Offshore wind farm builders say "no" to new Government schemes, failing to bid at auction

A Government auction of offshore wind projects has failed to receive any bids. Ministers have confirmed this morning only that “significant numbers of solar power and onshore wind, and a record number of tidal energy schemes, have been awarded funding,” as part of the annual contracts for difference (CfD) auction. Wind farm builders have repeatedly warned that the Government has not adequately considered their soaring costs in the wake of inflation and interest rate rises, and there is little doubt that the lack of interest at the auction for new contracts to roll out Britain’s primary green energy supply will make it difficult to deliver on promises to deliver 50 gigawatts (GW) of offshore wind by 2030, up from 14 GW currently. Asked about the failure of the auction on GB News earlier, Foreign Secretary James Cleverly said he could not comment on a commercial process, however Energy and climate change minister Graham Stuart said: “Offshore wind is central to our ambitions to decarbonise our electricity supply and our ambition to build 50GW of offshore wind capacity by 2030, including up to 5GW of floating wind, remains firm”. Ed Miliband MP, Labour’s shadow energy security and net zero secretary, said the news was “an energy security disaster and a £1 billion Tory bombshell that will push bills up for hardworking families. The Conservatives have now trashed the industry that was meant to be the crown jewels of the British energy system – blocking the cheap, clean, homegrown power we need”.

The UK grew slightly faster than the eurozone in the second quarter as exports in the bloc fell 0.7% bringing growth to a near standstill. Revisions to the EU’s GDP figures between April and June showed that the eurozone grew at just 0.1%, down from a previous estimate of 0.3%. Weak performances from Italy, which contracted 0.4%, and Germany, which stagnated, as well as downwards revisions to Irish GDP impacted the EU data. “The downward revision to the eurozone’s second-quarter GDP data means the economy is now thought to have essentially flat-lined since the fourth quarter of last year,” Andrew Kenningham, chief Europe economist at Capital Economics, said, adding that he thought the eurozone will “slip into recession in the second half of the year”. The UK meanwhile, grew at 0.2% over the same period.

A Bank of England survey of Chief Financial Officers at over 2,000 British small-to-medium sized companies (SMEs) suggests firms are expecting price and wage growth to ease over the coming months. Over the next year, the finance chiefs expect to raise prices by 4.4% down from an expected 5.5% the month before. This is the lowest level of expected price increases since November 2021, and down from a peak of 6.7% in July last year. They also expect wages to grow by 5% over the next year, unchanged from the month before, and at the joint lowest level since May 2022. Actual wage growth in August was 6.9%.

Separately, a survey by The Recruitment and Employment Confederation (REC) of around 400 recruitment agencies last month suggests the number of workers hired by British employers using their services reduced at the fastest pace in more than three years. "For now, the labour market has more slack than it has since the heights of the first lockdown," REC CEO Neil Carberry said. The REC also reported that starting salaries rose at the joint-slowest pace since March 2021, and there were  "widespread reports" from its members that the pool of jobseekers had been swollen by increased redundancies.

The so-called “tourist tax” was debated in parliament yesterday. The tax, which is actually the removal two years’ ago of VAT rebates on goods bought by international visitors to the UK, has been criticised by numerous luxury goods businesses in particular; they say it means they are missing out on revenue. Recent figures from tax refund company Global Blue showed 10% of UK spending by international visitors in 2019 has now been diverted to EU countries, while research by the New West End Company found that 89% firms it surveyed had reported a decrease in spending by foreign tourists. During the debate, Conservative MP Geoffrey Clifton-Brown said the EU is currently enjoying a “Brexit bonus” at Britain’s expense as international visitors flock to Paris and Spain to enjoy tax-free shopping. “Brexit was an opportunity to bring change within our economy to truly benefit the UK creating new opportunities for growth and innovation,” he said, noting that instead,  “Britain is missing out on a one billion pound Brexit boost.” Meanwhile, his Conservative colleague Nickie Aiken said international visitors “are the lifeblood” for so many businesses in areas such as Knightsbridge and the West End. “World famous department stores like Selfridges and Liberty, as well as the luxury brands along Regent Street and Bond Street, rely on international visitors from China, India, USA and the Middle East,” she said.

A crackdown on cryptocurrency marketing has been delayed. The Financial Conduct Authority said that while stricter regulations will come into force on 8^th October, firms will be given until 8^th January next year to comply with rules, which include a 24-hour cooling-off period and a ban on incentives such as ‘refer a friend’ bonuses.

The scandal hit Confederation of British Industry (CBI) and Make UK, the manufacturers' body, are in discussions about areas of potential collaboration and, possibly, lead to a full-blown merger. Sky News, which first reported the story, said it is unclear how such a merger would work.

Staff at 140 universities across Britain will take five days of strike action later this month in a long-running dispute over pay and working conditions, the University and College Union (UCU) said on Wednesday. The UCU said it had also now withdrawn a marking and assessment boycott that has been running since 20^th April.

The Daily Mail and General Trust (DMGT), which is owned by Lord Rothermere, is said by the Financial Times to be in talks with Qatari tycoons to make an offer to buy the Telegraph Group, which includes the Daily and Sunday Telegraph newspapers and The Spectator. The Group was put up for sale in June by Lloyds bank, after it seized control of the company when the then owners, the Barclay family, failed to repay over £1bn in loans owed to the bank. Lloyds then appointed investment bank Goldman Sachs and law firm Linklaters to manage the sale. Analysts estimate the group could fetch between £400m-£700m. A DMGT spokesperson said: “Over the past few years we have been approached and have had talks with a number of Middle Eastern investors who have shown an interest in participating in a bid for the Daily Telegraph. To date we do not have a formal relationship with any investors; however, if we did, we would only do so if we have the majority of economic and equity risk, and the control needed to invest in the business and protect its editorial independence.” Rupert Murdoch’s News Corp, Belgian publisher Mediahuis, National World -  chaired by David Montgomery – and private investor Paul Marshall, the chairman of hedge fund group Marshall Wace, are also rumoured to be interested in bidding for the Telegraph titles, as it the Barclay family, which is thought to be keen to take back control of its former asset.  It has been reported previously the family is seeking support from UAE investors.

British American Tobacco (BAT) says it will sell its last cigarette in Russia within a month, 18 months after it pledged to leave the market in response to Putin’s invasion of Ukraine. The London-based maker of Lucky Strike and Camel cigarettes had captured 25% of the Russian market, and accounted for 2.7% of the £13.4bn in revenues BAT generated in the first half of 2023. Now, however, BAT has now agreed to sell its Russian and Belarusian businesses to a group led by its Moscow management team. The FTSE 100 firm did not disclose how much it would receive for the sale, or whether the terms of the agreement may allow it to buy the business back at some point in the future if sanctions against Russia are lifted. In exiting Russia, BAT will forfeit around £725m annually, and expects a hit to profits of some £290m.

Waitrose is understood to have entered into talks with employees late last month to discuss changing the hours they work and possible job losses, the Financial Times claims. Tina Mitchell, retail director at Waitrose, warned in a staff video seen by the newspaper that staff (called partners because they jointly own the business) will need to make “sacrifices and compromises” and that cost cutting operations may result in “some partners leaving the business”. “Unless we change how we work, there’s a real danger that the partnership won’t exist in the form that we want it to in the future,” Martin was reported to say. When contacted by City AM, a spokesperson for Waitrose said: “We want to provide the very best service to our customers, and this means having the right amount of partners doing the right tasks at the right time.  To do this, we’re asking some partners across our shops to change their working pattern, and are proposing to cease night shifts at a small number of stores. This isn’t something we take lightly, and we’ll be supporting our partners through any changes.” Waitrose is looking to save £50m a year from renegotiating staff contracts. The John Lewis Partnership, of which Waitrose is a part, reported annual losses of £234m in March.  

German supermarket Lidl has opened a new £300 million food distribution centre in Luton, Bedfordshire. The 1.2m sq ft facility - the firm's largest warehouse in the world - is expected to create 1,500 jobs. Meanwhile, its rival Aldi opened its 1,000th store in the country, yesterday in the Surrey town of Woking, and unveiled plans to open 500 more across the UK, 20 of them by the end of this year.  According to the Evening Standard, its growth plans will cost around £1.3bn over the next two years. Recent data from Kantar placed Aldi as the UK's fastest-expanding supermarket, and currently ranking fourth in terms of market share. "Our popularity is growing, and there is huge demand for people to have an Aldi store near to them to increase shoppers' access to our unbeatable prices," Aldi UK and Ireland CEO Giles Hurley was quoted as saying.

Berkeley, the FTSE 100 housebuilder, has reported a 35% slump in underlying private sales’ reservations in the first four months of its current fiscal year which started on 1^st May. The drop echoed the “elevated macroeconomic and political volatility,” the firm said.

The Competitions and Markets Authority (CMA) provisionally backed the aviation regulator, the CAA, in a row over how much Heathrow Airport can charge airlines for the 2024-2026 period. When the CAA announced it was cutting the charges, both Heathrow and airlines launched appeals against the decision. Heathrow said lower fees would hit investment, while British Airways and Virgin Atlantic said the cuts did not go far enough. The CMA now has until 17^th October to decide whether to allow or dismiss the appeals. "Overall we provisionally consider that the CAA was not wrong in most of the decisions that were appealed to us," it said this morning.

FTSE 100 paper and packaging company Smurfit Kappa confirmed yesterday it in merger talks with US peer WestRock. No financial details were given but a report by the Wall street Journal suggested the combined group could be worth around $20bn. Smurfit said the potential combination would involve the creation of a new holding company, Smurfit WestRock. This would be incorporated and domiciled in Ireland with global headquarters in Dublin, and North and South American operations headquartered in Atlanta, Georgia. "Discussions between the parties remain ongoing regarding the potential combination," Smurfit said.

Apple shares fell for a second day following reports by Bloomberg and in the Wall Street Journal that Chinese government workers have been banned from using or bringing iPhones into the office. The dip means the stock has now fallen by more than 6%, wiping almost $200bn (£160bn) of the technology giants value. China is Apple’s third-largest market and contributed 18% of its total revenue last year. It is also where most of Apple's products are manufactured. There has been no official statement from the Chinese government in response to the reports.

Bruce Carnegie-Brown, the chairman of Lloyd’s of London, has said he wants to see people working in its building in the City for most of the week, to avoid a situation where people were taking “long weekends” every week, and Mondays and Fridays weren’t properly covered for clients. Workers should come into the office at least three days a week – and not just Tuesday to Thursday – to ensure clients are properly served, he said.

Simon Peckham, the CEO and co-founder of British aerospace supplier Melrose will step down in March after more than 20 years, the firm said today. He will be replaced by chief operating officer Peter Dilnot. The FTSE 100 company also published its first set of results yesterday since it spun off all its non-aerospace related interests to create Dowlais Group in April, saying it now expects full-year adjusted operating profit to be between £375m and £385m, up some 8% on a May forecast. It also announced a £500m share buyback. The announcement took Melrose shares their highest since February 2020. Melrose’s finance director Geoffrey Martin, who has been with the group for more than 18 years, will also be replaced by Matthew Gregory, who is currently finance chief of Melrose-owned GKN Aerospace.

Ken Hanna, Chairman of The Restaurant Group (TRG) is to step down once a successor has been found. TRG owns chains including Wagamama, Chiquito's and Frankie & Benny's. His announcement comes in the wake of considerable pressure from activist investors, notably Oasis Management, a Hong Kong-based fund which owns nearly 15% of TRG. Oasis wants a seat on the board and has been demanding a number of directors step down. Irenic Capital Management is also seeking changes. TRG shares lost two-thirds of their value last year.

And finally… When Ryanair CEO Michael O’Leary arrived in Brussels yesterday to protest outside the European Commission against repeated air traffic controllers’ strikes in the EU, two female environmental activists hit him in the face with cream pies. “Welcome [to] Belgium,” one of them said, while the other shouted: “Stop the pollution from planes”. O’Leary calmly asked an assistant to take his jacket away to be cleaned, and shortly afterwards, Ryanair’s X/twitter feed posted he had received a “warm welcome in Brussels,” adding that: “Passengers so happy with our routes and petition that they’re celebrating with cake”.