Published: 12 September 2023
By Suzanne Evans, Director, Political Insight
UK wage growth has caught up with inflation, according to the latest official figures from the Office for National Statistics (ONS). Regular pay, excluding bonuses, rose by 7.8% in May to July compared with the same period last year, matching inflation over the same period. "This means people's real pay is no longer falling," the ONS said. Including bonuses, earnings growth came in at 8.5%. Meanwhile, the unemployment rate rose to 4.3% in the three months to July, up from 4.2% a month earlier, and its highest since the three months to September 2021. The fall in employment was driven by men and the self-employed, the ONS said, adding that the number of people not working or looking for work was up, and the numbers of long-term sick reaching another record high. The number of job vacancies has also fallen below one million for the first time since the summer of 2021, post the first covid lockdowns, but are still well above pre-covid levels. Public sector employment has also gone up again, to 5.87m in June 2023, 133,000 or 2.3% more than in June 2022.
Chancellor Jeremy Hunt has hinted there will not be any tax cuts before the next general election, telling Bloomberg TV he did not expect to have more fiscal headroom when he delivers his Autumn Statement than he did at the Spring Budget, and that now “debt interest payments are higher” and inflation is “stickier.” “Our priority is bringing down inflation and when you’re trying to bring down inflation you have to be really careful not to pump extra money into the economy; much as you would like to, not to pump extra money into people’s pockets because that can push up prices and keep inflation higher for longer,” he said, adding: “The one thing I can absolutely say is that our focus at the Autumn Statement will be on bringing down inflation and delivering both the Prime Minister’s goal to halve inflation and the Bank of England’s target to bring it down to two per cent…We brought inflation down from over 11 per cent to 6.8 per cent so we are making progress… but the long-term future of the economy depends on getting inflation down.”
John Lewis’ Chair Sharon White warned yesterday that Britain’s high streets risk becoming “looting grounds for emboldened shoplifters and organised gangs” unless there is a comprehensive plan put in place to stop the rise in thefts from stores. Writing in The Telegraph, she called for a Royal Commission review of Britain’s ailing town centres. “High streets are more important to us than the sum of their parts; they help define our towns and cities and create civic pride,” she wrote. “They are vital to us as a nation and, which is why, piecemeal decisions on individual problems will not work”. White highlighted how some 6,000 high street stores have closed in the past five years, and how shoplifting and abuse of retail staff has also risen dramatically, an observation previously mentioned by Tesco and the Co-op among others. The Co-op said there were around 1,000 cases of crime and shoplifting at its shops every day in the six months to June, while Tesco is now offering staff body cameras in an attempt to prevent abuse. A TikTok-inspired flash mob attempted a mass shop-lift of JD Sports just last month.
HMV owner Doug Putman’s attempt to save Wilko has collapsed, after talks with administrators PwC broke down amid concerns about the costs of running Wilko's legacy operations. Putman confirmed that his firm Putman Investment had financing in place and had received the full support of the administrators as well as Wilko management and staff representatives. "However, commitment to overhauling the trading framework of the business with partners and the costs of running Wilko's legacy operations infrastructure combined has meant that a stable foundation could not be secured to ensure long-term success for the business and its people in the way that we would have wanted," Putman said in a statement. Last week, B&M announced lit would buy "up to" 51 Wilko stores for £13m, but a total of 1,600 redundancies have already been announced, and PwC says a further 9,100 Wilko employees will be made redundant by early October, saying yesterday: "Staff at 124 stores have today been informed that those outlets will close on, or before, Thursday 21 September. Timings for the closure of the remaining 222 stores will be announced in due course." According to Sky News, PwC is now in discussions with Poundland to take over 100 sites. The Range and Home Bargains are also said to be interested in some stores, but the BBC says it understands no bidders are interested in running shops under the Wilko name.
FTSE 250 British housebuilder Vistry is moving to a model focussed solely on social housing, saying that while private sales had slowed further since June – when the housebuilder reported an 8% fall in half-year pre-tax profits – it continued to see “good demand” for affordable housing from bodies including local authorities. “The scale of the social need for affordable mixed-tenure housing across the country continues to increase,” CEO Greg Fitzgerald said, adding: “Delivering on the acute social need for housing across the country and increasing the availability of affordable, sustainable homes is at the core of the group’s social purpose and vision.” The move was welcomed by investors yesterday: Vistry stocks ended the day 12.56% higher.
An electric car leasing company which raised tens of millions of pounds from backers such as Legal & General (L&G) has crashed into administration, Sky News reports. Onto Holdings, which secured new capital injections as recently as three months ago, had been running a sale process with advisers at Deloitte, having assembled a fleet of 7,000 EVs and a subscriber base of 20,000 customers, but the firm called in Teneo Financial Advisory yesterday. Sky News revealed during the summer that L&G had notified Onto that it would not commit further funding to the business, having committed £22.5m in May and June, and having led a previous £60m funding round.
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