Published: 15 February 2023
By Suzanne Evans, Director, Political Insight
The Office for National Statistics (ONS) has published the latest inflation data this morning, reporting that the Consumer Prices Index (CPI) including owner occupiers’ housing costs rose by 10.1% in the 12 months to Jan 2023, down from 10.5% in Dec 2022. The statistics mean inflation has now slowed for the third month in a row, although it has now been running in double-digits for five straight months. Earlier figures from the ONS showed real incomes have therefore fallen by 4.3% in the three months to December, one of the steepest drops since records began two decades ago. ONS Chief Economist Grant Fitzner said: “Although still at a high level, inflation eased again in January. This was driven by the price of air and coach travel dropping back after last month's steep rise. Petrol prices continue to fall and there was a dip in restaurant, café and takeaway prices”. He added: “There are further indications that costs facing businesses are rising more slowly, driven by falls in crude oil, electricity, and petroleum prices. However, business prices remain high overall, particularly for steel and food products”. Housing and bills are still the biggest drivers of inflation, and CPI remains at a near-40 year high.
The Government has announced that 80% of retail, hospitality and leisure businesses in England – sone 350,000 commercial properties - will either see a 20% reduction or a freeze in their business rate bills in April, as part of the £13.6bn support package announced by Chancellor Jeremy Hunt in his Autumn Statement. However, the Treasury statement released yesterday also confirmed that large distribution warehouses will see a 27% increase in rates, reflecting the growth in the online sales sector.
Several sites around Leeds suspected of hosting illegally operated crypto cash machines have been inspected by the Financial Conduct Authority (FCA), the BBC reports. The action, with West Yorkshire Police, is said to be a national first. Users buy or sell crypto assets such as Bitcoin by putting cash into or taking it out of dedicated terminals that can resemble regular cash machines, but no such machines are registered with the FCA, it says, so operating them in the UK is illegal.
It is now official: Britain last year recorded the highest number of working days lost to strike action for more than 30 years. The Office for National Statistics (ONS) said yesterday that nearly 2.5 million working days were lost to industrial action last year, the highest since 1989 when 4.1 million days were lost. 843,000 days were lost to strike action in December 2022 alone the ONS said, as border force staff, some 100,000 nurses and thousands of ambulance workers took industrial action over the Christmas period.
More than 100 British Museum staff who are members of the Public and Commercial Services Union (PCS) are on strike over the half term period, until 19th February. The majority of them are members of the visitor services and security teams. The museum has cancelled its programme of half term events and warned it might also have to close galleries at short notice. It says it is subject to government pay guidelines.
Ford said yesterday that it will cut 3,800 jobs across Europe in the next three years, 1,300 of them in the UK, to usher in a “leaner, more competitive cost structure” for the business and help with the transition toward a smaller, more focused and increasingly electric product portfolio, the company said.. CEO Jim Farley has repeatedly flagged that electric vehicle (EV) production would require less labour and significant cost cutting to remain competitive, Reuters says. The British job losses, which amount to one in five of the workforce, will be mostly at the carmaker's research centre in Dunton, southeast England. The Unite union said it would be working with Ford to protect "as many jobs as possible". Conservative MP John Baron, whose Basildon and Billericay constituency includes the Dunton site, called the news "disappointing".
Airbus hase signed a multi-billion pound deal to build 250 new planes for Air India, a deal Prime Minister Rishi Sunak said will create jobs and boost exports, as the French plane maker designs and makes aircraft wing in Wales. The deal should create 450 manufacturing jobs and bring in more than £100m pounds of investment, the Department for Trade said. The deal also includes 40 wide-body A350 aircraft powered by Rolls-Royce engines, which are assembled and tested in Derby.
Barclays has reported a 14% fall in annual profits, saying costs from an administrative blunder that saw it oversell securities in the United States compounded a collapse in deal fees earned by its investment bank - profits before tax in that division tumbled by 23% to around £5bn. Overall, the British lender reported a pre-tax profit for 2022 of £7bn, down from £8.2bn the year before. The bank also set aside £498m in impairment costs in case of bad loans, compared to a release of £31m the year before. Because of the regulatory breaches, Barclays says,it has docked the pay of some top executives by a combined £1m, including cutting the 2022 bonus for CEO C.S. Venkatakrishnan by £403,000, and that of CFO Anna Cross by £166,000 pounds. The FTSE 100 bank’s shares are around 10% down this morning.
The Financial Conduct Authority (FCA) has "publicly censured" Amigo Loans for failing to conduct adequate affordability checks on borrowers and guarantors, but let if off a £72.9m fine because Amigo had demonstrated it would cause "serious" financial hardship and prevent the firm paying out compensation to customers to whom it mis-sold loans, as required by a High Court-sanctioned scheme of arrangement.
Over 854,000 Thames Water customers are at risk of falling behind on their bills when prices rise in April, according to research from data science company Outra, which also suggests the water supplier could subsequently face a financial shortfall of up to £512m. Prices for Thames Water’s 15m customers are going up by 11.6% increase from April to account for inflation and adjustments for past performance, taking the average monthly water bill to £50. Peter Jackson, chief data and product officer at Outra said: “Unlike gas or electricity bills, water companies cannot, by law, disconnect the water supply of domestic customers. As a result, consumers are more likely to fall behind on water bills than other utilities, meaning Thames Water will likely experience an extensive financial shortfall over the next twelve months.” Thames Water, which was recently told by Ofwat to hand back over £50m to its customers after missing key performance targets, is disputing Outra’s figures.
The Competition and Markets Authority (CMA) has closed its investigation into alleged anti-competitive behaviour by Mitie, Mitie Care and Customer Limited and PAE regarding contracts at Heathrow Airport and Derwentside Immigration Removal Centres. In March, the CMA launched the investigation into ongoing procurement processes run by the Home Office for contracts to supply certain services at Heathrow and immigration removal centres across the UK. "Today the CMA has announced that it has reached a final decision to close the investigation on the basis that there are no grounds for action," Mitie said in a brief statement issued yesterday.
Waitrose says it will spend £100m to cut prices on over 300 own-brand ‘Essential Waitrose’ products to retain customers amid record grocery price inflation which hit 16.7% in the four weeks to 22 January. The British supermarket group said nearly a quarter of the reductions would be 20% or more.
The Advertising Standards Authority (ASA) has banned adverts for grocery delivery service Gorillas it has deemed “irresponsible and likely to cause serious or widespread offence” as they featured references to drugs, sex and excessive or unhealthy drinking. The TV, video-on-demand and social media ads, seen in April last year, featured a series of short scenes, starting with a man chopping lemons with a voiceover saying: “London loves acid,” City A.M. reports. Other scenes included a voiceovers saying “getting smashed” as a woman mashed avocado; “blow” as a woman sneezed; “a bit of grind” while a man scrubbed a bathroom floor; and “getting wet” as a man showered and a second person’s arm cleaned his chest. Gorillas said it did not consider the scenes to be graphic, inflammatory, or offensive and that it did not condone illegal drugs or drug use. However, the ASA disagreed, saying the references would be widely understood as referring to illegal drugs and that presenting drugs as a subject of humour would be seen to have encouraged apathy towards dangerous substances.
The ASA has also banned ads for Huel meal replacement shakes that suggested they could save people money on their food bills, saying they were misleading. One Facebook ad claimed: "Huel helps keep money in your pockets," but the company did not show its products were cheaper than traditional food.
The Organisation of Petroleum Exporting Countries (OPEC) has upped its global oil demand forecast for 2023 by 100,000 b/d (barrels per day) to 2.3m b/d on the back of the improved outlook for the world economy. The US, Norway, Brazil, Canada, Kazakhstan and Guyana were expected to drive the increase, while production in Mexico and Russia was expected to decline.
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