Cabinet Office minister Gavin Williamson resigned from the government yesterday over claims that he bullied colleagues. In a letter to Prime Minister Rishi Sunak that he posted on Twitter, Williamson said that he was complying with an investigation and had “therefore decided to step back from government so that I can comply fully with the complaints process that is underway and clear my name of any wrongdoing”.
Prime Minister Rishi Sunak and Chancellor Jeremy Hunt are now considering expanding the top rate of income tax next week after the Treasury warned that more money was needed to protect pensions and benefits, The Telegraph said yesterday. The newspaper said that raising the 45% top rate, or lowering the £150,000 annual income threshold at which it kicks in, are both options being discussed, along with increasing the Employers’ National Insurance rate by 1.25%. Meanwhile, the Financial Times claims plans by former Prime Minister Liz Truss for low-tax investment zones to boost UK economic growth are also set to be ditched in next week's Autumn Statement.
London Underground workers will strike tomorrow after talks failed to resolve a contract dispute. "TfL (Transport for London) have missed a golden opportunity to make progress in these negotiations and avoid strike action on Thursday," Mick Lynch, the general secretary of the National Union of Rail, Maritime And Transport Workers (RMT), said. TfL warned that "limited or no service" was expected on the entire network on 10th November, adding that the impact from the walkout will continue into Friday morning.
The cost of the average annual grocery shop has risen by almost £40 in just one month, and by £682 a year, according to a report by Kantar Worldpanel, which warned it is too early to say when food price inflation will peak. Kantar also published evidence to support a claim by Sainsbury's last week that people were eating at home more to keep costs down as they prepared to face the impact from record winter energy bills. Kantar reported a 5.2% leap in grocery sales over the 12 weeks to the end of October - the fastest rate of growth since April 2021. Own label sales have also jumped by 10.3% over the last four weeks, while the branded goods market grew far more slowly at 0.4%. Aldi was the fastest growing retailer in the latest period, increasing its sales by 22.7% year on year to gain 9.2% market share, while Lidl boosted sales by 21.5% to take its market share to a new record of 7.2%. Asda again led the traditional "Big Four" supermarkets with sales growing by 5.3% to maintain an overall market share of 14.3%.
The number of restaurants and food outlets entering liquidation has increased by 46%, rising from 108 in June to 158 by the end of August, according to figures released by the Insolvency Service and analysed by RPG Chartered accountants incorporating Crawfords. Sacha Lord, one of three night-time advisers across the UK, has warned the data signals an impending collapse in the sector. He said: "The data we have received today is just the tip of the iceberg, and shows a very worrying trend which we believe will only get worse over the months to come. An increase of nearly 50% in insolvencies in three months shows the sector in an extremely worrying state and it is now entering winter in freefall”. He said those running small independent businesses in particular are struggling, and the crisis has been exacerbated by the confusion over possible business support and ongoing U-turns. "The implementation and subsequent reversal in the freeze on alcohol duty is just one example where planning has been made impossible, adding to the despondency and anxiety across the board," he said. "The stark truth is that hospitality businesses are paying more for ingredients, energy, and day-to-day business needs than they were this time last year, and we are seeing venues shutting due to financial difficulties on a daily basis”. He called on the government to offer relief to the sector in the form of a “reduction in VAT and through business rates relief, both measures that will undoubtedly offer operators a lifeline."
In a further sign that the UK housing market may be cooling, housebuilder Persimmon and Taylor Wimpey warned yesterday of weaker demand because customers are delaying purchases in the face of rising mortgage interest rates. Taylor Wimpey cut its volume outlook, saying it expected 2022 group volumes to be broadly similar to the previous year, having previously guided low single-digit year-on-year volume growth. Persimmon said its cancellation rate had risen to 28% from 21% in the last six weeks after the former government's mini budget, when thousands of mortgage offers were pulled from the market. "Rising interest rates and broader economic uncertainty are clearly impacting mortgage lending and customer behaviour," said CEO Dean Finch. Persimmon did not provide guidance for 2023 given the rapid change in market conditions. "Our current expectation is for fewer legal completions than in 2022 and this together with a deterioration in average selling prices will have an impact on 2023 margins," it said. Shares in the company fell 7%. Lenders Nationwide and Halifax reported a fall in property prices in October of 0.9% and 0.4% respectively.
Clothing and homeware retailer Next has agreed to buy Made.com out of administration, and will take over its brand, domain names and intellectual property. No financial details were given, but press reports have suggested an acquisition price of around £3.5m.
Primark has said it will not raise prices further, despite significant cost increases, as it announced a return to pre-Covid sales and market share in the UK. Commenting on Primark's full-year results, George Weston, CEO of Primark’s FTSE 100 parent company, Associated British Foods (ABF), said Primark has faced "significant input cost inflation and sharply moving currency exchange rates" but that it had experienced a "significant" increase in customer footfall as markets emerged from the pandemic. Total sales were up 43% to £7.7bn compared to last year, though sales were weaker in continental Europe due to cautious customer sentiment. He highlighted plans to build the retailer's digital capability by trialling an online click and collect in store service in 25 UK shops, "which will be a key element in the future development of Primark". ABF also announced its first-ever share buyback, in the sum of £500m, and an 8% increase in dividends to 43.7p per share. However, the profit increases won't last forever, and group profits and adjusted earnings per share will be lower next year than this year, Weston added.
Prominent British fintech Railsr formerly known as Railsbank, is working with bankers at FT Partners on a range of strategic options, including an outright sale, Sky News has learnt. Railsr is a specialist in so-called embedded finance, and snapped up assets from the collapsed German company Wirecard. In a statement issued yesterday, Nigel Verdon, Railsr co-founder and CEO, said: "The market conditions over the past 12 months are driving market consolidation, as it did in the past when multiple companies came together to build what is today called PayPal”. To date, Railsr has raised well over $100m in equity funding, with backing from investors including Visa.
North Sea oil and gas producer Ithaca Energy's planned initial public offering (IPO) in London is set to be priced at the bottom of the range at 250p per share, a bookrunner on the deal said yesterday. Ithaca's market debut will be watched for indications of investor appetite for energy producers in the British North Sea, an ageing basin where private-equity firms have in recent years bought assets, but avoided public listings, which can raise cash but also increase public scrutiny, Reuters said. Ithaca produces around 70,000 barrels of oil equivalent per day and also holds stakes in the yet-to-produce fields Rosebank, which is operated by Equinor, and Cambo, where Shell is trying to sell its minority stake. It has said it wants to use the cash from the IPO to pay down debt, which stood at a net $1.4bn (£1.21bn) at the end of June and that it aims to pay dividends of 15-30% of post-tax net cash from operations, expecting a 2023 dividend of $400m (£345m).
Aston Martin Lagonda (AML) shares rallied yesterday when it emerged Canadian billionaire Lawrence Stroll increased his stake in the luxury car maker to 23.3% from 19.0% on Monday. According to The Telegraph, Stroll's investment vehicle, Yew Tree, led a £30m investment in the shares. Chinese car maker Geely has a 7.6%, and failed over the summer to take control of AML by offering a huge capital injection. Other investors include Saudi Arabia's Public Investment Fund which has a 16.7% stake.
French car maker Renault has announced a major overhaul that will see it separate its activities in five businesses, deepen ties with China's Geely and spin off its electric vehicles unit through a stock market listing next year. Renault’s long-standing Japanese partner Nissan is expected to take a stake in the EV venture, codenamed "Ampere", alongside other investors, though Renault will keep a majority stake.
And finally…For the first time since WWII, thousands of Spitfire aircraft are to be built in the UK – but only the models. Airfix is launching a new Supermarine Spitfire Mk.IXc model which will be made in Britain - the first time a main model kit has been produced in the UK in over a decade.
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