UK Shoppers Faced With Rising Prices Switching to Cheaper Products

(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

QLM Business News and Market Analyses Now Available Digitally

 

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.

www.qlmbusinessnews.com

Theresa May will fail to deliver EU trade deal in 2019, OECD predicts

Brexit talks
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Theresa May will fail to secure a comprehensive free trade agreement with the rest of the EU by 2019 in a development that would mean a destructive “cliff-edge” Brexit for the UK, the OECD has predicted.

In its latest Global Economic Outlook report, the Paris-based multilateral economic organisation has upgraded its 2017 GDP growth forecast for the UK to 1.6 per cent, up from 1.2 per cent last November.

But it is still anticipating a sharp slowdown in UK growth to just 1 per cent in 2018.

“This projection critically assumes that ‘most favoured nation’ treatment will govern UK trade after the United Kingdom leaves the European Union in 2019,” the OECD says, referencing a description of the way that countries must trade with each other under minimal World Trade Organisation rules.

In her Lancaster House speech in January, Theresa May said that she wanted to conclude a “a new, comprehensive, bold and ambitious free trade agreement” with the rest of the EU.

The Prime Minister also signalled her willingness to agree a “transitional” deal post 2019, which would allow trade to carry on unimpeded while such an overarching free trade agreement was concluded.

But she also warned that “no deal is better than a bad deal”, implying that she could also walk away from the negotiating deal and that the UK could crash out of the EU’s single market and customs union with no new agreement in place.

That latter threat was also contained in the Conservative manifesto.
The WTO outcome would imply, among many other things, 10 per cent tariffs on UK car exports to the EU, tight quotas on agricultural exports and an abrupt end to the right of UK financial firms to operate in Europe.

The OECD’s baseline assumption is that this is what materialises – and also that the UK has no other new free trade deals with other non-EU countries in place by 2019.

It said that the channels through which this would likely adversely impact the UK economy next year were through weaker household consumption, confidence and investment.

“The major risk for the economy is the uncertainty surrounding the exit process from the European Union. Higher uncertainty could hamper domestic and foreign investment more than projected,” the OECD writes.

Catherine Mann, the OECD’s chief economist, told The Independent that it was sticking with the same WTO Brexit outcome it used in previous UK forecasts made since last June’s referendum.

“Discussions regarding the nature of trade modalities, the time table for any deal, as well as interim agreements are on-going between the UK and the EU. We continue with the same assumption of WTO ‘Most Favoured Nation’ basis, as in our previous projections.” she said.

The overwhelming majority of economists expect that a cliff-edge Brexit would be highly damaging for the UK economy.

Researchers from the London School of Economics estimate that it would cost 2.6 per cent of GDP by 2020, rising to 9.5 per cent by 2030.

The one detailed study that argues trading on WTO rules post 2019 would boost the UK economy has been severely criticised as methodologically flawed and making wildly implausible assumptions.

Business groups have warned loudly about the catastrophic impact of a “no deal” Brexit, with the CBI president Paul Dreschler saying it would “open Pandora’s box” for firms.

In its latest report, the OECD also argues that Britain needs a major increase in infrastructure spending, something more in line with Labour’s manifesto pledges than the Conservatives’.

“Higher investment in transport infrastructure, in particular in less productive regions, would improve connectivity and the diffusion of knowledge,” the OECD says.

Labour’s manifesto also promises a free trade agreement with the EU and explicitly rejects “no deal” as a viable option.

The UK’s GDP growth slowed to just 0.2 per cent in the first quarter of 2017, well down from the 0.7 per cent expansion in the final quarter of 2016.

This was the joint slowest quarterly expansion of any G7 country, alongside Italy, although growth is expected to pick up somewhat in the following quarter.

Responding to the OECD report Vince Cable, the Liberal Democrat shadow Chancellor, said: “Voters should listen to this eve of poll warning on the major economic risk posed by Theresa May’s reckless approach to Brexit.”

“The hardline approach [she] has taken, insisting that no deal is better than a bad deal and planning to take us out of the single market, will seriously damage opportunities and jobs for years to come. The Liberal Democrats will fight to keep Britain in the single market and customs union, and to ensure the people have the final say on the Brexit deal.”

Bu Ben Chu

RBS adjourned investors case in 11th-hour bid to settle

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(qlmbusinessnews.com via uk.reuters.com — Mon, 22 May, 2017) London, UK —

Royal Bank of Scotland (RBS) (RBS.L) pursued last-minute settlement talks with a group of investors on Monday to avoid a potentially embarrassing trial over allegations the lender misled them about a 2008 capital increase.

A successful settlement would save former RBS Chief Executive Fred Goodwin from facing scrutiny in the courts over his decision-making and leadership at the time the lender almost collapsed.

RBS has doubled its offer to the remaining claimants as it seeks to settle the case, two people close to the matter told Reuters on Monday.

The civil trial brought by thousands of RBS investors was due to open at the High Court in London on Monday but was adjourned for a day to allow the settlement talks to continue.

The plaintiffs allege former executives gave a misleading picture of the bank’s financial health ahead of a 12 billion pound ($15.5 billion) cash call in 2008. Months after the cash call, RBS had to be rescued by the government with a 45.8 billion pound bailout.

RBS, which remains more than 70 percent state-owned, denies any wrongdoing over the 2008 rights issue and says its former bosses did not act illegally.

Jonathan Nash, a lawyer representing the claimants, appealed in court for an adjournment saying the two parties were in settlement talks and wanted longer to strike a deal.

“We are involved in settlement discussions and we are hopeful of making progress,” Nash said.

The sources said RBS Chief Executive Ross McEwan was directly involved in talks over the weekend and that the bank had offered more than 80 pence for each RBS share held, though it was not clear if any investors have accepted the offer.

A settlement at that price would cost RBS “in the tens of millions of pounds”, a third source familiar with the matter said.

The bank has settled with 87 percent of the investors who originally brought the case but the others have so far rejected its offers and say they were determined to go to court.

By doubling the amount on offer, RBS is close to a sum the remaining investors would accept, one of the sources said, indicating that they might settle if RBS raises its offer to 100 pence per share.

That represents half of the 200 pence per share investors paid at the time of the rights issue.

The outstanding group represents about 9,000 retail shareholders and 20 institutional investors. The large investors include U.S. bank Wells Fargo (WFC.N), the Boeing (BA.N) pension fund, Bank of America Merrill Lynch (BAC.N) and local British council pension funds.

RBS declined to comment on the settlement offer.

By Andrew MacAskill and Lawrence White

Scottish Start-up Pave Way For Building New Roads

 

Engineer Toby McCartney explains how his Scottish start-up MacRebur is persuading councils to use local waste plastic to build roads. Two English councils have already started building roads this way. A smartphone film for BBC World Hacks by Dougal Shaw.

Mark Lack interviews Beate Chelette – CEO of The Women’s Code

 

Mark Lack interviews Beate Chelette – CEO and Founder of The Women’s Code, a revolutionary system to help women cope, collaborate and lead in their careers! Beate talks about why she decided to start this business and her aha moment! She tells the story about of reaching out to the President of the United States and how that led her to where she is today!

UK Retail Sales Increase to Highest in April Since mid-2015 – CBI

 

Tim Tabor/Flickr

(qlmbusinessnews.com via uk.reuters.com — Thur, 27 Apr 2017) London, UK —

British retailers reported the biggest increase in sales volumes since mid-2015 during April, according to an industry survey on Thursday that may help to allay fears of a worsening consumer-led slowdown.

The Confederation of British Industry’s monthly retail sales balance spiked to +38 from +9 in March, confounding expectations for a decline to +6 in a Reuters poll of economists.

The upbeat figure contrasted with official data that showed retail sales posted their biggest quarterly fall in seven years in the first quarter of 2017, reinforcing economists’ view that household spending, the main driver of the economy, is now slowing sharply.

The CBI said the strength during April was notable because the survey of 57 retailers did not cover the Easter holidays, one of the most important shopping periods of the year.

However, the CBI’s retail balance has been volatile from month to month recently.

“Retailers are still cautious over the outlook, expecting slower growth over the year to May, as higher inflation eats into household spending,” CBI economist Ben Jones said.

“With price competition remaining fierce and rising costs squeezing margins, retailers face mounting pressures in the months ahead.”

The CBI said retailers expected sales growth to slow next month, with the index falling back to +16.

By Andy Bruce

Lloyds Banking Group Re-pay UK Taxpayers £20.3bn in Fill

Elliott Brown/flickr.com

(qlmbusinessnews.com via bbc.co.uk – – Wed, 26 Apr, 2017) London, Uk – –
The £20.3bn spent bailing out Lloyds Banking Group during the financial crash has been repaid in full, UK chancellor Philip Hammond has said.
Nine years after the government bought 43.4% of Lloyds, the taxpayer has now got slightly more – £20.4bn – back.

The government began selling off its stake to investors in 2013, with the final 2% likely to be sold this year.

Earlier this week, Mr Hammond hinted that the 72% stake in Royal Bank of Scotland may be sold at a loss.

The vast bulk of the money returned to taxpayers has come from selling tranches of Lloyds shares, which began in September 2013 with the offloading of a £3.2bn stake.

However, the government has also received £400m in share dividends from Lloyds as the group returned to health.

In February, Lloyds reported its highest annual profit in a decade, helped by a reduction in payment protection insurance provisions.

‘Private sector’
Mr Hammond, speaking in Washington on Friday, said: “Recovering all of the money taxpayers injected into Lloyds marks a significant milestone in our plan to build an economy that works for everyone.

“While it was right to step in with support during the financial crisis, the government should not be in the business of owning banks in the long term.

“The right place for them is in the private sector and I’m pleased to be able to say we are approaching the point at which we will sell our final shares in Lloyds Bank.”

There were plans to sell off a large tranche of shares to the public rather than institutional investors, but this was scrapped last year, with then chancellor George Osborne blaming turmoil in global financial markets.

‘Elephant in the room’
Hargreaves Lansdown senior analyst Laith Khalaf said that although the share sell-off has taken far longer than expected, the remaining stake “can now be sold off as pure profit for the government”.

He added: “Of the UK banks, Lloyds has cleaned up its act fastest since the financial crisis.

“For the Treasury, the elephant in the room is, of course, RBS, which required twice as much financial support from the taxpayer as Lloyds.”
The bailout of RBS was worth 502p a share – or £45bn in total. On Friday, RBS shares were trading at about 239.8p.

Mr Hammond said on Wednesday that the government would return RBS to private hands “as soon as we can”, but this might be at a price below what was paid.

“We have to live in the real world,” he said.

By Russell Hotten

Business Rates Relief £300m Fund Put On Hold After Election

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(qlmbusinessnews.com via theguardian.com – – Tue, 25 Apr, 2017) London, Uk – –

The government appears to have performed a weekend U-turn on business rates and says a £300m relief fund to help small businesses worst hit by the shakeup is now available for councils to share out.

On Friday the Guardian was told by the Department for Communities and Local Government that although the consultation on how to distribute the money was complete it would require the approval of the new government – signalling a hiatus of several months until after the 8 June general election.

However, speaking in the House of Commons on Monday the communities secretary, Sajid Javid, insisted there would be “absolutely no delay because of the general election”. “It’s going ahead, exactly as planned. Councils are free to start using the scheme and helping local businesses.”

The business rates revaluation triggered a furious political row in February with the government coming under fire from its own MPs over the impact of the changes in their constituencies. Many of the affected businesses are in Conservative heartlands and the pressure saw the chancellor Philip Hammond announce a £435m relief package in the budget.

Half a million shopkeepers, pubs and restaurants saw their rates bills – the commercial equivalent of council tax – increase at the start of this month after a revaluation of property hit parts of the country where prices have surged.

For example, a property boom in the Suffolk coastal town of Southwold forced rateable values up by 152%, with some shop owners saying the resulting hike in their rates bill threatened the viability of their businesses.

Rachael Maskell, the Labour MP for York Central, described the situation created by the revaluation as “totally unfair” as although more small businesses were exempt from rates in her constituency others had seen their rateable value increase by 600%. “No one knows how the new relief funds will be distributed,” she said. “Total chaos.”

The DCLG website was updated over the weekend with the following statement added to the relevant homepage: “The government has considered the responses to the consultation on the scheme announced at spring budget 2017 for discretionary business rates relief and determined that final allocations to local authorities will be made according to the draft allocations published as part of the consultation.”

A DCLG spokeswoman confirmed the relief fund was now being rolled out. “Councils should establish their own schemes to distribute funds to local firms and can claim the funding from DCLG as soon as their schemes are up and running,” she said.

The revaluation, which is revenue neutral for the government, is supposed to make the system fairer by ensuring business rates reflect the property market with rates bills actually coming down in some parts of the country.

A revaluation is supposed to take place every five years but the previous review was controversially delayed by two years with high street campaigners accusing the government of postponing the process as it would be vote loser in Tory-held seats in the south-east ahead of the 2015 general election. The last revaluation, which came into effect in 2010, was based on rental values from 2008 which explains why some firms have seen a sharp rise in their bills.

Hammond’s relief package comprised the £300m discretionary fund, which is spread over four years, and a £1,000 discount on this year’s rates bill for pubs with a rateable value of less than £100,000.

It is now up to local councils, who receive funds quarterly, to decide the local businesses that need help. Local authorities have already been developing their schemes with London’s Haringey, for example, where the rates of most high street shops have increased by 20% to 30%, considering giving preference to small, medium and independent firms.

Mark Rigby, chief executive of business rent and rates specialists CVS, said it was important that councils acted quickly as businesses were already paying higher rates. “I would now urge councils across England to expedite the distribution of this relief to those firms hardest hit by the revaluation with business rates bills having already been sent out and the first tax instalment having been collected,” he said.

By Zoe Wood

Household Energy Bills Cap ‘will hit consumers’ : UK Energy Industry

(qlmbusinessnews.com via bbc.co.uk – – Mon, 24 Apr, 2017) London, Uk – – 

Plans by the Conservative Party for a cap on household energy bills will lead to fewer benefits for consumers, says one of the UK's biggest providers.
A cabinet minister said the Tories planned to intervene in the energy sector "to make markets work better".
But Scottish Power, one of the "Big Six" energy firms, told the BBC that the move would "stop competition" and "damage customers in the long run".
Shares in energy firms were hit by the proposed price cap.
British Gas owner Centrica fell about 5% and SSE was down more than 3% in early trading.
The energy industry has reacted with scepticism to the plan, saying it could lead to higher prices.
Labour said the proposal should be taken with "a pinch of salt", adding that energy bills had "soared" under a Conservative government.
'Dangerous' energy idea finds its time
Tories to promise cap on energy bills

Speaking to the BBC, Scottish Power's chief corporate officer, Keith Anderson, said: "If you put a cap on prices, you actually stop competition. That's the danger of price intervention."
When companies do not compete as much, that tends to lead to fewer benefits for customers, he said.
He added that if the Conservatives did intervene, it would be better to abolish standard variable tariffs.
About 800,000 of the poorest pensioners and 1.5 million low-income families with children are on standard variable tariffs, according to Citizens Advice.
These households are paying an average of £141 more a year for a dual-fuel gas and electricity bill than if they were on the cheapest deal, it said.
'Not working'
Defence Secretary Sir Michael Fallon defended the Conservative's intention to impose a cap on energy prices.
"We wanted to see more competition, we wanted to see more people able to switch between energy users," Sir Michael told the BBC.
"That over the last three or four years has not happened. This is a market that is not working perfectly and therefore we are intervening to make markets work better," he added.
Co-leader of the Green Party Jonathan Bartley said the policy did not go far enough and he wanted more local choices of supplier for consumers.
But trade association body Energy UK said a cap could risk "billions in investment and jobs".
British Gas parent firm Centrica and fellow supplier E.On have both said market competition is essential.
Price comparison site uSwitch.com said that previous interventions in the energy sector had led to lower switching rates and higher prices.

Tony Robbins’s Top 10 Rules For Success

 

In this Tony Robbins video, we’ll take a look back at some of the best footage of him out there, soaking up his advice to improve our lives and increase our success.

Anthony ‘Tony’ Robbins is an American motivational speaker, self-help author, philanthropist, and advisor to stars like Oprah, who became well known from his infomercials and self-help books.

He’s done interviews with big names like Wayne Dyer, Marie Forleo, and Frank Kern, and as of 2013, Forbes estimated his net worth at $480 million dollars.

He raises people’s standards in health, business, and relationships and is a big proponent of rituals that change our state.

MOT 4 years Wait for First Test Raises Safety Concerns

richard mullany/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 21 Apr, 2017) London, Uk – –

The motor industry is campaigning against changes to the car testing regime, highlighting safety risks that potential changes to the MoT system could cause.

Drivers would collectively save £100m a year under proposals being consulted on by the government to delay when a new car needs its first MoT test to check its roadworthiness from the current three years to four. The requirement for annual tests after that would remain.

Such a change would mean a financial hit to the industry in lost test fees, with about 2.5m cars taking their first test each year at a typical cost of about £45 for the checks which measure cars’ emissions levels, as well as safety and roadworthiness. Other revenue generated from replacement parts and labour would also be delayed.

Changing the first MoT would bring the UK into line with much of Europe – though the proposal is not related to EU regulations.

However, industry body the Society of Motor Manufacturers (SMMT) is calling for the government to give up on the change, citing safety concerns.

SMMT research found eight out of 10 drivers said the test fee is worth the peace of mind of knowing a car is safe and legal. Seven out of 10 raised concerns that delaying a car’s first MOT could put them and other road users in danger.

The results drove the trade group to call for a U-turn on the plans, a reversal it said was backed by eight out 10 drivers.

“MoTs are is an essential check on the safety and roadworthiness of vehicles,” said Mike Hawes, SMMT chief executive. “Extending the first test from three to four years is not what consumers or industry want given the serious risk posed to road safety and vehicles’ environmental performance.”

Almost one in five cars fail the checks when they take their first MoT, according to the SMMT, which calculates an extra 500,000 unsafe cars could be on UK roads if the change were to go through.

Keeping the requirement has not found such strong support from motorists’ organisation the AA.

Its research revealed that 44pc of members backed the change, 26pc were against it with the remainder ambivalent.

Modern cars are becoming much more reliable and safer said Luke Bosdet, from the AA’s policy unit, and this could mean that MoTs are not required so soon in a vehicle’s life.

“Cars now have the ability to ‘squawk’ and tell their drivers when there is a problem with the tyres of battery, as well as more fundamental mechanical models,” he said.

“This could be an opportunity for the car industry to extend the warranty on new cars to four years, with drivers getting protection from their car alerting them to problems which need to be fixed.”

By  Alan Tovey

The International Monetary Fund Raised Global Growth Forecast

 

The International Monetary Fund has raised its global growth forecast for this year but also warned protectionist policies could undermine a broad-based, but modest, recovery.

It credits improving manufacturing and trade in bigger economies for the 3.5 percent growth it now expects, up from January’s 3.4 percent forecast.

IMF chief economist Maurice Obstfeld said: “This improvement comes primarily from good economic news for Europe and Asia as well as our continuing expectation for higher grow.

Hackers Post Fake Deals on Amazon

 

Amazon third-party sellers, which account for more than half of the company’s sales, have been hit repeatedly by hackers who post fake deals on legitimate sellers’ pages. WSJ’s Laura Stevens explains the impact on consumers on Lunch Break with Tanya Rivero. Photo: Reuters

Business Clients Boosts Travelodge Turnaround in Profits

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(qlmbusinessnews.com via telegraph.co.uk – – Mon, 10 Apr, 2017) London, Uk – –

Business customers now make up more than half of sales at low-cost hotel chain Travelodge, helping the business outpace its competitors.

The company said it was the first time since its financial restructuring in 2012 that business travellers had represented such a strong proportion of sales and this contributed to the 2.5pc rise in revenue per available room – a key industry performance metric – to £39.34, compared with a 1.4pc rise by its main competitors.

Travelodge noted the growth rate in the UK hotel market was slower than the prior year with a weaker London market offset by better performance in the regions.

This pushed the level of occupancy in its hotels down slightly to 76.1pc from 76.6pc in 2015 but the average price it charges for its rooms rose 3.1pc to £51.70. This was thanks to the aforementioned business customers and the fact its overhauled website is leading to a larger number of customers booking a room once they visit the site.

The near 7pc rise in total group revenue to £597.8m was also fed by a 14pc uplift in food and drink sales. Management has been working to encourage more of its guests to stay on site and eat by upgrading its breakfast offer. It now has 160 hotels with on-site restaurants.

Tight cost control also meant operating profits rose nearly 5pc to £110.1m.

Peter Gowers, Travelodge chief executive, said the UK still had a lower number of low-cost hotels than other major international markets such as the US and France and so the company was planning to open an average of 20 hotels each year for the next three.

He acknowledged “increased cost pressures” from the National Living Wage as well as business rates but thought the company would benefit from attracting business customers who wish to reduce their travel costs as well as people opting for so-called staycations in the UK because the pound’s fall has made travelling to some foreign destinations more expensive.

In March, Travelodge announced its largest ever hotel would form part of its next wave of expansion in yet another sign the low-cost player is putting its high-profile restructuring behind it.

Construction has started on the 395-room flagship hotel on London’s Middlesex Street, close to the iconic Gherkin, which will open in 2018.

The company’s huge debt pile led to a restructure in 2012 that saw turnaround specialists GoldenTree Asset Management, Avenue Capital and Goldman Sachs take control of the company from Dubai International Capital in a debt-for-equity swap.

The trio ploughed £75m into the company and in 2013, former Hilton deputy chief executive Brian Wallace was installed as chairman while Mr Gowers, who had previously held senior roles at Holiday Inn owner InterContinental Hotels, joined as chief executive later that year to help spearhead the turnaround.

By  Bradley Gerrard