Published: 11 May 2023
By Suzanne Evans, Director, Political Insight
Most analysts expect the Bank of England Governor Andrew Bailey and the rest of the 9-strong Monetary Policy Committee to back the 12thconsecutive interest-rate rise today, probably lifting them by 25 basis points to 4.5%. The Bank rate is already at its highest level in 14 years.
Business secretary Kemi Badenoch said yesterday that the Government was amending the Retained EU Law Bill (REUL), in a move which angered Brexit-backing MPs such as Jacob Rees-Mogg, who told the BBC the decision showed ministers “incapability,” and pro-Brexit business leaders such as former British Chambers of Commerce chair John Longworth. REUL was intended to ensure laws imported wholesale into British law post-Brexit were deleted from the statute books in a ‘sunset clause,’ by the end of 2023, unless they were specifically retained or replaced with new legislation. However other MPs argued this would mean crucial laws and regulations either vanishing or were overlooked. Now Badenoch said her department would “replace the current sunset in the bill with a list of the retained EU laws that we intend to revoke at the end of 2023” when the EU bill is back in Parliament next week. She said: “This provides certainty for business by making it clear which regulations will be removed from our statute book, instead of highlighting only the REUL that would be saved.” The Government has revoked or reformed more than 1,000 pieces of EU law since Brexit, Badenoch added, and will now directly revoke around 600 under the REUL bill, and around a further 500 as part of the financial services and markets bill and the procurement bill. “We are committed to lightening the regulatory burden on businesses and helping to spur economic growth,” she added in her statement. Labour labelled the government’s U-turn on the Bill as “humiliating”. Shadow cabinet office minister Jenny Chapman said: “After wasting months of parliamentary time, the Tories have conceded that this universally unpopular bill will damage the economy. They are now trying to adopt some of Labour’s amendments to try and rescue this sinking ship of a Bill.”
Foreign secretary James Cleverly talked down hopes of a UK-US trade deal at a press conference in Washington DC on Tuesday, saying the government was not “prioritising” a free trade agreement but aiming for “real economic coordination” with the superpower.
According to new figures from UK Finance, £2,300 was lost every minute to authorised push payment (APP) fraud and unauthorised fraud across payment cards, remote banking and cheques making Britain, according to CEO David Postings, “the fraud capital of the world.” A total of over £1.2bn was stolen in 2022, a less that 1% drop on the previous year.
Demand for temporary staff is currently running much higher than for full-time workers, according to a regular survey by consultancy KPMG and the Recruitment and Employment Confederation (REC), suggesting businesses are either struggling to recruit permanent staff, or are deliberately turning to part-timers to avoid locking into long-term contracts during an economic slump. The survey, which measures how quickly firms are taking on full-time staff, slid at its quickest pace since the beginning of 2021, shortly before covid lockdown restrictions began, falling to 44.2 points in April, from 49.3 points in March. That drop pushed the index far below the 50 point threshold that separates growth and contraction. London’s permanent placing index was among the lowest in the UK. Meanwhile, KPMG and the REC also found worker shortages are putting upward pressure on wages. The permanent starting salary index jumped to 61.4 points, while the temp pay index hit 57.9 points, meaning pay is rising rapidly, and making it all the more likely that the Bank of England will hike interest rates for the twelfth time in a row later this morning.
£3.1bn was spent on 161 £10m+ luxury London homes in the year to March 2023 according to estate agent Knight Frank, making it the strongest year for such property sales since 2016. The highest number of deals took place in Kensington, Belgravia and Mayfair, where the mega-rich bought 73 homes.
The Department of Transport has stripped TransPennine Express of its contract to run its service because of poor service and cancelled trains over the past year. The Government will now run the rail service, which covers the North of England and parts of Scotland. Around one in six of its services were cancelled in March, the highest of all rail franchises in the UK.
Liam Condon, CEO of Johnson Matthey, one of Britain’s largest manufacturers, has warned Prime Minister Rishi Sunak he risks squandering the country’s lead in clean energy production by failing to respond to US President Joe Biden’s $400bn (£317bn) green stimulus package. Condon told Sky News it has intellectual property which could help the UK become a world leader in the production of green hydrogen, but as the US now provides billions of dollars of subsidies for those making similar products through Biden’s Inflation Reduction Act, designed to incentivise companies to produce green products on American soil, the UK risks losing out on this part of the “green industrial revolution”. “I think the risk is that over time we will lose another leading, cutting-edge industry where the UK could be a global champion. I think batteries is gone – we’ve lost that. That race is, from my point of view, over,” he said. “In hydrogen, the UK can still be a global champion. But we’ve got to move with a sense of urgency,” he added.
John Lewis chair Dame Sharon White won a vote of confidence on her future leadership yesterday, but lost another on whether partners had confidence in her decisions over the past year, when the retailer reported a £234m full-year loss and failed to pay a partnership bonus to employees for only the second time in its history. The partnership council vote was tabled after White said she would consider selling a stake in the business, undermining the 70-year-old partnership model, where 74,000 employees are part-owners. Ex-boss Andy Street said such a move would be a 'tragedy'.
According to The Sun newspaper, Manchester United owners the Glazer family have identified their preferred bidder for the football club, and it is Sir Jim Ratcliffe, who has offered £5bn in a deal which will see the Glazers themselves remaining at the club as minority shareholders.
Virgin Atlantic has partly blamed last years’ 100,000 passenger cap at Heathrow Airport for its 2022 final year results, which record a pre-tax loss of £206m. It also highlighted the current economic climate, with Shai Weiss, Virgin Atlantic’s CEO saying: “The devastating war in Ukraine dramatically affected fuel and energy prices and global supply chains. In parallel, inflation stoked a cost-of-living crisis, particularly felt by UK consumers as energy prices rocketed. These factors contributed towards losses, albeit significantly improved on 2021”. He added the airline does not expect to return to profit in 2023.
Meanwhile, Heathrow said this morning it had started to see some “levelling off” of demand through the first four months of the year, with passenger numbers stable at around 93 – 95% of pre-pandemic levels. It welcomed 6.4m passengers through the doors in April and 90% of them were through security in less than 10 minutes.
The EU’s General Court has upheld Ryanair Holdings challenge to the EU’s 2020 €6bn (£5.22bn) bailout of rival Lufthansa, saying the European Commission made "several errors" in its evaluation and that Lufthansa could have obtained all of the financing that it required on the markets. Lufthansa has already paid the German government back, and Berlin has since sold the 20% stake it had taken in the airline.
The UK Supreme Court ruled yesterday that it was too late for Nigerian claimants to sue two Shell subsidiaries over a 2011 oil spill they say had a devastating long-term impact on the coastal area where they live. The case was one of a series of legal battles Shell has been fighting in London courts against residents of Nigeria's oil-producing Niger Delta, a region blighted by pollution, conflict and corruption related to the oil and gas industry, Reuters reports.
Hotter shoes owner Unbound tumbled 50% yesterday after reporting a deterioration in trading conditions and saying a funding deal had collapsed. Last month, Marwyn Investment Management said it would provide a £10m investment in exchange for shares, but withdraw on Tuesday "citing principally concerns over current trading".
Shares in ASOS fell more than 23% yesterday after the British online fashion retailer reported a deeper half-year loss and said it faced a challenging trading backdrop. Sales were down 8% and its revenue to 28th February dropped to £1.8bn from £2bn, it said. The FTSE 250 company also posted a £290.9m pre-tax loss, compared to the £15.8m loss a year earlier.
Melrose Industries’ shares rallied, after it said it would focus on being a 'pure-play' aerospace company after the recent spin-off of its automotive business. Melrose, which has long bought struggling industrial companies, said it will no longer seek acquisitions 'of an unrelated industrial business or, in the near term, a material aerospace business'. The FTSE 100 group, which still owns GKN Aerospace after spinning off GKN Automotive, GKN Powder Metallurgy and GKN Hydrogen into newly named Dowlais, also said revenues jumped by 19% for the first four months of the yer and said trading was “materially ahead of expectations with significant growth in revenue, profit and margin being achieved”.
Holiday let owners in Edinburgh have told the BBC a new licencing scheme for short-term lets is effectively banning their businesses, and have taken the decision to a Judicial Review which is being heard this week. They say the new rules, which came into effect in October last year, will have a "seismic" impact on the capital, as they are a "de facto ban" on holiday lets for small business owners and were removing "small operators in favour of big business" as they have not been able meet new requirements for retrospective planning permission for a change of use. However, the housing minister said responsible operators had "nothing to worry about". Louise Dickins, from Dickins Homes From Home, highlighted problems which would arise for the Edinburgh's festivals, as accommodation shortages have already being blamed for pricing out audiences and performers. She said the application cost of the licence alone was putting many people off applying. "Lots of people will close across Scotland - bed and breakfast, little self-catering units, guest houses. It will change the landscape of people's ability to holiday in Scotland," she said. Another owner, Fiona Johnston said neither of her properties had been able to get a licence. "They were knocked back on the premise that the planners could not guarantee that unscrupulous people might come in in the future and run them differently," she said, adding: "So far every single person who has applied for planning permission for retrospective change of use, which is an unusual thing on existing businesses, have all been turned down." Despite claims that the policies could help address housing shortages, homelessness charity Shelter said the scheme was "a drop in the ocean" in Edinburgh, where 38,500 social homes were needed.
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