major stories from the last two weeks, in brief:
Octopus Energy completed its takeover of rival Bulb, making it the third-biggest supplier in the country as it added a further 1.5m customers, taking it over 5m in total.
Regulated rail fares in England will increase by up to 5.9% from March.
Facebook parent company Meta Platforms has agreed to pay over $275m to resolve a class-action lawsuit. It stands accused of allowing UK political consulting firm Cambridge Analytica access to the data of as many as 87 million users. it is the largest-ever settlement achieved in a US data privacy class action and the biggest sum the firm has agreed to resolve a class action lawsuit. Meta maintains it has done nothing wrong.
Goldman Sachs CEO David Solomon told employees in an end-of-year message that the bank was preparing for an economic slowdown, and that cuts to staffing numbers would be made in early January. Subsequent reports suggested that up to 8% of its 49,000 employees could be fired - the equivalent of 4,000 job losses. The bank is also thought to be considering slashing its bonus pool by up to 40%.
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