Crossrail costs mount as delays continue

(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

Source: Crossrail

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.

UK may be entering full-blown recession: budget watchdog

(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.

Reporting by David Milliken

UK wage growth accelerates to levels not seen since 2008 but hiring remains slow

(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

By James Sillars, business reporter

Two million UK employees in line for government-funded sick pay

(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”.

Bank of England might need to cut interest rates almost all the way down to zero in the event of a no-deal Brexit – BoE’s Vlieghe

(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.

By William Schomberg

UK financial system strong enough to cope Brexit and trade war says Bank of England

(qlmbusinessnews.com via news.sky.com– Thur, 11th July 2019) London, Uk – –

The Bank of England says the risk of a no-deal scenario has increased while global trade tensions have also darkened the outlook.

Britain's financial system is strong enough to cope with the shock of a trade war-driven global slowdown even if it coincides with a “disorderly” Brexit, the Bank of England has said.

The bank said in its Financial Stability Report that the risk of crashing out of the EU had increased since the start of the year while rising trade tensions posed higher risks to the global outlook.

It said greater uncertainties over Brexit had weighed on markets, pointing to sharp falls in foreign investment in commercial property and loans to highly-indebted companies.

But the bank added that in recent months, the government and business had taken “some steps to improve the preparedness of the real economy for a disorderly Brexit”.

That includes border and customs preparations as well as agreements for Britain to roll over existing trade deals it has with the rest of the world as a current member of the EU.

The bank has previously assessed Britain's lenders and insurers as being able to withstand the impact of a worst-case Brexit scenario.

It has now judged that this would be the case even if such a scenario were to be combined in a double-whammy with a worldwide slowdown prompted by trade tensions – as Donald Trump threatens China, Europe and Mexico with a range of higher tariffs.

That included a scenario in which Washington and Beijing ramp up duties on goods imported from each other to 25% and there is a global trade war in the car manufacturing sector.

“Even if a protectionist-driven global slowdown were to spill over to the UK at the same time as a worst-case disorderly Brexit, the FPC judges that the core UK banking system would be strong enough to absorb, rather than amplify, the resulting economic shocks,” the bank said.

However, it cautioned that this did not mean there would be wider market stability, with “significant volatility” to be expected in the case of no deal.

In a wide-ranging report, the bank's Financial Policy Committee (FPC) also revealed that it was considering reforms in the wake of the recent suspension of Neil Woodford's equity income fund.

That could mean forcing funds which offer clients same-day redemptions of their investments – which are often in illiquid, or hard-to-sell assets – to instead offer longer notice periods.

The potential reform reflects the bank's increasing concern that not enough is being done internationally to tackle such “open-ended funds”, and that problems in this sector could have the potential to cause wider disruption.

It is also planning a formal assessment of the risks posed to financial stability by climate change, to be published in 2021.

In addition, it is weighing up the implications of the cryptocurrency “tokens” such as the Libra venture being backed by Facebook.

By John-Paul Ford Rojas, business reporter

Pound Sterling hits six-month low as Brexit and economic gloom deepens

This image has an empty alt attribute; its file name is QLM.png

(qlmbusinessnews.com via news.sky.com– Tue, 9th July 2019) London, Uk – –

Sterling has weakened further just at the time when many UK holidaymakers are preparing to exchange their pounds.

The pound has slipped to a fresh six-month low against the dollar as sustained worries over Brexit and the UK economy weigh on the currency.

Sterling was half a cent down, at less than $1.25, taking it to its weakest point since a “flash crash” in January and not far off its lowest level since early 2017.

It was also lower versus the euro, slipping close to €1.11 – close to six-month lows – and adding to anxieties for UK holidaymakers preparing to travel abroad over the summer.

Britons will find their pound does not stretch as far compared with the same time last year, when it was trading at around $1.33 versus the dollar and €1.13 against the euro.

The latest fall against the dollar extends two weeks of declines for the pound amid concerns about the weakening economic outlook, prompting speculation about lower interest rates.

A recent gloomy speech by Bank of England governor Mark Carney was taken by some as a hint that the policy makers may strike a more dovish tone on rates.

Business surveys have indicated that the UK economy probably shrank in the second quarter of 2019, leaving it potentially on the verge of recession – as a potential no-deal Brexit looms on 31 October.

Sentiment was further dampened on Tuesday as Ireland's finance ministers said it now thinks there is a significant risk of a disorderly departure of the UK from the EU and that it was taking measures to protect itself from any legal consequences.

Meanwhile, the British Retail Consortium reported the worst June decline in sales since its records began in 1995, pointing to a “bleak” picture as consumers put off non-essential purchases due to Brexit uncertainty.

Trading was also impacted on Tuesday by the strength of the dollar as traders reassessed their expectations about US interest rates.

Stronger than expected jobs data last week has prompted investors to question expectations about how much the US Federal Reserve will cut rates later this month.

The pound's latest weakness also comes ahead of official monthly growth figures on Wednesday and the Bank of England's Financial Stability Report on Thursday.

By John-Paul Ford Rojas, business reporter

Construction sector output ‘falls at steepest rate since April 2009’

(qlmbusinessnews.com via news.sky.com– Tue, 2nd July 2019) London, Uk – –

Fears are growing the UK economy may have contracted in the second quarter of the year as the latest data misses expectations.

Output in the construction sector fell at its steepest rate since April 2009 in June, according to a close-watched activity survey.

The IHS Markit/CIPS purchasing managers' index (PMI) showed declines across the sector over the month – adding to evidence of a wider economic slowdown in the second quarter of the year.

The index for construction showed a reading of 43.1 in June – down from 48.6 in the previous month and way below the expectations of economists.

Anything above 50 indicates growth.

The PMI findings – based on the responses of purchasing managers – suggested business activity and incoming new work both fell at the fastest pace for just over 10 years.

The slide in construction demand across residential, commercial and civil engineering operations was mainly attributed by survey respondents to “risk aversion among clients in response to heightened political and economic uncertainty.”

Continued fog over the UK's departure from the EU has coincided with a sharp easing in demand across the global economy – largely blamed on the US-China trade war.

The UK economy grew by 0.5% in the first three months of 2019 however much of that growth surge was attributed to Brexit stockpiling ahead of the original deadline of 29 March.

The Office for National Statistics (ONS) figures showed construction had flat-lined during January to March with growth of just 0.06%.

The PMIs suggest construction output will have contracted during the second quarter.

There is little to cheer in the sector as the housing market continues to lose steam and businesses hold back on investment decisions.

Separate figures by Nationwide released on Tuesday showed house price growth at an annual rate of 0.5% in June – with London and surrounding areas continuing to see the largest declines in prices.

Shares in housebuilders fell at the open and declined further when the PMI number emerged.

Persimmon was down by more than 2%.

Dr Howard Archer, chief economic adviser to the EY ITEM Club, said: “With the purchasing managers also reporting that manufacturing activity contracted in June and was at a 76-month low, the dire June construction survey fuels belief that the UK economy highly likely contracted in the second quarter.

“Obviously, the performance of the dominant services sector will be important so there will be appreciable interest in the June services purchasing managers survey out on Wednesday – but while services activity is likely to have avoided contraction in the second quarter, we doubt it will have been sufficient to stop GDP contracting given the likely sharp falling back in manufacturing output.

“Specifically, we currently expect GDP to have contracted 0.2% quarter-on-quarter in the second quarter.”

By James Sillars

G20 heads voiced concern over trade tensions and the risk to global growth

(qlmbusinessnews.com via uk.reuters.com — Fri, 28th June 2019) London, UK —

OSAKA (Reuters) – Many leaders of the world’s top 20 economies on Friday voiced concern over trade tensions and the risk they pose to global growth, but were at loggerheads on key issues such as World Trade Organization (WTO) reform, Japanese and Russian delegates said.

The bitter U.S.-China trade war and signs of slowdown in the global economy have overshadowed a two-day Group of 20 summit that kicked off in Osaka, western Japan, on Friday with a session on the world economy and trade.

Yasutoshi Nishimura, Japan’s deputy chief cabinet secretary, who was present at the meeting, said the G20 heads discussed ways to address common challenges such as promoting free trade and jump-starting stalled talks on reforming the WTO.

“There are downside risks to the global economy as trade tensions escalate. Against this background, the G20 leaders agreed on the need for the group to drive global growth,” Nishimura told reporters after the session on Friday.

But that was as far as they could agree, as U.S. President Donald Trump’s “America first” policies and aversion to multilateralism test the solidarity of the G20.

Russia’s economy minister Maxim Oreshkin told reporters on Friday there was no common agreement among the G20 members on how to reform the WTO.

The G20 leaders were also struggling to find common ground on issues such as information security, climate change and migration, said Svetlana Lukash, Russia’s sherpa to the group.

“Currently work on the final (G20) documents is ongoing and this is not going easy,” Lukash told reporters.

But she added a final G20 communique will likely be signed, as well as other documents related to the group’s agenda that may be in a “more political format.”

Japan, as chair of this year’s G20 meetings, has sought to downplay the rift emerging among the group’s members on various topics, notably trade – with little success.

French President Emmanuel Macron had also said his country will not sign off on a G20 communique that does not mention the Paris agreement on climate change.

Japanese media has reported that Tokyo, as a compromise on phrasing the thorny issue of trade, is working with its G20 counterparts on a communique that would call for the “promotion of free trade” to achieve strong global growth.

Reporting by Leika Kihara

Britain firms more confident about hiring and investing after Brexit extension- survey

(qlmbusinessnews.com via uk.reuters.com — Wed, 26th June 2019) London, UK —

LONDON (Reuters) – Employers in Britain have turned more confident about hiring and investing after the extension to the Brexit deadline which has also reduced their worries about the outlook for the economy, a recruiters’ group said on Wednesday.

The Recruitment & Employment Confederation (REC) said its Jobs Outlook survey showed an increase of four percentage points in confidence about hiring and investment decisions which returned to positive territory at +1.

“Today’s survey shows that businesses believe in their own prospects and are ready to grow if the pall of economic uncertainty is removed,” Neil Carberry, Chief Executive of REC, said in a statement.

Confidence in Britain’s economy improved but remained negative at -26. Hiring intentions for temporary agency workers continued to rise.

Carberry said the contrast between employers’ views of their own prospects and those for the wider economy underscored the stakes of Britain’s Brexit impasse.

Both the candidates to replace Prime Minister Theresa May – former foreign minister Boris Johnson and the current incumbent Jeremy Hunt – have said they are prepared to take Britain out of the European Union without a transition deal if necessary.

The latest deadline for Brexit is Oct. 31.

“Resolving this will require cool heads through the summer and autumn, so that companies can rely on a smooth and stable new relationship with the EU – not the chaos of a no-deal exit,” Carberry said.

The REC survey was based on responses from 610 employers and was conducted between March 1 and May 28.

Reporting by Katya Sanigar

BMW seeks to double electric and hybrid vehicles sales in the next two years

(qlmbusinessnews.com via theguardian.com – – Tue, 25th June 2019) London, Uk – –

Carmaker to have 25 electrified models on sale by 2023 as strict new EU rules loom

BMW is accelerating its push away from the internal combustion engine towards battery technology, as the German carmaker seeks to double the number of electric and hybrid vehicles it sells in the next two years.

The company will have 25 electrified models on sale in 2023, two years earlier than previously planned, it announced on Tuesday. More than half of the vehicles will be fully electric.

The step up in BMW’s electrification efforts comes as European carmakers face an unprecedented challenge to their profitable business model as major markets, from the UK to the rest of the EU to China, plan to decarbonise road transport.

For German carmakers including BMW, Volkswagen and Daimler, the race to move away from fossil fuels is particularly urgent. Under strict EU rules due in 2021, manufacturers must ensure average emissions from new cars are below 95g of carbon dioxide per kilometre driven or face huge fines. BMW’s models averaged carbon emissions of 128.9g per kilometre in 2018, according to the data company Jato Dynamics.

In response the BMW group plans to increase sales of electric or hybrid vehicles by more than 30% a year up to 2025, slashing average emissions across its three brands: BMW, Mini and Rolls-Royce.

The carmaker is launching a slew of models in Munich on Tuesday, including an all-electric concept sports car and the BMW Vision M Next. Before the event, Harald Krüger, the chairman of the BMW management board, said: “We are moving up a gear in the transformation towards sustainable mobility, thereby making our company fit for the future.

“We will offer 25 electrified vehicles already in 2023 – two years earlier than originally planned.”

BMW currently only sells one fully electric model, the i3, but this will expand to five within two years. The fully electric Mini, which will be made at BMW’s Oxford plant, will launch next month.

By Jasper Jolly

UK inflation falls to Bank of England expectations reducing chance of interest rate rise

(qlmbusinessnews.com via uk.reuters.com — Wed, 19th June 2019) London, UK —

LONDON (Reuters) – Britain’s inflation rate cooled in May and cost pressures in factories fell to a three-year low, according to data that might reassure the Bank of England there is no urgency to pursue its stated policy of gradually raising interest rates.

Unlike in the euro zone and United States, where waning inflation has spurred expectations for interest rate cuts, the British central bank has stuck to its view that rate hikes will be required at some point to prevent the economy overheating.

Still, Wednesday’s data pointed to muted price pressures.

Britain’s Office for National Statistics said consumer prices rose at an annual rate of 2.0% in May after a 2.1% rise in April, matching the BoE’s target as well as the consensus in a Reuters poll of economists.

Sterling, which has fallen sharply in response to growing expectation that Prime Minister Theresa May’s successor will take a more hardline approach to Brexit, showed little reaction to the data.

“With inflation relatively subdued, and against a backdrop of heightened political and economic uncertainty, the case for raising interest rates anytime soon remains weak, despite recent warnings by some Monetary Policy Committee members,” the British Chambers of Commerce’s head of economics, Suren Thiru, said.

Stable inflation, combined with the lowest unemployment rate in 44 years and rising wages, has taken the edge off the uncertainty about Brexit for many households whose spending drives Britain’s economy.

Britain’s modest rate of underlying inflation is also helping the BoE to hold off on fresh interest rate hikes while it waits for the outcome of the Brexit impasse, although some officials in recent weeks have said increases may be needed sooner rather than later.

Core inflation, excluding energy, food, alcohol and tobacco, dropped to 1.7% in June, the lowest annual rate since January 2017 and as expected in the Reuters poll.

“Inflation eased in May, as travel prices such as air fares fell back after their Easter highs in April,” ONS statistician Mike Hardie said.

Britain’s inflation rate surged in 2017, pressured by the slump in sterling after the Brexit referendum in June 2016.

It peaked at a five-year high of 3.1% in November 2017 but has now fallen back to the BoE’s 2% target.

Britain’s on-target inflation differs from the euro zone’s where the European Central Bank has struggled to get inflation to match its target of just below 2%. ECB President Mario Draghi on Tuesday raised the prospect of further monetary stimulus to end the persistent undershoot.

Investors will also watch for signals that the U.S. Federal Reserve might plan to cut rates later this year — as markets expect and U.S. President Donald Trump has demanded — when it announces its policy statement at 1800 GMT.

By contrast, when the BoE announces its policy decision on Thursday the focus will be on policymakers’ enthusiasm for higher, not lower, rates.

Still, the ONS figures suggested less short-term pressure in the pipeline for consumer prices.

Among manufacturers, the cost of raw materials — many of them imported — was 1.3% higher than in May 2018, slowing from 4.5% in April and marking the weakest increase since June 2016.

Economists polled by Reuters had expected input prices to rise by 0.8%.

Manufacturers increased the prices they charged by 1.8% last month compared with 2.1% in April, broadly in line with forecasts and the lowest rate since September 2016.

The ONS said house prices in April rose by an annual 1.4% across the United Kingdom as a whole compared with 1.6% in March. Prices in London alone fell 1.2%, the tenth consecutive fall.

Kier Group construction and services firm to cut 1,200 jobs

(qlmbusinessnews.com via news.sky.com– Mon, 17th June 2019) London, Uk – –

The company plans to concentrate on its core businesses and exit areas such as waste collection and facilities management.

Construction and services firm Kier Group is to cut 1,200 jobs and non-core businesses as it seeks to turnaround its fortunes.

The company, which has been the subject of speculation over its financial health in the wake of the collapse of Carillion, launched a strategic review in April – weeks after chief executive Haydn Mursell was effectively ousted by shareholders.

His successor Andrew Davies told investors on Monday that he was taking a number of actions that would concentrate resources on core activities, simplify its portfolio and bring down debt at the same time.

The review found an insufficient focus on cash generation after years of expanding the company's interests.

It said Kier would now focus on its regional building, infrastructure, utilities and highways arms – saying their performance was underpinned by long-term contracts and would deliver sustainable revenues and margins.

Kier said it would sell or substantially exit Kier Living along with its property, facilities management and environmental services businesses to allow a renewed focus on cash generation.

It hoped that cutting 1,200 full-time jobs across its businesses would help deliver annual cost savings of £55m from 2021.

Under an accelerated programme of cuts Kier, which employs almost 20,000 workers, said it expected around 650 staff would have already left the business by the end of this month with a further 550 roles going in the next financial year.

Kier's financial woes were partly of its own making in that an accounting error in the spring added £50m to its debt pile.

A capital-raising at the end of last year failed to attract enough investor demand – leaving banks to pick up the tab.

Kier said that media speculation relating to its financial position – which included claims that credit insurers were getting cold feet – had knocked confidence in the company and affected its working capital position.

It said that while its banking facilities were able to absorb the “volatility”, net debt at the end of this month would be higher than current market expectations.

The company expected average month-end net debt to come in at £420m-£450m.

It confirmed dividends were suspended for this current financial year and next.

Shares – down more than 65% in the year to date – were 3% up in early deals but were almost 10% lower later in the session as sentiment turned sour.

Mr Davies said of the shake-up: “These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt.

“By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders.”

By James Sillars, business reporter

The British- flower growning industry now worth £121m

(qlmbusinessnews.com via theguardian.com – – Thur, 13th June 2019) London, Uk – –

Homegrown stems accounted for 14% of £865m worth of flowers sold in Britain last year

The British-grown flower industry is now worth £121m – up from £82m in 2015 – following years of decline owing to imported stems, figures reveal.

Last year homegrown flowers accounted for 14% of the £865m worth of all stems sold in the UK, compared with 12% three years ago, according to a report by the Department for Environment, Food and Rural Affairs.

The uplift has been driven by increased consumer demand for British blooms, in turn allowing UK growers to expand and flourish. Environmental benefits include increased biodiversity as growing flowers supports wildlife such as bees and butterflies across local farms.

According to Alastair Owen of New Covent Garden Market, the largest fresh produce market in the country, the use of British blooms in recent royal weddings had helped drive growth in homegrown stems. “We encourage anyone who loves flowers to get involved and to buy more British,” said Owen.

Without the lengthy transportation and refrigeration used for imported flowers, British stems are said to have a better scent and stay fresher for longer. Imported flowers are either cultivated in vast glasshouses in the Netherlands, or flown in by the millions of stems from farms in Africa and South America.

Supermarkets remain the largest outlet for cut flowers in the UK, however, representing just over half of all sales. Waitrose has reported a resurgence in the popularity of British peonies, up 48% compared with last year.

The Co-op recently became the second UK supermarket – after Aldi – to sign up to the National Farmers’ Union’s plants and flowers pledge, a 12-point charter aiming to increase the proportion of British plants and flowers available for consumers to buy.

By Rebecca Smithers

UK economy contracted by 0.4% after ‘dramatic’ fall in car output – ONS

(qlmbusinessnews.com via bbc.co.uk – – Mon, 10th June 2019) London, Uk – –

A “dramatic” fall in car production and an easing of stockpiling by manufacturers meant the economy shrank in April, official figures show.

The economy contracted 0.4% from the month before, according to the Office for National Statistics (ONS).

The contraction meant growth for the three months to April slowed to 0.3%.

Factory shutdowns designed to cope with disruption from a March Brexit slashed UK car production in April by nearly half, the industry said last month.

‘Hangover'

The economy seen a spurt of growth in the run-up to the proposed March date for the UK leaving the European Union, as manufacturers stockpiled parts, raw materials and goods in the anticipation of holdups at the border.

After the Brexit deadline was extended to October, it suffered the reverse effects as these supply reserves were used up and fewer purchases were made.

“The hangover that's followed the UK's original exit date is proving stronger than anticipated,” said Yael Selfin, chief economist at accountants KPMG UK. “Today's figures signal the UK economy is likely to experience more subdued growth for the rest of the year, marred by Brexit uncertainty.”

“The significant drop in car manufacturing, and in broader manufacturing activity at the start of [the second quarter], point at more than just a reversal of the stock building effect seen as businesses prepared for an expected Brexit in March.”

ONS statistician Rob Kent-Smith said: “Growth showed some weakening across the latest three months, with the economy shrinking in the month of April mainly due to a dramatic fall in car production, with uncertainty ahead of the UK's original EU departure date leading to planned shutdowns.

“There was also widespread weakness across manufacturing in April, as the boost from the early completion of orders ahead of the UK's original EU departure date has faded.”

‘Sluggish growth'

The contraction in April was far sharper than economists had expected.

Ruth Gregory, senior UK economist at Capital Economics, said the figures suggest “underlying growth is pretty sluggish”.

“With the Brexit paralysis and a slowing global economy taking its toll, we doubt GDP will grow by much more than 1.5% or so in 2019 as a whole and expect interest rates to remain on hold until the middle of next year.”

The Society of Motor Manufacturers and Traders (SMMT) estimated car production for the whole of 2019 would be about 10% down on last year. It said the market might pick up by the end of the year if there was a favourable deal between the UK and the EU and a substantial transition period to adapt to trading outside the single market.

But it has said a no-deal Brexit would make the declines worse with the threat of border delays, production stoppages and additional costs.

Uk Manufacturing shrinks as stockpiling eased ahead of Brexit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 3rd June 2019) London, Uk – –

The UK manufacturing sector contracted in May for the first time since July 2016 as stockpiling eased ahead of Brexit, an influential survey shows.

The research, by IHS Markit/CIPS, said firms found difficulty convincing clients to commit to new contracts.

The manufacturing Purchasing Managers' Index (PMI) was 49.4, down from 53.1 in April when it was lifted by stockpiling ahead of the UK's expected EU exit.

Any reading below 50 indicates contraction.

The last time there was a reading below 50 was the month after the EU referendum.

The UK had been due to leave the EU on 30 March and the survey had shown stockpiling ahead of this departure date.

In April, the UK and EU subsequently agreed a delay to Brexit until 31 October.

May's survey found that stockpiling meant that it was difficult for manufacturers to win new orders.

The volume of new business fell for the first time in seven months and at one of the fastest rates recorded by the survey in the past six-and-a-half years.

Rob Dobson, director at IHS Markit, which compiles the survey, said new order inflows declined from both domestic and overseas markets.

“Demand was also impacted by ongoing global trade tensions, as well as by companies starting to unwind inventories built up in advance of the original Brexit date. Some EU-based clients were also reported to have shifted supply chains away from the UK,” he said.

Manufacturing jobs fell for the second consecutive month and Mr Dobson said the manufacturing downturn “may have further to run and will have negative ramifications for the growth in the months ahead.”

Duncan Brock, group director at the Chartered Institute of Procurement and Supply (CIPS) which also conducts the survey, said: “A slowdown in the global economy, and trade wars hotting up could tip the scales even further next month and increase the likelihood that the UK manufacturing sector will remain in contraction territory”.

UK banks approved mortgage rise in April to highest since early 2017

(qlmbusinessnews.com via uk.reuters.com — Tue, 28th May 2019) London, UK —

LONDON, (Reuters) – British banks last month approved the greatest number of mortgages since February 2017, adding to signs that the housing market may be over the worst of its pre-Brexit slowdown, a survey showed on Tuesday.

Banks approved 42,989 mortgages in April, up from 40,564 in March and 11.5% higher than a year ago, marking the biggest annual increase since March 2016, according to seasonally-adjusted figures from industry body UK Finance.

Net mortgage lending rose by 1.795 billion pounds last month, a smaller increase than March’s 2.440 billion pound rise which was the largest in 15 months.

Britain’s housing market slowed sharply in the run-up to the original March Brexit deadline but consumer spending has remained solid, driving economic growth just as businesses have cut investment spending due to Brexit uncertainty.

UK Finance said consumer lending increased 3.8% year-on-year in April, slowing a little from March’s growth rate of 4.1% which was the highest in nine months.

Lending figures from the Bank of England, which cover a broader section of Britain’s finance industry, are due on Friday.

Reporting by Andy Bruce

People aged over 70 still in work has more than doubled in a decade

(qlmbusinessnews.com via theguardian.com – – Mon, 27th May 2019) London, Uk – –

Despite benefits of working into retirement, campaigners say figures point to pensioner poverty in UK

The number of people aged over 70 who are still working has more than doubled in a decade to nearly half a million, new research has shown.

The number of those aged over 70 who are in full- or part-time employment has been steadily rising year on year for the past decade, according to new Office for National Statistics data, reaching a peak of 497,946 in the first quarter of this year – an increase of 135% since 2009.

Nearly one in 12 of those in their 70s are still working, a significant increase from the one in 22 working 10 years ago.

“While we know that the over-50s in general have been the driving force behind the UK’s impressive employment growth in recent years, our deeper analysis shows the hard work and significant economic contribution made by the rapidly growing numbers of over-70s in the workplace,” said Stuart Lewis, founder of Rest Less, the site for work and volunteering opportunities specifically targeted at the over-50s, which commissioned the research.

“Many are actively looking to top up their pension savings while they still can but there is also a growing understanding of the many health and social benefits that come with working into retirement,” he said.

The research also shows that nearly one in nine men aged 70 and over are currently working full or part-time: an increase of 137% over the past 10 years.

Over three times more men aged 70 and above are working full-time compared with a decade ago: 113,513 up from 36,302 in 2009.

The number of women aged 70 and above who are still working has also more than doubled in a decade. Today, there are 175,000 women aged 70 and above in work: an increase of 131%.

In addition, the research found, there are currently more than 53,000 over 80s working in the UK, 25% of whom are working full-time.Advertisement

But Catherine Seymour, head of policy at Independent Age pointed out that the rise in people working beyond 65 coincides with increases in pensioner poverty. “One in every six people – nearly two million – of pension age are now living in poverty and every day, another 226 people join that number,” she said.

“Many people who are now working in their late sixties and seventies are doing so out of necessity to pay the rent, heat their homes and afford their weekly shop,” she added. “Everyone who wants to should be able to retire from paid work at state pension age, and these figures suggest many people cannot afford that right.”

Stephen Clarke, senior economic analyst at the Resolution Foundation, pointed out that the UK still performs poorly compared to many other similar countries in terms of older workers’ participation in the labour market. “Plenty more progress can be made,” he said.

“The government should enable people to partially draw down pension pots while continuing to work, while businesses need to do more to keep those with health problems or caring responsibilities engaged with the labour market,” he added.

Patrick Thomson, senior programme manager at the Centre for Ageing Better, said that with fewer younger people starting work to replace those set to retire in the future, uncertainty over Brexit, and worsening skills and labour shortages, “it’s vital that employers wake up and adopt age-friendly practices like flexible working to enable people to work for as long as they want.

“The face of Britain’s workforce is changing dramatically. We can’t afford to ignore our older workers,” he said.

Lily Parsey from the International Longevity Centre, said:

“To maximise the longevity dividend of our ageing society, we need to create inclusive and supportive workplaces, to ensure that we all can benefit from the benefits longevity can yield.”

Case study: ‘My age is totally irrelevant’

Reverend Michael Soulsby, 82, took up a hospital chaplaincy in Buckinghamshire at the age of 80 and is still working one or two days a week.

“I retired as a Church of England parish priest at the age of 68 but un-retired four months later. I have been working part-time since then on baptisms, births, funerals, Sunday services and administering to those in hospital here who need me.

“My age is totally irrelevant in terms of my health. My wife has preserved me very well, so I feel exactly the same physically as I did 20 years ago. I would like to think that my age has, however, made me a better hospital chaplain because I’ve gained the experience to appreciate better what the people I’m administering to really need to hear.

“I’m not still working for financial reasons. I’m still working because there’s a great deal of satisfaction in a job well done. I’ll leave when I stop working to the judgement of the hospital and the chaplaincy but I hope I still have a good few years in me left.”

By Amelia Hill

How Singapore developed one of the world’s best public housing programs

Source: Bloomberg

Singapore had a severe housing shortage decades ago. But it developed one of the world's best public housing programs, which has also allowed a huge number of its citizens to buy their own homes.

Cadent hit with record £44m penalty over gas supply failures

(qlmbusinessnews.com via bbc.co.uk – – Wed, 22nd May 2019) London, Uk – –

 company which left customers without gas for months has received the largest-ever enforcement action, of £44m, from the energy regulator.

Ofgem said Cadent also had no records of 775 high-rise blocks of flats.

That discovery was in part prompted by an information request from a council in the wake of the Grenfell Tower tragedy.

The company offered an “unreserved apology” to customers who were without supplies for 19 days on average.

“We aim to put customers' needs at the heart of everything we do, and we acknowledge that in the past, we have fallen short of customers expectations and the higher standards we have now set ourselves; for this, we are sorry,” said Steve Hurrell, chief executive of Cadent.

Cadent, previously known as National Grid Gas Distribution, is involved in the final leg of piping gas into people's homes.

‘Unacceptable'

It owns four of England's eight regional distribution networks – north London, the West Midlands, the North West of England and eastern England. It did not supply Grenfell, but received an information request from a council following the tragedy.

Many of the customers affected by the gas outage were in north London. Some had their gas cut off for more than five months

Jonathan Brearley of Ofgem told BBC Radio 4's Today programme: “When they were making repairs, people had their gas cut off for far too long.

“So in London, people in tower blocks were off for an average of 19 days and some were off for several months. We think this is unacceptable.

“If they do not look after their customers in totality, then absolutely they will either lose their licence or indeed they will suffer further financial penalties.”

Three failings

The penalty takes two parts: £24m for improvements and compensation and £20m for a community fund, which will receive 1.25% of Cadent's after tax profits. The firm's operating profit last year was £724m.

The company admitted that its regulatory data supplied to Ofgem showed that it was leaving residents in blocks of flats without gas for longer than necessary.

It also reported to Ofgem that it failed, over a six-year period, to compensate up to 12,000 residents left without gas for more than 24 hours.

It also reported to the regulator that it did not have records of gas pipes – or risers – in many tower blocks in its London network.

As part of the penalty, Cadent – which supplies gas to 11 million properties and 3,347 blocks of at least six storeys – will double compensation payments to customers who experience an unplanned disruption of longer than 24 hours, at a cost of £6.7m.

It will also pay £300,000 – double the amount first envisaged – to 2,140 customers who faced delayed compensation in 2018 and 2019.

The Health and Safety Executive is investigating the record-keeping issue and will publish its findings in due course.