Published: 25 May 2023
By Suzanne Evans, Director, Political Insight
Although the headline CPI rate of inflation fell to 8.7% in April, the fact core inflation – which strips out volatile items such as fuel and food - rose from 6.2% to 6.8%, rather than holding steady, sent the FTSE falling yesterday. Sell-offs were especially notable in those industries likely to suffer most from any further Bank of England interest rate increases - such as housebuilding - which analysts now believe to be back on the cards. The FTSE 100 slumped 1.75% to 7,615.22 points, and the more domestically-focused FTSE 250 index 1.44% to 18,931.16 points. US bank Citi said it is now expecting two further Bank of England interest rate hikes, rather than the one it had previously forecast, and no rate cut in November. "The headline (inflation) data is ugly," Citi economist Benjamin Nabarro said in a note to clients.
Energy regulator Ofgem has slashed the energy price cap by some 40%, to £2074, on the back of reduced wholesale energy costs. Technically, that is £426 a year less than currently, however, because Government subsidies have kept the average energy cost at £2,500 per year for householders since October last year, most of us will actually see our bills drop by only around 17%. “After a difficult winter for consumers it is encouraging to see signs that the market is stabilising and prices are moving in the right direction," Ofgem CEO Jonathan Brearley said in a statement.
9.9% more cars were made in Britain in the year to April, thanks to easing supply chains and an increase in exports to Europe, the Society of Motor Manufacturers and Traders (SMMT) says. The EU remained a top market with more than half of all exports to the region, while electric vehicle volumes were well over a third of total car output, it added.
Following comments by Labour Shadow Chancellor Rachel Reeves reported here yesterday, FTSE 100 insurer Aviva says it will oppose any proposals to force pension funds to back more British start-ups in a bid to keep London competitive with rival finance hubs like New York. "We're big supporters of investing in the UK... However, we are not supportive of a mandated participation," CEO Amanda Blanc told Reuters. "We do not feel that creating a complex and bureaucratic fund... is the right way forward at all”. Aviva also said that with NHS waiting lists at record levels, its private health insurance sales grew 25% to £33million in the first quarter, following a 14% jump last year.
London has been ranked as the world’s most high-tech city snatching the top spot from New York, according to new research shared exclusively with City A.M. The capital scored top marks for its world-leading financial services, deep talent pool as well as the quality of its business environment and international reputation, according to Z/Yen Group’s seventh edition of the Smart Centres Index.
Jeremy Rees, CEO of Excel, London’s largest events venue, has hailed the new Elizabeth Line has having been “transformational for the city’s events industry”. The hybrid urban-suburban high-speed route is marking its first anniversary. Rees said the railway has led to a boom in visitor numbers, and the venue is on track to smash the previous 2019 record for its busiest ever year. “The introduction of the Elizabeth Line has not only removed the friction of travel across London, but it’s also been transformational for the city’s events industry,” Rees said. “In person events are not just back, they’re booming and firmly in the driving seat to reviving the city’s business tourism economy”. He said visitor footfall to the Excel has increased by 10 % in the year following the Elizabeth Line’s introduction, according to data shared with City A.M., and that 49% of Excel visitors now arrive via the line. The Excel sees around up to four million visitors every year, with around one million of those from overseas, accounting for approximately 25 % of all inbound business tourism to London.
The BBC reported yesterday that Britain is likely to win the contract to host a multi-billion pound Jaguar Land Rover (JLR) electric vehicle battery plant, which could create up to 9,000 jobs. Although a deal has yet to be signed, sources told the broadcaster that the process has moved from negotiations to drafting. Tata – JLR’s parent company – had been contemplating a site in Spain for the deal, but according to the BBC, is now expected to choose Somerset for its location.
Barclays CEO CS Venkatakrishnan has told the Wall Street Journal British mortgage holders will see their monthly payments jump to around 28-30% of their income, up from a median of about 20% over the past few decades, meaning there in going to be “a huge income shock” by the end of next year. “Obviously it affects consumption, and that is before you even bring in the other effects of inflation being food and energy, and basic goods and services. I think therefore what you will see ultimately is a slowdown in consumption – we are seeing it already,” he added.
A union vote on a pay deal that should end the dispute between Royal Mail and The Communication Workers Union (CWU) has been called off by the latter. The offer included a 10% pay rise over three years, as well as a £500 bonus payment and a profit-sharing deal, but the CWU is now refusing to send out ballot papers to its members because, according to CWU general secretary Dave Ward, “The environment we are attempting to deliver this agreement in remains toxic”. However, the Daily Mail reports the deal negotiated by CWU leaders had faced resistance from the membership, with as many as 32% of postal workers expected to vote against it.
Ofcom has allowed BT to cut wholesale prices at its Openreach networking arm, despite claims from competitors such as Virgin Media 02 that it would give the company an unfair advantage. The go-ahead for Openreach’s so-called Equinox 2 plan will cut prices for broadband network clients such as BT & Sky on the proviso that they use its full-fibre products for new orders, Sharecast News says. "Based on the evidence available to us, we don't consider Openreach's new pricing discounts to be anti-competitive," Ofcom said in a statement.
Supermarket chain Lidl has announced its third staff pay increase in a year for all of its 24,500 hourly-paid workers. Store and warehouse staff working outside the M25 will see hourly pay increase to £11.40 from £11.00, rising to £12.30 with length of service. Hourly pay for those inside the M25 will increase to £12.85 from £11.95, rising to £13.15.
Tate & Lyle has posted a significant rise in annual profits, driven by higher prices on the back of soaring inflation. Pre-tax profit came in at £152m versus £42m a year earlier, while revenue was up 27% to £1.75bn.
Bulmers and Magners owner C&C Group posted a jump in full-year profit and revenues yesterday, and reinstated its dividend. In the year to 28th February, operating profit grew 75.6% to €84.1m at the FTSE 250 company, while pre-tax profit rose to €66.8m from €34.4m. Revenue increased 18.4% to €1.7bn.
Office-space provider Workspace Group has posted an annual loss this morning, due to a 3% drop in the valuation of its properties amid a more pervasive ‘work from home’ environment that has piled pressure on commercial rents, and higher levels of inflation affecting costs. The FTSE 250 firm said pre-tax loss came in at £37.5m for the year ended 31st March, compared to a profit of £124m in the previous year.
Cineworld now says it expects to emerge from bankruptcy protection in July after receiving further backing from lenders for its restructuring plan, but shareholders are still set to be wiped out.
Retail investment platform AJ Bell said profits had rocketed 61% in the first half of the year after a rise in the number of savers and ‘do-it-yourself investors’ using its platform. Revenues jumped 37% to £103.6m in the six months to the end of March, and pre-tax profits surged to £41.9m, up from £26.1m in the same period last year, it said.
The London Stock Exchange Group has announced that CFO Anna Manz will step down in May next year to take a similar position outside the financial industry.
Crew Clothing CEO David Butler was ousted by the retailer's owner, Brigadier Acquisition Company, according to reports in the Daily Mail. However, a Crew Clothing spokesperson told the newspaper: “The directors of Crew Clothing Co Limited announce that David Butler has resigned as chief executive of the business by mutual agreement”.
Richard Branson has put the final nail in the coffin of his satellite launch company Virgin Orbit, selling off its assets for £29m to other space start-ups. A mission set to launch from Spaceport Cornwall failed in January, leaving the firm fighting for survival. It then laid off almost all of its staff and filed for bankruptcy protection in the US last month. Virgin Orbit’s Californian headquarters was sold to rival start-up Rocket Lab USA.
Why Media is an award-winning design, marketing, digital communications and PR agency offering tailored solutions to companies on a global scale. We have extensive experience in delivering design and marketing services to a spectrum of companies including professional services, property companies, financial institutions and shopping centres. We have offices in London UK, Hertford UK, Finestrat ES & Brescia IT.
Marketing Contact
Name: Claire White
E-Mail: claire@whymedia.com
Telephone: 01992 586 507
