Public sector borrowing hit £34.1bn in December

(qlmbusinessnews.com via news.sky.com– Fri, 22nd Jan 2021) London, Uk – –

The news comes amid fears that some local authorities are taking on risky levels of debt in an effort to stay financially afloat.

Public sector net borrowing reached £34.1bn in December – the third-highest monthly figure since records began in 1993.

The figure from the Office for National Statistics (ONS) means that:

• Borrowing since the start of the financial year in April has reached £270.8bn

• Borrowing in December 2020 was £28.2bn more than in December 2019

• December's figure was also higher than the £31.6bn borrowed in November 2020

• Public sector debt has reached an all-time high of £2.13trn – equivalent to 99.4% of GDP, the most
since the financial year ending 1962

Chancellor Rishi Sunak said: “Since the start of the pandemic we've invested over £280bn to protect jobs and livelihoods across the UK, and support our economy and public services.

“This has clearly been the fiscally responsible thing to do. But, as I've said before, once our economy begins to recover, we should look to return the public finances to a more sustainable footing.”

Economists were divided over how soon Britons could see tax rises as part of the government's response.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said in a note: “Public borrowing will fall sharply from about 20% of GDP this year to between 8% and 10% in 2021/22, if the government stops the furlough and self-employment income support schemes in the spring, and healthcare spending declines. Where have jobs been lost during the pandemic?

“We doubt that the chancellor will go a step further in the Budget on 3 March and push through large immediate tax rises or non-health spending cuts.

“But the Treasury will not tolerate a 10% deficit indefinitely and the timing of the next general election in 2024 suggests that Mr Sunak will not wait until the economy has fully recovered before actively tightening fiscal policy.

“Accordingly, we expect taxes to rise sharply in 2022, in order to attempt to stabilise the debt-to-GDP ratio while at the same time funding big demography-linked increases in health and pensions spending.”

Richard Hunter, head of markets at Interactive Investor, said the borrowing figure “underscores the inevitability of tax hikes in the March budget”.

He added: “There is, therefore, the increasing need for a substantial amount of 2020's enforced savings, propelled by pent-up demand, to find its way back into the economy later this year.”

Meanwhile, MPs have warned that some local authorities are taking on risky levels of debt in an effort to stay financially afloat.

Meg Hillier, chairwoman of the Commons public accounts committee, said the Treasury was displaying a “worryingly laissez faire attitude” to the issue.

Ms Hillier said that “some local authorities have taken on extremely risky levels of debt in recent years in an effort to shore up dwindling finances”, particularly in commercial property investments.

“The pandemic has doubly exposed that risk – in the huge extra demands and duties it is placing on local authorities, and in the hit to returns on commercial investments,” the Labour MP added.

By Sharon Marris

UK households urged to brace for £80-a-year hike in energy bills

(qlmbusinessnews.com via theguardian.com – – Thur, 21st Jan 2021) London, Uk – –

Ofgem plans to lift cap on standard energy tariffs in April as market price for gas soars. The market price for UK gas climbed to three-year highs in recent weeks. 

Millions of households should brace themselves for an energy bill hike of more than £80 a year from April as Ofgem lifts the cap on standard energy tariffs, according to the regulator’s chief executive.

Jonathan Brearley said Ofgem would announce plans to lift the energy price cap for the first time in two years early next month, and warned that the move would wipe out the £84-a-year cut brought in last year.

In total, the increase could raise the dual-fuel energy bills for 11 million households to £1,126 a year from April, when the government’s job support scheme is due to reach its final weeks.

What is the energy price cap and how does it work?

“I understand that any change in energy prices right now is not going to be welcomed by customers,” Brearley said.

The Ofgem boss blamed the looming hike in standard variable energy tariffs on the steady rise in the market price for gas and electricity.

The price cap increase may include up to £21 for energy suppliers to help recover the cost of unpaid bills during the coronavirus pandemic, but a final decision on this amount has yet to be made, he added.

“The price cap is intended to protect customers against unfair charging. It’s never intended to be the best price in the market,” Brearley said. “If you want the best price then you should get in there and switch your supplier. I’ve just done so myself, and I do it every year. That is the best way to get good value.”

Almost 500,000 energy customers switched to a new supplier each month last year, according to figures from the industry group Energy UK. This compares with a total of 6.4 million for the whole of 2019.

The energy price increase has been widely expected within the energy industry after the market price for UK gas climbed to three-year highs in recent weeks, amid surging gas import rates in Asia and a global commodities boom.

The market boom could add £66 a year to the average dual-fuel energy bill, according to the energy consultancy Cornwall Insight.

However, Britain’s biggest energy suppliers are also calling for an extra £21 a year on the cap to help them reclaim the “bad debt” from households which have been unable to afford their energy bills during the pandemic.

Brearley said Ofgem would treat “any submission from any part of the industry with a degree of scepticism”, but that evidence he had seen so far suggested the cost estimates used to account for customer debt needed to change.

“We’re going to take a very cautious view, from a customer’s perspective, but we do need to take bad debt into account because it is one of the costs that these businesses face,” Brearley said.

He added that the regulator’s top priority for the year would be helping energy customers to weather the financial strain of the pandemic, by insisting suppliers treat customers fairly.

The regulator lifted a ban on energy companies using debt collectors to chase unpaid bills in June last year, after only three months’ reprieve, on the condition that suppliers first offered debt repayment plans to struggling customers.

“What we’ve said to suppliers is that we understand that you need to issue energy bills, we understand that you need to pursue costs but you’ve got to do that in a respectful and fair way,” Brearley said.

He said Ofgem was also “looking very hard” at E.On UK, one of the largest energy suppliers, which charged its customers twice in the run-up to Christmas and was unable to run its customer service channels as usual for almost two weeks owing to a deluge of customer complaints.

“E.On came to us very openly, and self-reported this, and they have put things right,” said Brearley. “But what a time for something like that to happen to customers. We’re not in a position to comment publicly, but as you can imagine we’re looking very hard at what happened, and any detriment to customers as a result.”

By Jillian Ambrose

Chancellor Rishi Sunak unveils £4.6bn relief package for UK retail and hospitality sectors

(qlmbusinessnews.com via theguardian.com – – Tue, 5th Jan, 2021) London, Uk – –

Retail, hospitality and leisure sectors to be given one-off grants worth up to £9,000

Larry Elliott Economics editor

Firms in those sectors of the economy hardest hit by stringent new lockdown measures will receive grants of up to £9,000 in a £4.6bn Treasury package designed to keep them afloat to the spring.

The chancellor, Rishi Sunak, said he expected 600,000 business properties in retail, leisure and hospitality to receive financial support from the government through a one-off grant.

Acknowledging that the period ahead would be “difficult”, the chancellor said the government was bolstering its efforts to protect jobs and to prevent businesses from collapsing.

In addition to grants worth £4bn, a further £594m will be made available to local councils to assist businesses impacted by the lockdown but not eligible for the new payments. As part of the package, the Scottish government will receive £375m, the Welsh government £227m and the Northern Ireland executive £127m.

The director general of the British Chambers of Commerce, Adam Marshall, said: “While this immediate cash flow support for business is welcome, it is not going to be enough to save many firms. We need to see a clear support package for the whole of 2021, not just another incremental intervention.

“The government must move away from this drip-feed approach and set out a long-term plan that allows all businesses of all shapes and sizes to plan, and ultimately survive.”

Sunak, who has already spent close to £300bn tackling the economic fallout from the Covid-19 crisis, said: “The new strain of the virus presents us all with a huge challenge – and, while the vaccine is being rolled out, we have needed to tighten restrictions further.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the spring.A

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

The Treasury said there would be a £4,000 grant for businesses with a rateable value of £15,000 or under, £6,000 for businesses with a rateable value of between £15,000 and £51,000, and £9,000 for businesses with a rateable value of more than £51,000.

Some business groups have been calling on the government to extend a business rates holiday for a further year to help firms with their cashflow or to prolong the temporary cut in VAT, which is due to end this month.

Treasury sources did not rule out further announcements but said the grants were intended to tide the worst-affected businesses over until it was clear whether the new lockdowns had been effective. Sunak dropped strong hints that the budget on 3 March would provide the opportunity for a more comprehensive package of economic support.

Many analysts are forecasting that after collapsing by almost a quarter in the first half of 2020 the UK economy will again contract in both the final three months of last year and the first three months of 2021 – thus meeting the definition of a double-dip recession.

Sunak expects more employees to be placed on the furlough scheme – which runs until the end of April – as a result of the measures deemed necessary to control the spread of the virus.

The Treasury said the new one-off grants came on top of existing business support, including grants worth up to £3,000 for closed businesses, and up to £2,100 a month for impacted businesses once they reopen.

Roger Barker, the director of policy at the Institute of Directors, said: “This new grant package is welcome, and will go some way to reassuring the worst affected businesses.

“We are particularly pleased the Treasury has taken on board our recommendation to increase the discretionary local authority grant fund. This policy has helped to reach those who haven’t been able to access other support. The government should be prepared to top up the fund if necessary.

“The chancellor must remain wary of a spring cliff-edge in business support as the furlough scheme and other support measures unwind.”

By Larry Elliott Economics editor

The United Kingdom exits the EU entering a post-Brexit future still uncertain

(qlmbusinessnews.com via uk.reuters.com — Thur, 31st Dec 2020) London, UK —

LONDON (Reuters) – The United Kingdom exits the European Union’s orbit on Thursday, turning its back on a tempestuous 48-year liaison with the European project and entering a post-Brexit future whose details are still uncertain after years of drama over the departure.

Brexit, in essence, takes place at the strike of midnight in Brussels, or 2300 London time (GMT), when the United Kingdom leaves de-facto membership that continued for a transition period after it formally left the bloc on Jan. 31.

For five years, the frenzied gyrations of the Brexit crisis dominated European affairs, haunted the sterling markets and tarnished the United Kingdom’s reputation as a confident pillar of Western economic and political stability.

Supporters cast Brexit as the dawn of a newly independent “global Britain”, but it has weakened the bonds that tie England, Wales, Scotland and Northern Ireland into a $3 trillion economy.

“Brexit is not an end but a beginning,” Prime Minister Boris Johnson, 56, told parliament just hours before it approved his post-Brexit EU trade deal. Grinning, he later jokingly assured reporters that he had read the lengthy agreement that was reached only on Dec. 24.

Johnson said there would be no bonfire of regulations to build a “bargain basement Dickensian Britain” and told Europe that the United Kingdom would remain the “quintessential European civilization”.

But Johnson, the face of the Brexit campaign, has been short on detail about what he wants to build with Britain’s “independence” – or how to do it while borrowing record amounts to pay for the COVID-19 crisis.

His 80-year-old father, Stanley Johnson, who voted to remain in 2016, said he was in the process of applying for a French passport.

BREXIT

In the June 23, 2016, referendum, 17.4 million voters, or 52%, backed Brexit while 16.1 million, or 48%, backed staying in the bloc. Few have changed their minds since. England and Wales voted out but Scotland and Northern Ireland voted in.

The referendum showed a United Kingdom divided about much more than the European Union, and fuelled soul-searching about everything from secession and immigration to capitalism, the legacy of empire and what it now means to be British.

Leaving was once the far-fetched dream of a motley crew of “eurosceptics” on the fringes of British politics: the UK joined in 1973 as “the sick man of Europe” and two decades ago British leaders were arguing about whether to join the euro.

“The UK establishment had basically lost its mojo and we went into what was then the Common Market, really, for reasons of self-protection – we thought that was the best future for us, we couldn’t see another way forward,” Johnson said.Slideshow ( 4 images )

Fast forward 48 years.

“We see a global future for ourselves,” said Johnson who won power in 2019 and, against the odds, clinched a Brexit divorce treaty and a trade deal, as well as the biggest Conservative majority since Margaret Thatcher, in the 2019 election.

Supporters see Brexit as an escape from a project that had fallen far behind global powers the United States and China. Opponents say it will weaken the West, further reduce Britain’s global clout, undermine its economy and lessen its cosmopolitanism.Slideshow ( 4 images )

But when the Great Bell known as Big Ben strikes 11 in London, there will be few outward displays of emotion as gatherings are banned due to COVID-19 restrictions.

UNITED KINGDOM?

After the United Kingdom leaves the Single Market or the Customs Union, there is almost certain to be some disruption at borders. More red tape means more cost for those importing and exporting goods across the EU-UK border.

The Port of Dover expects volumes to drop off in early January. The most worrisome period, it says, will be in mid- to late January when volumes pick up again.

The exit also means changes to everything from pet passports and driving licence rules for the British in Europe to data rules.

Support for Scottish independence has risen, partly due to Brexit and partly due to COVID-19, threatening the 300-year-old political union between England and Scotland.

Scottish leader Nicola Sturgeon has said an independence referendum should take place in the earlier part of the devolved parliament’s next term, which begins next year.

After clinching the Christmas Eve trade deal that will smooth out the worst disruption, European Commission President Ursula von der Leyen quoted both William Shakespeare and T.S. Eliot.

“Parting is such sweet sorrow,” she said. “What we call the beginning is often the end. And to make an end is to make a beginning.”

By Guy Faulconbridge

UK Shoppers splurge on luxury food and drink to see out dismal 2020 in style

(qlmbusinessnews.com via theguardian.com – – Mon, 28th Dec 2020) London, Uk – –

Shoppers splurge on champagne, gold-flecked smoked salmon and posh New Year’s Eve takeaways

After years of decline, champagne sales are starting to pick up.

From champagne to gold-flecked smoked salmon and even posh New Year’s Eve takeaways, Britons in lockdown are popping more premium corks and splashing out on luxury food treats to help them see out a miserable year in style.

Figures show that many shoppers have traded up to premium fizz – spending nearly a quarter more in the last three months than the same time last year – to tide them over Christmas and celebrate the new year.

Overall, sales of champagne in supermarkets and shops were up 16% by volume and 22% by value in the last 12 weeks, equivalent to 2.3m bottles worth £63m, the Wine and Spirit Trade Association reported on Monday.

“This has been an incredibly difficult year, so it’s great that we can end on a positive note that champagne sales, after years of decline, are starting to pick up,” said Miles Beale, the WSTA’s chief executive. “There is no better way to celebrate than with a bottle of fizz, and our numbers show that, even with everything that has gone on this year, many of us are still looking to celebrate or bring a little extra sparkle with a bottle of bubbly. Many will consider it a little luxury for a festive period when we are having to celebrate at home.”

Similarly, sales of luxury foods such as smoked salmon, patés, fine cheeses and chocolates soared in the run-up to Christmas as Britons indulged in pick-me-up “treats”.

The East End-based smoked salmon specialist H Forman & Son, whose supplies of its award-winning London Cure smoked salmon to top restaurants collapsed following lockdown in March, has enjoyed record sales through its Forman & Field home delivery arm, more than double those of last year. Shoppers stocked up on smoked salmon and paté, British artisan cheeses and its sellout “ultimate care package” hamper, aimed at elderly relatives and student offspring.

Its owner, Lance Forman, said: “Forman’s has been around a long time – since 1905 – and we’ve seen a few recessions. When times are tough, people still need a touch of luxury to lighten those darker days. They may not be able to travel as much or may have to hold back on large purchases, but a little taste of luxury doesn’t need to break the bank.”

Waitrose said sales of deluxe salmon, including its gin-infused smoked salmon adorned with gold lustre, were up 18% on last year, and those of its premium own-brand No 1 cheeses and Christmas confectionery up 55% and 19%.

“The holiday period is the perfect time to indulge in a little luxury, and despite no celebratory events this year, shoppers are still embracing the sheer decadence of a glass of fizz,” said Rebecca Hull, the supermarket’s champagne and sparkling wine buyer. “While champagne remains a popular choice, it’s fantastic to see shoppers broadening their sparkling horizons as the popularity of our English sparkling wine continues to grow.”

At the Co-op, sales of champagne doubled over Christmas, with alternatives such as pink prosecco also popular. Simon Cairns, the retailer’s head of drinks, said: “Champagne sales have been bubbling over this year as shoppers have been choosing more premium bottles of wine to make the most of more at-home drinking occasions.”

Top UK hotels forced by lockdown restrictions to switch to takeaway services have been striving to offer the full New Year’s Eve restaurant experience in the comfort of diners’ homes. In London, the Savoy’s celebration meal for two comprises five courses for an eye-watering £350. Homemade foie gras terrine or chilled lobster, beef wellington or Scottish salmon, a selection of British cheeses and chocolate fondant can be washed down with the bottle of Louis Roederer champagne included in the price.

The Michelin-starred L’Enclume in Cartmel, Cumbria, has sold out of its £95 five-course meal for one, although three-course options are still available for delivery nationwide.

By Rebecca Smithers

UK government restarts talks over £20bn nuclear power station

(qlmbusinessnews.com via theguardian.com – – Mon, 14th Dec 2020) London, Uk – –

Move comes alongside energy white paper, which aims to cut UK’s carbon emissions

The latest round of negotiations over the £20bn nuclear reactor will focus on whether EDF can prove that it has learned lessons from the Hinkley Point nuclear project, and that a successor plant would offer the public value for money.

The government said it was considering a new deal to help the French state-owned energy company finance Sizewell, which may include taking a direct stake in the project and making taxpayers liable for any cost overruns.

A statement from the Department for Business, Energy and Industrial Strategy said it would consider a greater role in the project provided there was “clear value for money for consumers and taxpayers”.

The decision to restart formal negotiations comes after a hiatus in talks that have been dogged by concerns over cost, and the involvement of China General Nuclear Power (CGN), which holds a 20% stake in the project.

CGN is reportedly considering backing out of the project, which would leave a financing gap for EDF if the UK government is unwilling to help pay for the construction costs. The government is also planning to back a new generation of small modular nuclear reactors, or “mini nukes”, which can be built at a lower cost.

The decision to reignite Britain’s new nuclear ambitions was announced alongside industry-wide plans to cut carbon emissions from the energy system while keeping a lid on energy bills and helping to create 220,000 new jobs in the next 10 years.

Alok Sharma, the business and energy secretary, said the plans will transform the government’s “climate ambition into climate action” through a “decisive and permanent shift away from our dependence on fossil fuels”.

The white paper builds on the prime minister’s 10-point climate plan which set out plans to invest in offshore wind farms, spend £1bn to develop carbon capture technology, ban the sale of new fossil fuel vehicles from 2030, and provide £1.3bn for a nationwide roll-out of electric vehicle charge points.

The energy white paper also includes the following proposals:

  • Cut energy bills: trials for a new switching service to automatically move homes onto better deals, as well as £6.7bn over the next six years to support socially vulnerable and fuel poor homes.
  • Replace fossil fuel boilers: an aim for all newly installed heating systems to be low carbon by the mid-2030s.
  • UK carbon trading: a new UK emissions trading scheme to replace the EU’s carbon market from January 2021 which will put a tighter limit on emissions.
  • North Sea transition: plans to support the people and communities most affected by the move away from oil and gas production.

Sharma added: “At every step of the way, we will place affordability and fairness at the heart of our reforms – unleashing a wave of competition so consumers get the best deals possible on their bills, while protecting the vulnerable and fuel poor with additional financial support.”

 

Extended EU trade talks pushed Pound higher against the US dollar and the euro

(qlmbusinessnews.com via bbc.co.uk – – Mon, 14th Dec 2020) London, Uk – –

The pound has pushed higher against the US dollar and the euro on news that trade negotiations with the European Union (EU) are continuing.

In London trade, sterling was up 1.5% against the dollar at $1.3428, while against the euro it rose 1.2% to €1.1043.

The pound hit a one-month low last week on worries of a no-deal Brexit.

Although the deadline was missed on Sunday, the EU and the UK agreed to continue negotiations.

UK Prime Minister Boris Johnson and the European Commission President Ursula von der Leyen will carry on talks “to see whether an agreement can even at this late stage be reached”.

Some analysts have warned that the rally in the pound might be short-lived, because Britain and the EU have repeatedly failed to reach a deal, and there is still a risk that one won’t happen.

“This is a temporary move higher in the pound, but it is still not clear that a no-deal scenario can be avoided,” Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo told Reuters.

The basics
  • Brexit happened but rules didn't change at once: The UK left the European Union on 31 January 2020, but leaders needed time to negotiate a deal for life afterwards – they got 11 months.
  • Talks are happening: The UK and the EU have until 31 December 2020 to agree a trade deal as well as other things, such as fishing rights.
  • If there is no deal: Border checks and taxes will be introduced for goods travelling between the UK and the EU. But deal or no deal, we will still see changes.

A joint UK-EU statement said. “Despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over we think it is responsible at this point to go the extra mile.”

Britain formally left the EU in January, but has since been in a transition period during which it remains in the EU single market and customs union.

The transition period ends on 31 December, and without a deal the trade relationship could be affected by tariffs and quotas.

 

 

UK grocery sales in November hit record 10.9 billion pounds – Kantar

(qlmbusinessnews.com via uk.reuters.com — Tue, 8th Dec 2020) London, UK —

LONDON (Reuters) – November was the most lucrative month ever for the UK grocery market, with 10.9 billion pounds spent, as out of home eating and drinking was restricted by England’s second national lockdown, industry data showed on Tuesday.

Market researcher Kantar said grocery sales rose by 11.3% in the 12 weeks to Nov. 29 year-on-year and were up 13.9% year-on-year in the last four of those weeks.

England’s second lockdown to stem rising COVID-19 infections started on Nov. 5 and ran until Dec. 1.

All non-essential shops had to close, along with pubs, cafes and restaurants, except to offer takeaway food. People were also encouraged to work from home if possible. All those factors boosted supermarket sales.

“November as a whole saw shopper frequency hit its highest level since the beginning of the pandemic, suggesting more confidence among people going into stores,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

Kantar forecast spending would be close to 12 billion pounds in December, around 1.5 billion pounds more than December last year.

Of Britain’s big four supermarket groups, No. 4 player Morrisons again outperformed rivals over the 12 week period with sales growth of 13.7%.

Second-ranked Sainsbury’s saw growth of 10.8%, with market leader Tesco on 10.4%. Walmart owned Asda was again the laggard with growth of 7.7%.

Reporting by James Davey

Post-Brexit trade deal between Boris Johnson’s government and Brussels on a knife-edge

(qlmbusinessnews.com via news.sky.com– Mon, 7th Dec, 2020) London, Uk – –

Negotiations on a post-Brexit trade deal have “entered the endgame” with the PM and EU president due to speak later.

By Greg Heffer, political reporter

Brexit trade talks go down to the wire with a phone call between Boris Johnson and European Commission President Ursula von der Leyen this afternoon.

The prime minister was due to speak with the EU chief at 4pm (5pm in Brussels) to assess whether a post-Brexit trade agreement can still be reached.

Meanwhile, the government offered a concession to the EU and said it would drop the most controversial parts of its Internal Market Bill – which could break international law – following “good progress” in talks over Irish border arrangements.

This afternoon's phone call between Mr Johnson and Ms von der Leyen is their second within 48 hours, after they agreed over the weekend to make a “further effort” to reach a deal, despite months of deadlock on key issues.

Saturday's call preceded another day of negotiations, which continued late into the night.

However the EU's chief negotiator, Michel Barnier, was said to have been “very gloomy” about the prospects of a deal when he spoke to the bloc's national ambassadors on Monday morning.

Irish foreign minister Simon Coveney told RTE news: “Having heard from Michel Barnier this morning, really the news is very downbeat.

“I would say he is very gloomy, and obviously very cautious about the ability to make progress today.”

One EU diplomat said: “EU-UK negotiations have entered the endgame, time is running out quickly.

“Despite intensive negotiations until late last night, the gaps on level playing field, governance and fisheries are still not bridged.

“The outcome is still uncertain, it can still go both ways.”

Meanwhile, an EU source told Sky News they were “not expecting anything substantial yet” although they predicted “some more drama” and said trade talks were “moving in the right direction on fishing”.

Downing Street said on Monday that “significant differences remain on critical issues”, including fisheries, which was still being negotiated by the UK's team in Brussels.

The prime minister's official spokesman said: “Our negotiations are ongoing but we remain committed to trying to reach a free trade agreement, and that is what our team is there trying to achieve today, but we are clearly in the final stages now.”

The spokesman also said the UK government was “prepared to negotiate for as long as we have time available if we think an agreement is still possible”, after Mr Barnier reportedly told members of the European Parliament the deadline for talks succeeding is Wednesday.

In a bid to soothe tensions, the UK government also confirmed it would “be prepared to remove” two parts of the Internal Market Bill.

The draft legislation has been condemned by critics both in Westminster and across European capitals for allowing ministers to override the Withdrawal Agreement – the UK's divorce deal with the EU that was agreed last year.

The government has admitted the legislation could see the UK breach international law, but argue it is needed to protect the integrity of the UK and the Good Friday Agreement in Northern Ireland.

Senior cabinet minister Michael Gove met with European Commission vice-president Maros Sefcovic in Brussels on Monday.

Following their meeting, the UK government released a statement saying it could scrap the controversial parts related to state aid and export declarations.

The bill is being debated on on Monday in the Commons after the Lords took out the same sections, but the government is expected to successfully reinsert them – setting up a “ping pong” battle between the two Houses.

Foreign Office minister James Cleverly told Sky News' Kay Burley those clauses would be reintroduced to the bill when it returns to the House of Commons today, with MPs set to vote on whether to keep or scrap the Lords' amendments this evening.

“It contains clauses that we may need to rely on and, if we do need to rely on them, better that they're there,” Mr Cleverly said.

“It's an insurance policy, like all insurance policies you'd prefer not to have to use it. But you would kick yourself if you need it and it isn't there.”A no-deal was unthinkable once – this week we'll find out if the PM is prepared to press that button

Asked whether it was worth risking the EU's anger by reintroducing the controversial legislation in full, Mr Cleverly replied: “Not having that in place would weaken our position and actually give an advantage to the EU negotiators.

“And, in a negotiation like this, it is really key that both parties negotiate hard – I'm sure the EU negotiators are negotiating hard, but so is David Frost (the UK's chief negotiator) and our negotiating team.

“We do it in a spirit of positivity, but we do want to get a deal that works for the UK, an agreement that works for the UK.”

The EU's national leaders will gather for a summit in Brussels on Thursday, which will come just three weeks before the end of the Brexit transition period on 31 December.

The pound fell by more than two cents against the US dollar on Monday morning to just over $1.32 as investors grew more anxious about the possibility of a no-deal outcome.

It was a sharp reverse from market optimism over the talks last week which saw sterling climb above $1.35 for the first time this year.

Without a post-Brexit trade deal being agreed by the end of this month, the EU and UK are likely to have to trade on World Trade Organisation rules with tariffs imposed in both directions.

UK service sector businesses more optimistic about 2021 after vaccine news, surveys show

(qlmbusinessnews.com via uk.reuters.com — Mon, 3rd Dec 2020) London, UK —

LONDON (Reuters) – British businesses in the service sector grew more optimistic about 2021 following news of COVID-19 vaccines, despite the first fall in activity since June as a four-week partial lockdown across England took its toll.

The IHS Markit/CIPS UK services Purchasing Managers’ (PMI) dropped to 47.6 in November from 51.4 in October, the first time since June that it fell below the 50 level that divides growth from contraction.

But this was a much smaller decline than during the first lockdown in April, when the PMI hit a record-low of 13.4, and less of a slowdown than an earlier ‘flash’ November reading of 45.8.

The composite PMI, which includes manufacturers who enjoyed stronger growth, dropped to 49.0 from 52.1.

News of effective COVID-19 vaccines also boosted business optimism in the services PMI, which rose to its strongest since February’s five-year high.

Samuel Tombs, an economist at Pantheon Macroeconomics, said the downturn could still prove significant, as a separate survey from Britain’s Office for National Statistics pointed to a hefty 3% monthly drop in revenue in early November.

“We still look for around a month-to-month drop in GDP of about 5% in November, followed by an incomplete rebound of around 4% in December,” he said.

Britain’s economy suffered a record 25% fall in output in March and April. The Bank of England forecast this month that output would fall just 2% in the final three months of 2020.

Thursday’s PMI survey showed job losses continued for a ninth consecutive month, the longest run since 2010.

Unemployment is forecast to rise further during the months it will take to roll out the vaccine to millions of Britons.

While some sectors such as retail – which is not covered by the PMI – and hospitality have been hard hit by the second lockdown, others have found it easier to adapt, IHS Markit said.

A Bank of England (BoE) survey showed optimism for 2021. Businesses expected sales in the second quarter of 2021 would be only 2% below pre-pandemic levels, less severe than an 8% shortfall forecast a month earlier.

The services PMI survey took place from Nov. 12-26, while the BoE survey was conducted from Nov. 6-20, meaning most responses came after news of the initial COVID-19 vaccine breakthrough from Pfizer and BioNTech on Nov. 9.

Businesses that traded with the European Union also told the BoE they were more prepared for new post-Brexit customs requirements from Jan. 1. – though almost a third said they were still only partly or not at all prepared with just weeks to go.

Reporting by David Milliken

England’s high streets returned to business after lockdown

(qlmbusinessnews.com via theguardian.com – – Wed, 2nd Dec 2020) London, Uk – –

Primark stores were some of first to open as Covid controls on non-essential shops eased

England’s high streets returned to business slowly and tentatively on Wednesday with queues outside some Primark stores as they became some of the first to open their doors at 7am.

Non-essential stores in England are reopening after the month-long lockdown brought in by the government in its latest effort to control the spread of Covid-19.

While there were reports of queues outside some Primark stores in Newcastle and Birmingham, only about 20 masked people queued outside Primark’s Oxford Street branch in London, with almost as many press photographers as shoppers.

A number of stores, including Forever 21, Schuh and several former tourist gift shops remain permanently closed on London’s main shopping street, which has been hard hit because tourists and commuters have been kept away by travel restrictions and the shift to working from home.

Standing in the queue outside the cut-price fashion store, which was still bringing in trollies full of Primark stock after the doors opened, Gabriella Abrile, 21, said “I’m so excited. It’s a very good store. I’m here to buy gifts.”

Several other shoppers said they were popping in on their way to work. Tracey Banks, 57, said she had been keen to get back into stores as “I’m old, I like to touch and feel things. I don’t like to just look at a picture.

“I’m going to get some Christmas pyjamas to make sure I get them before the mayhem starts. I’m surprised there is only a little queue. I expected it to be much bigger,” she said.

By Sarah Butler

Brexit trade talks stuck on fishing, governance rules because EU is asking too much, UK says

(qlmbusinessnews.com via uk.reuters.com — Tue 1st Dec, 2020) London, UK –

LONDON (Reuters) – Brexit trade talks are stuck on fishing, governance rules and dispute resolution because the European Union is asking too much of Britain, a senior member of the British government said on Tuesday.

Just 30 days before Britain leaves the EU’s orbit following a transition period since it formally quit the bloc, the sides are trying to agree a trade deal to avoid a turbulent rupture that could snarl almost $1 trillion in annual trade.

With each side urging the other to compromise, a French official said Britain must clarify its positions and “really negotiate”, and cautioned that the EU would not accept a “substandard deal”.

Even if a trade accord is secured, it is likely to be just a narrow deal on goods, and some disruption is almost certain as border controls are erected between the world’s biggest trading block and Britain.

Talks have snagged on fishing in Britain’s rich waters, on what EU rules London will accept and on how any dispute might be resolved.

“The EU still wants to take the lion’s share of the fishing in our waters – which is just not fair given that we are leaving the EU,” Michael Gove, Chancellor of the Duchy of Lancaster and a senior ally of Prime Minister Boris Johnson, told Sky.

“The EU still want us to be tied to their way of doing things,” Gove said. “The EU are at the moment reserving the right, if there is any sort of dispute, not quite to rip everything up but to impose some really penal and tough restrictions on us, and we don’t think that’s fair.”

A trade deal would not only safeguard trade but also buttress peace in British-ruled Northern Ireland, though some disruption is almost certain at the busiest EU-UK border points.

Failure to secure a deal would snarl borders, spook financial markets and disrupt delicate supply chains that stretch across Europe and beyond — just as the world grapples with the vast economic cost of the COVID-19 outbreak.

Gove said the process was close to conclusion but avoided repeating an earlier prediction of a 66% probability of a deal. He declined to put a figure on the probability.

BREXIT NERVES

German Chancellor Angela Merkel, Europe’s most powerful national leader, has said some of the EU’s 27 member states are getting impatient.

“The priority is for the British to clarify their positions and really negotiate to find a deal,” a French presidency official told Reuters. “The EU also has interests to fight for, those of a fair competition for its businesses and those of its fishermen.”

“The Union has made a clear and balanced offer for a future partnership with Britain. We will not accept a substandard deal which would not respect our own interests,” the official said.

Irish Prime Minister Micheal Martin said a deal could be done this week.

“There is a landing zone for an agreement,” Martin told the Irish Times in an interview. “We are now really in the endgame if a deal is to be arrived at this week.”

By Sarah Young, Guy Faulconbridge

Royal Mail moves a step closer to scrapping Saturday letter deliveries

(qlmbusinessnews.com via theguardian.com – – Thur, 26th Nov 2020) London, Uk – –

Research finds scrapping service would have no significant impact on customers

Ofcom estimates ending Saturday service could save Royal Mail up to £225m a year.

Royal Mail has moved a step closer to scrapping Saturday letter deliveries after research from the postal regulator found there would be no significant impact on consumers.

Ofcom, which estimates the move could save Royal Mail £225m a year, said cutting Saturday deliveries would still allow the company to “meet the needs of nearly all people and businesses”.

A comprehensive review of the postal market conducted by Ofcom found that a six-day-a-week letter delivery meets the needs of 98% of residential users and 97% of small and and medium-sized businesses (SMEs) in the UK. Cutting back to five days a week would still meet 97% of the needs of residential and SMEs.

Ofcom has estimated this could help Royal Mail cut costs by £125m-£225m a year.

“Our research suggests that people’s needs would still be met if letter deliveries were reduced from six days a week to five,” said Lindsey Fussell, Ofcom’s networks and communications group director.

“It would ultimately be for parliament to decide whether the change is needed. However, Royal Mail must still modernise and become more efficient, to keep pace with customers’ changing needs.”

In September, Royal Mail, which delivered 1.1bn fewer letters in the five months to the end of August compared with the same period last year, hinted that Saturday letter deliveries were no longer essential.

Royal Mail is keen to focus on parcel delivery, which is booming thanks to the online shopping revolution. The company reported a 31% increase in UK parcel volumes between April and September, as home deliveries boom during the pandemic.

However, in the last six months letter volumes have fallen by around a third. “To stay relevant and sustainable, the universal service must adapt to life in the 21st century,” said Keith Williams, the interim executive chairman at Royal Mail.

“The reduction in letter volumes has had a significant impact on the finances of the universal service which lost £180m in the first half of the year. This, along with our own comprehensive customer research, demonstrates the need to rebalance the universal service in line with growing consumer demand for parcels, and lower usage of letters.”

Ofcom’s annual monitoring report published on Thursday found that 2.8bn parcels were sent and received in the UK in the year to the end of March 2020 – 1bn more than in 2013. The volume of letters has fallen by about 5% each year since 2015, as people move to digital communications, according to Ofcom.

However, Ofcom also said the cost savings made by cutting Saturday letter deliveries was not enough on its own to make Royal Mail sustainable over the long term.

Ofcom also gauged consumer reaction to other features of the universal service, including scrapping the first-class service and creating a single service offering a two-day delivery speed. 

The research found this option, which would be slower than first-class mail but faster than second class currently, would not “have a large impact on users’ acceptability of the service”. However, Ofcom said the option would have limited scope for cost savings, and would risk reduced revenues.

Under its universal service obligation, Royal Mail is required to deliver letters six days a week and parcels five days a week to every address in the UK at a standard price. Royal Mail exceeds its obligation relating to parcels, with a six-day service, but Ofcom’s research found consumers would be “largely indifferent” if it was reduced to five days.

In June, Royal Mail revealed a cost-cutting plan that will lead to the loss of 2,000 management jobs by March, in areas including IT, finance, marketing and sales. The company’s 90,000 postal workers would not be affected by the cuts, Royal Mail said at the time.

Last year, its former chief executive, Rico Back, set out a five-year £1.8bn turnaround plan to revamp Royal Mail as an international parcel-led business. But changes have been held back by strikes. The company has long been at loggerheads with trade unions about changes to working practices.

Chancellor Rishi Sunak warns of ‘lasting’ damage to UK economy

(qlmbusinessnews.com via bbc.co.uk – – Wed, 25th Nov 2020) London, Uk —

Chancellor Rishi Sunak has warned that the coronavirus pandemic has dealt “lasting” damage to the economy as official forecasts predicted the biggest economic decline in 300 years.

The UK economy is expected to shrink by 11.3% this year and not return to its pre-crisis size until the end of 2022.

Government borrowing will rise to its highest ever level outside of wartime to deal with the economic impact.

Mr Sunak said: “Our economic emergency has only just begun.”

The government's independent forecaster, the Office for Budget Responsibility (OBR) expects growth of 5.5% in 2021 and 6.6% the following year.

Mr Sunak said the government had already spent £280bn to help support the economy through the coronavirus.

It will spend a further £55bn next year as part of a package of measures to support the recovery. This includes billions of pounds to help people find jobs.

However, Mr Sunak said long-term scarring meant the economy would be 3% smaller in 2025 than expected in the March budget.

The OBR expects unemployment to peak at 2.6 million next year, although fewer jobs are expected to be lost than predicted this summer.

The government has extended its furlough scheme to support jobs and wages until next March.

Non-essential retail and gyms to reopen in lead-up to Christmas

(qlmbusinessnews.com via news.sky.com– Mon, 23rd Nov 2020) London, Uk – –

The prime minister is publishing a COVID Winter Plan, with new restrictions in England in December but a break for Christmas.

Boris Johnson is hoping to lace his latest COVID crackdown with more good cheer, with ministers working on plans to allow families to meet up in a festive bubble.

He is unveiling a new blueprint to fight the pandemic that he hopes will not only save lives during the winter but also prevent a Commons revolt by rebel Tory MPs.

The prime minister is publishing a COVID Winter Plan, which will include tough new restrictions in England in December but a break of up to five days for Christmas.

But despite the restrictions, due to replace England's national lockdown when it ends on 2 December, Mr Johnson will announce:

Non-essential retail will be allowed to open, in a boost for Christmas shoppers – and the high street

Gyms will be allowed to open too, so the nation doesn't pile on the pounds in the run-up to Christmas

The 10pm curfew for pubs and restaurants, which critics claim did more harm than good, will be scrapped

And a mass testing programme is to be launched in Tier 3 areas, using the Army, like the recent pilot programme in Liverpool

In a Commons statement, Mr Johnson is not expected to confirm how many households will be able to bubble together at Christmas, or how long the break in restrictions will last. That is planned for the following day.

But ministers are working on plans for three households and a five-day break, from Christmas Eve to 28 December, subject to agreement from the Scottish, Welsh and Northern Ireland governments.

The mass coronavirus testing programme will be launched in areas facing the toughest restrictions, in Tier 3, using the Liverpool, model, which the government claims has been a success.

Announcing the testing programme, the prime minister is expected to tell MPs: “The selflessness of people in following the rules is making a difference.

“The virus is not spreading nearly as quickly as it would if we were not washing our hands, maintaining social distance, wearing masks and so on.

“And in England, where nationwide measures came into effect at the start of this month, the increase in new cases is flattening off.

“But we are not out of the woods yet. The virus is still present in communities across the country, and remains both far more infectious and far more deadly than seasonal flu.

“But with expansion in testing and vaccines edging closer to deployment, the regional tiered system will help get the virus back under control and keep it there.”

Plans for a Christmas break from restrictions were announced after weekend talks with the first ministers of Scotland, Wales and Northern Ireland – Nicola Sturgeon, Mark Drakeford and Arlene Foster.

The government is proposing “some limited additional household bubbling for a small number of days”. But the public is being urged to remain cautious and avoid travelling wherever possible.

But just hours after the announcement of the festive break was announced by the Cabinet Office, the Scottish government claimed: “No agreement has been reached and discussions are continuing.”

This was echoed by Health Secretary Matt Hancock, who told Sky News a final decision “hasn't been made”.

Speaking to Kay Burley, he said: “We'll confirm it when we have that agreement across the four nations.”

Mr Hancock added: “We've agreed in principle that there should be a set of rules that applies across the board that is balanced, that allows a little bit more freedom, but is still safe.”

The dispute may be over the dates of the break. Last week Scotland's First Minister Nicola Sturgeon said for some families in Scotland Hogmanay would be more important than Christmas.

“For many, bringing in new year is very important,” she said.

“For some families in Scotland that may be the time they get together, even more so than Christmas, so we do have to take that into account in our planning and we need to think across the whole festive period.”

Labour's shadow health secretary Jonathan Ashworth told Sky News: “We understand that people will want to come together, but this still remains a very serious, horrific and deadly virus, so please be cautious.”

And he added that the PM needs to “be honest with the British people” about the tough new restrictions.

“If areas are continuing in these localised lockdowns, we hope there is a proper package of support for the small businesses impacted,” Mr Ashworth said.

In the Commons, Mr Johnson will also face fierce criticism from a growing number of Conservative MPs of his plans to re-impose the three-tier restrictions in England which were in force from 14 October until 5 November.How lockdown leak created surge of social activity

Although the PM will reaffirm his pledge to end England's national lockdown, many Tory MPs are furious at the government's plans to make the restrictions tougher and place more areas in Tiers 2 and 3.

The Covid Recovery Group of Conservative MPs, led by ex-ministers Mark Harper and Steve Baker, has written to the prime minister threatening to vote against the three-tier system when it is voted on in the Commons.

Mr Baker told Kay Burley: “We're determined to do our duty and help the government to come up with the right solutions.”

He added: “Each measure needs to be shown to actually reduce the transmission of COVID and some of the measures can't be shown to do that, not in a material way. Things like closing non-essential retail that's COVID safe.

“We also want to see a cost benefit analysis for each measure, so that we can see that the measures will save more lives than they harm.”

By Jon Craig, chief political correspondent, and Alan McGuinness, political reporter

Rishi Sunak says spending announcement this week will not spell austerity

(qlmbusinessnews.com via bbc.co.uk – – Mon, 23rd Nov 2020) London, Uk – –

Rishi Sunak has said people “will not see austerity” when he makes spending announcements for public services this week, despite the billions spent on the pandemic response.

The government has indicated it will keep to past promises when allocating funds for policing, nurses and schools.

On Wednesday the chancellor will detail the Spending Review.

It will outline how taxpayers' money will be spent on departments such as health and education.

But while ruling out a return to austerity, Mr Sunak has also warned people will soon see an “economic shock laid bare”.

He told the BBC's Andrew Marr show that record government borrowing to deal with the coronavirus must be “grappled with”.

The Spending Review will give a clearer picture of the economic damage wrought by the pandemic so far.

However tax rises and spending cuts were unlikely in the short term, Paul Johnson, director of the Institute for Fiscal Studies (IFS), told the BBC's Today programme.

“We are still in the position of being able to borrow incredibly cheaply and really wanting to protect the economy,” he said.

Although tax rises might end up being “quite significant” they might not come until after the next election, Mr Johnson added.

“It's not something that is super-urgent as we come out of this crisis,” he said.

Last week, reports that Mr Sunak would freeze wages for public sector staff were met with fierce criticism from unions and workers, though NHS frontline staff are likely to be excluded from such a move.

Speaking on Sky's Sophy Ridge On Sunday, the chancellor said: “You will not see austerity next week, what you will see is an increase in government spending, on day-to-day public services, quite a significant one coming on the increase we had last year.”

But, while he said that he “cannot comment on future pay policy”, Mr Sunak added: “When we think about public pay settlements, I think it would be entirely reasonable to think of those in the context of the wider economic climate.”

It is thought the chancellor is keen to freeze public sector pay since average private sector earnings have fallen this year.

The IFS's Mr Johnson said that while a pay freeze would save about £2bn a year, the chancellor would need to balance that with the need to keep money in the economy and the recruitment and retention of teachers and nurses.

“Over this year public sector pay has done much better than private sector pay… but this has come off the back of 10 years when public sector pay has done really quite badly,” he said.

On Monday, the shadow chancellor, Anneliese Dodds, will give a speech which argues that: “Freezing the pay of firefighters, hospital porters and teaching assistants will make them worried about making ends meet ahead of Christmas – that means they'll cut back on spending and our economy won't recover as quickly.”

Labour is calling on the government to bring forward £30bn in capital spending over the next 18 months to create new jobs.

Prior spending commitments made by the government include the hiring of 50,000 more nurses, and 20,000 extra police officers by 2023.

However, the BBC's Reality Check team points out that while 30,000 new nurses will be trained locally or recruited from overseas, 20,000 of the 50,000 roles announced will be existing nurses persuaded to stay in the profession.

The Reality Check team also points out that adding 20,000 police officers will return total staffing levels to the 143,000 police officers employed prior to the 2010 election when the Conservatives came to power.

The government has also promised to increase spending on schools by £2.2bn in the 2021-2022 financial year, and direct £1.5bn towards building works at Further Education colleges.

The Treasury announced on Sunday that another £1.25bn would be allocated to the prisons service.

The government says a total of £4bn will be allocated to build more than 18,000 additional prison places across England and Wales over the next four years. Some 10,000 of these places have been planned since 2015.

Mr Sunak said: “This has been a tough year for us all. But we won't let it get in the way of delivering on our promises – the British people deserve outstanding public services, and we remain committed to delivering their priorities as we put our public services at the heart of our economic renewal.”

Supermarkets selling greeting cards ‘grossly unfair’ – Clintons boss

(qlmbusinessnews.com via bbc.co.uk – – Mon, 16th Nov 2020) London, Uk – –

It is “grossly unfair” that supermarkets can sell greeting cards in lockdown while specialist retailers have to shut their shops, the boss of Clintons cards has told the BBC.

Eddie Shepherd said some retailers were “exploiting” ambiguities in the rules.

Until 2 December, any shop in England selling “non-essential” goods such as gifts, books and homeware must close.

But those deemed essential can continue to sell non-essential items if they are stocked on their aisles.

It has sparked a wave of complaints against supermarkets, garden centres and news agents, with the boss of book chain Waterstones saying the government guidance “doesn't make sense”.

Mr Shepherd told BBC Radio 5 Live's Wake up To Money programme: “If our category and product is deemed to be non-essential, which it is, then that should apply in all retail scenarios.

“But garden centres and supermarkets often operate card and gift sections as large as some High Street stores and they are able to continue to trade in these sections whilst we're not.”

He added: “I think elements of the legislation are unclear and it's affording an ambiguity that people are able to exploit.”

Clintons' sales dropped sharply in the first national lockdown and the chain – which has 270 UK shops – hoped to make up for it this Christmas.

But Mr Shepherd said revenue would now be 20% of usual levels this December, in part due to trade lost to essential retailers.

“Undoubtedly an element of what was the available market will be gone at the point we reopen,” he said.

Clothes and book sellers have also criticised the lockdown rules in England, with the British Retail Consortium (BRC) accusing the government of creating “arbitrary” lines between retailers.

During Wales's recent two-week lockdown, essential retailers had to cordon off aisles selling clothes and toys, although this sparked anger among some customers.

‘Hurts the independents'

James Daunt, the boss of book chain Waterstones, has repeatedly criticised the fact that WH Smith continues to sell books in its shops in lockdown because it is a news agent, while his business can only sell online.

On Monday, he told the BBC: “I don't think anyone would object to the supermarkets being open to sell food and pharmacies to sell medicines.

“What I am objecting to is really very comparable retailers are open, and others closed, and I think that really hurts the independents.”

The BRC estimates non-essential retailers in England will lose £2bn of sales in the lockdown, which began on 5 November.

However, the Department For Business, Energy and Industrial Strategy maintains the new restrictions will limit social contact and slow the spread of coronavirus.

“We recognise this continues to be a very difficult period for businesses, which is why we've confirmed that there will be a full package of financial support in place,” a government spokesperson said last week.

WH Smith plans to close 25 store with the possible loss of 1,500 jobs

(qlmbusinessnews.com via news.sky.com– Thur, 12th Nov 2020) London, Uk – –

The retailer's latest cuts are in addition to plans announced earlier this year which could see as many as 1,500 jobs go.

By John-Paul Ford Rojas, business reporter

WH Smith says it is planning to close 25 high street stores over the coming months as it reported a £280m annual loss thanks to the impact of the pandemic.

The closures will result in just under 200 job losses, in addition to up to 1500 jobs the company announced earlier this year that could go as a result of restructuring in its travel division.

WH Smith fell into the red for the year to the end of August as sales slumped by 27% and it also took a £175m hit directly related to the COVID-19 crisis.Coronavirus: where jobs have been lost

The charge included a big write-down in the value of the company's store network as well as the cost of its redundancy programme.

The company's annual loss compares to a profit of £135m a year earlier.

WH Smith said that, depending on “negotiations with our landlords and the government's future approach to property rates”, it expected to close around 25 stores in the current financial year as leases on those sites expire.ARTICLE CONTINUES BELOW THIS ADVERT

“While this is not an easy decision to make for our colleagues or the communities we serve, it is vital we retain a strong cash generative high street portfolio going forward,” the company added.

Chief executive Carl Cowling said the company had been “heavily impacted by the pandemic” but that it was now in a “strong position to navigate this time of uncertainty”.

Even stores in hospitals, which remained open throughout, saw sales drop when there were no visitors.

The six months to the end of August was also “very challenging” for the group's high street division, where sales fell 39%.

WH Smith has 568 high street stores of which 558 are currently trading.Economic revival is breathtaking

It also has more than 1,000 stores in its travel division – which also covers hospitals – of which more than 300 are outside the UK.

The company said more than 60% of its UK travel stores remained open.

Government to introduce bill shortly that updates its powers to block foreign takeovers of UK firms

(qlmbusinessnews.com via bbc.co.uk – – Wed, 11th Nov 2020) London, Uk – –

The government is to introduce a bill shortly that updates its powers to block foreign takeovers of UK firms if they threaten national security.

The National Security and Investment Bill will allow it to curtail deals where it decides there are unacceptable risks to the UK.

The new powers could halt foreign takeovers, even retrospectively.

It follows recent concern about the activities of some foreign companies, notably China's Huawei.

Pressure from some MPs forced the government to reverse plans allowing the Chinese tech giant to supply the UK's 5G mobile network.

The proposals mean that companies from any country that plan a takeover in 17 key sectors, including energy and cryptography, will be required to tell the government their plans.

There have been only 12 government interventions in foreign takeovers on national security ground since 2002 and this is the first update in 20 years.

‘Real step change'

The UK has long been seen as more “open for business” when it comes to foreign firms seeking investment than other countries, such as France, Germany and the US.

It said in a statement that the updated rules would bring it more into line with theirs.

Nicole Kar, UK head of competition law at Linklaters and a specialist adviser to the Commons Foreign Affairs Committee, said the rules were “a real step-change in terms of government powers”.

“There's been a lot of concern around foreign investors buying up start-ups.”

She said there were regrets in government that some businesses had been allowed to be taken over: “I think there's a real feeling in the government that more needed to be done.”

Business Secretary Alok Sharma said: “The UK remains one of the most attractive investment destinations in the world and we want to keep it that way.

“But hostile actors should be in no doubt – there is no back door into the UK.”

Companies that do not comply with the new law will face sanctions including fines of up to 5% of worldwide turnover or £10m, whichever is the greater, and even imprisonment.

Last year, Boris Johnson was forced to defend the controversial £4bn takeover of UK defence and aerospace company Cobham by a US private equity firm.

He said at the time it was “very important we should have an open and dynamic market economy”.

Bank of England ramps up stimulus by 150bn

(qlmbusinessnews.com via uk.reuters.com — Thur, 5th Nov 2020) London, UK —

LONDON (Reuters) – The Bank of England increased its already huge bond-buying stimulus by a larger-than-expected 150 billion pounds as it braced for more economic damage from new coronavirus lockdowns and damage from Brexit, too.People walk past The Bank of England, amid the outbreak of the coronavirus disease (COVID-19), in London, Britain, November 5, 2020.

On the day England began a four-week lockdown to curb a second wave of COVID-19, which is killing as many Britons each day as in May, the BoE said it was still looking into the pros and cons of taking interest rates negative, but gave no update on the process.

“If the outlook for inflation weakens, the Committee stands ready to take whatever additional action is necessary to achieve its remit,” the BoE said as it cut its growth forecasts.

Britain’s economy was set to shrink by a record 11% in 2020 overall, more than the 9.5% it had forecast in March, and it cut its estimate for next year’s recovery.

“The outlook for the economy remains unusually uncertain,” the BoE said, pointing to the COVID-19 crisis and the still unresolved trading relationship between Britain and its closest trading partners in the European Union after Jan. 1.

Britain’s economy has been supported by a surge in debt-fuelled spending by the government, and the BoE is buying up many of those bonds.

Finance minister Rishi Sunak is due to speak in parliament later on Thursday. His emergency spending and tax cuts have saddled Britain with its biggest budget deficit since World War Two.

The BoE kept its benchmark Bank Rate at 0.1%, as expected in a Reuters poll. It made little mention of negative rates while a consultation with banks over the practicalities is underway.

Sterling rose against the dollar and the euro after the announcements and bond yields fell.

The increase in the size of the BoE’s asset-purchase programme took it to 895 billion pounds, 50 billion pounds more than expected by most economists.

The central bank said that would give it enough firepower to stretch its buying of government bonds through to the end of 2021, but the purchases could be sped up if needed.

SLOWER RECOVERY, HIGHER UNEMPLOYMENT

The central bank now expects Britain’s economy to shrink by 2% during the fourth quarter and only exceed its size before the COVID-19 pandemic in the first quarter of 2022. Previously, it had predicted the end of next year.

Unemployment was set to peak 7.75% in the second quarter of next year, much higher than its most recent reading of 4.5%.

Gross domestic product was likely to grow by 7.25% in 2021, weaker than a previous forecast of 9%.

But its two-year inflation forecast remained unchanged at 2%, the central bank’s target.

“Our view is that inflation will be closer to 1.5% by the end of 2022. That’s why we believe the Bank will still have to increase its policy support,” said Ruth Gregory, an economist at Capital Economics.

JP Morgan analyst Allan Monks said that the prospect of weak inflation next year would pressure the BoE to do more, and that the likelihood of negative rates in the second half of 2021 was growing.

As well as COVID-19, Britain faces the risk of a trade shock when its post-Brexit transition with the EU expires on Dec. 31.

So far, London and Brussels have failed to strike a new agreement. The BoE’s Monetary Policy Committee said trade would suffer even if there is a deal.

“The MPC’s projections are also conditioned on the assumption that cross-border trade falls temporarily in the first half of 2021 as businesses adjust to the new trading arrangements with the EU,” the BoE said.

GDP is likely to suffer a 1% hit from the trade changes in the first quarter of next year, limiting recovery from the fourth-quarter lockdown and reducing quarterly growth to 2.4%.

Reporting by William Schomberg, David Milliken and Andy Bruce