Shop price inflation falls again - it's back to May 2022 levels - but the British Retail Consortium warns…

Shop price inflation in January fell to 2.9%, its lowest level since May 2022 according to the British Retail Consortium (BRC). It was 4.3% in December. For non-food products, inflation dropped to 1.3% in January, a decline from the 3.1% recorded in December, and the lowest rate since February 2022. Food inflation also slowed, to 6.1% in January, down from December's 6.7%, a significant fall from a peak of 19.2% in March 2023. However, the BRC said “new cost pressures coming directly from the Government” will continue to push prices up for shoppers. These include an increase in the minimum wage from £10.42 to £11.44 an hour, and in increase in Business Rates in April, as well as “rising geopolitical tensions” which will add “uncertainty and costs in supply chains”.  

Consumer group Which? is urging broadband and mobile phone firms to drop plans for "grossly unfair" inflation-linked bill increases in April, plus an extra charge, typically 3.6%. Which? predicts that some customers will be forced to pay up to £35 more for their broadband, and up to £27 more for a Sim-only phone contract, becasue they risk far higher bills if they exit contracts early. For example, Which?'s calculations show EE mobile customers face a £24.84 hike in bills, but leaving the contract would incur a £289.64 exit fee. Vodafone customers could pay up to £339 to leave the firm, Which? said. Rocio Concha, director of policy and advocacy for Which?, says leaving customers facing big price hikes or punative exit fees is "outrageous".  "Telecoms providers must do the right thing by halting unfair price hikes immediately, rather than piling more misery on their customers," he said. New rules expected to come into force later this year will ban telecomms firms from similar increases, after Ofcom concluded that mid-contract bill rises cause "substantial consumer harm". BT said it had been "clear and transparent" over its rises. Shell Energy Broadband said it was keeping rises below those of its rivals. TalkTalk disputed Which?'s calculations. Three and Vodafone declined to comment when approached by Which?

HSBC has been fined £57.4m by the Bank of England’s Prudential Regulation Authority (PRA) for “serious failings” between 2015 and 2022 relating to The Financial Services Compensation Scheme, which is designed to protect customers if financial institutions collapse. HSBC’s failings include incorrectly marking 99% of eligible beneficiary deposits as being "ineligible" for protection under the scheme, which currently safeguards up to £85,000 of savings per individual, per bank. The scheme also covers mortgages, insurance and investments. Sam Woods, the Bank's deputy governor for prudential regulation and CEO of the PRA, said: "The serious failings in this case go to the heart of the PRA's safety and soundness objective. It is vital that all banks comply fully with our requirements around preparedness for resolution." He also criticised the bank for not disclosing its failings to us in a timely manner," however the fine was reduced by 15% because HSBC cooperated with the PRA enquiry. It is still, however, the second highest penalty ever imposed by the financial watchdog. HSBC said it was pleased to have resolved the "historic matter". “The PRA's final notice recognises the Bank's co-operation with the investigation, as well as our efforts to fully resolve these issues," a statement said.

Channel 4 has confirmed a major overhaul that will involve moving out of the London headquarters it has occupied for the last 30 years, and making some 18% of its workforce redundant. Nearly 250 jobs will go as a result of the broadcaster’s ‘fast forward’ plan to cut costs over the next five years, shrink its annual £108m wage bill, and embrace “the generational shift that is taking place in TV viewing” by refocusing on streaming. The channel is experiencing cost pressures because of a downturn in digital advertising on its streaming service, which makes up around a quarter of its £1.14bn total revenue. Because 600 roles will be moved outside London by the end of 2025, and because C4 wants to shift to flexible working, its £90m HQ in Horseferry Road will no longer be the “fit-for-purpose office space” C4 is now looking for.  A statement from the broadcaster also heralded creation of a new “double-digit million e-commerce business” for customers to purchase products. CEO Alex Mahon said: “While getting ourselves into the right shape for the future is without doubt the right action to take, it does involve making difficult decisions. I am very sad that some of our excellent colleagues will lose their jobs because of the changes ahead. But the reality of the rapid downshift in the UK economy and advertising market demands that we must change structurally”.

The Government’s ban on disposable vapes has inevitably sent shares in companies involved in making and distributing the products plunging. Chill Brands and Supreme lost 25.39% and 66.7% of their value respectively yesterday.  Chill Brands said its products, equipped with recharging ports, should not be classified as disposable, and asserted they should be unaffected by the ban, although Russ Mould, investment director at AJ Bell, told Sharecast News: "The market seems to question this logic given the fierce share price sell-off”. "Effectively, investors are saying there is a major risk to earnings, whether it is from Sunak's latest announcement or the general direction of travel by the government to stop young people getting into the vaping habit," he added.

BP under pressure from London-based hedge fund Bluebell Capital Partners to drop its “unrealistic” clean energy strategy, which Bluebell says has depressed BP’s share price and wrongly presumed a “drastic decline in oil and gas demand”. BP plans to cut oil output by a quarter, compared to 2019, by the end of the decade, and has invested heavily in solar, wind and biofuels. It is also exploring green hydrogen production. Bluebell co-founders Giuseppe Bivona and Marco Taricco said in their letter to BP CEO Murray Auchincloss that they are “passionate environmentalists” who embraced green energy, but that they wanted BP to “stay away from businesses in which they have no right to win” and where investment returns are low, such as solar and offshore wind. The 30-page letter, initially reported by the Financial Times, also argued that BP should pledge only to cut emissions “in line with society,” and that the firm was worth 50% more than its share price implied. Commentry in the Guardian says that Bluebell is a relatively small fund that only manages about $150m (£118m) across a dozen or so companies, meaning “it does not have the financial might to force BP into a shareholder vote”.

Inchcape confirmed Sky News reports that it is reviewing strategic options for its UK car retailing business, including a potential sale, following approaches from a number of interested parties. "This review is at a very early stage and there can be no certainty that it will result in a transaction," it said. The retail division consists of 70 sites, employing 3,700 people, and works with car manufacturers including Audi, BMW, Jaguar, Toyota and Volkswagen.

Analysis by investment platform XTB show that the number of firms listed on the London Stock Exchange (LSE) has fallen by more than 25% over the last decade and that the pace accelerated last year. The combined market capitalisation of LSE-listed firms has shrunk by 17% since 2013, XTB says, with the number of companies listed in London decreasing nine out of the last ten years. In terms of value, listed companies only grew he LSE only grew – and only then in nominal terms – in three of the last ten years due to the pace of delisting.

In another blow to the LSE, FTSE 100 gambling giant Flutter Entertainment began trading on the New York Stock Exchange yesterday, and chose the moment to announce it intends to move its primary listing to the US “as soon as practicable". The Paddy Power, Betfair, and PokerStars owner will put the proposal to shareholders at the annual meeting on 1^st May.

Amazon and Roomba maker iRobot are terminating their planned $1.7bn (£1.34bn) merger, admitting that the deal "has no path to regulatory approval" in the European Union amid opposition from EU regulators. Amazon will pay iRobot a $94m (£76.436m) termination fee. Meanwhile, Robot says it plans to cut 31% of its workforce as part of a restructuring programme.