Your 2% inflation target stays, Treasury tells the Bank of England

The Government will not change the Bank of England's 2% inflation target, the Economic Secretary to the Treasury Andrew Griffith told Parliament yesterday. "We will continue to work closely with them to ensure that monetary and fiscal policy are well coordinated. And the chancellor reconfirmed the inflation target of 2% at the Autumn Statement and confirmed this government will not change the target," he said.

The Business Select Committee has been told that the long-term future of British car making is under threat because of the failure to develop an electric battery industry despite petrol and diesel fuelled vehicles being phased out. MPs heard yesterday that more than 800,000 people are employed in the sector which relies on the development of so-called ‘gigafactories’ producing batteries for plug-in electric cars, but that at the moment the UK “doesn’t have a strategy, doesn’t have a runner in this race,” according to Simon Moores, CEO of consultancy Benchmark Mineral Intelligence. Manufacturing body Make UK also told the Committee that Britain was being let down by the lack of a broader industrial strategy. Darren Jones, chairman of the business select committee, suggested that if the battery industry fails to catch up, car companies will over time ‘make decisions to relocate new production lines in other countries where these supply chains exist’ triggering a decline for the industry. “I sadly think that’s true – and that’s 800,000 people’s jobs on the line and we just can’t accept that,’ said Jeff Townsend, founder of industry body the Critical Minerals Association.

The bosses at three of the UK's water companies – Thames, Yorkshire and South West Water - have chosen not to take their annual bonuses after widespread criticism from MPs and the public over sewage pollution. Thames Water CEO Sarah Bentley Bentley will not take up any bonuses or long term incentive plans for the financial year 2022-2023, the company said, and CFO Alistair Cochran will decline all performance-related pay. Thames is in the second year of an eight-year turnaround plan combat ageing and deteriorating infrastructure, a legacy of under-investment and poor performance in the water industry, City A.M. says, and various headwinds putting this behind schedule include the rapidly rising costs of energy and chemicals due to Russia’s invasion of Ukraine; sudden increases in interest rates; the severe weather events of a long drought in the summer and a rapid freeze-thaw in December. Bentley said: “Against this backdrop it simply doesn’t feel right to take my bonus this year.” Last year, Bentley received £496,000 and Cochran was handed £298,000 in performance-related bonuses. South West Water CEO Susan Davy is also forgoing her bonus after the firm was fined a record amount of more than £2.1m last month for causing pollution in Devon and Cornwall, having earlier been told by Cornwall Council to "urgently address" the impact of waste water discharges by curbing bonuses and dividends rather than increasing costs to consumers. The company said the money Davy would have received would instead go directly to customers via a shareholder scheme or be taken as a credit on their bill. Meanwhile, annual reports show Yorkshire Water CEO Nicola Shaw could have received up to £800,000 if the company had met its performance targets for the year, the BBC says. "I understand the strength of feeling about the issues linked to river health which is why I've decided that this year I won't be accepting a bonus," she told the broadcaster. In 2022 the Liberal Democrats urged a ban on water company bosses’ bonuses until sewage offences stopped. The BBC says it has contacted the eight other major water companies to see if they will follow suit.

Fallout from scandals surrounding business lobby group The Confederation of British Industry (CBI) continues. John Allan, a former CBI president and the current Chair of Tesco has been accused of inappropriate behaviour, The Guardian reported yesterday. Allan has strongly denied all bar one of the claims, admitting he told a CBI employee's appearance in 2019 that her dress "suited her figure". He apologised after she complained to her manager, saying it had been a "misjudged way of seeking to cheer someone up". According to The Guardian, Allan has also been accused of touching the bottom of two members of Tesco staff at two separate events, while making inappropriate remarks on both of those occasions, as well as similar comments to two other female CBI staff. A spokesperson for Allan told the newspaper: "Mr Allan was mortified after making the comment in 2019 and he immediately apologised. The person concerned agreed the matter was closed and no further action was taken. Regarding the other claims, they are simply untrue. Even so, Mr Allan requested that Tesco and Fox Williams - who were instructed by the CBI to conduct an investigation following various allegations - to investigate them. Fox Williams decided not to, and Tesco are not aware of and have not received any complaints about Mr Allan's conduct." In December, Tesco announced that Allan, 74, would step down as chair in 2024 after spending the recommended nine years in the role. The Guardian said it knew the identity of the four woman involved but had chosen not to name them.

The Competition and Markets Authority (CMA) confirmed yesterday it has given the green light to the $7.3bn (£5.79bn) merger Viasat and Inmarsat, saying that while it found that while the two satellite communication firms competed closely, the merged company would be "challenged" by emerging and established competitors in coming years. The satellite communication sector was expanding, The CMA said, "a trend that is expected to continue". California-based Viasat, which is listed on the Nasdaq, agreed to take over Britain's Inmarsat in November 2021. The two companies supply businesses with satellite connectivity that enables services such as internet, video calling and email, including for use on airplanes, where they compete particularly closely.

FTSE 250 outsourcer Capita has warned it will take a £15m- £20m hit after its systems were hacked in a cyber incident earlier this year, saying that is the cost of specialist professional fees plus investment to reinforce its cyber protections. The British outsourcing company - which has among others the Government contracts to collect TV Licensing fees, administer Department for Work and Pensions payments, and manage Army recruitment - initially claimed there had been no data breach, but it was later discovered that customers’ passport pictures, bank account details and phone numbers had been uploaded to the dark web. At the weekend, The Sunday Times quoted Darktrace’s Toby Lewis and cybersecurity researcher Kevin Beaumont who both suggested Capita had paid a ransom to the Russian criminals who orchestrated the hack, as the stolen data has not been deleted from the Black Basta portal.   

JD Sports is buying French sportswear retailer Courir in a €520m (£451.36m) deal. Courir has 313 stores across six countries in Europe and an additional 36 stores trading under franchise agreements as Courir in North West Africa, the Middle East and French overseas territories. It also has two stores which trade as Naked in Denmark. Courir is currently owned by private equity firm Equistone, which bought the business in 2018 following the carve-out from Groupe Go Sport. In the year to the end of December 2022, Courir had consolidated revenues of €609.8m (£529.31m), profit before interest and tax of €47.4m (£41.14m) and gross assets of €678.4m (£588.85m).

Civitas Social Housing announced yesterday that it has agreed to be bought by Wellness United Limited in a £485m deal. Under the terms of the offer, Wellness, a company owned by Hong Kong property conglomerate CK Asset Holdings, will pay 80p per share in cash, a 44.4% premium to the closing share price on Friday, hence the race to buy which saw the Civitas share price end the day at 80.1p, a 40.58% increase. However, the sale price is well below the value of the firm’s sprawling portfolio of properties and the 104p per share price the firm floated at in 2016, leading some analysts to suggest shareholders were being short-changed by the “opportunistic bid”. The Civitas board justified the under-value offer – which it said it would recommend to shareholders – by pointing to a wave of “negative sentiment” towards the social housing sector and increasing scrutiny from the social housing regulator, which served its second largest tenant with an enforcement notice last month, leading to questions around the stability of Civitas’ rental income. The issue had been fuelled by “an aggressive and vocal short-selling attack” on the firm from ShadowFall in 2021 which was widely covered by the media and “created further negative sentiment”, Civitas said.

JD Wetherspoon is expecting a “record” high in sales this year it said this morning, sending its shares around 8% higher at the time of writing. The budget pub chain said it had managed to shrug off inflationary and supply chain woes, and that sales during Easter week were the highest-ever for the company, with customers seeking out cheap pints amidst the cost of living crisis.

Ryanair has agreed a $40bn (£31.7bn) deal with Boeing to buy 300 new aircraft between 2027 and 2044, putting an end to an 18-month long feud between the two companies. The Irish low-cost carrier has placed a firm order for 150 Boeing 737-MAX-10 aircraft, seating 228 passengers, with an option for another 150. Half of the new purchases will replace older aircraft in the Ryanair fleet, boosting efficiency and cutting emissions, while the rest will help Ryanair increase passenger numbers by 80% over the next decade, to 300m annually, it said. Ryanair flew 168m people in its last financial year. Ryanair CEO Michael O'Leary broke off talks with Boeing last year and unleashed a barrage of criticism at the firm over pricing and delays in delivery of previously ordered jets. He joked with reporters yesterday saying: "I have been told to say there was a competitive discount ... although I didn't think (it) was particularly competitive". He added the order had risen by about 100 planes to help bring the two sides together.

FTSE 250 travel firm TUI says bookings for the summer have jumped 13% compared with the same period last year, reaching 96% of bookings made in the summer of 2019, the last before Covid-19 restrictions were introduced. Average prices for summer trips are up 5% over last year, it also said.

Uber Technologies Inc has launched international and domestic flight bookings on its UK app, the Financial Times reported yesterday. The move is "the latest and most ambitious step" in the company's strategy to expand its core ride-booking business, Uber’s UK General Manager Andrew Brem told the newspaper. The San Francisco-based company has partnered with travel booking company Hopper to sell flights, and will take a small commission from each sale, the report said.

National Express is to change its parent company name to Mobico Group PLC, from June 2023. The coach operator said it believes the name ‘Mobico’ “better reflects” the “international nature” of the group, as it continues a shift to mass transit.

Donal Murphy, the CEO of FTSE 100 sales, marketing and support services group DCC is stepping back from his day-to-day responsibilities for the next few weeks, while remaining involved in the business, to address a medical condition. DCC said Murphy expects to make a full return to work before its AGM in July.