Blue Bottle Coffee offers drip coffee that costs roughly $5 per cup at more than 75 cafe locations around the world. The company touts its high-quality single-origin, freshly roasted artisanal beans. Based on Nestle's 2017 purchase of a majority stake in Blue Bottle the latter has a valuation of more than $700 million.
Before he founded Blue Bottle, James Freeman was a struggling classical musician roasting his own fresh beans as a hobby. Since he was obsessed with drinking the freshest cup of coffee he could find he purchased raw, green coffee beans before heating them himself. Freeman felt that most retail coffee chains over-roasted their beans.
Vespas are more than just scooters. Over the years, they have become an icon of Italian culture and of the made in Italy itself. They have been featured endlessly on the big screen in movies like Fellini's “La Dolce Vita” or “Roman Holiday” with Audrey Hepburn.
At a new clinic in Boston, genetic counselor Carrie Blout helps healthy patients get their DNA tested for predispositions to more than 2500 diseases. Bloomberg's Aki Ito goes through the testing herself, trialing a controversial technology at the forefront of modern medicine.
(qlmbusinessnews.com via bbc.co.uk – – Fri, 19th July 2019) London, Uk – –
London's Crossrail project will probably go even further over budget, according to a report by MPs.
Commuters have been “let down” by a programme that is well behind schedule, the Public Accounts Committee said.
MPs said they were “sceptical” about the Department for Transport's “ability to oversee major rail projects”.
In response, the Department for Transport said it had acted “swiftly and effectively” when problems at Crossrail became clear.
Construction on the Crossrail route began in 2009. It is Europe's biggest infrastructure project.
It has been officially named the Elizabeth Line in honour of the Queen. When completed, it will serve 41 stations, connecting Reading, to the west of London, with Shenfield, to the east.
The line will make use of some existing track, but involves 26 miles of new tunnels connecting Paddington and Liverpool Street stations to improve rail capacity crossing the capital.
The project was allocated £14.8bn in 2010, but this has since swollen to £17.6bn.
While it was originally expected to start running services throughout the line in December, Crossrail now expects it to open as late as March 2021.
The Public Accounts Committee also criticised the bonuses paid to bosses, even as the project faltered.
The chief executive at the time, Andrew Wolstenholme, was paid a bonus of £481,000 for the year to 2016 and £160,000 for the year to 2017.
The Department for Transport allowed itself few powers to curb bosses' pay following their failings, it said.
“While the department is now working to learn and apply the lessons from what went wrong with Crossrail, it should acknowledge that this is far from an unfamiliar tale,” the committee said.
“We have witnessed cost increases and delays on major rail projects several times over the past few years and the department still does not appear to have got a grip on the problem.”
A spokesperson for the Department for Transport said: “The department consistently challenged the leadership of Crossrail Ltd – a wholly owned subsidiary of TfL [Transport for London] – on the delivery of the project.
“When problems became clear, the department acted swiftly and effectively, changing the leadership of the board and strengthening governance structures.
“The new Crossrail Ltd management team has now produced a new plan to open the railway, and the department and TfL will continue to scrutinise progress to ensure this happens as soon as possible.”
Crossrail in numbers
£14.8bnexpected cost in 2010
£17.6bnexpected cost as of 2019
December 2018 Original scheduled launch
March 2021 Current expected completion, without Bond Street
15,000 people have worked on Crossrail
60 miles Distance of the line from Reading to Heathrow
Crossrail split the work between 36 contractors, creating a large burden of organisational work, the report said.
A spokesperson for Crossrail said: “The Elizabeth Line is one of the most complex infrastructure projects ever undertaken in the UK and we recognise many of the challenges raised in the Public Accounts Committee report.
“The new leadership team's plan to complete the Elizabeth Line continues to be kept under careful review. Progress against our plan will become clearer in 2020, once we start to fully test the operational railway and integrate the train and signalling software.
“We are fully focused on completing the Elizabeth Line and ensuring a safe and reliable passenger service as quickly as possible.”
An estimated 200 million passengers will use the new underground line annually, increasing central London rail capacity by 10% – the largest increase since World War Two.
Crossrail says the new line will connect Paddington to Canary Wharf in 17 minutes.
In May, Crossrail was criticised by the National Audit Office for running late and over budget, suggesting that bosses had clung to an unrealistic opening date.
(qlmbusinessnews.com via uk.reuters.com — Fri, 19th July 2019) London, UK —
LONDON (Reuters) – Britain’s new prime minister must urgently make a decision on the role China’s Huawei will have in next-generation 5G networks as the ongoing debate is damaging international relations, a powerful committee of British lawmakers said on Friday.
Britain has emerged as a key battleground in a geopolitical battle over Huawei Technologies HWT.UL, the world’s biggest maker of telecom networking equipment.
The United States has threatened to cut off valuable intelligence sharing with allies who use the company’s equipment, which it says could be exploited by Beijing for spying. China has warned Britain that excluding the firm could hurt investment and trade.
Britain’s National Security Council, chaired by outgoing Prime Minister Theresa May, met to discuss the issue in April and a decision was made to block Huawei from all critical parts of the 5G network but to give it restricted access to less sensitive parts.
The final decision on Huawei was already supposed to have been taken by the British government but May’s decision to step down has stalled the process. Her replacement, either foreign minister Jeremy Hunt or former London mayor Boris Johnson who is the frontrunner, will be installed next week.
“Such an important decision therefore requires careful consideration,” parliament’s Intelligence and Security Committee (ISC) said in a statement. “However, the extent of the delay is now causing serious damage to our international relationships: a decision must be made as a matter of urgency.”
The ISC said Britain’s cyber security chiefs had been clear that the issue was not about one country or company, but that the national networks had to be able to withstand any attack, malicious action or simple human error.
The committee said this was best achieved by diversifying suppliers and the issue at the moment for 5G was that there were only three firms in the running – Huawei, Nokia and Ericsson. Overdependence and less competition resulted in lower security standards, it said.
“Therefore including a third company – even if you may have some security concerns about them and will have to set a higher bar for security measures within the system – will, counter-intuitively, result in higher overall security,” the ISC said.
Huawei Vice President Victor Zhang said he supported the committee’s comments on supplier diversity. “We agree that diversity improves resilience in networks,” he said.
The ISC also acknowledged, however, that the decision was not just technical and that the government had to take into account political concerns and so should not do anything to jeopardise the “Five Eyes” intelligence alliance of the United States, Britain, Australia, Canada and New Zealand.
It argued that China would understand if Huawei were excluded as Beijing would not allow a British company to play a role in its critical national infrastructure.
“The public debate implies that we have to choose between good economic links with China and our own national security … This is a simplistic viewpoint, and those promoting it do a disservice to China,” it said.
(qlmbusinessnews.com via uk.reuters.com — Thur, 18th July 2019) London, UK —
LONDON (Reuters) – Britain might be entering a full-blown recession and a no-deal Brexit could more than double the country’s budget deficit next year, the watchdog for public finances said on Thursday.
The Office for Budget Responsibility said the world’s fifth-biggest economy appeared to have flat-lined or possibly contracted in the second quarter, some of which was probably “pay-back” after Brexit-related stock building in early 2019.
“But surveys were particularly weak in June, suggesting that the pace of growth is likely to remain weak. This raises the risk that the economy may be entering a full-blown recession,” it said in a report on the outlook for the public finances.
A no-deal Brexit would hurt confidence and deter investment and lead to higher trade barriers with the European Union, pushing down the value of the pound and causing the economy to contract by 2% by the end of 2020, the OBR said, referring to forecasts by the International Monetary Fund.
A no-deal Brexit – something the two contenders seeking to be Britain’s next prime minister say they are prepared to do if necessary – could add 30 billion pounds ($37.4 billion) a year to public borrowing by the 2020/21 financial year, the OBR said.
The OBR said the spending and tax cut promises made by Boris Johnson and Jeremy Hunt, one of whom is due to become prime minister next week, would put a strain on the budget.
“The spending control framework seems to be under pressure, with major announcements being made outside fiscal events, and the Conservative leadership making pledges that would prove expensive if pursued,” it said.
(qlmbusinessnews.com via theguardian.com – – Thur, 18th July 2019) London, Uk – –
Quantity of goods bought in June rose 1% from May, says Office for National Statistics
Retail sales in the UK were unexpectedly strong in June, boosted by sales of secondhand goods at charity shops and antique dealers, although department stores continued to struggle.
The quantity of goods bought in June rose 1% from May, according to the Office for National Statistics. City economists had forecast a 0.3% drop in sales, following May’s 0.6% fall. The figures boosted the pound by half a cent to $1.2480.
However, there was a sharp slowdown in retail sales growth in the three months to June. Sales rose 0.7%, down from 1.6% in the previous three months – marking the weakest growth rate since the three months to February.
Many economists believe the UK economy could shrink in the second quarter, a hangover from the stockpiling boom in the run-up to the original Brexit deadline in March. The Office for Budget Responsibility warned on Thursday that a no-deal Brexit would plunge Britain into a recession.
Rhian Murphy, head of retail sales at the ONS, said: “Retail sales growth slowed in the latest three months as food stores saw falling sales for the first time this year and department stores continued their steady decline.
“However, retail as a whole saw a return to growth in the month of June, mainly due to growth in non-food stores, with increased sales in secondhand goods, including charity shops and antiques.”
Clothes sales staged a partial recovery, rising 1.2% following May’s 3.8% drop, as consumers flocked to summer sales in June after a slow uptake in the previous month.
Not all sectors experienced a rebound – department store sales fell 0.2%, the sixth month of declines and the worst run in records that date back to the late 1980s.
Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said: “June’s retail sales figures are a timely reminder that consumers aren’t being haunted by the possibility of a no-deal Brexit but are happy to spend the proceeds from rising growth in the real wages.
“Consumers will remain deaf to the warnings about a no-deal Brexit and only pare back their spending if it happens.”
He said June’s strong rise was not flagged by any of the surveys, partly because sales in the “other stores” category – mainly consisting of small, independent retailers – jumped by 3.2%.
The British Retail Consortium’s latest survey showed sales fell 1.3% last month, the biggest drop on record.
(qlmbusinessnews.com via news.sky.com– Wed, 17th July 2019) London, Uk – –
The second half of the year may be a buyers' market for much of the UK as average price increases continue to slow sharply.
House prices in London fell in May at their fastest rate for almost a decade, according to official figures.
The Office for National Statistics (ONS) reported a 4.4% decline, on an annual basis, in residential property costs in the capital.
It marked the biggest fall since the 7% reduction recorded in August 2009 as the effects of the financial crisis took a hold on the sector.
The wider ONS figures showed a continuation of the slowdown across the UK as a whole – with prices increasing by 1.2% in the year to May, down from 1.5% in April.
The gradual decline – over the past three years – was first driven by London followed by the wider South East region.
However, house price growth in Wales – while sharply down from a 5.3% rate in April – remains positive at 3%.
The figure was 2.8% for Scotland.
The English region with the strongest rate of growth was the North West at 3.4%.
London saw a surge house price growth after the financial crash that saw prices almost double before cracks began to appear in late 2016.
They were a consequence of concerns about affordability after the boom and shaky sentiment since the Brexit vote.
The ONS said that while London house prices fell over the year, it remained the most expensive place to purchase a property at an average of £457,000.
That sum is 6.7% down on the 2017 peak.
The North East continued to have the lowest average house price, at £128,000, and remains the only English region yet to surpass its pre-economic downturn peak, the ONS said.
There are signs of worse news for prices ahead.
The official figures lag other industry surveys which have already reported on activity during June.
A report by Rightmove earlier this week suggested that the current political uncertainty – as the clock ticks down to the extended Brexit deadline of 31st October – was continuing to weigh on sentiment.
It said average prices had fallen in the UK for the first time in 2019.
Rightmove's director and housing market analyst, Miles Shipside, said: “With record employment, low interest rates and good mortgage availability, buyers have a lot in their favour apart from the lack of political certainty.
“Those who have postponed their purchase should note that estate agency branches have more sellers on their books than at any time for the past four years, so there should be more choice of properties to buy.”
(qlmbusinessnews.com via bbc.co.uk – – Wed, 17th July 2019) London, Uk – –
The next prime minister should lower the salary threshold for foreign workers in the UK from £30,000 to £20,000, a group of business and education bodies has said.
They say that such a move would help to avoid “acute” skills shortages.
Currently any non-EU citizen working in the UK must earn at least £30,000, but under current proposals this will be extended to EU citizens after Brexit.
The Home Office said it was still consulting on the plans.
The extension of the threshold was proposed in last year's Immigration White Paper, which set out the government's vision for a post-Brexit immigration system.
However, the coalition – including the British Retail Consortium, business advocacy group London First, Universities UK, and UK Hospitality among others – warned that more than 60% of all jobs in the UK were currently beneath the £30,000 cut-off.
“It is vital that the government does all it can to keep the country at full strength at a time of great uncertainty. The thousands of businesses we represent are clear that without a bold move now on immigration reform, the skills shortages many companies face risk becoming even more acute,” said Jasmine Whitbread, chief executive at London First.
The coalition also called for more generous temporary and post-study work visas, following curbs in recent years to lower immigration.
“Without the ability to access international talent, many of our world-class sectors are at significant risk,” they said in a letter to both prime ministerial candidates.
“As the UK prepares to leave the EU in the near future, it is imperative that the government puts in place measures that will avoid employers facing a cliff-edge in recruitment, and works towards building a successful economy that is open and attractive.”
Foreign Secretary Jeremy Hunt – considered the underdog in the race to be the next leader of the Conservative Party – has said he would review the £30,000 salary threshold, while prioritising skilled workers.
The frontrunner to take over from Theresa May, Boris Johnson, has called for a new Australian-style points-based system.
This would consider factors such as whether an immigrant has a firm job offer and their ability to speak English.
Both men also oppose the government's target of bringing net migration down to under 100,000 people a year, which has never been met.
According to the Migration Observatory, a think tank, the government is already issuing waivers to allow essential workers to bypass the £30,000 cut-off.
Recent figures gleaned from freedom of information requests show that, despite Home Office rules, 90% of nurses, half of all medical radiographers, 10% of paramedics and a third of secondary schoolteachers earn below the minimum.
A Home Office spokesman said: “Our new skills-based immigration system is designed to attract the talented workers we need for the economy to continue to prosper, while also delivering on the referendum result following the end of free movement.
“We know there are a range of views about salary thresholds, and the home secretary has asked independent experts to advise on this issue before the proposals are finalised next year.
“The new system will reduce the burden on businesses by streamlining and simplifying our sponsorship system and we will create a new temporary work route to allow UK companies access to the employees they need to thrive.”
(qlmbusinessnews.com via news.sky.com– Tue, 16th July 2019) London, Uk – –
The latest employment figures give some support to growing evidence of a reluctance to hire but the overall picture remains rosy.
Average wage growth has accelerated to levels not seen since July 2008, according to official figures.
The Office for National Statistics (ONS) said earnings, excluding the effects of bonuses, rose by 3.6% on an annual basis in the three months to May – beating the forecasts of economists.
When bonuses were included, the percentage figure rose to 3.4% from 3.2% a month earlier.
The data suggests a boost to household spending power as the rate of inflation, due to be updated on Wednesday, currently stands at 2%.
But the latest employment figures also betrayed a possible early sign that the jobs market – resilient since the EU vote in 2016 – may be showing a sign of stress as the clock ticks down to the next Brexit deadline of Halloween and the world economy slows because of the US-China trade war.
Employment growth slowed to its weakest level since August last year with 28,000 positions created over the three months though the jobless rate remained at 3.8%.
The ONS released its findings at a time when closely-watched surveys of companies have pointed to growing caution over hiring.
The latest research from recruitment firm Reed showed a 2.3% decline in jobs advertised in the second quarter of the year – the largest drop since 2010.
It blamed political and economic uncertainty as the Conservatives prepare to choose the country's next prime minister – a leader set to preside over the ultimate fate of Brexit.
Commenting on the ONS figures, employment minister Alok Sharma said: “Wages outpacing inflation for 16 months in a row, more people in work than ever before and joint-record female employment, means better prospects for many thousands of UK families and shows the continued resilience of the UK labour market.”
But he conceded in an interview with Sky News that continued uncertainty over Brexit was dragging on investment – and therefore UK economic growth.
He said: “It's not good for business, it's not good for government so I think Boris Johnson's right.
“We have this hard deadline (of) 31st October. We leave, hopefully with a deal, if not without a deal”.Sponsored Links
(qlmbusinessnews.com via theguardian.com – – Tue, 16th July 2019) London, Uk – –
Budget airline says it plans to close some bases and will carry fewer passengers
Ryanair has warned delays to deliveries of Boeing’s 737 Max aircraft will reduce passenger numbers next year and it plans to downsize or close bases at some airports as a result.
Europe’s biggest budget carrier has ordered 135 of the 737 Max models, which remain grounded after two crashes in Indonesia and Ethiopia killed a total of 346 people. Boeing has yet to convince regulators that software modifications are sufficient to ensure the plane’s safety.
Ryanair will reduce the number of flights it operates next summer and now expects to carry 157 million passengers in the year to March 2021, rather than 162 million, cutting its summer 2020 growth rate to 3% from 7%.
The airline said the shortfall in aircraft deliveries will mean “some base cuts and closures” for the winter and next summer, and it has started talking to airports to identify which underperforming or lossmaking bases to shut from November. Ryanair will consult with its staff and unions.
It emerged this week that a 737 Max aircraft due to be delivered to Ryanair had the name Max dropped from the livery, fuelling speculation the manufacturer and airlines will seek to rebrand the troubled plane once it is given the all clear to fly again.
The Ryanair chief executive, Michael O’Leary, said: “Ryanair remains committed to the 737 Max aircraft, and now expects that it will return to flying service before the end of 2019, however, the exact date of this return remains uncertain.”Timeline
Boeing’s 737 Max crisis
The carrier has ordered the larger version with 197 seats, called Max 200, and hopes to receive its first aircraft in January or February 2020. Since it can only take delivery of six to eight new aircraft each month, the carrier is now planning its summer 2020 schedules based on taking up to 30 deliveries up to the end of May, less than the 58 Max aircraft planned for.
O’Leary said: “Ryanair will continue to work with Boeing and EASA [European Aviation Safety Agency] to recover these delivery delays during the winter of 2020 so that we can restore our growth to normal levels in summer 2021.”
Ryanair shares in Dublin rose as much as 1.5% in early trading to €10.30 each, perhaps on relief that the airline is taking action and that the damage appears to be limited.
Other airline shares also rose, on hopes that Ryanair’s capacity cuts will enable rival carriers to raise their fares – bad news for holidaymakers. EasyJet gained 3% and shares in IAG, the owner of British Airways, were up 2.4%.
(qlmbusinessnews.com via news.sky.com– Mon, 15th July 2019) London, Uk – –
The retailer's investors react nervously as the company delays its annual results citing several factors.
Shares in Mike Ashley's Sports Direct have dived more than 10% after the retailer said it had delayed the publication of its annual results.
The company, whose shares trade on the FTSE 250, blamed problems integrating its purchase of House of Fraser (HoF) stores last summer and increased scrutiny of its accounts.
It added that this could affect its financial forecasts.
Sports Direct had been due to publish results for the year to 28 April on Thursday but said it now expected to release them between 26 July and 23 August.
Its statement said: “The reasons for the delay are the complexities of the integration into the company of the House of Fraser business, and the current uncertainty as to the future trading performance of this business, together with the increased regulatory scrutiny of auditors and audits including the FRC (Financial Reporting Council) review of Grant Thornton's audit of the financial statements of Sports Direct for the period ended 29 April 2018.”
In December, Sports Direct had described trading as “unbelievably bad” with significant challenges for House of Fraser, which it had bought out of administration at the height of the high street crisis.
It has since lost a major stake in the collapse and rebirth of struggling Debenhams and it is currently in the process of taking full control of Game Digital.
Shares – down almost 40% this year – fell more than 12% in early deals on Monday.
Neil Wilson, chief market analyst at Markets.com, said of the announcement: “The big question was what impact House of Fraser and various other acquisitions of dubious value would have on Sports Direct results. A material impact, one can only assume. HoF must be losing money hand over fist.
“Looking to the earnings, top line growth is expected to rise but profits are seen weaker as the cost of acquisitions weighs.
“Since reporting a 27% decline in underlying profits in the first half we've not heard a peep from Sports Direct on performance.
“The delay in delivering the annual results does not sit well with investors, who must be nervous about what it means.
“It seems likely it's been a tough ride in the core Sports Direct retail division, whilst acquisitions have added nothing but increased costs,” he added.
(qlmbusinessnews.com via bbc.co.uk – – Mon, 15th July 2019) London, Uk – –
Two million low-paid workers could receive government-funded sick pay for the first time.
Currently, employees must earn at least the equivalent of 14 hours on the minimum wage to qualify. But the government is looking at whether to extend eligibility to those earning below this threshold.
There could also be more help for those returning to work after sick leave.
The government has launched a consultation on the proposed changes.
Health Secretary Matt Hancock said: “We need to remove the barriers that stop people with disabilities or health conditions from reaching their full potential – these steps will help us achieve that.”
Workers need to earn at least £118 a week to receive statutory sick pay, although the threshold is reviewed every tax year.
It is unclear if the plans would benefit “gig” workers on freelance or short-term contracts, but the Department for Work and Pensions said the consultation did not seek to “undermine the flexibility in the UK labour market”.
Around 1.1 million people in the UK are considered gig economy workers, receiving little or no holiday or sick pay.
Sick pay: What are my rights?
To qualify for statutory sick pay (SSP) you must be classed as an employee
Agency workers are also entitled to SSP
You need to earn at least £118 per week to be eligible for SSP
You need to have been ill for at least four days in a row, including non-working days to claim SSP
SSP is £94.95 a week. If your employer has a sick pay scheme you may get more
The maximum amount of time you can claim SSP for is 28 weeks
Phased returns to work
The government is also looking at making statutory sick pay more flexible, as it seeks to reduce the number of people quitting work after a period of sickness.
Each year more than 100,000 people leave their job after a sickness absence lasting at least four weeks, it said.
It will explore allowing phased returns to work, in which people would continue to receive statutory sick pay, as well as offering small businesses who help employees return to work a rebate.
It will also consider whether to change legal guidance to encourage employers to intervene early during a period of sickness absence.
For example, employees could be given the right to request modifications to their working patterns – similar to the right to request flexible working – to help them return to work.
Matthew Fell, chief UK policy director at lobby group the CBI, said managing sickness absence effectively made “good business sense”.
(qlmbusinessnews.com via uk.reuters.com –Fri, 12th July 2019) London, UK —
LONDON (Reuters) – The Bank of England might need to cut interest rates almost all the way down to zero in the event of a no-deal Brexit and it is not clear how long it would take for them to rise again, senior BoE official Gertjan Vlieghe said.
Vlieghe’s comments, in a speech at Thomson Reuters in London, went further than those of other BoE policymakers who have said rates would probably need to be cut after a no-deal Brexit shock to the economy, but have not been explicit about the size of such a move.
The prospect of Britain leaving the European Union without a deal has grown after both candidates to become Britain’s next prime minister said they would be prepared to lead the country into a no-deal Brexit if necessary.
Vlieghe dedicated most of his speech to arguing that the BoE should make a major change to its forecasting process and follow other central banks by setting out its best collective guess about how borrowing costs might change.
Currently the BoE bases its forecasts on interest rate futures in financial markets, which Vlieghe said made it unnecessarily complex for the central bank to get its message across to companies, investors and consumers.
He sought to lead by example by spelling out what he thought the BoE should do with its benchmark rate – which currently stands at 0.75% – if Britain leaves the European Union without a deal to cushion the change.
“On balance I think it is more likely that I would move to cut Bank Rate towards the effective lower bound of close to 0% in the event of a no-deal scenario,” Vlieghe, one of nine interest-rate setters at the British central bank, said.
“It is highly uncertain when I would want to reverse these interest rate cuts,” he said, explaining it would depend on the economy recovering from its no-deal shock or a rise in inflation risks caused by a slump in the value of the pound.
On the other hand, if Britain can ease its way out of the EU with a deal, the BoE could raise rates to 1.0% in one year, 1.25% in two years and 1.75% in three years’ time, he said.
However, such increases would probably also depend on the global economy recovering from its slowdown.
Under a third scenario – another Brexit delay beyond the current Oct. 31 deadline – the outlook for rates “is likely to lie somewhere between the two paths that I have outlined already,” Vlieghe said.
The BoE’s long-standing core message that it plans to raise rates gradually, assuming Britain avoids a no-deal Brexit, has been increasingly at odds with the view of many investors.
They have ramped up their bets on the central bank’s next move being a rate cut.
That tension has grown recently due to increased concerns about a no-deal Brexit, as well as a slowdown in the global economy, which has prompted other major central banks such as the Federal Reserve and the European Central Bank to signal that they are ready to pump more stimulus into their economies.Slideshow (5 Images)
BoE Governor Mark Carney warned last week that Britain was facing higher risks from Brexit and increased protectionism, prompting investors to put a 50-50 chance of a BoE rate cut before Carney’s term ends in just over six months’ time.
In his speech, Vlieghe noted the global headwinds for Britain and said Britain’s jobs market – long a bright spot – also appeared to be slowing, with a small fall in the number of vacancies and a slight slowdown in wage growth.
But he warned against reading too much into Britain’s weak second-quarter growth rate which could be close to zero “or even slightly negative” due to swings in car production and inventory build-ups around the original Brexit deadline in March.
“It is entirely possible that we see data volatility again around the perceived no-deal risk at the end of October,” he said.
(qlmbusinessnews.com via bbc.co.uk – – Fri, 12th July 2019) London, Uk – –
Troubled travel company Thomas Cook is in £750m rescue talks with banks and its largest shareholder, Fosun.
The measures, which have not been finalised, would see the Chinese investor buy the firm's tour business.
Thomas Cook's chief executive, Peter Fankhauser, said the proposal was “not the outcome any of us wanted” but insisted it was “pragmatic”.
He told the BBC that customers did not need to worry because their holiday bookings were “secure”.
Is my holiday safe?
“They can book with us without worries,” Mr Fankhauser said. “We have enough resources to operate our business so they can enjoy their holidays with us.”
And this cash injection would give the group enough money to trade through to the end of next year and invest for the future, Thomas Cook said.
When store closures and cost-cutting measures were announced at the firm earlier this year, Thomas Cook said holidaymakers could have “complete confidence” because it is an ATOL-protected business.
Protection under the ATOL – or Air Travel Organiser's Licence – scheme means UK travellers on an air package holidays do not lose their money or become stranded abroad if a travel agent collapses.
It also covers many charter flights and means that, if the operator collapses while people are away, they can finish their holiday and be flown home at no extra cost.
Why does Thomas Cook need the money?
The travel agent has found it difficult to maintain a presence on the High Street in the face of increased online competition. Last year, it also issued a number of profit warnings blaming a heatwave for a dip in summer holiday bookings.
It launched a strategic review in February, but since then, dwindling bookings and uncertainty surrounding Brexit have contributed to a deterioration in the market. In March, the firm announced plans to close 21 stores, costing more than 300 jobs, and in May, it revealed a £1.5bn half-year loss.
Thomas Cook said it was trying to combat those challenges with a “rigorous focus on cost” and by “delivering a stronger holiday offering to customers through high quality, higher-margin hotels”.
The travel firm had already announced plans to slash costs, axing 150 roles from its head office in Peterborough, in the face of tough trading conditions and higher fuel expenses.
On Friday, Thomas Cook said the European travel market had become “progressively more challenging” as it painted a bleak picture for the second half of the year, blaming an “uncertain customer environment” for “intense competition”.
That has hit the firm's finances and made it difficult to sell its airline or tour business to generate some cash.
As a result, the group has been forced to enter into talks with its banks and Fosun, which will own a significant majority of the travel company's tour operator and a large minority stake in its airline if the deal goes ahead.
Is it a good deal?
Mr Fankhauser told the BBC's Today programme that “considering all options we had on the table”, the deal was the “best available” choice.
Responding to a suggestion that the proposed deal was a last resort, he said: “This is a very good option to secure the business and to put the business on a solid financial foot for the future.”
Earlier, in a statement issued by Thomas Cook, Mr Fankhauser said: “While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees.”
What about shareholders?
Thomas Cook said people who currently hold shares in the firm would see the value of their investment “significantly diluted” as a result of the proposed deal.
“Basically, it's wipe out time” for shareholders, according to Markets.com analyst Neil Wilson.
But Thomas Cook said existing shareholders may be given the option to reinvest in the firm, alongside Fosun, to become creditors.
The proposed rescue deal may even indicate a potential retreat from the stock market for Thomas Cook, in a move that would see the world's oldest package holiday firm become a private company.
Shares were trading down by about a third on Friday, at just under 9p apiece. The company's stock price has shed more than 90% of its value in the past year.
What is Fosun?
Fosun is a £74.4bn Chinese investment giant that is listed on the Hong Kong stock exchange. The firm already has an 18% stake in Thomas Cook, but if this deal goes ahead, it would gain a “significant majority” of the firm.
Fosun's portfolio of companies runs the gamut from insurers to football clubs. It says it operates in three major segments: “health, happiness and wealth”.
The investor said it had “extensive experience” in the global travel industry.
“We are committed investors, with a proven track record of turning around iconic brands, including Club Med and Wolverhampton Wanderers FC,” it said.