Published: 12 April 2023
By Suzanne Evans, Director, Political Insight
The UK is set to be one of the worst performing major economies in the world this year, according to the International Monetary Fund (IMF). The fund says our 2023 economic performance will be the worst among the G20, including Russia, as it expects the economy to shrink by 0.3% in 2023 and then grow by 1% next year. This is an upgrade from its previous expectation of a 0.6% contraction, made in January, and the IMF also predicts the UK to grow faster than Germany, France or Italy between 2025 and 2028. Rachel Reeves, Labour's shadow Chancellor, said the forecast showed "just how far we continue to lag behind on the global stage". “This matters not just because 13 years of low growth under the Tories are weakening our economy, but because it's why families are worse off, facing a Tory mortgage penalty and seeing living standards falling at their fastest rate since records began," she added. Liberal Democrat Treasury spokesperson Sarah Olney said the forecast was "another damning indictment of this Conservative government's record on the economy".
The Government has unveiled plans to make it easier to prosecute organisations if employees commit fraud for the benefit of a business by way of an amendment to the Economic Crime and Corporate Transparency Bill that is currently making its way through parliament. Security Minister Tom Tugendhat said: "Our new failure to prevent fraud offence will protect consumers from dishonest and misleading sales practices, and level the playing field for the majority of businesses that behave responsibly". "If fraud is committed by an employee of an organisation, the organisation must be able to demonstrate it had reasonable measures in place to deter the offending or risk receiving an unlimited fine," a statement added. There will be an exemption for small and medium-sized firms.
“Buy-now pay-later” (BNPL) firms Klana and Zilch have expressed their concerns about plans by the Government to regulate the sector later this year. Among the measures consulted upon are firmer credit checks on borrowers and expanding the remit of the City’s complaints watchdog, the Financial Ombudsman Service, to allow shoppers to dispute claims. However, Klarna and Zilch said yesterday that while they backed regulation, some sections of the planned rules lean on outdated legislation and claimed ‘dangerous loopholes” would lead consumers to bypass borrowing restrictions. “We are concerned with the suggestion to copy and paste Consumer Credit Act rules on credit agreements, which are outdated and don’t protect or inform consumers,” a Klarna spokesperson told City A.M. They added: “Quite the opposite, they leave consumers confused and, ironically, push them towards expensive and higher-risk forms of credit.”
The woes of the Confederation of British Industry (CBI) have deepened still further: the City of London Police have confirmed they have launched an investigation into claims of rape and sexual misconduct allegations. Meanwhile, the former director general of the organisation, Tony Danker, who was fired yesterday, said he was “shocked” by the decision and claimed that allegations against him had been “distorted”. “I recognise the intense publicity the CBI has suffered following the revelations of awful events that occurred before my time in office,” he said on Twitter, adding: “I was appalled to learn about them for the first time last week”. He went on: “I was nevertheless shocked to learn this morning that I had been dismissed from the CBI, instead of being invited to put my position forward as was originally confirmed”.
BP has taken a major stake in a major upcoming carbon capture project by Harbour Energy, no doubt as part of its UK investment target to commit to spend £18bn on domestic energy projects over the current decade. It has acquired 40% holding in the Viking CCS project, which aims to meet up to a third of the UK’s annual target of capturing 30m tonnes of carbon dioxide by the end of the decade. It is not known what BP paid, but is understood the oil giant will operate the project with Harbour, the largest UK-based oil and gas producer in the North Sea.
London’s Heathrow Airport has reported its busiest day since 2019. Over 221,606 passengers travelled through Britain’s largest airport on 31st March, despite this being the day members of the Unite union went on strike. Throughout March, 6.2m travellers passed through, one million more than in February.
The owners of Manchester United, the Glazer family have said they want a third round of bidding for the football club to take place, two weeks after the deadline for second offers for the sale passed without any response. British billionaire Sir Jim Ratcliffe and Qatari Sheikh Jassim Bin Hamad Al Thani have both made bids to take control of United, while activist investor Elliott Management is among several parties offering financing that would allow the Glazer family to remain as owners. The Glazers are said to be seeking a £6bn deal, however the current market capitalisation of the US-listed company is just $3.47bn, or £2.79bn. The current offers on the table are believed to be in the region of £5bn.
Shona McCarthy, CEO of the Edinburgh Festival Fringe Society, has warned that “It’s not an exaggeration to say that this festival is under existential threat” due to rising costs. Speaking on Barry Fearn’s Leading Conversations podcast, McCarthy said lack of support had left the Fringe “cracking at the seams” before the pandemic, but when Covid lockdowns hit its entire income went “in one fell swoop”. “The Fringe came back last year, but with every single participant and organisation carrying a debt or deficit after surviving the previous couple of years,” she said, saying the situation had been exacerbated by the fact that the festival has now “come into 2023 with a massive cost-of-living hike, serious political issues and the war in Ukraine”.
Accountant EY’s plans to split its audit and consulting businesses have been scrapped following months of internal disagreement over the move, the Financial Times reports.
The Bank of England (BoE) is to replace Silvana Tenreyro, whose term on its interest-rate setting Monetary Policy Committee (MPC) ends in July, with Megan Greene, global chief economist of risk management firm Kroll. Reuters says: “The hiring of Greene, who spoke recently about the need for higher BoE rates, could shift the debate on the MPC in a more hawkish direction, with the outgoing Tenreyro talking about rate cuts”.
Hikma Pharmaceuticals has appointed Riad Mishlawi, currently president of the group's injectables business, CEO from 1st September. Said Darwazah will step down as acting CEO and return to his role as executive chairman.
Newmont, the world’s largest gold miner, has raised its takeover offer for its main rival, Australian group Newcrest to £15.7bn. A £13.7bn offer was rejected in February. Newmont founded Newcrest in the 1960s and is trying to bring the business back together after splitting it three decades ago.
Twitter Inc CEO Elon Musk told the BBC yesterday in a surprise interview that the social media company is now "roughly breaking even" as most of its advertisers have returned and its aggressive cost-cutting efforts have started bearing fruit after massive layoffs. He said Twitter has about 1,500 employees now, a sharp decline from "just under 8,000 staff members" it had before he took it over in October.
The Bitcoin price has risen above $30,000 for the first time since June, but remains a considerable distance off its peak of close to $70,000 in late 2021.
And finally…
Sotheby’s auction house has sold a pair of signed trainers once worn by basketball legend Michael Jordan for $2.2m (£1.7m), making them the most expensive shoes ever sold. A jersey Jordan wore at the 1998 NBA Finals sold in 2022 for $10.1m.
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