After nearly 150 years, there will be several months of silence as London’s Big Ben undergoes repairs. CNN’s Nic Robertson reports.
After nearly 150 years, there will be several months of silence as London’s Big Ben undergoes repairs. CNN’s Nic Robertson reports.
(qlmbusinessnews.com via theguardian.com – – Tue, 15 Aug, 2017) London, Uk – –
Rail fares for commuters in England and Wales will increase by 3.6% from next year, adding pressure to incomes already squeezed by higher prices.
The rise, the biggest annual increase in five years, is set by the government and linked to July’s retail price index (RPI) measure of inflation announced by the Office for National Statistics on Tuesday. The higher fares will take effect from January.
Economists had expected RPI to increase to 3.5% in July, while rail fares rose by 2.3% at the start of 2017 based on last year’s figures.
The change applies to about 40% of rail fares, including season tickets on many commuter journeys, some off-peak return tickets on long-distance journeys and anytime tickets around major cities. So-called regulated fares are set by the government but normally provide the benchmark for rises across the network.
Unions and campaigners have been holding protests against the rises at railway stations around the country.
The RMT general secretary, Mick Cash, said government policies of holding down wages while allowing fares to rise was a “toxic combination”. He said: “The private operators and government say the rises are necessary to fund investment but the reality is that they are pocketing the profits while passengers are paying more for less with rail engineering work being delayed or cancelled, skilled railway jobs being lost and staff cut on trains, stations and at ticket offices.”
The Aslef general secretary, Mick Whelan, called for the system to be reformed, saying: “The government must intervene to make fares simpler, fairer and cheaper in Brexit Britain. Passengers and taxpayers will rightly be asking what they are paying for.”
He said fares should at the least be linked to the consumer price index (CPI), which rose by 2.6% in July, rather than RPI.
Stephen Joseph, the chief executive of Campaign for Better Transport, called for a fares freeze: “[The government’s] frozen fuel duty for the last seven years and we think rail fares should be given the same treatment.”
Joseph also said it was unacceptable that the government continued to use the higher RPI rate to calculate rail fare rises. “Passengers would be forgiven for thinking they are being taken for a ride when RPI has been dropped as an official measure for most other things.”
The rail industry defended the steep increase. Paul Plummer, the chief executive of the Rail Delivery Group, representing train companies and Network Rail, said: “Money from fares pays to run and improve the railway, making journeys better, boosting the economy, creating skilled jobs and supporting communities across Britain. It’s also the case that many major rail industry costs rise directly in line with RPI.”
Inflation had been expected to rise again after an unexpected fall in June, helped by falling fuel prices, which offset the rising costs of food, clothing and household goods.
Although CPI did not resume its upward trajectory last month, it is still running above the government’s 2% inflation target and outstripping the pace of wage rises. That has led to a rising cost of living, heaping pressure on households. Consumers are using credit cards to fund spending and the Bank of England has expressed alarm about the increase in personal debt.
Chris Williamson, the chief business economist at data company IHS Markit, said there were still risks “skewed towards inflation rising in coming months”, while wage growth is expected to remain below 2%.
ames Tucker, the head of CPI inflation at the Office for National Statistics, said RPI was not seen as a good measure by the statistics authority. However, the Treasury said the use of RPI was “consistent with the general approach adopted across the rail industry”, while the measure is used to account for inflation in the cost of running train services.
“Although inflation is likely to start falling next year, we understand some families are concerned today about the cost of living,” a Treasury spokesperson added.
Labour said the latest rise meant the average commuter will be paying £2,888 for their season ticket in January, £694 more than they paid in 2010. Some are paying over £2,500 more to travel to work than in 2010, it added.
A Virgin Trains season ticket between Birmingham and London Euston will now cost £10,567, while season tickets on some routes have risen by more than 40% since 2010. Andy McDonald, the shadow transport secretary, said the rises were “truly staggering”, adding: “The truth is that our fragmented, privatised railway drives up costs and leaves passengers paying more for less. The railways need serious reform.”
In Scotland, the blow for some rail travellers will be eased slightly as the Scottish government plans to limit regulated off-peak fares to an increase of 1% below RPI, or 2.6%, although season tickets will rise at the RPI rate.
By Richard Partington and Gwyn Topham
(qlmbusinessnews.com via uk.reuters.com — Thur, 10 Aug, 2017) London, UK —
LONDON (Reuters) – British firms are keeping a lid on pay and automating more production while some shoppers, faced with rising prices, are switching to cheaper products, the Bank of England said on Wednesday.
The findings came in a report from around the country that showed Brexit is hurting households, mainly though the weaker pound.
Businesses serving British consumers are suffering compared with export-focused manufacturers, as the weaker exchange rate and higher inflation following last year’s vote to leave the European Union feeds through the economy.
Last week BoE Governor Mark Carney said Britain’s economy was suffering from uncertainty and higher prices caused by the referendum decision in June 2016, and the central bank cut its forecasts for future growth and wages.
Wednesday’s report by the BoE’s regional staff — which fed into last week’s forecasts — showed businesses planned to offer pay awards of between 2 and 3 percent, despite growing recruitment difficulties.
“Overall employment intentions remained modest,” the BoE said. “Growth in manufacturing (employment) intentions was stable and was dampened by a stronger focus on productivity improvements and automation over job creation,” it added.
The BoE forecast last week that economic growth would slow to 1.7 percent this year and 1.6 percent in 2018, while wages are seen rising by 2 percent and then 3 percent.
After unexpectedly outperforming other big advanced economies last year, in 2017 Britain had its slowest first half of the year since 2012.
Firms reported prices for goods and services rose at the fastest pace in four years, in line with official measures of inflation, and consumer spending growth slowed.
“Some contacts ascribed this to increased caution among consumers, and to consumers trading down to cheaper products or brands,” the BoE said.
Sales at consumer services businesses grew at their slowest pace in over four years, while manufacturing exports saw their fastest expansion since 2011.
Business investment – which the BoE hopes will offset some of the damage to consumer spending – remained modest, with unspecified “uncertainty” weighing on longer-term plans.
The agents’ report on contacts with businesses in June and the first half of July, which includes the period when Prime Minister Theresa May unexpectedly failed to win a parliamentary majority, as well as the start of Brexit talks in Brussels.
Reporting by David Milliken; Editing by William Schomberg and Jeremy Gaunt
By David Milliken
Transactions made in cash are losing ground to digital payments, and governments around the world are considering the merits of losing paper currency for good. Bloomberg QuickTake Q&A explains the advantages and disadvantages of a world without cash.
(qlmbusinessnews.com via theguardian.com – – Tue, 1 Aug 2017) London, Uk – –
Experts fear rise will prompt another round of increases after Centrica sanctions average annual dual fuel bill rise of 7.3% to £1,120
British Gas has raised electricity prices by 12.5% in a move consumer experts warned could kick off a new round of price rises from rival suppliers this winter.
The company, owned by Centrica, left its gas prices unchanged, which means the average annual dual fuel bill will rise by 7.3%, or £76, to £1,120. The increase, which takes effect on 15 September, will affect 3.1 million customers. The company said it would give a £76 credit to more than 200,000 vulnerable customers to protect them from the increase.
Ministers expressed concern about the rise, which they said should not be blamed on government policy, and said they were not ruling out future steps to “increase fairness for customers”.
A spokesperson for the Department for Business, Energy and Industrial Strategy (BEIS) said: “Energy firms should treat all their customers fairly and we’re concerned this price rise will hit many people already on poor-value tariffs. Government policy costs make up a relatively small proportion of household energy bills. Wholesale prices are the bigger portion of household bills and are coming down.
“We are not ruling anything out – whether it is action by the regulator or legislation – to increase fairness for customers.”
Shadow energy minister Alan Whitehead called it a “whopping rise” and said the government should take further action.
“There was an agreement coming into the election that there should be a price cap operating across the market and action should be taken on the standard variable tariffs that so many customers are on. Unfortunately the government has changed their minds about that now and we want to press them to change their minds,” the Labour MP told BBC Radio 4’s Today programme on Tuesday.
The chief executive of Citizens Advice, Gillian Guy, said: “British Gas has in recent years been offering one of the less expensive standard variable tariffs from a larger firm, but today’s price rise will close this gap and hit longstanding customers hardest. This price rise has been issued despite costs for energy firms dropping in recent months.”
Iain Conn, Centrica’s chief executive, defended the move, saying the electricity price rise was the first since November 2013 and reflected a 16% rise in the cost of energy and delivery to customers’ homes since 2014.
“We haven’t taken the decision lightly,” he said on Sky News. “We realise that 3.1 miilon people are affected. I should stress that just over 5 million customers are unaffected by today’s news. In the end we’ve had to respond, like many of our competitors, to the underlying increases we’ve seen in electricity.”
Martin Lewis, the founder of the MoneySavingExpert website, said the move was a catch-up price rise from British Gas and might prompt another batch of rises this winter.
Previous price freezes by British Gas had lulled customers into a “false sense of security that it wouldn’t move prices”, Lewis said, which meant consumers did nothing, “when they could have cut their rate and locked that in for longer by actively picking a far cheaper one-year fixed energy tariff.” He added that the cheapest tariffs on the market cost £844.
News of the price rise came as Centrica reported an adjusted profit before tax of £639m for the six months to June, down from £688m a year earlier.
Conn, who was handed a pay rise of nearly 40% last year, taking his remuneration package to £4.15m, said: “Centrica delivered a solid first-half financial performance despite reduced energy demand due to warm weather and strong competitive pressures, and we remain on track to achieve the 2017 targets we set out in February.”
Households are missing out on the cheapest tariffs by not switching suppliers. Although the number of people switching rose by 30% last year, around two-thirds of bill payers are still on the worst-value standard tariffs. Trials are under way on how to encourage people to switch.
Hannah Maundrell, editor in chief of money.co.uk, said: “I’m worried the Conservatives’ promise to ‘end unfair practices in the energy market’ will make people think they don’t need to switch. They do. There is no guarantee when and if anything will be done, so it’s not worth wasting money while you wait.
“Switching energy deals could help you to save now and protect you against hikes in the near future. There’s no point sticking with the same supplier when you could pay hundreds less for exactly the same service elsewhere.”
By Julia Kollewe and Jessica Elgot
(qlmbusinessnews.com via bbc.co.uk – – Thur, 27 July 2017) London, Uk – –
Two of the country’s estate agent chains have posted slumping profits in the face of a slowing housing market.
London-focused estate agent Foxtons saw profits plunge 64% in the first six months of this year.
Another estate agent, Countrywide, also saw profits tumble, by 98% in its case. The firm said it would not pay a dividend.
Foxtons’ head said demand had slowed in the face of “unprecedented economic and political uncertainty”.
Countrywide said house sales exchanges were down 20%, 24% in London.
Countrywide said the first six months of this year were also tough in comparison with last year, which saw high levels of housing transactions brought forward to beat an increase in stamp duty changes and ahead of the EU referendum.
Its profits were £447,000, down from £24.3m.
Both agents are making deep cost cuts.
Foxtons pre-tax profits fell to £3.8m, down from £10.5m for the same period last year. Revenues fell 15% to £58.5m.
Foxtons said in its statement that there had been further cooling of the market in the second quarter of 2017, with the unexpected general election a factor in slowing activity.
It added that London was more greatly affected than the rest of the country.
Foxtons has been warning since 2014 that rapid price growth and strong demand in London had started to cool.
However, it said that in the longer term, it expected London to remain an attractive property market for sales and lettings.
(qlmbusinessnews.com via theguardian.com – – Wed, 26 July 2017) London, Uk – –
Plans follow French commitment to take polluting vehicles off the road owing to effect of poor air quality on people’s health
Britain is to ban all new petrol and diesel cars and vans from 2040 amid fears that rising levels of nitrogen oxide pose a major risk to public health.
The commitment, which follows a similar pledge in France, is part of the government’s much-anticipated clean air plan, which has been at the heart of a protracted high court legal battle.
The government warned that the move, which will also take in hybrid vehicles, was needed because of the unnecessary and avoidable impact that poor air quality was having on people’s health. Ministers believe it poses the largest environmental risk to public health in the UK, costing up to £2.7bn in lost productivity in one recent year.
Ministers have been urged to introduce charges for vehicles to enter a series of “clean air zones” (CAZ). However, the government only wants taxes to be considered as a last resort, fearing a backlash against any move that punishes motorists.
“Poor air quality is the biggest environmental risk to public health in the UK and this government is determined to take strong action in the shortest time possible,” a government spokesman said.
“That is why we are providing councils with new funding to accelerate development of local plans, as part of an ambitious £3bn programme to clean up dirty air around our roads.”
The final plan, which was due by the end of July, comes after a draft report that environmental lawyers described as “much weaker than hoped for”.
The environment secretary, Michael Gove, will be hoping for a better reception when he publishes the final document on Wednesday following months of legal wrangling.
A briefing on parts of the plan, seen by the Guardian, repeats the heavy focus on the steps that can be taken to help councils improve air quality in specific areas where emissions have breached EU thresholds.
Measures to be urgently brought in by local authorities that have repeatedly breached EU rules include retrofitting buses and other public transport, changing road layouts and altering features such as roundabouts and speed humps.
Reprogramming traffic lights will also be included in local plans, with councils being given £255m to accelerate their efforts. Local emissions hotspots will be required to layout their plans by March 2018 and finalise them by the end of the year. A targeted scrappage scheme is also expected to be included.
Some want the countrywide initiative to follow in the footsteps of London, which is introducing a £10 toxic “T-charge” that will be levied on up to 10,000 of the oldest, most polluting vehicles every weekday.
Sources insisted that while the idea of charges were on the table, there was no plan to force councils to introduce them, and that other measures would be exhausted first.
They hope the centrepiece of Wednesday’s strategywill be the plan to ban diesel and petrol sales completely by 2040, in line with Emmanuel Macron’s efforts across the Channel.
The French president took the steps to help his country meet its targets under the Paris climate accord, in an announcement that came a day after Volvo said it would only make fully electric or hybrid cars from 2019 onwards.
That decision was hailed as the beginning of the end for the internal combustion engine’s dominance of motor transport after more than a century.
Prof David Bailey, an automotive industry expert at Aston University, said: “The timescale involved here is sufficiently long-term to be taken seriously. If enacted it would send a very clear signal to manufacturers and consumers of the direction of travel and may accelerate a transition to electric cars.”
Britain’s air quality package also includes £1bn in ultra-low emissions vehicles including investing nearly £100m in the UK’s charging infrastructure and funding the ”plug-in car” and “plug-in grant” schemes.
There will also be £290m for the national productivity investment fund, which will go towards the retrofitting, and money towards low-emission taxis.
The report will also include an air quality grant for councils, a green bus fund for low carbon vehicles, £1.2bn for cycling and walking and £100m to help air quality on the roads.
The strategy comes amid warnings that the UK’s high level of air pollution could be be responsible for 40,000 premature deaths a year.
A judge had said the government’s original plans on tackling the issue, which included five clean air zones, were so poor as to be unlawful. The government was asked to present a new draft policy to tackle air pollution from diesel traffic before the election.
It was then called to court to explain why it had made a last-minute application to delay publication of its draft policy until after the election.
James Eadie QC, representing the government, said the policy was ready to be published but it would be controversial and should therefore be withheld until after the election.
“If you publish a draft plan, it drops all the issues of controversy into the election … like dropping a controversial bomb,” he said, adding that it could risk breaching rules about civil service neutrality and lead to the policy being labelled a Tory plan.
However, judges said the government did have to publish a draft plan with the final version needed by the end of July.
May’s draft contained few concrete proposals and did not specify the cities and towns where polluting vehicles might face charges, the level of any charges or the scope or value of any scrappage scheme.
Instead, the plan put the onus for action on local authorities: “Local authorities are already responsible for improving air quality in their area, but will now be expected to develop new and creative solutions to reduce emissions as quickly as possible, while avoiding undue impact on the motorist.”
Analysis in the documents showed increasing the number of CAZs from the current six planned to 27 would make by far the greatest impact in cutting pollution and provide cost benefits of over £1bn. The CAZ policy would cut more than 1,000 times more NO2 than a scrappage scheme, even if that scheme required old diesels to be replaced by electric cars.
But it required local authorities to exhaust all other options before introducing CAZ charging for diesel vehicles, such as removing speed bumps and retrofitting buses.
The coalition government had already set out a vision for almost every car and van to be ultra-low emission by 2050 – a move which the government acknowledged would require “almost all new cars and vans sold to be near-zero emission at the tailpipe by 2040”. So it is unclear to what extent the new pledge will further boost Britain’s ability to achieve air quality requirements.
ClientEarth, the campaign group that has successfully pursued the government through the courts over the UK’s air pollution crisis, gave a cautious welcome to the announcement but said ministers must take immediate action to tackle the UK’s air pollution crisis.
“The government has trumpeted some promising measures with its air quality plans, but we need to see the detail,” said CEO James Thornton. “A clear policy to move people towards cleaner vehicles by banning the sale of petrol and diesel cars and vans after 2040 is welcome, as is more funding for local authorities.
“However, the law says ministers must bring down illegal levels of air pollution as soon as possible, so any measures announced in this plan must be focused on doing that.”
The mayor of London, Sadiq Khan, has been calling for tougher measures to tackle air pollution, which kills 9,000 people a year in the capital.
A City Hall source was sceptical about the government’s announcement. “We need to look at the full details but what Londoners suffering from the terrible health impacts of air pollution desperately need is a fully-funded diesel scrappage fund – and they need it right now.”
Areeba Hamid, clean air campaigner at Greenpeace, said: “The high court was clear that the government must bring down toxic air pollution in the UK in the shortest possible time. This plan is still miles away from that.
“The government cannot shy away any longer from the issue of diesel cars clogging up and polluting our cities, and must now provide real solutions, not just gimmicks. That means proper clean air zones and funding to support local authorities to tackle illegal and unsafe pollution.”
By Anushka Asthana and Matthew Taylor
(qlmbusinessnews.com via independent.co.uk – – Tue, 25 July 2017) London, Uk – –
Ground rents on flats could also be cut to zero under proposals tobe outlined by communities secretary Sajid Javid
Builders are to be banned by the government from selling houses as leasehold in England and ground rents on flats could be cut to zero following widespread outrage over exploitative contracts.
In a blow for major housebuilders such as Taylor Wimpey and Persimmon, the communities secretary, Sajid Javid, will on Tuesday set out plans to “ban new-build houses being sold as leasehold as well as restricting ground rents to as low as zero”.
Flats can be continued to be sold as leasehold, but ground rents will be restricted to a “peppercorn” level and therefore be of little financial value to speculative buyers. The ban is expected to come into force after an eight-week consultation period.
The ban, while welcomed by campaigners, leaves the position of existing leasehold homeowners unclear. The DCLG is expected to consult on what it can do to support existing leaseholders with onerous charges, which could include tackling unreasonable rises – such as rents doubling every 10 years – and giving more powers to householders to fight unfair charges.
“Under government plans, [ground rents] could be reduced so that they relate to real costs incurred, and are fair and transparent to the consumer,” said the DCLG.
Tens of thousands of homebuyers have been caught in spiralling ground rents, which have in some cases left homes virtually unsaleable. Javid cited one family home that is now unsaleable because the ground rent is expected to hit £10,000 a year by 2060.
A Guardian Money campaign has over the past nine months highlighted reports of buyers trapped in properties valued at zero just six years after being built, £2,500 fees demanded by freeholders for permission to build an extension, and quotes of £35,000 to buy freeholds on detached houses only just a few years old.
Javid said: “It’s clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiralling ground rents.
“Enough is enough. These practices are unjust, unnecessary and need to stop. Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future.”
Javid told BBC Radio 4’s Today programme that ground rent had been used by some housebuilders “as an unjustifiable way to print money”.
He said building firms should do more to compensate those affected by such problems: “If they are responsible, if they want to keep their business in the future, if they want to show that they really care about their customers, they should be seeing what they should do to right some of the wrongs of the past.”
However, Javid said there were not as yet any definite government plans to compel builders to take action to assist those already affected.
“It’s an eight-week period of consultation to look at what action can be taken,” he said.
“I don’t profess that I’ve got all the answers on this. I’ve identified a problem, we’ve come up with some potential solutions. We don’t pretend they’re easy, there are are complex matters here.”
New legislation will close legal loopholes to protect buyers, some of whom have faced repossession orders after failing to keep up with the ground rent. The government will also change the rules on help-to-buy equity loans so that the scheme “can only be used to support new build houses on acceptable terms”.
Sebastian O’Kelly, whose Leasehold Knowledge Partnership has been the sharpest critic of abusive practices, welcomed the ban. He said: “Leasehold houses are an absolute racket: a means by which developers have managed to turn ordinary people’s homes into long-term investment vehicles for shadowy investors, often based offshore. In short, plc housebuilders have been systematically cheating their own customers.”
The practice of selling houses as leasehold has been particularly prominent in the north-west of England.
DCLG statistics estimate there were 4m residential leasehold dwellings in England in the private sector in 2014-15 and of these 1.2m were leasehold houses.
Justin Madders, Labour MP for Ellesmere Port and Neston, who has many constituents suffering from leasehold problems, said: “What has occurred in this sector should be regarded as a national scandal. Therefore, once we have taken action to drive out these rotten practices, the ultimate aim must be to hold to account the men and women who must have known that creating this second lucrative income stream for developers would ultimately be at the cost of their customers.”
Jo Darbyshire, whose Taylor Wimpey-built house has a clause where the ground rent doubles every 10 years and is part of the National Leasehold Campaign group on Facebook, said the ban was “fabulous news”.
“It’s great that others won’t be stuck in the nightmare we have been in,” she said. “But what are they really going to do for people in our position? There now needs to be a national review, like the review of endowment misselling, to review every case and put people back into the position they would have been without these onerous clauses.”
Earlier this year, Taylor Wimpey agreed a £130m deal to help distressed leasehold buyers. At the time, it said that the contracts where ground rents double every 10 years were legal but “not consistent with our high standards of customer service and we are sorry for the unintended financial consequence and concern that they are causing”.
By Patrick Collinson and Peter Walker
(qlmbusinessnews.com via bbc.co.uk – – Mon, 24 July 2017) London, Uk – –
The UK is to hold its first talks with the US to try to sketch out the details of a potential post-Brexit trade deal.
International Trade Secretary Liam Fox will spend two days in Washington with US counterpart Robert Lighthizer.
EU rules mean the UK cannot sign a trade deal until it has left the bloc.
EU rules mean the UK cannot sign a trade deal until it has left the bloc.
Mr Fox said it was too early to say exactly what would be covered in a potential deal. Firms and trade unions have both warned of the risks of trying to secure an agreement too quickly.
The Department for International Trade said discussions were expected to focus on “providing certainty, continuity and increasing confidence for UK and US businesses as the UK leaves the EU”.
Mr Fox added: “The [UK-US trade and investment] working group is the means to ensure we get to know each other’s issues and identify areas where we can work together to strengthen trade and investment ties.”
‘Small practical things’
The British Chambers of Commerce (BCC) director general Adam Marshall said the US’s experience at such negotiations would make it difficult for the UK to secure a good deal.
“We’re just getting back into the game of doing this sort of thing after 40 years of doing it via the EU,” he told the BBC’s Today programme.
“So I think early on in the process, it would be concerning if the UK were to go up against the US on a complex and difficult negotiation.”
Mr Marshall said while the BCC’s business group’s members would welcome the US and the UK talking about how to increase trade between them, the focus should be on improving “small practical things” such as custom procedures rather than a comprehensive trade deal.
Trade unions the TUC and Unite have also expressed disquiet over a rushed US trade deal.
“Ministers should be focused on getting the best possible deal with the EU, rather than leaping into bed with
Donald Trump,” TUC boss Frances O’Grady told the Guardian.
US President Donald Trump and UK PM Theresa May at the G20
But independent economist Michael Hughes told the BBC’s World Business Report that talking to the US at this stage was important.
“To have some preliminary ideas and get some basic principles out is a sensible thing to do,” he said.
He said currently talks were expected to focus on financial services and farming.
“In both cases it is likely that the UK would have to water down some of the standards it currently has, either in terms of genetically modified food or in terms of regulation of financial services firms operating in the UK, in order to get a deal, so it’s a delicate one,” he added.
Earlier this month, US President Donald Trump said he expected a “powerful” trade deal with the UK to be completed “very quickly”.
At the time, a UK government official said Mr Trump and UK Prime Minister Theresa May had agreed to prioritise work on a post-Brexit trade deal.
Trade between the two countries is already worth over $200bn (£150bn) a year
In 2015, US exports of goods and services to the UK were $123.5bn, up by 4% from 2014, according to the Bureau of Economic Analysis
The US is the single biggest source of inward investment into the UK
Together the UK and US have around $1 trillion invested in each other’s economies
The trading relationship between the UK and the US supports over a millions jobs in both countries
QLM Business News Digital Media Channel for offering the latest business news as well as market analyses. Thanks to the fast-paced life people lead, most busy business people prefer to browse the Net on the go in order to keep up with the latest business news.
Both the US and the UK are to have a slower economic growth than previously predicted according to the International Monetary Fund.
The IMF shaved its forecasts for U.S. growth to 2.1 percent for 2017 and 2018, slightly down from projections of 2.3 percent and 2.5 percent, respectively, just three months ago. The Fund reversed previous assumptions that the Trump administration’s planned stimulus measures would boost U.S. growth, largely because no details have materialised.
(qlmbusinessnews.com via telegraph.co.uk – – Fri, 21 July 2017) London, Uk – –
Jaguar Land Rover has opened its first engine plant outside the UK, picking China for the new facility.
The company already has a joint venture in the country with Chery, and the car maker said the new facility was part of a 10.9bn yuan (£1.2bn) investment partnership with the domestic firm.
“The new engine plant demonstrates JLR’s long-term commitment to the Chinese market, providing customers with an exciting range of vehicles and powertrain options, as well as to its joint venture,” the company said in a statement.
JLR’s Ingenium 2-litre, four-cylinder petrol engine will be produced at the new factory in Changshu.
Opening the new plant comes a week after Jaguar launched its new E-Pace small SUV, which is expected to be the company’s biggest seller when it hits the roads at the end of the year.
Already Britain’s biggest car maker, with more than 500,000 cars rolling off its UK production lines last year, the E-Pace is expected to drive JLR closer to its target of producing 1m cars a year.
A smaller, all-electric SUV, the I-Pace, will follow next year, allowing JLR to accelerate its progress towards that target.
The E-Pace will be a first for the company in that unlike others cars in its range none of it will be produced in Britain. Although JLR has plants in China and Brazil and is building another in Slovakia, at the moment at least part of the production of all models is in the UK.
At the E-Pace’s glitzy launch, when the car performed a record-breaking barrel-roll stunt, JLR revealed that the small SUV would be built by contract manufacturer Magna Steyr in Austria, with the car later being produced in China.
JLR is racing to open new factories to meet demand for its premium vehicles, as its plants in the Midlands are all at maximum capacity.
With Britain preparing to leave the EU, the car industry also fears that it could be hit with huge cost increases in the form of import and export tariffs if the UK cannot secure a free trade deal. Building more plants and expanding production inside the EU would help reduce the impact of such measures.
By Alan Tovey
Britain is to get a new ten pound bank note made of plastic and with the face of a famous woman on the back of it, the novelist Jane Austen.
The Bank of England’s governor presented the new tenner in Winchester cathedral where she was buried exactly two hundred years ago.
(qlmbusinessnews.com via independent.co.uk – – Tue, 18 July 2017) London, Uk – –
The practice of late payments is slamming small and medium-sized businesses across the UK with a hefty bill of more than £2bn ever year, new research reveals.
According to figures released by Bacs Payment Schemes, small to medium sized enterprises, or SMEs, are owed a total of £14bn by customers. While that’s an overall improvement on the £30.3bn figure from five years ago, it’s still hobbling their performance.
Despite the drop in late payment debt, over a third of the 1.7 million SMEs across the country say payments are often prolonged way beyond agreed terms and The impact of late payments can often be devastating; one in five small businesses say that they face being driven into bankruptcy if they are owed between £20,000 and £50,000. Some 7 per cent of businesses say they are already in that danger zone.
Bank overdrafts are an increasingly common resource; almost a quarter of small businesses say they rely on borrowed cash to keep up with essential overheads.
The research done by Bacs also shows that 16 per cent of SMEs struggle to pay staff on time, that the majority of companies spend almost four hours a week chasing late payments, and that 12 per cent employ a specific role dedicated to pursuing outstanding payments.
Almost a third of companies face delays of at least a month beyond their terms and nearly 20 per cent are having to wait more than 60 days before being paid.
SMEs are already facing an uncertain future as a result of Brexit and what the UK’s split from the EU might mean for tariffs, regulation and their ability to employ staff from overseas.
Earlier this month, a survey of more than 1,000 investors, conducted by peer-to-peer trading platform Asset Match showed that 60 per cent were not confident the Government would help SMEs grow after Brexit.
A total of 62 per cent said they felt the Government was favouring “new-age sectors” like fintech, over traditional industries such as construction and manufacturing.
Figures published by The Federation of Small Businesses last month showed a drop in confidence among members for the first time since the aftermath of the referendum.
FSB national chairman Mike Cherry said at the time that small companies were “still reeling” from April’s business rates hike, and an accompanying note said that labour costs and the tax burden were common concerns.
Operating costs for small businesses are now at their highest in four years, according to the FSB.
By Shafi Musaddique
(qlmbusinessnews.com via theguardian.com – – Mon, 17 July 2017) London, Uk – –
Contracts announced as transport secretary prepares to unveil changes to final Manchester and Leeds routes
The government has awarded £6.6bn in contracts to build the new high-speed railway between London and Birmingham, to companies including crisis-ridden construction firm Carillion.
Construction work is due to begin in earnest next year on new stations, tunnels, embankments and viaducts on the London to Birmingham line, which forms the first phase of the controversial HS2 project.
The major infrastructure project is expected to create 16,000 jobs, with the first trains due to run between London and Birmingham in 2026.
Chris Grayling, the transport secretary, is due to update MPs later on Monday on phase 2b of the HS2 route between Crewe and Manchester and from the West Midlands to Leeds.
The TUC welcomed the contract awards as a “shot in the arm for Brexit Britain”. The union’s deputy general secretary, Paul Nowak, said: “It will provide thousands of decent jobs, billions in investment, and help close the north-south divide. HS2 is a real opportunity for British steel to shine. The next phase of HS2 should bring jobs and investment to the parts of Britain that need them most.”
The TUC has signed a framework agreement to guarantee high employment standards and to “maximise the potential benefits of HS2 to the UK supply chain”.
Grayling is expected to confirm changes to the final route for the Y-shaped second phase, including alterations to the original proposed route around Sheffield.
Plans for a dedicated HS2 station at the city’s Meadowhall shopping centre were opposed by city councillors, and it is expected that the line will follow the M18, with a slow rail spur into the city centre – despite the objections of concerned residents and local MPs, including Ed Miliband.
Critics have warned this will mean homes on the new Shimmer housing estate in nearby Mexborough being bulldozed. Some residents found out about the HS2 plans just weeks after moving into the development of two- and three-storey townhouses.
Grayling will also publish a bill to prioritise phase 2a of HS2, which involves speeding up construction work between Birmingham and Crewe.
Opponents of the high-speed rail scheme claim the government is drastically underestimating the true cost, and that construction has already been delayed. The overall budget was revised up to £55.7bn, but estimates drawn up earlier this year on behalf of Lord Berkeley, chairman of the Rail Freight Group, who had argued at select committees for alternative routes for HS2 out of London, suggested it could be as high as £111bn.
Grayling told BBC Radio 4’s Today programme that HS2 would be “on time, on budget” and insisted the government had “a clear idea of what it will cost”.
He rejected a Sunday Times report that it would be the most expensive railway in the world with a total cost of more than £100bn, according to calculations by Michael Byng, a quantity surveyor. Grayling dismissed the figure as “nonsense”.
Asked about the decision to spend on infrastructure while there is a 1% cap on public sector pay, Grayling said: “That’s a very different issue because we are talking about capital investment over the next 15 years. We are not talking about current spending that the chancellor will decide on come the budget.”
Carillion’s joint venture with French construction company Eiffage and UK firm Kier has won two contracts worth £1.4bn to design and build the North Portal Chiltern tunnels to Brackley and the Brackley to Long Itchington Wood Green tunnel South Portal.
The troubled construction company’s share price crashed 70% last week after it issued a profit warning and announced the departure of its chief executive. However, Carillion shares were up more than 15% on Monday after the HS2 contract win. The firm announced it had appointed accountancy firm EY to support a strategic review of the business.
Balfour Beatty’s joint venture with French firm Vinci has won two contracts worth £2.5bn. They will design and build the Long Itchington Wood Green tunnel to the Delta Junction/Birmingham Spur and the section from the Delta Junction to the west coast main line near Lichfield in Staffordshire. Vinci has been involved in the high-speed Tours-Bordeaux rail project in France.
The Balfour Beatty chief executive, Leo Quinn, described HS2 as a “generational engineering project”.
A joint venture between Sweden-based Skanska, Austria’s Strabag and UK firm Costain, which has worked on Crossrail and the Channel tunnel, won contracts worth nearly £2bn.
Other companies to have won HS2 work are French construction group Bouygues and UK firms Sir Robert McAlpine and VolkerFitzpatrick. Their venture was awarded a £965m contract.
HS2 phase 1 construction contracts
S1: Euston tunnels and approaches – SCS JV (Skanska Construction UK, Costain, Strabag)
S2: Northolt tunnels – SCS JV (Skanska Construction UK, Costain, Strabag)
C1: Chiltern tunnels and Colne Valley viaduct – Align JV (Bouygues Travaux Publics, VolkerFitzpatrick, Sir Robert McAlpine)
C2: North Portal Chiltern tunnels to Brackley – CEK JV (Carillion Construction, Eiffage Génie Civil, Kier Infrastructure and Overseas)
C3: Brackley to South Portal of Long Itchington Wood Green tunnel – CEK JV (Carillion Construction, Eiffage Génie Civil, Kier Infrastructure and Overseas)
N1: Long Itchington Wood Green tunnel to Delta Junction and Birmingham Spur – BBV JV (Balfour Beatty Group, Vinci Construction Grands Projets, Vinci Construction UK, Vinci Construction Terrassement)
N2: Delta Junction to WCML Tie-In – BBV JV (Balfour Beatty Group, Vinci Construction Grands Projets, Vinci Construction UK, Vinci Construction Terrassement)
By Julia Kollewe and Gwyn Topham
(qlmbusinessnews.com via theguardian.com – – Mon, 10 July 2017) London, Uk – –
Dearer imported ingredients such as Spanish juice, French butter and Danish bacon will raise the price of a family breakfast by £3, says KPMG
Shoppers would be forced to pay £3 more for a traditional British fry-up if the government fails to secure a trade deal with the EU, piling more pressure on already cash-strapped consumers.
A typical basket of ingredients for a family breakfast could rise by almost 13% from £23.59 to £26.61 according to a report by KPMG.
The accountancy firm warned households would face above-inflation price rises for imported breakfast classics such as olive oil, bacon and orange juice if Britain left the EU without a deal and defaulted to the World Trade Organisation’s (WTO) customs rules.
It estimated that a 79p litre of orange juice from Spain and bottled in Ireland would rise to 93p, and a 300g pack of Danish bacon would increase from £2 to £2.18. In other examples a litre of Italian olive oil would jump from £3.60 to £4.68.
A 500g pack of French butter would rise by a quarter to £4.08. Butter prices are already at an all-time high, up 20% over the past 12 months, as farmers and dairies struggle to cope with demand.
Consumer budgets are under mounting pressure as the sharp fall in sterling’s valuesince the Brexit vote last year pushes up the prices of goods imported from abroad and drives shop prices higher. The pound is currently trading at about $1.29, 13% lower than it was on the day of the June 2016 referendum.
As a result, inflation has risen rapidly, from 0.3% in May last year to a four-year high of 2.9% in May this year. Meanwhile wage growth is weak, intensifying the squeeze on household finances.
“WTO tariffs could have a significant impact on both consumers and retailers alike – totting up consumer price tags and further squeezing retail margins,” said Bob Jones, director at the accountancy firm. “It’s important to remember that our analysis does not even reflect the steep costs consumers and retailers are already facing as a result of the pound sterling’s devaluation or the costs of any new non-tariff barriers.”
KPMG said that if no deal was struck on or before March 2019, two years after the UK triggered article 50, imported food and drink items would be among those hardest hit by increased tariffs.
“If the UK leaves the EU without a trade deal or transitional agreement, we can expect both higher prices and a huge spike in red tape at the borders,” Jones said.
“The top priority for businesses is to fully understand their own supply chains: the volumes and values of the goods they ship back and forth and which countries they’re importing to and from.”
KPMG made the calculations by taking the cost of mid-range ingredients of a fry-up from a UK supermarket and applying the current EU external customs tariffs to each product. It also took into account the grocer’s price mark-up.
Milk, free range eggs and sliced white bread were all sourced from the UK in the analysis, and were therefore free from additional tariffs.
Paul Martin, UK head of retail at KPMG, said that while supermarkets had so far avoided fully passing on higher prices to customers, this would change if the UK leaves the EU without a deal.
“The British consumer has become accustomed to seasonal produce all year round and has binged on a diet of discounts for some time.
“Shoppers could be forgiven for overlooking the significant impact customs will have on the prices they pay at the till. However, against a backdrop of increasingly squeezed margins, it is unlikely retailers will be able to hold the flood on higher costs indefinitely.”
Last week Michel Barnier, the EU’s chief Brexit negotiator, said Britain has more to lose than the EU if it walked away without a deal.
“In practice, ‘no deal’ would worsen the ‘lose-lose’ situation which is bound to result from Brexit. And the UK would have more to lose than its partners,” Barnier said.
By Angela Monaghan
(qlmbusinessnews.com via bloomberg.com — Wed, 5 July 2017) London, Uk —
Ten years since the Bank of England last raised interest rates, policy makers are warning Britons to prepare for the next one.
“Our foot is pretty much on the floor with the accelerator,” Michael Saunders, a member of the rate-setting Monetary Policy Committee, told The Guardian in an interview published late on Tuesday. “Households should prepare for interest rates to go higher at some point.”
The comments came on the same day that the central bank told lenders to prove they’re not underestimating the risks of rapidly growing consumer credit given the current “benign economic environment.” With BOE interest rates at a record low, shoppers have borrowed and run down the rate at which they save to fuel spending and prop up the economy since the Brexit vote, with many first-time borrowers never having experienced an increase in official borrowing costs.
Governor Mark Carney said last week that “some removal of monetary stimulus is likely to become necessary,” tweaking his previous remark that it’s not yet time to start making that adjustment.
“I don’t think the economy needs as much stimulus” as it currently has, said Saunders, who voted for tighter policy in June. “But if rates do go up, it will be in the context of the economy doing OK and unemployment being low and probably falling.”
Members of the MPC are weighing up the risks of faster inflation against the need to support growth ahead of their next announcement on Aug. 3. They have publicly split in recent weeks, with three of eight officials in June dissenting for tighter policy and a fourth subsequently suggesting he might follow suit.
One risk of raising rates too soon is that highly indebted households curtail their spending, putting the brakes on an expansion not getting enough of a boost from exports. However, officials have also warned about the potential threats posed by leaving policy too loose for too long, which include losing control of inflation expectations and fueling consumer credit.
“To me this is the time when you don’t take the punch bowl away fully but you just start to edge it away,” Saunders said. “The risk that you run with maximum stimulus is that the jobless rate keeps falling then at some point if pay growth picks up you have to reverse course very sharply. It would then be much harder for tightening to be limited and gradual.”
The BOE, which kept its benchmark interest rate at 0.25 percent in June, last increased borrowing costs 10 years ago on Wednesday — to 5.75 percent. Policy makers subsequently cut rates in response to the financial crisis, recession and the threat of deflation.
A report showing services growth slowed in June indicated that the U.K. recovery may still be uneven as the government starts talks to leave the European Union. IHS Markit said that while GDP growth probably improved to 0.4 percent in the second quarter, it is likely to cool again in the three months through September.
The BOE isn’t alone in contemplating lifting policy from emergency levels. The U.S. Federal Reserve starting increasing rates in December 2015. Investors see Canada raising rates next week for the first time since 2010, and European Central Bank officials have started talking about how to signal winding down stimulus.
In the U.K., Saunders and Ian McCafferty have called for tighter policy, while Chief Economist Andy Haldane has said he’s considering it. On the other side of the debate, BOE official Jon Cunliffe said last week that officials have time to see how domestic inflation pressures evolve before they need to act, while his colleague Ben Broadbent has not made his stance public since voting to keep policy unchanged at last month’s meeting.
The balance for the August decision is difficult to predict, not least because the rate-setting panel may have two new voters without a track record. Kristin Forbes, the leading advocate of higher rates, is being replaced by economics professor Silvana Tenreyro. A successor for former deputy governor Charlotte Hogg is also due to be appointed to the nine-member MPC.
By Scott Hamilton
(qlmbusinessnews.com via uk.finance.yahoo.com — Mon, 3 July 2017) London, Uk —
The hospitality industry’s stellar growth since the financial crisis could be halted and start to fall by 2021 if the Government continues to overlook it, a new report has suggested.
Research by Ignite Economics, carried out for the British Hospitality Association, has predicted the sector’s workforce could begin to drop by 2021 with the contribution it makes to the economy also falling as cost pressures from wages and business rates bite alongside a potential labour squeeze once the UK leaves the EU.
The report’s least optimistic ‘bear case’ scenario suggests a 1pc fall in the number of people directly employed in the sector compared to 2016 to 3.17m, with the economic contribution the sector makes also starting to fall from its current level of £73bn.
While the estimated drop is small, any weakness in the industry would be a concern given it employs almost 10pc of the entire UK workforce and has grown its contribution to the economy faster than any other sector since the economic crisis.
“The hospitality sector has been largely overlooked by successive Governments, and was notable in its absence in party manifestos ahead of the General Election, as well as its absence from the Government’s Industrial Strategy,” the report said.
Ufi Ibrahim, the chief executive of the BHA, said hospitality’s growth outlook was “highly uncertain”.
“We need the Government to step up and support our industry by reducing tourism VAT, working with us to reduce the dependence on EU workers and increase the number of UK workers joining the hospitality industry, allowing the Low Pay Commission to set the National Living Wage and to bring forward a fundamental review of Business Rates,” Ms Ibrahim said.
The bear case in the report assumes the 65,000 jobs per annum that come from EU workers are no longer able to be filled and that labour productivity ceases to improve and stays at 2016 levels.
A far rosier scenario is also offered by the report, suggesting employment could grow by 15pc to 3.69m and that the sector’s economic contribution could rise 30pc compared to 2016 to £95bn. A base case predicts a 7pc growth in employment to hit 3.43m and a 22pc rise in the sector’s economic contribution compared to 2016 to £89bn.
Ed Birkin, founder of Ignite Economics, said it was “more important than ever” to promote industries with strong economic fundamentals such as the hospitality sector.
“However, there are a number of potential headwinds facing the sector, and the extent of these will determine whether the industry can continue to be a key driver of growth for the UK economy.”
By Bradley Gerrard
(qlmbusinessnews.com via ibtimes.co.uk – – Thu, 29 June 2017) London, Uk – –
Bank of England data shows mortgage approval rate hits highest level since March 2016 last month.
Britain’s mortgage lending and consumer borrowing accelerated past expectations last month, allaying fears consumers could be reining in spending as a result of the pay squeeze.
According to the Bank of England (BoE), the number of loans approved by banks and building societies edged slightly higher from April’s 65,051 to 65,202 last month, ahead of forecasts for a reading in the 64,000 region.
Net mortgage lending, meanwhile, recorded its largest increase since March 2016, rising by £3.53bn ($4.58bn) last month.
The figures come just a day after Nationwide reported the first increase in house prices in three months.
Meanwhile, consumer credit rose by £1.7bn, ahead of expectations for a slowdown to £1.4bn and higher than the £1.52bn figure recorded in April.
Growth in unsecured consumer borrowing rose 10.2% year-on-year in the three months to May, higher than from April’s 9.7% and the joint-highest reading since November.
While the unexpectedly positive data will prompt speculation the economic slowdown experienced in the first quarter might be a thing of the past, it also means households feeling the squeeze are dipping into their saving to continue spending.
“May’s UK money and credit figures provide another reason to think that the consumer slowdown shouldn’t be too severe,” said Ruth Gregory, UK economist at Capital Economics.
“This suggests that households remain confident enough to increase borrowing to help smooth consumption, in the face of the squeeze on their real incomes.
“Of course, this will do nothing to allay policymakers concerns about the recent rapid increases in unsecured lending and strengthens the case for the Financial Policy Committee to act to address this issue at its next meeting in September.”
Earlier this week, BoE Governor Mark Carney warned that consumer borrowing was rising at a much quicker rate than incomes, adding banks had loosened credit standards due to “intense competition”.
On Wednesday (28 June), Carney added over the coming months the Bank will begin discussing when to start raising interest rates, which have been at a historic low of 0.25% since August last year.
The BoE chief economist Andy Haldane hinted he might back a rate hike later this year, while deputy governor Sir Jon Cunliffe warned the bank would make mistake if it raised rates now.
“We do have to look at what’s happening to domestic inflation pressure, and I think that, on the data we have at the moment, gives us a bit of time to see how this evolves,” he said.
By Dan Cancian
(qlmbusinessnews.com via telegraph.co.uk – – Thu, 29 June 2017) London, Uk – –
Almost 20m Britons banked on smartphone apps last year as mobile transactions surged by 57pc, according to fresh data that underscores the technology revolution that has driven the decline in the traditional bank branch.
Some 38pc of the adult UK population used a banking app in 2016 as the number of people turning to their smartphones to manage their personal finances climbed by 11pc on the year to more than 19.6m, a report by the British Bankers’ Association (BBA) and accountancy giant EY has found.
The number of app transactions leapt by 57pc to 932m, equating to 30 each second, the BBA and EY said. Apps were mainly used to check account balances, but were also increasingly used to check statement entries, transfer money between accounts and pay bills
The report has been released on the eve of the disappearance of the 98-year-old BBA, which is becoming part of a new, bigger financial lobbying group called UK Finance.
The BBA — which was hit by the Libor rigging scandal because it was responsible for administering the benchmark rate — is coming together with the Council of Mortgage Lenders, UK Cards Association, Financial Fraud Action UK, Asset Based Finance Association, and Payments UK to form the new association.
The growing popularity of smartphone apps and online banking generally has transformed the personal finance landscape in the UK, forcing lenders to shake-up their business models.
Britain’s biggest banks have closed thousands of branches across the country in recent years to cope with falling footfall as more of their customers choose to bank over the internet.
“Customers’ appetite for using technology to manage their money on the move is showing no signs of abating, with banking apps now the principal means by which we access our current accounts,” said Eric Leenders, the BBA’s retail and commercial banking managing director.
“And this doesn’t appear to be a fad with more and more people moving beyond payments, increasingly using apps to access a broader range of banking services, such as savings, credit cards, mortgage and investment accounts.”
By Ben Martin