(qlmbusinessnews.com via uk.reuters.com — Thur, 21st March 2019) London, UK —
LONDON (Reuters) – British retail sales unexpectedly kept up a robust pace of expansion last month, after unusually warm weather boosted sales, reinforcing the sector’s role as a bright spot for the economy ahead of Brexit.
Annual retail sales growth slowed only a fraction to 4.0 percent in February after sales volumes grew at their fastest in more than two years in January, the Office for National Statistics said on Thursday.
Economists polled by Reuters had forecast a slowdown in sales growth to 3.3 percent.
Consumer spending has been a source of strength for the British economy at a time when businesses say that Brexit uncertainty is forcing them to postpone investment and a slower global economy is hurting export demand.
On Wednesday Prime Minister Theresa May asked for a three-month delay to Brexit on Wednesday to buy time to get her twice-rejected departure deal though parliament, but the request faced immediate resistance from the European Commission.
Sales volumes in February alone rose by 0.4 percent versus a poll forecast of a decline, after jumping by 0.9 percent in January, while annual sales growth for the three months to February was its strongest in over two years at 3.7 percent.
Falling inflation, a steady rise in wages and the lowest unemployment since 1975 have all boosted household incomes over the past year, though after inflation wages are still below their peak before the financial crisis.
Last year overall British economic growth slowed to its weakest since 2012 and the Bank of England – which is predicted to keep rates on hold later on Thursday – forecasts the weakest growth for a decade this year.
The ONS said that unusually warm weather in February had boosted spending at garden centres and on sporting equipment, sales fell at supermarkets and in clothing stores due to an end of January’s seasonal promotions.
Earlier on Thursday, major British clothing chain Next reported a small fall in annual profit on Thursday, hurt by lower store sales, and forecast another decline for 2019-2020.
Figures from the British Retail Consortium at the start of the month had suggested that annual sales growth at bigger high-street stores slowed in February, with the trade association blaming Brexit.
Separate figures from the ONS on Thursday showed the government broadly on track to meet updated borrowing goals for the 2018/19 financial year, as the strong labour market boosted income tax revenue.
Public borrowing for February, the eleventh month of the tax year, fell to 0.2 billion pounds from 1.2 billion pounds a year earlier, below economists’ average forecast of 0.6 billion pounds in a Reuters poll.
BMW warns of significant profit fall in 2019, seeks 12 bln eur in cuts
With just one month remaining of the current financial year, government borrowing totals 23.1 billion pounds, down 44 percent from the same point in the 2017/18 tax year, though these figures are likely to be revised further.
Last week Britain’s official budget forecasters cut their 2018/19 borrowing forecast to 22.8 billion pounds or 1.1 percent of GDP from 25.5 billion pounds.
Finance minister Philip Hammond said at the time that if Brexit went smoothly there would be more money for public services in a major multi-year spending review due late this year.
(qlmbusinessnews.com via news.sky.com– Tue, 19th Mar 2019) London, Uk – –
The unemployment rate has fallen below 4% for the first time since 1975, according to official figures.
The Office for National Statistics (ONS) said the jobless rate was 3.9% in the three months to January, down from 4% at the end of 2018.
Meanwhile wages excluding bonuses rose by 3.4%, unchanged on the previous month and still outpacing inflation.
Unemployment fell by 35,000 to 1.34 million and the number of people in work rose by 222,000 – the fastest pace of hiring in more than three years and nearly twice as strong as economists had expected.
The ONS said the employment rate had hit a new record high of 76.1% while the level of economic inactivity – covering people who are neither seeking work nor available for it – hit a record low.
ONS senior statistician Matt Hughes said: “The unemployment rate has also fallen below 4% for the first time since early 1975.”
But the ONS said that while the labour market had continued to perform strongly as it had in 2018, the general economic outlook was “more complex” with growth slowing and a number of companies shelving investments and some going into administration amid ongoing uncertainty.
(qlmbusinessnews.com via theguardian.com – – Mon, 18th Mar 2019) London, Uk – –
Budget chain is to open 100 hotels in the next five years that will create 3,000 jobs
Travelodge wants to recruit parents returning to work to fill post-Brexit staffing gaps, as it pushes ahead with 100 hotel openings that will create 3,000 jobs over the next five years.
The company, one of Britain’s biggest hotel chains with 575 properties, hopes to fill 550 jobs immediately by attracting parents with hours that fit around the school run.
They include roles in reception, restaurants, housekeeping as well as some head office roles with flexible hours. Travelodge said it was targeting some of the UK’s 2 million-plus unemployed parents, citing YouGov research that 86% of them would like to return to work.
The majority of Travelodge’s hotel managers are female, and across the group almost three-quarters of its staff are women.
Like the rest of the hospitality sector, Travelodge is heavily reliant on EU staff, who account for 30% of its workforce. The industry has warned of the devastating impact the government’s plans to slash immigration from the EU by 80% after Brexit will have on the industry. The government wants to extend the £30,000-a-year minimum salary threshold that applies to non-EU workers to EU migrants.
The firm’s chief executive, Peter Gowers, said: “Travelodge is growing quickly and we want to unlock the potential of Britain’s mums and dads as they return to work. Hospitality can offer a great career for parents, with jobs close to home, hours that can match the school run, benefits that suit families and a path into management.
“We are preparing in earnest for post-Brexit Britain. With thousands of new jobs to fill, we need more new colleagues than ever. We see vast untapped potential in parents who want to return to work.”
(qlmbusinessnews.com via news.sky.com– Thur, 14th March 2019) London, Uk – –
Sterling climbed by as much as three cents to reach a nine-month high against the US dollar and added two cents against the euro.
The pound is clinging on to gains of the past 24-hours following a big leap as MPs voted to rule out a no-deal Brexit.
In volatile trading, Sterling climbed by as much as three cents against the US dollar to nearly $1.34, a nine-month high, and was two cents up versus the euro to as high as €1.18 – a new 22-month peak.
That was after an amendment rejecting a no-deal Brexit in all circumstances was narrowly backed by the Commons.
It had given up some of those gains by Thursday morning – trading at €1.17 and $1.32 – as investors mulled the political reality that the vote was non-binding.
But the pound moved higher again later after Goldman Sachs put the chances of a no-deal Brexit at 5% – a shift from Wednesday's position of 10%.
There was a broad welcome for the MPs' no-deal vote from business groups but it was combined with continued frustration about the lack of a clear way forward, with the Commons due to vote on Thursday night on delaying the Brexit process.
A survey for the CBI suggested nearly 9 in 10 firms would back a delay but only if the alternative is to leave the EU with no deal.
Commenting on the task ahead Edwin Morgan, interim director general of the Institute of Directors, said: “If they vote for an extension there will still be the considerable task of convincing the EU that there is an exit deal the House of Commons can get behind.”
Miles Celic, chief executive of TheCityUK, noted: “Unless the withdrawal agreement or some other realistic course of action is agreed very soon, the UK will still crash out, regardless of MPs' wishes.”
Business anxiety has mirrored days of high drama over Brexit in Westminster while currency markets have see-sawed sharply.
Sterling had hit a previous 22-month high against the euro earlier in the week when Theresa May secured a revised transition deal with the European Union before falling back again when it proved too little to win over parliamentary opposition.
Mrs May's crushing Commons defeat on Tuesday paved the way for the vote on Wednesday that saw MPs reject a “no deal” Brexit – seen as likely to create major economic uncertainty.
Investors see the further vote on delaying Brexit as positive for the pound as it could increase the Prime Minister's chance of securing a deal or even lead towards a second referendum.
David Cheetham, chief market analyst at xtb online trading, said: “It appears that hardline Tories are now starting to fear that the game is up and are looking to change tack and throw their weight behind the PM.
“There is significant scope for a sizeable relief rally in the pound, with the path of least resistance for sterling now appearing to be higher – albeit with several potential potholes still lining the way.”
(qlmbusinessnews.com via uk.reuters.com — Wed, 13th March, 2019) London, UK —
LONDON (Reuters) – Britain said on Wednesday it would eliminate import tariffs on a wide range of goods and avoid a so-called hard border between Ireland and Northern Ireland in the event of a no-deal Brexit.
The government announced the moves, which it said would be temporary, ahead of a vote by lawmakers later on Wednesday on whether Britain should leave the European Union without a deal, a prospect that alarms many employers with the scheduled March 29 Brexit date fast approaching.
Prime Minister Theresa May suffered a second, heavy parliamentary defeat on the withdrawal deal she struck with the bloc on Tuesday, leaving open the possibility of an abrupt, economically damaging Brexit without a transition arrangement.
However, lawmakers are expected to vote against a no-deal Brexit and then, on Thursday, vote in favour of seeking a delay to Brexit.
Under the tariff plan for a no-deal Brexit that would last for up to 12 months 87 percent of total imports to the United Kingdom by value would be eligible for tariff-free access, up from 80 percent now.
The new system would mean 82 percent of imports from the EU would be tariff-free, down from 100 percent now, while 92 percent of imports from the rest of the world would pay no duties at the border, up from 56 percent now.
Some protections for British producers would remain in place, including for the country’s carmakers and beef, lamb, pork, poultry and dairy farmers.
Cutting import tariffs on imported goods would ease the hit to British consumers from an expected jump in inflation in the event of a no-deal Brexit which would probably cause sterling to tumble and make imports more expensive.
But it would also expose many manufacturers to cheaper competition from abroad and, if maintained, low or zero tariffs would deprive Britain of ammunition for extracting concessions from other countries in future trade talks.
On the Irish border, the British government said it would not introduce any new checks or controls on goods moving from the Irish Republic to the British province of Northern Ireland in the event of a no-deal Brexit, stressing the plan was temporary and unilateral.
“The measures announced today recognise the unique circumstances of Northern Ireland,” Karen Bradley, Britain’s secretary of state for Northern Ireland said in a statement. “These arrangements can only be temporary and short-term.”
Britain would seek to enter discussions urgently with the European Commission and the Irish government to agree long-term measures to avoid a hard border.
Goods crossing the border from Ireland into Northern Ireland would not be covered by the new import tariff regime.
Britain, Ireland and the EU have said they want to avoid physical checks on the border, which was marked by military checkpoints before a 1998 peace deal ended three decades of violence in the region. But they disagree on the “backstop”, or insurance mechanism, to exclude such border checks.
(qlmbusinessnews.com via bbc.co.uk – – Wed, 6th Mar 2019) London, Uk – –
The system allowing people to use cash in the UK is at risk of “falling apart” and needs a new guarantee to ensure notes and coins can still be used.
A hard-hitting review by finance experts has concluded that market forces will not save cash for as long as people need it.
The report calls on the government and regulators to step in to ensure cash remains viable.
Suggestions include ensuring rural shops offer cash-back.
The report also said that essential services, such as utility and council bills, should still allow customers to pay in cash.
An independent body, funded by the banks, should be set up that would step in if local communities were running short of access to cash in shops and ATMs, the report said.
The research – called the Access to Cash Review – is authored by former financial ombudsman Natalie Ceeney and was paid for by cash machine network operator Link, but was independent from it. It took evidence from nearly 100 businesses and charities across the UK.
How quickly is cash use falling?
Cash use has been falling dramatically in recent years. In 2017, debit card use – driven by contactless payments – overtook the number of payments made in cash in the UK for the first time.
The report said that the current rate of decline would mean cash use would end in 2026.
However, it concluded that notes and coins would still be used in 15 years' time, but accounting for between 10% and 15% of transactions.
The demise of cash, if unchecked, would be driven primarily by retailers and other businesses refusing to accept cash owing to the cost of handling it.
‘My cashless pub is cheaper to run'
Mike Keen opened The Boot pub in Freston, near Ipswich, last year as a cashless business with no tills.
“There are a whole bunch of reasons. The [biggest] gain is management time,” he said, such as never having to cash up at the end of the day, drive to the bank and queue to pay it in, two or three times a week.
He said that saved the business 15 hours a week, and many thousands of pounds.
Insurance premiums had been lower as there was no cash on the premises, security was less of a problem, and the time taken to serve customers was much quicker, he said.
What is the problem with a cashless society?
Banknotes and coins are a necessity for eight million people, according to the review's interim findings published in December.
These include rural communities where alternative ways of paying are affected by poor broadband or mobile connectivity, and many people who have physical or mental health problems and therefore find it hard to use digital services.
The report also concludes that vulnerability in this area is generally the result of income, not old age.
“Poverty is the biggest indicator of cash dependency, not age,” the review concludes.
“There are worrying signs that our cash system is falling apart. ATM and bank branch closures are just the tip of the iceberg, underneath there is a huge infrastructure which is becoming increasingly unviable as cash use declines,” Ms Ceeney said. “If we sleepwalk into a cashless society, millions will be left behind.”
‘Survival' tougher without cash
Kev Jackson has been homeless and currently lives in temporary accommodation.
“Cash is easy because you know what you have got on you,” he said. “On a card – when you can't see your balance – it is easy to overspend. [Cash] is very good for budgeting.”
“A lot of people [on the streets] do not have bank accounts, so they only carry cash. If you can't spend cash in a shop, it is going to be difficult for them. They won't be able to survive.”
He said that he preferred using a card himself, but was concerned that technology left many people behind.
What should be done?
Evidence from Sweden, seen as much closer to a cashless society than the UK, suggested that infrastructure was needed before cash use declined beyond anyone's control.
The review suggested that an independent body was needed to oversee a guarantee that people need not travel too far to get access to cash.
Innovation should also be used to protect cash, such as:
Local shops offering cash-back to customers, rather than customers relying on ATMs
Small businesses given the opportunity to deposit cash in secure lockers or “smart” ATMs, rather than have to make a weekly trip to a bank branch
A “radical” change to the infrastructure behind cash, overseen by the Bank of England, to lower the cost and maintain free access for consumers
Britain's cash infrastructure costs around £5bn a year to run. It is paid for predominantly by the retail banks and run mostly by commercial operators.
The Bank of England's chief cashier, Sarah John, said it would call together key players in this sector to develop a system that would support lower levels of cash use and encourage innovation “to support cash as a viable means of payment for those who want to use it”.
What has already been done?
Consumer group Which? has called for a single regulator to be established with a statutory duty to protect access to cash and build a sustainable cash infrastructure for the UK.
However, a number of regulators already operate in the financial sector.
Eric Leenders, from UK Finance, which represents banks, said: “The finance industry is using a range of solutions to ensure cash can still be accessed including over the counter withdrawals through 11,500 Post Offices and cash-back from retailers, to investment in ATMs and mobile bank branches to reach more rural communities.
“We will continue to work with the review team, government, and regulators to take forward this important work.”
(qlmbusinessnews.com via theguardian.com – – Tue, 5th Mar 2019) London, Uk – –
Employment levels falling at fastest pace in almost nine years, survey finds
The UK economy came close to flatlining last month as Brexit uncertainty intensified and the global economy weakened, with employment levels falling at the fastest pace in almost nine years.
According to the latest snapshot of Britain’s services sector – which accounts for 80% of economic growth – businesses have begun to delay hiring staff against a backdrop of subdued demand and concerns about the economic outlook as the scheduled date of the UK’s departure from the EU draws nearer.
IHS Markit and the Chartered Institute of Procurement and Supply said that political uncertainty had encouraged delays to corporate spending in the largest sector of the UK economy, which includes financial firms, hotels, shops and restaurants.
Business optimism about the year ahead plunged to the lowest ever recorded by the survey of about 650 UK services firms, barring the height of the global financial crisis and the period immediately after the Brexit vote in July 2016.
The IHS Markit/Cips services purchasing managers’ index (PMI) registered 51.3 in February, up from a two-and-a-half-year low of 50.1 a month earlier, beating a gloomier forecast made by City economists for a reading of 49.9.
Although the reading was above the 50 mark separating growth from contraction, analysts warned the expansion in service sector activity was only marginal, with the biggest driver of UK growth heading for its weakest quarter since 2012.
Duncan Brock, the group director at Cips, said: “Once again this month, the lifeblood of the sector continued to leak away with Brexit indecision striking another blow to new orders and employment in February.
“Any hoped-for progress next month looks like it will be equally stifled, as services activity heads for its weakest quarter since late 2012.”
Theresa May’s further potential defeat over her Brexit plan amid the mounting political chaos in Westminster sapped companies’ confidence, with consequences for jobs and firms’ hiring plans.
Official figures have previously suggested that Brexit has done little to dent hiring, with employment rising to record highs last year and unemployment still at the lowest levels since the mid-1970s.
Economists believe companies have put on hold their capital investment – such as in new plant machinery or efficiency-boosting technology – to hire workers instead amid the political uncertainty.
The latest snapshot from the PMI, however, suggests that jobs growth has kicked into reverse. Private sector employment across the three biggest sectors of the economy – services, manufacturing and construction – fell at the fastest rate since September 2012. Firms said that a lack of new work to replace completed projects had contributed to more cautious recruitment strategies.
Thomas Pugh, a UK economist at the consultancy Capital Economics, said: “As long as Brexit uncertainty continues growth is unlikely to accelerate, but if a Brexit deal is agreed soon, growth will surely rise later this year.”
(qlmbusinessnews.com via uk.reuters.com — Mon, 4th March 2019) London, UK —
LONDON, March 4 (Reuters) – Britain’s construction industry reported the first fall in activity in almost a year last month, as Brexit uncertainty and a slow housing market delayed new building projects.
The IHS Markit/CIPS Purchasing Managers’ Index (PMI) fell to 49.5 in February from January’s reading of 50.6, the first time the index has been below the 50-mark that separates growth from contraction since unusually icy weather in March 2018.
The last time the reading was below 50 for reasons unrelated to the weather was in September 2017, and February’s number was at the bottom end of economists’ forecasts in a Reuters poll.
“The UK construction sector moved into decline during February as Brexit anxiety intensified and clients opted to delay decision-making on building projects,” IHS Markit economist Tim Moore said.
Britain remains at risk of leaving the European Union on March 29 with no transitional arrangements, though last week Prime Minister Theresa May said lawmakers would be able to vote to delay Brexit for a short period if they continued to reject the deal she agreed with Brussels last year.
Builders said they were experiencing some of the longest delays in getting construction materials since 2015, due to transport shortages caused by manufacturers stocking up on materials in case a no-deal Brexit disrupts imports.
Construction projects such as new homes and office space were also being put on hold as Brexit uncertainty slowed commercial decision-making and the housing market weakened, with knock-on effects for hiring.
Although Bank of England data last week showed a pick-up in the number of mortgages approved at the start of 2019, house prices have been flat over the past couple of months, according to figures from mortgage lender Nationwide Building Society.
Last year construction output rose by the smallest amount since 2012, up just 0.7 percent according to official data.
Construction makes up only 6 percent of Britain’s economy, but its volatility often means it has an outsize effect on the quarterly growth rate of the whole economy.
(qlmbusinessnews.com via bbc.co.uk – – Fri, 1st Mar 2019) London, Uk – –
The government will pay £33m to Eurotunnel in an agreement to settle a lawsuit over extra ferry services in the event of a no-deal Brexit.
In December, the Department for Transport (DfT) contracted three suppliers to provide additional freight capacity for lorries.
Eurotunnel said the contracts were handed out in a “secretive” way.
As part of the agreement, Eurotunnel has agreed to make some improvements to its terminal.
One of the firms awarded a contract, Seaborne Freight, has already had its deal cancelled after the Irish company backing it pulled out.
Shortly after it was awarded the contract, the BBC found out that Seaborne had no ships and had never run a ferry service.
Transport Secretary Chris Grayling has been heavily criticised for the Seaborne deal, which would have been worth £13.8m.
In January, Eurotunnel wrote to Mr Grayling to complain that it had not been considered when the contracts were awarded.
It argued that unlike Seaborne, it has actually run a cross-Channel ferry service (MyFerryLink, which closed in 2015) and should have been approached.
In a statement accompanying the agreement, Transport Secretary Chris Grayling said: “While it is disappointing that Eurotunnel chose to take legal action on contracts in place to ensure the smooth supply of vital medicines, I am pleased that this agreement will ensure the Channel Tunnel is ready for a post-Brexit world.”
(qlmbusinessnews.com via uk.reuters.com — Tue, 26th Feb 2019) London, UK —
LONDON (Reuters) – Bank of England Governor Mark Carney said on Tuesday he expected the British central bank would provide more support for the economy in the event of a no-deal Brexit.
Carney said the BoE’s interest-rate setters had stressed that their response to the shock of a no-deal Brexit would not be automatic.
“As my colleague Gertjan Vlieghe has noted, that does not necessarily mean that, in the event of a no-deal, no-transition scenario, either direction of policy is equally likely,” Carney said in an annual report to lawmakers.
“Given the exceptional circumstance associated with Brexit, I would expect the Committee to provide whatever monetary support it can consistent with the price stability remit given to the Committee by Parliament. But there are clearly limits to its ability to do so.”
(qlmbusinessnews.com via news.sky.com– Thur, 21st Feb 2019) London, Uk – –
The FTSE 100 group spooked investors by admitting that cash flows for the year ahead were expected to miss targets.
Shares in British Gas owner Centrica have fallen sharply after it warned 2019 financial performance would be hit by factors including the energy price cap.
The FTSE 100-listed group was down 12% after it also revealed that it had shed 742,000 UK customer accounts last year in a “highly competitive” market.
Centrica said profits at its UK home energy supply division were down by 19% to £466m for 2018, though the overall group's headline measure of adjusted operating profit was up 12% to £1.39bn.
The group had said in November that the cap on default energy tariffs, introduced at the start of January, would have a one-off impact of £70m in the first quarter of 2019.
In its latest statement it said that the impact of the cap, together with a declining performance for its energy exploration and production division and nuclear arm, would see cash flow about £300m below target for the year as a whole.
The company also said it was selling its North American franchisee home services business Clockwork Inc for $300m after a slower than expected recovery for its operations in the region last year.
Chief executive Iain Conn said: “Centrica's financial performance in 2018 was mixed against a challenging backdrop.
“We are taking actions to strengthen the company in 2019 and improve underlying performance in 2020, including driving cost efficiency hard and delivering further divestments.”
The results come after regulator Ofgem introduced a cap on default energy prices following years of political pressure, which came into force on 1 January and promised to save customers a typical £76 a year.
It had an immediate impact on British Gas, the UK's biggest energy supplier, as the cap was set at a level £68 lower than its standard variable tariff (SVT).
However the regulator said just weeks later that the cap would rise on 1 April by an average £117, blamed on higher wholesale gas and electricity costs.
All of the UK's so-called “big six energy” suppliers including British Gas have now followed suit, lifting their own SVTs to the newly increased cap level.
Centrica reiterated in its latest results that it does not believe the price cap is a “sustainable solution for the market” and was “likely to have unintended consequences for customers and competition”.
Analysts pointed to fears that the group's dividend could be cut being behind its sharp share price fall.
George Salmon, equity analyst at Hargreaves Lansdown, said: “The bad news for Centrica is that the weaker outlook comes from a multitude of factors – the government's price cap, continued outages in the nuclear business and weak offshore production activity.
“This all means the dividend is starting to creak. We wouldn't be surprised if a cut was around the corner.”
(qlmbusinessnews.com via bbc.co.uk – – Wed, 20th Feb 2019) London, Uk – –
The number of people in work in the UK has continued to climb, with a record 32.6 million employed between October and December, the latest Office for National Statistics figures show.
Unemployment was little-changed in the three-month period at 1.36 million.
The jobless rate, remaining at 4%, is at its lowest since early 1975.
Weekly average earnings went up by 3.4% to £494.50 in the year to December – after adjusting for inflation, that is the highest level since March 2011.
The number of people in work between October and December was up 167,000 from the previous quarter and 444,000 higher than at the same time in 2017.
The employment rate – defined as the proportion of people aged from 16 to 64 who are working – was estimated at 75.8%, higher than the 75.2% from a year earlier and the joint-highest figure since comparable estimates began in 1971.
Employment Minister Alok Sharma said: “While the global economy is facing many challenges, particularly in sectors like manufacturing, these figures show the underlying resilience of our jobs market – once again delivering record employment levels.”
ONS deputy head of labour market Matt Hughes said: “The labour market remains robust, with the employment rate remaining at a record high and vacancies reaching a new record level.
“The unemployment rate has also fallen, and for women has dropped below 4% for the first time ever.”
However, Andrew Wishart, UK economist at Capital Economics, warned that next month's figures may not be so buoyant.
“The labour market data didn't reflect the slip in hiring surveys in December, with employment rising,” he said.
“However, the surveys deteriorated more markedly in January, so a Brexit effect might start to weaken employment growth in the next batch of official data.”
By Dharshini David, BBC economics correspondent
The jobs market remains in a robust shape despite the loss of momentum in the economy towards the end of last year – although the Brexit fog effect may be yet to register.
Continuing recent trends, the majority of those entering work were previously inactive (students, looking after home, long-term sick etc).
The demand for labour continues to bolster wage growth. Real wages increased by more than 1% per year, better on the whole than in recent years although about half the rate of the pre-crisis era.
So little sign of Brexit uncertainty hitting hiring so far – but demand in the labour market tends to lag significantly behind changes in output.
More recent employment surveys show a marked deterioration in January, so a Brexit effect might start to weaken employment growth in the next batch of official data.
And productivity – output per hour – was down by 0.2% in the fourth quarter of 2018 versus a year previously, as output rose more slowly than employment. The lack of progress in this area could weigh on wage growth in the longer term.
Looking at the average earnings figures, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “With surplus labour extremely scarce and job vacancies rising to a new record high, workers are having more success in obtaining above-inflation pay increases.
“Looking ahead, we doubt that wage growth will slip below 3% this year.”
Despite the wage increases and low unemployment figures, Suren Thiru, head of economics at the British Chambers of Commerce, did not think that struggling High Streets would benefit.
He said: “The uplift to consumer spending from the recent improvement in real pay growth is likely to be limited by weak consumer confidence and high household debt levels.
“The increase in the number of vacancies to a new record high confirms that labour and skills shortages are set to remain a significant a drag on business activity for some time to come, impeding UK growth and productivity.”
(qlmbusinessnews.com via news.sky.com– Mon, 18th Feb 2019) London, Uk – –
The Rail Delivery Group says some prices would rise and others would fall under the plan to set fares “more flexibly”.
Train operators are calling for a major shake-up of fares that would throw out current rules governing peak and off-peak pricing and also end the need for so-called split-ticketing.
The Rail Delivery Group (RDG) says it wants to simplify the system under the principle that customers “only pay for what they need and are always charged the best value fare”.
It said some fares would go up and some would go down under the plan though claimed that overall it would be “revenue neutral”.
The RDG said updating regulations on peak and off-peak travel “would mean ticket prices could be set more flexibly, spreading demand for a better customer experience”.
It said current rules resulted in under-used and more expensive services at natural peak times and overcrowded trains at the “shoulder peak” – immediately before and after the peak time.
The body, which represents Britain's train operating companies, said however that it recognised concerns about protecting “affordable access to the walk-up railway” and was proposing for some services to have a cap on the overall level of revenue that can be raised.
It said its plan for passengers to always be charged the best value fare would also remove the need for “split ticketing”
That is where savvy travellers have worked out that they can save money by paying for multiple tickets for different sections of the same journey.
For example, the £150 cost of a journey from Manchester to Edinburgh would currently be reduced to £92.20 by buying two tickets: one from Manchester to York, and a second from York to Edinburgh.
Another part of the RDG plan would see commuters benefit from the kind of weekly capping system currently available for journeys within London.
Pay-as-you-go pricing and a “tap-in, tap-out” system would allow those who currently buy weekly season tickets to save money when they travel fewer than five days or are able to travel off-peak.
That could benefit the increasing numbers of people who work part-time.
RDG chief executive Paul Plummer said: “Reconfiguring a decades-old system originally designed in an analogue era isn't simple, but this plan offers a route to get there quickly.
“Ultimately, it is up to governments to pull the levers of change.
“So this report is a call on them to work with us to update the necessary regulations and subsequently the system of fares.”
The “easier fares for all” plan has been submitted to the government's Williams Review, which is evaluating all aspects of the rail network.
Lilian Greenwood MP, chair of the Commons transport select committee, said the proposals showed a “welcome recognition that things need to change”.
But she added: “The devil will be in the detail, and my committee… will be keeping a close eye on this work to ensure it develops in ways that are fair, transparent, recognise the needs of passengers, and take account of the vital contribution that the railway makes to our society and economy.
“In the meantime, passengers still require reassuring that enough trains will turn up – on time and fit to run – particularly after the timetabling chaos in May 2018.”
(qlmbusinessnews.com via bbc.co.uk – – Fri, 15th Feb 2019) London, Uk – –
Millennium & Copthorne Hotels has blamed a shortage of workers due to Brexit uncertainty for contributing to falling profits.
The hotel chain reported a 28% fall in pre-tax profits to £106m for the 12 months to 31 December 2018, compared with the same period in 2017.
It said Brexit concerns had affected its UK hotels, particularly in London.
The hotel chain also blamed the US-China trade war, minimum wage and competition from Airbnb for its woes.
For the fourth quarter of 2018, pre-tax profits dropped 76% to £7m.
In particular, revenue per available room in London dropped 7.4%, partly due to the closure of its Mayfair hotel for refurbishment.
“Concerns about Brexit have affected the Group's UK hotels especially in London, where the hotels started to face difficulties in recruiting EU workers which currently comprise more than half of the London workforce,” it said in a statement.
The hotel chain also said that it had been affected by the increase in the minimum wage, which came into force last year.
“The shortage of talent-from rank and file to senior management-is intensifying with many new hotels being built around the world, not to mention the growth of Airbnb and serviced apartments,” said chairman Kwek Leng Beng.
He stressed that all hospitality businesses would “need to evolve and embrace” changes in the industry in order to remain relevant and profitable.
(qlmbusinessnews.com via bbc.co.uk – – Wed, 13th Feb 2019) London, Uk – –
UK inflation fell to 1.8% in January, the lowest in two years, the Office for National Statistics said.
This is down from 2.1% the previous month.
A fall in electricity, gas and other fuels drove the decline, the ONS said.
Head of Inflation Mike Hardie said: “The fall in inflation is due mainly to cheaper gas, electricity and petrol, partly offset by rising ferry ticket prices and air fares falling more slowly than this time last year”.
It means that rises in pay are now now outpacing inflation.
The rate of inflation is now below the Bank of England's 2% target and has fallen from the five-year peak of 3.1% in November 2017 in the wake of the Brexit referendum vote.
Energy prices fell because of Ofgem's energy price cap which came into effect from 1 January 2019, the ONS said.
(qlmbusinessnews.com via theguardian.com – – Thur, 7th Feb 2019) London, Uk – –
Ofgem’s decision on default tariffs and prepayment meters down to rising wholesale costs
Around 15m households will see their energy bills increase by more than £100 a year from April after the regulator Ofgem said it was lifting two price caps because of rising wholesale costs.
Big energy suppliers are expected to increase their prices by £117 for 11m customers on default tariffs to a new ceiling of £1,254 a year for a home with typical use, leaving many consumers paying more for their electricity and gas than before the flagship policy took effect on 1 January.
Consumer groups said the rise was “eye-watering” and would be a shock for people who thought the cap would stop their bills from rising.
The significant increase, which wipes out the average saving of £76 from the cap, will be embarrassing for ministers, who promised that people would save money under the flagship policy.
The rise is one of the worst increases in years and on a par with the largest by the big six energy suppliers over the past two years, many of which the government claimed were unjustified.
Comparison sites, which are opposed to the cap, branded the increase “brutal”, “jaw-dropping” and the “worst possible start for the energy cap”.
Ofgem also announced a rise of £106 a year to £1,242 for a further 4m households on prepayment meters, who are typically more vulnerable customers.
Together, the increases in the two caps will add a collective £1.71bn to consumer bills, according to the auto-switching site Look After My Bills.
Ofgem insisted consumers were paying a fair price for their energy despite the increases. The regulator said it had to raise the caps because wholesale costs facing energy firms had increased by 17% and other costs had climbed, too.
“We can assure these customers that they remain protected from being overcharged for their energy and that these increases are only due to actual rises in energy costs, rather than excess charges from supplier profiteering,” the regulator’s chief executive, Dermot Nolan, said.
The regulator said its analysis suggested without the cap people would be “paying significantly more even after the increase” of the cap in April.
The government said the higher caps reflected sharp increases in electricity and gas costs.
Claire Perry, the energy minister, said: “We were clear when we introduced the cap that prices can go up but also down.”
Gillian Guy, the chief executive of Citizens Advice, a consumer group that backs the cap, said: “As unwelcome as this news is, it’s likely that prices would be higher still without the cap and there are steps people can take to ease the strain on their bills.”
Industry body Energy UK said suppliers of all sizes were facing “drastically rising costs”.
One of the big six companies, npower, last week blamed 900 job cuts on the cap and competition.
The caps dictate the maximum suppliers can charge per unit of energy and for a standing charge, so higher energy users will pay more.
(qlmbusinessnews.com via uk.reuters.com — Tue, 5th Feb 2019) London, UK —
LONDON (Reuters) – Britain’s economy risks stalling or contracting as Brexit nears and the global economy slows, with firms in the dominant services sector reporting job cuts for the first time in six years and falling orders, a survey showed on Tuesday.
A closely watched gauge of the world’s fifth-biggest economy, the IHS Markit/CIPS UK Services Purchasing Managers’ Index, fell to 50.1 in January from 51.2 in December — its lowest level since July 2016 and barely above the 50 mark that separates growth from contraction.
A Reuters poll of economists had expected a reading of 51.0.
Britain’s economy defied forecasts from some economists that it would go into recession after the 2016 referendum vote to leave the European Union. But growth slowed sharply in late 2018 as worries mounted about an abrupt, no-deal Brexit.
Overall, the survey suggested Britain’s economy is flat-lining after losing momentum late last year.
Tuesday’s figures are likely to worry Bank of England officials ahead of their latest interest rate decision announcement and new forecasts for the economy on Thursday.
“The latest PMI survey results indicate that the UK economy is at risk of stalling or worse as escalating Brexit uncertainty coincides with a wider slowdown in the global economy,” said Chris Williamson, chief business economist at survey compiler IHS Markit.
The report adds to other signs that Brexit, scheduled in less than two months’ time, is taking its toll on businesses and consumers.
Prime Minister Theresa May, under pressure from her own Conservative Party, wants to reopen her withdrawal agreement with the European Union to replace a contested Irish border arrangement, something Brussels has rejected.
Investors are urging the government to ensure an orderly exit from the club Britain joined in 1973.
On Monday, a Deloitte survey of chief financial officers showed appetite to take on financial risk had fallen to its lowest level in nearly a decade due to fears of “the hardest of Brexits” and rising U.S. protectionism.
That caution was evident in Tuesday’s survey, covering the bulk of Britain’s private sector economy.
New orders fell for only the second time since the financial crisis, while employers cut jobs for the first time since late 2012 — around the last time Britain flirted with recession.
“The survey results indicate that companies are becoming increasingly risk-averse and eager to reduce overheads in the face of weakened customer demand and rising political uncertainty,” Williamson said.
New export orders contracted at the fastest pace since records for this part of the PMI began in September 2014.
The composite PMI for December, combining the manufacturing, construction and service sectors, fell to 50.3 from 51.5 in November, the lowest level since July 2016.
(The story corrects Reuters poll figure in 3rd paragraph to 51.0 from 51.1.)
(qlmbusinessnews.com via theguardian.com – – Mon, 4th Feb 2019) London, Uk – –
Carmaker will not build new X-Trail in UK, saying uncertainty about future is affecting firms
Nissan has confirmed it is abandoning plans to build a new model of one of its flagship vehicles at its Sunderland plant, as it warned that uncertainty over Brexit was affecting businesses.
The Japanese car manufacturer announced in 2016 it would be making the new version of the X-Trail SUV at the factory in north-east England after receiving assurances about Brexit from the government, but on Sunday it said it would be produced in Japan.
Nissan said it had taken the decision “for business reasons” but warned that Brexitwas having an impact, saying: “The continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”
It acknowledged in a letter to workers: “Today’s announcement will be interpreted by a lot of people as a decision related to Brexit.” The X-Trail is produced in Japan currently and Nissan said keeping production there would reduce “upfront investment costs”. The slump in the European diesel car market also played a role in the decision, with the Sunderland plant originally earmarked for the diesel version of the X-Trail.
Greg Clark, the business secretary, made no attempt to hide his disappointment at Nissan’s decision and said it was not surprising that business were holding back on spending decisions given the ongoing political impasse over Brexit.
“People are keen to invest but all motor companies and others across the economy point to the fact they don’t know what our trading relationship will be with our most important trading partner, and that is a source of uncertainty they want resolved and I want it resolved too, because it is hampering investment that would otherwise be made,” Clark said.
The minister hopes that Nissan’s announcement will help concentrate minds in cabinet and Westminster, and believes MPs in his own party and elsewhere will need to switch to supporting Theresa May’s Brexit deal to avoid similar decisions being taken by other multinational companies shortly.
The Labour leader, Jeremy Corbyn, said: “The Conservatives’ botched negotiations and threat of a no-deal Brexit is causing uncertainty and damaging Britain’s economy.” The party added it would press the government to spell out in detail what Brexit reassurances May had given the carmaker in 2016, when she met its former chief executive Carlos Ghosn before the original decision to manufacture the X-Trail in Sunderland. At the time the government said the assurances covered research and development, training and supporting the local supply chain.
Clark will give a statement about Nissan in the House of Commons on Monday, although a government insider added: “There’s no conspiracy about the reassurances; if they were any good, they’d have worked”.
Sunderland voted 61% to leave, although several of the MPs in the north-east want the UK to stay in the European Union. Phil Wilson, the Labour MP for nearby Sedgefield, said that Nissan had originally invested in the UK because “we were in the single market, the customs union and the EU”. He added: “If companies like this are starting to thing twice in investing in Sunderland and in the UK, it could have a significant downside for the economy on this area,” which he described as “the equivalent of when the collieries closed in the 1980s”.
Calling the decision “very disappointing news” for Sunderland and the north-east”,the Unite union said it blamed Brexit uncertainty for the decision, along with the government’s “mishandling” of the transition away from diesel. It expected the company “to work with us to ensure full preparations for Brexit in which jobs and investment are prioritised”.
Nissan said plans over other future models destined for the Sunderland plant – the next-generation Juke and Qashqai – were unaffected by the announcement.
The company’s decision will fuel concern about the economic impact of Brexit, particularly on deprived parts of the country – less than eight weeks before the UK is due to leave the European Union – with some global companies appearing reluctant to make further investment.
The announcement came days after figures from the Society of Motor Manufacturers and Traders (SMMT) revealed that British car production had dropped to a five-year low in 2018, as manufacturers warned that fears of a no-deal Brexit had prompted a fall in new investment.
Nissan employs about 6,700 staff at the Sunderland site, producing 2,000 cars a day. It is Britain’s biggest car plant, making it one of the region’s key employers. The opening of the Nissan plant in the mid-1980s marked the revival of a UK car industry that makes some of the world’s most renowned brands, including Mini, Jaguar Land Rover, Toyota, Honda and Bentley.
Since the plans were linked to greater investment, the move is not expected to have a significant impact on jobs, although Unite’s assistant general secretary, Steve Turner, referred to hundreds of new jobs and apprenticeships being lost because of the move.
Labour’s Bridget Phillipson, the MP for Houghton and Sunderland South, said the announcement “is the clearest signal yet of the damage being caused to the UK car industry by the uncertainty around Brexit. I fear this announcement is only the beginning and it is working people who will suffer the consequences.”
The MP for Sunderland Central, Labour’s Julie Elliott, said tens of thousands of people depended on Nissan for their livelihoods – both directly and through the supply chain. She said: “The production of the X-Trail would have created hundreds of much-needed extra jobs in the future. Sadly, any loss of future production at the plant makes it less stable.”
Rebecca Long-Bailey, the shadow business secretary, said: “The government’s chaotic handling of Brexit has been the root cause of business uncertainty. There are serious questions that the government must now answer on Monday, not least what was in the secret Brexit deal it issued to Nissan and why this was no longer good enough.”
Nissan said the company had decided to “optimise its investments in Europe” by consolidating X-Trail production at its Kyushu plant in Japan, which is the model’s global production hub.
Hideyuki Sakamoto, Nissan’s executive vice-president for manufacturing and supply chain management, said: “A model like X-Trail is manufactured in multiple locations globally and can therefore be re-evaluated based on changes to the business environment. As always, Nissan has to make optimal use of its global investments for the benefits of its customers.”
Gianluca de Ficchy, Nissan Europe’s chairman, said that with the X-Trail already manufactured in Japan, “we can reduce our upfront investment costs”.Advertisement
He added: “We appreciate this will be disappointing for our UK team and partners. Our workforce in Sunderland has our full confidence and will continue to benefit from the investment planned for Juke and Qashqai.”
Other Nissan models built at the site include electric car the Leaf.
(qlmbusinessnews.com via news.sky.com– Tue, 29th Jan 2019) London, Uk – –
The company now expects group underlying earnings to decline to between £500m and £530m, compared with £694m last year.
Shares in Royal Mail have plummeted after the company warned that letter numbers by volume will be lower than expected next financial year.
Royal Mail said that letters by volume dropped 8% over the nine months to 23 December, with letter revenues down 6%.
It attributed the volume drop in part to the impact of the General Data Protection Regulation (GDPR) as well as “business uncertainty” in the run up to Brexit.
The company also confirmed that it expects group underlying earnings to decline to between £500m and £530m, compared with £694m last year.
This projected earnings fall comes after Royal Mail warned of a fall in annual profits last October.
The stock market reacted badly to Royal Mail's trading statement and shares fell by as as much as 13% on opening, making it the FTSE 250's worst performer at the start of business.
Shares rallied slightly within a hour to being down 8% on Monday's closing price of 301p.
Overall, Royal Mail reported a 2% rise in underlying revenues for the period, held up by an 8% revenue increase at its General Logistics Systems (GLS) division, which offset a 1% fall in its UK parcels and letters arm.
Royal Mail group chief executive Rico Back said: “We have had a busy Christmas season.
“In the UK we recruited 23,000 seasonal workers and opened six temporary parcel sorting centres to make sure we had the capacity to handle the high volumes of parcels and cards through our network.
“In the December trading period alone we handled 164 million parcels, up 10% compared with last year.”
Mr Back added: “Due to our letters performance to date, we expect addressed letter volume declines, excluding elections, to be in the range of 7% to 8% for 2018-19.
“While the rate of e-substitution remains in line with our expectations, business uncertainty is impacting letter volumes.
“As a result, addressed letter volume declines, excluding elections, are likely to be outside our forecast medium-term range next year.
“Otherwise, we are reconfirming the outlook and other guidance for 2018-19 provided in our half-year results.”
Nicholas Hyett, Equity Analyst at Hargreaves Lansdown said: “The continuing collapse in letter volumes is the big news in these numbers.
“Royal Mail's gone out of its way to say that's down to wider uncertainty, and the introduction of new privacy laws under GDPR, rather an uptick in companies using email rather than paper.
“Whatever the cause, we suspect those mailings are gone for good.”
“News that the capital markets day has been pushed back to after full year results suggests to us that the all-important cost savings may also be proving harder to deliver than hoped.
“Those efficiency gains remain central to the Royal Mail investment story, and if they can't be delivered then there's nothing to protect the group from the pains of an economic downturn in the UK.”