Published: 01 March 2023
By Suzanne Evans, Director, Political Insight
Prime Minister Rishi Sunak urged his MPs not to create "another Westminster drama" as he sought to win their support for his new Brexit deal yesterday. He addressed the influential 1922 committee of Tory backbenchers, after which Northern Ireland minister Steve Baker told reporters the deal was "as good as we're going to get", and indicated that the government would not be reopening negotiations with the EU. Meanwhile, DUP leader Sir Jeffrey Donaldson said the new deal goes "some way" to addressing his party's concerns but some issues remain. He said the party would continue to study the details and come to a collective decision. The European Research Group (ERG) of pro-Brexit Tory MPs, which heard from Sir Jeffrey at a meeting on Tuesday, have commissioned what they have called a "star chamber" of lawyers to scrutinise the deal, the BBC says. ERG chairman Mark Francois said it could take about a fortnight or even longer for the group's "legal eagles" to go through it "with an extremely fine tooth comb". However, the former Brexit minister and chief Brexit negotiator, David Frost, has, in a column for The Telegraph, said Sunak's deal “remains a bitter pill to swallow". The new arrangements were "oversold" and do not change the fundamentals of the Northern Ireland Protocol, he said. Allies of former PM Boris Johnson, on whose watch the original Protocol was negotiated, have told The Times he will not oppose Sunak's new deal.
Foreign Minister James Cleverly said in an interview that he raised the issue of BBC tax searches with India's foreign minister during a bilateral meeting yesterday. Last month, India's tax authorities conducted searches at the BBC offices in New Delhi and Mumbai after the Indian government reacted angrily to a documentary made about Prime Minister Narendra Modi's leadership of the state of Gujarat during riots in 2002.
The High Court heard British Gas, E.ON and Scottish Power argue yesterday that the government granted billions of pounds in unlawful subsidies to Octopus Energy to take over collapsed energy supplier Bulb, and that the deal should therefore be overturned. Bulb, which used to have 1.5 million customers, was one of the largest energy suppliers to collapse in 2021 as a result of soaring wholesale gas and electricity prices. The deal for Octopus to buy Bulb was approved by the Department for Business, Energy and Industrial Strategy (BEIS) in October, and went ahead in December, when the government said it would provide up to £4.5bn to fund the deal – support which was not offered to them. Octopus argues the deal is expected to be "extremely beneficial" for the taxpayer and will make a profit of around £1.2bn for the government.
High fertiliser costs mean British farmers could spend an extra £938m a year or £78m per month on the product, according to analysis from The Energy and Climate Intelligence Unit (ECIU). The cost of fertiliser, which has risen as a consequence of higher energy prices.
Chain stores are still closing faster than they are opening, but at their slowest rate for eight years, according to data compiled for the accountancy firm PwC. A total of 11,530 outlets shut across Great Britain in 2022 - 32 a day, on average – but a big improvement compared with the previous three years. Banks saw the most closures, while takeaways, convenience stores and amusement arcades performed best. When balanced against openings, PwC reported a net loss of outlets a day last year. The snapshot, conducted twice a year, covers more than 3,500 locations and shows the changing landscape of high streets, retail parks and shopping centres, the BBC reports. A chain store is classed as any business with more than five outlets, excluding local independent retailers.
Two separate reports on food inflation show further increases. According to new figures published by the British Retail Consortium (BRC), food inflation reached a fresh high of 14.5% per cent in February, up from 13% in January. Retailers are not expecting any let up in the rises, which are already the highest on record, the BRC said. Meanwhile British grocery inflation hit 17.1% in the four weeks to 19th February, another record high, according to market researcher Kantar, which added that prices are rising fastest in markets such as milk, eggs and margarine. UK households now face an additional £811 pounds on their annual shopping bills if they don't change their behaviour to cut costs, Kantar said.
According to Nationwide, house prices fell by 1.1% in the year to February, the first annual drop since June 2020 - early in the coronavirus pandemic - and the biggest such decrease since November 2012. The price of an average property is now £257,406, down from £258,297 in January, the mortgage provider says. Nationwide said prices were now 3.7% lower than their peak in August last year.
Permission Homes reported an increase in revenues during the full year ending December 2022, but admitted the UK housing market “remains uncertain”. The London-listed house-building company saw its revenues increase by £.3.8bn, from £3.6bn the previous year, having seen an increase in the price of the average home sold - £248,000 up from £237,000 the previous year. However, a hike in inflation has forced to group to warn that the number of homes it completes could fall to around 8,500 this year, down from 15,000 in 2022.
Fintech company Revolut has published its long-awaited annual accounts, revealing a first full-year profit for 2021 of £26m and 33% revenue jump last year. CFO Mikko Salovaara told Reuters revenues increased to more than £850m on the back of payments, subscriptions and business accounts, despite a downturn in crypto, which is a key part of the group's business. The crypto business accounted for about 5-10% of the total income last year, Salovaara said. Revolut’s 2021 annual accounts were delayed because it had to replace its internal accounting systems when the Financial Reporting Council (FRC) found Revolut's audit "inadequate." Publication of the accounts now paves the way for the UK banking licence Revolut applied for two years ago. Revolut is likely to opt for an "authorisation with restriction", a person close to the matter told Reuters in January, which imposes certain limits on the business. Revolut also doubled the number of its employees in 2022 to more than 6,000, and says it plans to expand internationally, including into India where it acquired foreign-exchange firm Arvog Forex, as well as in Brasil and Mexico. It will launch in New Zealand in the coming weeks. In 2020, Revolut made a loss of £223m.
The Co-operative Bank has posted a record increase in pretax annual profit of £132.6m, up from £31.1m last year. The increase was driven by higher interest rates, as its interest income which increased 41% on last year.
Engineering group Weir Plc has posted a rise in annual profits on the back of a booming mining industry. The company said pre-tax profits for 2022 rose by 24% to £260m. Revenue was up 28% to £2.47bn as orders surged 14% to £2.64bn.
FTSE 100 investment manager St James's Place says it has delivered record financial results in 2022, with pre-tax profits rising from £353.8m in 2021 to £501.8m last year.
British builders merchant Travis Perkins has reported a fall in annual profit due to a tougher housing market and restructuring costs, which offset a rise in sales. The company reported adjusted operating profit of £295m, down 16.4%, hit by a £15m restructuring charge. Revenue grew 9% to £4.9bn.
Ocado Group has posted wider losses as the cost of living crisis and return to normal shopping habits after the Covid pandemic hammered its joint venture with Marks & Spencer, Sharecast News reports. Ocado says it incurred a pre-tax loss of £501m for the year to November 27, 2022 compared with a loss of £179m a year earlier, and worse than analyst forecasts of a £399m loss. Core losses were £74m compared with a profit of £61m a year earlier. Retail losses at the M&S joint venture were £4m, down from a £150m profit in 2021. Ocado retail revenue declined by 3.8% to £2.2bn in what the firm called a "challenging market".
The FTSE 100’s BAE Systems has secured a $219m (£181m) contract to equip the Royal Navy's Type 26 frigates with five Mk 45 Maritime Indirect Fire Systems (MIFS).
UAE telecommunications company e&, formerly Etisalat, has upped its stake in London-listed Vodafone Group again, to 14% from 13% earlier this month. Abu Dhabi-listed e&, which first bought a stake of 9.8% in Vodafone last May, now owns 3.79 billion shares. e& still denies it is launching a takeover bid, saying again it is only making a prudent investment decision.
Sainsbury's is planning to close two Argos depots in Basildon, Essex, and Heywood, Greater Manchester, over the next three years in a move that will impact more than 1,400 jobs. The grocer also says its three remaining Habitat showrooms will close later this year as it plans to launch a replacement digital showroom, which will see a small number of workers affected; and that it will close its Milton Keynes office in response to flexible working across the group, but that no jobs will be impacted by that decision. Sainsbury's CEO Simon Roberts said it was a "difficult" decision, but the business needed to become "simpler, more efficient and more effective for customers".
Marks & Spencer is to raise hourly pay by 7% for over 40,000 store workers from April, the third rise in just over two years. Customer assistants will receive £10.90 an hour, up from £10.20 currently.
Reuters reports that US payment giants Visa and Mastercard are slamming the brakes on plans to forge new partnerships with crypto firms after a string of high-profile collapses shook faith in the industry. Both credit card companies have decided wait until market conditions and the regulatory environment improve, sources told the news agency. "Recent high-profile failures in the crypto sector are an important reminder that we have a long way to go before crypto becomes a part of mainstream payments and financial services," a spokesperson for Visa, the world's largest payment processor, said.
And finally…all is not magical in Disneyland. On Monday, Florida Governor Ron DeSantis signed a bill that takes control of a special tax district surrounding Walt Disney World which has, for half a century, allowed Walt Disney Co to operate with a high degree of autonomy. “The corporate kingdom finally comes to an end,” DeSantis said during a press event to announce the move, which is widely seen as a response by state Republicans to criticism made by Disney about Florida’s restrictions on what can be taught in classrooms about gender and sexual orientation. The bill now gives the state Governor the authorisation to appoint five supervisors to oversee traditional municipal services, such a fire protection, public utilities, waste collection and road maintenance in the region where Disney World operates, and the authority to raise revenue to pay outstanding debt and cover the cost of services. "We have a situation here that was basically indefensible from a policy perspective," DeSantis said. "How do you give one theme park its own government and then treat all the other theme parks differently? We believe that that was not good policy." Disney World is the largest employer in central Florida with close to 75,000 employees. It drew 36.2 million visitors in 2021, according to the Themed Entertainment Association.
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