Published: 19 April 2023
By Suzanne Evans, Director, Political Insight
Figures released by the Office for National Statistics this morning show annual inflation has slowed following a rise in February 2023. The Consumer Prices Index (CPI) rose by 10.1%, down from 10.4% last month. The main drivers of the decline were reductions in the price of motor fuel and heating oil, but this was offset by the continuing steep rise in food and non-alcoholic drink inflation, to 19.1%, with the price of bread and cereals at a record high. The price of clothing, household goods and furniture also rose, but slower than previously. Last month the Bank of England said it expected inflation to "fall significantly" in the second quarter, and forecast March inflation of 9.2%.
Responding to the inflation figures, Chancellor Jeremy Hunt said they "reaffirm exactly why we must continue with our efforts to drive down inflation so we can ease pressure on families and businesses”. The UK is "on track to do this", he said, noting that the Office for Budget Responsibility predicts inflation will halve this year. Rachel Reeves, Labour's shadow chancellor, said: "The reality is that under the Tories our economy is weaker, prices are out of control and never have people paid so much to get so little in return."
Chancellor Jeremy Hunt has appointed three new members to The Economic Advisory Council, an advisory panel he set up in October to bolster the Government's reputation for economic competence. Yesterday’s appointments add Jon Symonds, the chair of pharmaceuticals company GSK, Anna Valero, an expert on productivity at the London School of Economics, and Andy Haldane, who was the Bank of England's chief economist until 2021.
More companies in England and Wales went insolvent during March than at any point since monthly records started three years ago, according to Insolvency Service Agency data published yesterday. The official data showed a 16% increase on a year ago, with 2,457 reported corporate insolvencies last month, up from 1,784 in February. They are now significantly higher than pre-covid levels. The Insolvency Service said creditors' voluntary liquidations were the biggest driver of corporate insolvency in the month. Tim Symes, a partner in insolvency and restructuring, at Stewarts told City A.M. that the figures are “jaw-dropping,” not just because they are 16% higher than the same month last year, but because of the “massive upward spike compared to last month: court-ordered liquidations rose by a staggering 82% and voluntary liquidations by 34%”.
52% of City firms expect to hire sustainability experts in the next 12 months as they prepare to face tighter environmental regulations over the coming years, according to a report shared exclusively with City A.M. from recruiter Hays. Nearly three quarters of firms (74%) said their organisation has set sustainability targets, while close to two thirds of firms said the importance of responsible investment will become more important over the next 12 months.
Former CBI Director General Tony Danker has told the BBC he feels his reputation has been “totally destroyed” and that the business lobby group has thrown him “under a bus”. Danker acknowledged he had made some staff feel "very uncomfortable", adding: "I apologise for that." But, he said, his name has been wrongly associated with separate claims, including rape, cocaine abuse and bullying, that allegedly occurred at the CBI before he joined. He said he was fired on four grounds: organising a private karaoke party after a Christmas do for selected staff; viewing the Instagram accounts of CBI staff; sending non work-related messages to staff on work platforms; and inviting junior staff to breakfast, lunches and one-on-one meetings. “I have never used sexually suggestive language with people at the CBI,” he said in his first interview since he was fired. “You know, there was an incident somebody raised a complaint about unwanted contact, which was verbal contact...There was never any physical contact. I’ve never had any physical contact. I’ve never used any sexual language. I’ve never propositioned anybody”. Danker stepped aside during an inquiry into his behaviour, but was sacked a week after separate complaints of sexual misconduct by others before he joined the CBI. “It is just not OK to throw somebody under the bus and ask them to be the fall guy when their entire reputation is destroyed,” Danker added. The CBI did not comment but has said he was dismissed on strong legal grounds.
Cineworld has halted efforts to sell its business outside of the UK, US, and Ireland after failing to find a buyer. The London-listed firm — which filed for bankruptcy in the US last August — said it had received offers for its “Rest of World” business but they “did not meet the value level required by the Group’s lenders.” Previously, the cinema chain said it would launch a new debt restructuring plan which would wipe out shareholders in a bid to reduce its £3.68bn debt pile and exit Chapter 11 insolvency in the first half of 2023. Now, the cinema operator will be taken over by its creditors in a bid to restructure its debts and keep the struggling company afloat, leading to a 53% surge in its share price yesterday, albeit only to 1.35p. Cineworld shares were trading between 200p – 300p pre-covid lockdowns, during which the chain, which has 127 venues in the UK and over 700 globally, was badly hit by extended forced closures.
EasyJet has lifted profit expectations on the back of 'strong' summer bookings, despite the cost of living crisis. The budget airline said profit for the year to the end of September will exceed market expectations of £260million, partly thanks to higher ticket prices and rising ancillary revenues such as baggage fees and on-board food. EasyJet's holidays business is expected to grow 60% in the current year, it said.
According to the Financial Times yesterday, investment giant Abrdn is set to axe a number of roles in its multi-asset team, just a matter of weeks after the departure of its Global Absolute Return Strategy's head. At least 27 team members will be offered voluntary redundancy, the newspaper says.
The Washington-headquartered Managed Funds Association, which represents 170 firms managing some £1.8tn in assets, has announced a push into the UK as its members come “under attack” in the US. It says it is looking to capitalise on a more friendly regulatory environment by opening a first UK office, based in Mayfair, London. MFA chief Bryan Corbett, a former senior adviser to George W. Bush and executive at private equity firm Carlyle, said an impending regulatory overhaul in the UK had been seen as an opportunity by the body’s members. “We have felt very much under attack in the US in the past year. We haven’t had that sense of concern in the UK or the EU, frankly,” Corbett told City A.M. “What we’ve seen in the UK is really an openness to soliciting feedback to make their markets more competitive.”
Credit Suisse will appear tomorrow at the High Court in London to defend itself against a $160m (£129m) claim over allegations the Swiss bank made “fraudulent misrepresentations” related to the sale of residential mortgage-backed securities. The claim, brought by Loreley Financing, a subsidiary of German bank IKB, argues it was misled by Credit Suisse when it made a $100m investment in 2007, which eventually collapsed in value. The trial is set to last 8 weeks, and is expected to hear evidence from several former Credit Suisse staff involved at the time, City A.M. reports.
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