One in six people are estimated to be over the age of 65 by 2050. As the world’s aging population battles boredom and loneliness, some retirees are finding second careers to keep occupied. CNBC’s Uptin Saiidi met one couple in South Korea going back to work as Airbnb hosts.
Beyond Meat, Impossible Foods, and other traditional food companies are all betting the rise of meatless alternatives could permanently change the way people look at meat. But are they right? WSJ’s Akane Otani explains.
As global beer sales have stalled, major brewers such as AB InBev and Carlsberg are flocking to China. WSJ's Steven Russolillo in Hong Kong tests their strategies, sipping the beers specially crafted to win over Chinese drinkers.
British start up Audio Analytic is like the Shazaam for real world sounds. Its AI technology is put to use in smart home devices that can detect sounds like a window breaking or a smoke alarm going off.
The technology will take active measures to protect your home by alerting your phone or turning on your lights to scare away burglars. Bloomberg's Hello World Host Ashlee Vance visits the Cambridge start up to meet with its founder and CEO and a cute baby that was gracious enough to help demo the app.
(qlmbusinessnews.com via bbc.co.uk – – Wed, 11th Sept 2019) London, Uk – –
California lawmakers have passed a bill that paves the way for gig economy workers to get holiday and sick pay.
Assembly Bill 5, as its known, will affect companies such as Uber and Lyft, which depend on those working in the gig economy.
Some estimates suggest costs for those firms would increase by 30% if they have to treat workers as employees.
But opponents of the bill say it will hurt those people who want to work flexible hours.
Assembly Bill 5 would put into law a decision by the state's supreme court last year. Then, judges ruled that workers should be considered employees under state law if they are integral to a company's business or it tells them what to do.
US democratic presidential hopefuls Elizabeth Warren, Bernie Sanders and Kamala Harris have all come out in support of the bill.
But Uber and Lyft have both proposed a referendum on the decision. In a statement after the bill was passed, Lyft said: “We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need.”
Analysis: By David Lee
The business models of gig economy companies are already under strain – Uber lost more than $5bn in the last quarter alone. Some estimates suggest that having to treat workers as employees, rather than independent contractors, could increase costs by as much as 30%.
Uber and rival ridesharing service Lyft joined forces to push back again the bill. They suggested a guaranteed minimum wage of $21 per hour instead of the sweeping changes the bill would bring.
But that pledge wasn't enough to sway California's Senate, and the state's governor Gavin Newsom is expected to soon sign the bill into law. That paves the way for California's 1 million gig workers to gain added rights next year.
(qlmbusinessnews.com via theguardian.com – – Wed, 11th Sept 2019) London, Uk – –
Company improves offer to rival after its first approach was rejected in May
Bovis Homes has revived talks to buy Galliford Try’s housing businesses after improving its potential bid to almost £1.1bn and adding cash to the proposed deal.
The companies have agreed basic terms of a transaction that would more than double Bovis’s housebuilding and enlarge its affordable homes operation. Bovis, the smallest of Britain’s major housebuilders, would be building 10,000 homes a year, from a projected 4,000 this year, and would gain sites in new areas such as Yorkshire and Bristol. It plans to keep the Bovis and Galliford’s Linden Homes brands.
Bovis expects to pay Galliford £675m in shares based on its closing share price on Monday plus £300m in cash. It would also take on £100m of Galliford’s debt and its pension scheme, which has a small surplus. The two companies hope to seal a deal and get it approved by shareholders before Christmas.
The deal would leave Galliford as a construction and infrastructure business concentrating on bigger projects such as the Aberdeen bypass.
Galliford rejected an all-share approach from Bovis in May that valued the businesses at £1.05bn including debt. The revised proposal is £25m higher puts the value at £1.075and offers Galliford shareholders a large chunk of cash.
Bovis said it planned to raise the cash by selling shares worth 9.99% of its existing share capital as well as using existing funds and raising more debt. Bovis rejected a bid from Galliford in 2017 and hired its rival’s former boss Greg Fitzgerald as its chief executive after a damaging scandal over poorly built homes. The turnaround was declared complete when Bovis reported record profits in February.
Bovis would also gain an established affordable homes business with an order book of more than £1bn to expand its own division, which it launched this year and works in partnership with housing associations. It is a more stable business, while private housebuilding is reliant on the ups and downs of the economic cycle, and is more vulnerable to a no-deal Brexit.
The government announced a £3bn programme in March to fund the building of 30,000 affordable homes by providing Treasury backing to housing associations.
Analysts at Jefferies said: “We see the rationale for the deal as the opportunity to buy inexpensive assets well known by the current CEO, bringing Bovis larger market share, speeding up the development of Bovis’s partnership business as well as the potential for cost savings. However, we believe the market will question the timing of such a large deal at this stage in the cycle given all the political and economic uncertainties.”
Bovis shares dropped 4% to £10.16 by lunchtime, while Galliford Try shares initially jumped 20% to 737.5p and later traded 9% higher.
(qlmbusinessnews.com via uk.reuters.com — Tue , 10th Sept 2019) London, UK —
TOKYO (Reuters) – SoftBank Group (9984.T), a leading shareholder in the holding company of U.S. office-sharing startup WeWork, has urged it to shelve a planned IPO on concerns over the valuation, the Financial Times reported on Monday.
A SoftBank spokeswoman declined to comment on the report, which cited sources familiar with the matter.
Investor scepticism has already forced money-losing The We Company to consider slashing its IPO valuation to a little more than $20 billion, sources told Reuters last week. That followed weak initial trading at other startups including SoftBank-backed Uber Technologies Inc (UBER.N).
While SoftBank and its $100 billion Vision Fund emphasize their long-term investing credentials, founder and CEO Masayoshi Son has set out an ambitious IPO pipeline for tech investments spanning ride-hailing, fintech and health startups.
Putting The We Company’s offering on hold would disrupt that schedule at a time when SoftBank is seeking funds from investors for a second Vision Fund.
SoftBank made a follow-up investment in We Company, one of its biggest tech bets, at a $47 billion valuation earlier this year – a number widely treated with scepticism by analysts.
Sanford C. Bernstein analyst Chris Lane said that if The We Company halts the IPO, SoftBank could come up with an alternative funding plan for the startup, which he estimates needs $9 billion in funding to become cash-flow positive.
SoftBank “have got an important voice, but more importantly they have money … (The We Company) will have to listen to them,” said Lane, who values the office space-sharing firm at $23 billion.
Tech conglomerate SoftBank has burned through much of the $100 billion raised by its first Vision Fund in just two years, recording big paper gains on internal revaluations of its tech investments.
Vision Fund defends its valuation techniques, which include cash-flow analysis, recent transactions and comparison with peers to underpin its numbers.
At the end of June the fund recorded the value of $71 billion invested in 83 investments as having grown by $20 billion. Since then the share price of portfolio companies Uber and Slack (WORK.N) have both fallen by around a third.
SoftBank says many investments receive a vote of confidence as third parties come in as co-investors or by making follow-on investments at the same or higher valuations.
In the case of The We Company’s $47 billion valuation, if a tech company shelves an IPO due to a lower valuation than expected, investors are generally expected to take that fall into account when appraising their stakes.
Reporting by Sam Nussey and Tim Kelly in Tokyo, Julie Zhu in Hong Kong and Bharath Manjesh in Bengalurus
(qlmbusinessnews.com via bbc.co.uk – – Mon, 9th Sept 2019) London, Uk – –
British Airways pilots have begun a two-day strike in an ongoing dispute over pay and conditions.
Tens of thousands of passengers have been told not to go to airports, with the airline cancelling some 1,700 flights due to the disruption.
The pilots' union Balpa said BA management's cost-cuts and “dumbing down” of the brand had eroded confidence in the airline.
But BA chief Alex Cruz said investment in the operator had never been so big.
Both sides say they are willing to hold further talks, but no date has been set. The pilots are currently scheduled to stage another strike on 27 September.
Balpa's general secretary, Brian Strutton, said: “It is time to get back to the negotiating table and put together a serious offer that will end this dispute.”
But he told the BBC that while BA says publicly it is willing to talk, “in private they say they are not going to negotiate”. And although the headline dispute is about pay, he said there was also deep resentment about the airline's direction.
“BA has lost the trust and confidence of pilots because of cost-cutting and the dumbing down of the brand… management want to squeeze every last penny out of customers and staff,” Mr Strutton said.
Mr Cruz defended the airline against Mr Strutton's claim, saying it had never in its history embarked on such a big investment programme in services and training. He said the airline was “ready and willing” to return to talks with Balpa.
It is the first time BA pilots have walked out and the action could cost the airline up to £40m a day. Some 4,000 pilots are involved in the strike.
By Katie Prescott, Business reporter
It's unlikely that passengers will see that much disruption at airports – most of the real problems have happened over the past few weeks as people have rushed to make other travel arrangements, rebook their flights or apply for refunds.
In terms of the negotiations, both sides say that they are open to talks but neither has responded to the other, underlining just how acrimonious their relationship has become.
Ostensibly this is about pay, but there's also underlying discontent among pilots with the company's strategy. Some say they don't like British Airways' cost-cutting drive and they want to see more of the benefits of their bumper profits.
But industry insiders say BA has made those profits because they have cut costs. And that airlines are expensive and unpredictable beasts to run, in thrall to a fluctuating oil price (jet fuel accounts for a quarter of their operating costs) and random acts such as drones in the air.
If they don't come to an agreement in the next few weeks, another strike is scheduled for 27 September. The result of the pilots' union ballot allows strike action until the start of next year, but Balpa says it hopes to resolve the situation well before then.
How did we get here?
Pilots previously rejected a pay increase worth 11.5% over three years, which was proposed by the airline in July.
Balpa says that its members have taken lower pay rises and made sacrifices during more stringent times for the airline in recent years. The union insists that now that BA's financial performance has improved – its parent company IAG reported a 9% rise in profits last year – they should see a greater share of the profits.
BA says its pilots already receive “world-class” salaries. The airline believes the pay offer is “fair and generous”, and that if it is good enough for BA cabin crew, ground staff and engineers – whose unions, Unite and the GMB, have both accepted it – it should be good enough for pilots, too.
The airline says once the 11.5% pay deal has fully taken effect in three years' time, some BA captains could be taking home more than £200,000 a year, allowances included.
Two weeks ago, BA informed some customers they would have to re-book their flights next week due to the planned industrial action.
Unfortunately, due to “human error” the airline mistakenly sent emails to some customers whose flights were not actually affected, throwing BA's customer service operations into a tailspin over the bank holiday weekend.
On Friday, BA said the “vast majority” of affected customers had now either accepted a refund or rebooked, either on alternative dates or with other airlines.
What rights do passengers have if their flight is affected?
BA advice says you can request a full refund, rebook your flight for another time in the next 355 days, or use the value of your fare to fly to a different destination.
If your flight has been cancelled due to a strike, the Civil Aviation Authority sayspassengers also have a legal right to a replacement flight at BA's expense to get you to your destination, even if this means travelling with a different airline.
Most affected passengers would already have been in contact with BA, but they may not have considered additional costs, such as airport parking. They are advised to keep receipts for these extra costs, and BA said it would look at refunding them on a case-by-case basis.
The cost of separate hotel or accommodation bookings that cannot be used may need to be claimed from travel insurance.
INSIDER's Emily Christian heads to the Plaza Hotel to find out why young professionals are seeking out etiquette classes. She meets with expert Myka Meier, the founder of Beaumont Etiquette, who teaches Emily the graces of a duchess and explains why etiquette is more important today than ever. Does Emily have what it takes to act like a royal for the day?
Volkswagen is one of the world’s largest automakers. It houses brands such as Audi, Porsche, and Bentley. But perhaps its best-known vehicle is the Volkswagen Beetle. Over its entire lifespan, Volkswagen sold over 22.5 million of all three versions of the Beetle. But in July of 2019, production one of the most iconic and important cars of all time came to an end.
Fauzia Abdur-Rahman has been serving Jamaican food in the South Bronx from her cart Fauzia's Heavenly Delights, right outside the courthouse, for the last 25 years. The menu changes every day, but there are always two meat options, a fish option and three vegetarian options.
With the help of her daughter and husband, Fauzia makes her famous jerk chicken three times a week, and finishes it with her homemade jerk sauce that she makes with pimiento and scotch bonnet peppers, plus a host of other ingredients.
(qlmbusinessnews.com via bbc.co.uk – – Fri, 6th Sept 2019) London, Uk – –
TripAdvisor has hit back at allegations that it is failing to stop a flood of fake reviews that artificially boost hotel ratings.
The travel review site has come under fire from consumer group Which? over what it calls “hugely suspicious” patterns of comments from contributors.
But James Kay, a UK director of TripAdvisor, said the site went after fake reviews “very aggressively”.
“We are doing this more than any other platform out there,” he told the BBC.
Mr Kay was speaking in response to a Which? Travel survey that looked at 250,000 TripAdvisor reviews for the top 10 ranked hotels in 10 popular tourist destinations worldwide.
Which? said it had reported 15 of those 100 hotels to TripAdvisor as having “blatant hallmarks” of fake reviews.
It said that in the case of one hotel in Jordan, TripAdvisor subsequently removed 730 of its five-star reviews.
Naomi Leach of Which? Travel accused TripAdvisor of a “failure to stop fake reviews and take strong action against hotels that abuse the system”.
“Platforms like TripAdvisor should be more responsible for the information presented to consumers.”
But TripAdvisor's Mr Kay said the site had already taken action against the reviews in question, independently of the Which? investigation.
“This is something we do every day,” he said. “We have fraud detection tools that are far more sophisticated than those used by Which?”
Mr Kay said its investigators were always on the lookout for suspicious patterns of reviews.
In Italy, he added, TripAdvisor had assisted a prosecution that sent one fake reviewer to jail.
Under an EU directive that has been in force in the UK since 2008, hotel staff who post favourable reviews of their establishment on travel information websites such as TripAdvisor are committing a crime.
Any firm breaking the rules may face prosecution, stiff fines and possibly even jail terms for its staff.
(qlmbusinessnews.com via bbc.co.uk – – Thur, 5th Sept 2019) London, Uk – –
The Bank of England updates analysis on the potential impact of a no-deal Brexit on the economy as Mark Carney goes before MPs.
The negative impact of a no-deal Brexit will not be as severe as originally thought because of improved planning by the government, businesses and the financial sector, the Bank of England has said.
Governor Mark Carney told the Treasury select committee that the Bank now believes GDP will fall by 5.5% in the worst-case scenario following a no-deal Brexit – less than the 8% contraction it predicted in last November.
The Bank's revised assessment of the possible scenarios also says unemployment could increase by 7% and inflation may peak at 5.25% if the UK leaves the European Union without a deal.
While he warned that there would still be an economic impact, with food bills likely to rise, Mr Carney said preparations for no-deal since the end of last year had informed the improved picture.
These include work undertaken at Dover and Calais to reduce disruption to cross-Channel trade, the government's proposed tariff regime, and work to reduce disruption in the financial markets.
In a letter to the committee, Mr Carney said: “Advancements In preparations for a No Deal No Transition scenario mean that the Bank's assessment of a worst case No Deal No Transition scenarios has become less severe.”
Giving evidence to the committee, he said that while risks of economic disruption remain, the work undertaken to reduce delays at Dover and Calais had been significant.
These include the automatic registration of UK companies to trade with the EU, simplified customs procedures and a temporary waiver on security checks at the border.
The government's own assessment of disruption, set out in the Operation Yellowhammer documents leaked last month, is that between 40% and 60% of freight trade will be disrupted, less than the 75% previously predicted.
Mr Carney said the Bank's forecast was based on less than half of freight being disrupted, with every 5% of freight traffic processed equating to about 0.25% of GDP.
The announcement of a no-deal tariff regime that would see 87% of imports by value eligible for a tariff-free increase, and work to reduce disruption to UK and European derivative markets, has also improved the worst-case scenario.
Mr Carney said: “There's real progress on the ground, there's real progress in the financial system and that has some positive knock on effect on confidence on financial markets as a whole. All of that adds up to 2.5% to 3% of GDP that we would not otherwise lose.”
“It is likely that food bills will rise in the event of a no-deal Brexit, that is almost exclusively because of the exchange rate impact. Movements are quickly translated onto the shop shelf, and domestic prices, imperfect substitutes, also increase. That impact has lessened because of the new tariff regime the government has put in place.”
(qlmbusinessnews.com via uk.businessinsider.com – – Thur, 5th Sept 2018) London, Uk – –
Biggest UK housebuilder benefits from help to buy but warns of slow growth this year
Britain’s biggest housebuilder has shrugged off the tough housing market to report record annual profits of £910m, although it warned sales growth this year would be slower than expected.
Barratt reported an 8.9% rise in pre-tax profits to £909.8m for the year to 30 June, with sales surging to an 11-year high and margins improving. It announced a special dividend of 17.3p a share.
The company, the UK’s largest housebuilder by sales, sold 17,856 new homes last year, up from 17,579 the previous year. Sales in London were flat but rose outside the capital and in Scotland. The average selling price dropped to £274,400 from £288,900 as the company continued to shift away from central London to focus on the outer boroughs and areas such as Milton Keynes.Advertisement
Barratt has benefited from the government’s help-to-buy scheme, which accounted for 40% of sales. Its rival Persimmon, another major beneficiary of the taxpayer-funded programme, caused outrage in February when it made a profit of £1.09bn in 2018, the biggest ever made by a UK housebuilder, with nearly half of its sales coming from help to buy.
David Thomas, Barratt’s chief executive, said government schemes aimed at helping first-time buyers had been “enormously helpful to the market”. The first, Home Buy Direct, was launched by the Labour government in 2009, followed by FirstBuy in 2011 and help to buy in 2013, in which the government provides a guaranteed interest-free loan to homebuyers. Housebuilders have also benefited from affordable mortgages at a time of low interest rates.
Housebuilding collapsed during the financial crisis but has recovered, to 165,090 in England last year, although it is still far below the levels needed to solve Britain’s housing crisis.
The new-build housing market has been remarkably resilient, despite the increasing threat of a no-deal Brexit, and Thomas was sanguine about the outlook.
“If you look at the period over the last three years since the referendum, customer demand has been very strong, there is lots of eligibility, including help to buy,” he said. “So far we’ve not seen a reduction in consumer appetite.”
He welcomed the extension of the help-to-buy programme until 2023 and expressed confidence that lenders would fill the gap with affordable mortgages thereafter.
The housing market has been dragged down by Brexit uncertainty, which has deterred many from buying and selling and led to falling house prices in London and south-east England.
Barratt is forecasting that sales volumes will grow by 3% this year, the bottom end of its targeted 3% to 5% range. It has a forward order book of just below £3bn, down from £3.05bn this time last year. Shares in the company fell 5% initially, and later traded down 3.5% at 600p. City analysts are predicting pre-tax profits of about £880m this year, down from last year.
The company’s gross margin rose to 22.8% from 20.7% last year. The firm has reduced costs by cutting the number of house types it offers from more than 200 in 2016, to about 20 for Barratt, and 20 for its upmarket David Wilson brand. It has also changed the design, for example by reducing the pitch of its roofs to save money.
(qlmbusinessnews.com via bbc.co.uk – – Wed, 4th Sept 2019) London, Uk – –
Chancellor Sajid Javid is set to unveil the government's spending plans for the coming year on Wednesday.
The statement will set departmental budgets for just one year rather than the usual three years, due to uncertainty over the impact of Brexit.
Mr Javid will announce a further £2bn of Brexit funding for the government, as well as confirm additional funds for health, schools and the police.
The extra spending will be funded by borrowing rather than tax rises.
Independent think-tank the Institute for Government (IFG) says the government is likely to favour vote-winning measures ahead of a “potentially imminent” election.
But it argues the government should be prioritising other areas of spending, such as social care and prisons which it says are the services most in need of extra money.
Here we look at each of the public services, and which needs the most funding, according to the IFG's report.
It has graded services, according to need based on which are able to keep up with demand: amber for some concerns and red for significant concerns.
What has already been announced? Theresa May's government announced that annual funding would rise by £20 billion by 2023. Boris Johnson also announced a one-off injection of £1.8bn, but not all of that is agreed to be new money.
Spending on hospitals and GP services in England has risen since 2009-10, although more slowly than in the past.
IFG estimates suggest that the workload of GPs has risen faster than spending, meaning they have had to do more for less.
Despite practices increasing the number of telephone consultations and pooling resources, patients have been waiting longer for appointments.
This suggests that GPs, despite becoming more efficient, have not been able to keep up with demand.
However, the amount of work hospitals do has risen faster.
While hospitals have made efficiencies, hospitals have not been able to keep pace with the growing cost and demand for care, according to the IFG.
The result has been financial deficits and longer waiting times for treatment.
Analysis: By Nick Tiggle
The frontline of the NHS knows what its budget is until 2023-24: it was given a five-year settlement last summer.
The rises, an average of 3.4% a year, are generous compared to what the rest of the public sector can expect and reflect the fact the health service is constantly among the top priorities for voters and facing rising demand from the ageing population.
But there are still question marks around more than £13bn of funding that goes to things like staff training, buildings and healthy lifestyle initiatives, such as stop smoking.
What has already been announced? The government has announced that funding will rise by £2.6bn in 2020-21, £4.8bn in 2021-22 and £7.1bn in 2022-23.
Schools in England have not faced the same financial pressures as many other public services, according to the IFG.
However, after a rise in spending per pupil in most years since 2009-10, since 2014-15 the growth in pupil numbers has outpaced spending growth, meaning the per-pupil spending has fallen in both primary and secondary schools.
On top of this, schools have increasingly been paying for services that would have been previously provided by local authorities – such as educational psychology and extra support for special educational needs – following cuts to local authority budgets.
There are also signs that this increased workload is putting pressure on the workforce, with schools finding it harder to recruit and retain teachers, the IFG says.
But overall, schools have become more productive, it adds, with more pupils per teacher and pupil attainment increasing – particularly in primary schools.
Analysis: By Branwen Jeffreys
School funding in England had become a political headache and vote loser for the government, with both headteachers and parents campaigning. Rising costs such as national insurance and teachers pensions, as well as running costs such as utility bills, have contributed to an 8% real terms reduction in money spent in schools since 2010.
The extra money promised for 5-to-16 year-olds' education will almost reverse that squeeze by 2023. But that leaves financial pressures in England in other areas such as early years, and despite some extra cash for colleges educating 16-19 year-olds, an historic legacy under many governments of relative underfunding of further education.
What has already been announced? The government has promised 20,000 extra police officers over three years at a likely cost of £0.5 billion next year but has not yet confirmed how this will be funded.
Spending on the police in England and Wales has fallen sharply since 2009-10, says the IFG.
The number of police officers has also declined, with total police reserves now 9% lower in real terms than they were in 2009-10.
“Victim-reported crime has fallen over this period, but police-recorded crime has increased,” the IFG says.
“Overall police performance – as judged by inspection reports – has improved, although other indicators – such as public confidence in the police and the length of time taken to bring charges – have deteriorated.
“There is evidence that the police are struggling to maintain performance with current levels of spending.”
Analysis: By Dominic Casciani
The strength of policing reached a record high at the end of the Labour government that left office in 2010 – and then fell back by 21,000 as older officers left and cuts restricted recruitment.
The prime minister's pledge to re-recruit 20,000 officers in the coming three years is a huge task, because natural loss means forces may need to recruit more than double that number to hit the target.
What has already been announced? £0.1 billion pledged to boost security; promise of 10,000 extra prison places, but funding arrangements unclear
Prisons have experienced large spending cuts and a reduction in staff numbers since 2009-10.
This means prison safety has declined dramatically since 2012-13, according to the IFG.
Violence has risen and prisoners are less likely to have access to learning and development activities.
The 2016 Autumn Statement saw an injection of extra cash to tackle these safety issues and spending has risen again recently.
As a result, staff numbers are starting to rise again.
The IFG hailed a pilot programme to curb violence and drug use in 10 prisons, undertaken last year by the then Prisons Minister, Rory Stewart.
“This was largely successful, but replicating it across the whole prison system will require extra spending in every future year,” the IFG says.
Analysis: Dominic Casciani
The Ministry of Justice was one of the first big spending departments to settle with the Treasury in 2010, when the then Chancellor, George Osborne, demanded major cuts to public spending. Today, it has 25% fewer staff than back then.
The departure of experienced prison officers under the cuts coincided with a rise in smuggling of new psychoactive drugs into jails, leading to an increase in violence that the remaining prison officers struggled to control.
Adult social care
What has already been announced? In a Sunday Times interview, Boris Johnson said he would give councils £1bn for adult social care, but no formal announcement has yet been made.
Spending on adult social care in England fell between 2010-11 and 2014-15, but has since seen a rise.
The number of adults receiving publicly funded care packages has decreased, according to the IFG, even though an ageing population would suggest that demand is increasing.
Local authorities, responsible for providing adult social care, have driven down the price of care commissioned from private and voluntary sector providers following cuts to funding.
However, this has not enabled them to meet demand, the IFG says, and unpaid care – such as by family, friends or neighbours – has partially filled the gap.
In his first speech from Downing Street, Boris Johnson promised to “fix the crisis in social care once and for all”.
However, the IFG says there are no signs that plans to do so will be unveiled in the Spending Review.
Analysis: By Nick Tiggle
Not only has adult social care lost out in terms of funding, the long-awaited reform of the system has also been dodged.
Care services for the elderly and disabled simply do not have the profile of the NHS, although that is beginning to change a little as the problems worsen. But the challenge remains what to do about money.
Only the poorest and neediest get support from the state. But that means four-fifths of older people who need care go without, rely on family and friends or pay for it themselves.
Each of the areas covered by the IFG's report are devolved: the governments in Scotland, Wales and Northern Ireland run their own services.
So announcements on Wednesday will effect England (or England and Wales for policing and justice).
The devolved governments will receive extra money proportionate to the increases in spending, but they will decide how that money is spent.
Since 2010, the Westminster parliament has increased health spending faster and cut education and local government spending faster than the devolved governments.
(qlmbusinessnews.com via theguardian.com – – Wed, 4th Sept 2019) London, Uk – –
Exit of founding member of top City share index is latest sign of retailer’s declining fortunes
Marks & Spencer is to be demoted from the FTSE 100 for the first time in the latest sign of the declining fortunes of the retailer, which was a founding member of the leading City share index.
Relegation to the FTSE 250 comes as the company is closing 120 stores as part of an overhaul designed to shore up profits.
M&S’s demotion reflects a share price at nearly a 20-year low as a long-running sales slump at the retailer’s clothing arm is compounded by the high street crisisaffecting rivals including Debenhams and House of Fraser.
The FTSE 100, which was established in 1984, contains the UK’s biggest listed companies by market value, with membership considered a mark of business prestige. The index is reshuffled four times a year according to share price movements, allowing a handful of companies to move up and down.Q&A
Marks & Spencer timeline
Tony Shiret, an analyst at the stockbroker Whitman Howard, said: “It is significant [for M&S] in the sense that it is a fairly objective measure of the diminished scale of the company.”Advertisement
M&S shares closed down 1.5% at 187p, valuing the company at £3.6bn.
A decade ago, M&S was making a £1bn annual profit but the latest figure was below £100m on the back of more than £400m of restructuring costs relating to the revamp being led by the company’s chair, Archie Norman, who is highly regarded for turnarounds during his career including at Asda and ITV.
Losing its FTSE 100 status means M&S shares will no longer be held by the investment funds that only track the index of Britain’s highest-value companies, forcing them to dump the stock. Norman has previously been sanguine on the matter, saying: “When I went to ITV we dropped out of the FTSE 100, the sky didn’t fall in.”
Last year, he told shareholders M&S had bigger problems because it was facing an existential threat as retail shopping moved online. “This business is on a burning platform. We don’t have a God-given right to exist and unless we change and develop this company the way we want to, in decades to come there will be no M&S,” Norman warned.Q&A
What is the FTSE 100 and why does it matter?
Nick Bubb, a retail analyst, said M&S had been in the relegation zone for some time. “M&S has been declining remorselessly for many years, as a result of weak and arrogant management, and stronger, more focused competition [such as Primark]. The problems have mainly been on the clothing side, where M&S tries and fails to be all things to all people in the mid-market,” he said.
M&S – which was founded on a Leeds market stall in 1884 – was late to adapt to the rise in online shopping, hampered by its legacy of 300 clothing stores. Many of the chain’s shops predate the second world war and are no longer in the right place or are the wrong size for their local market.
Norman is putting the company through its biggest shake-up in a generation. He has paid £750m for a 50% share in Ocado’s retail arm and, from autumn next year, M&S products will replace Waitrose-branded goods in shoppers’ deliveries. But investors are split on the merits of the deal, with some arguing the company has taken an expensive route into the fast-growing online grocery market.
But Norman, who is working closely with the company’s chief executive, Steve Rowe, has had his work cut out reviving the M&S clothing business, which remains the country’s biggest in sales terms despite seven years of decline.
In July, M&S sacked its clothing head Jill McDonald after she failed to get a grip on the biggest job in high street fashion. At the time, Rowe – who is now running the business – revealed buying errors meant key products such as jeans had sold out, resulting in the poorest stock levels “I have ever seen in my life”.
With FTSE 100 membership purely a function of market cap size, Bubb said: “Other companies have grown bigger and M&S has got smaller. Life will go on after the exit from the FTSE 100 and in some ways, a lower profile might help M&S.”
(qlmbusinessnews.com via news.sky.com– Tue, 3rd Sept 2019) London, Uk – –
Tesco Bank's 23,000 mortgage customers are set to transfer to Halifax once the deal is completed next year.
Lloyds Banking Group has completed the purchase of Tesco Bank's mortgage book in a deal worth £3.8bn.
Sky News reported in July how the high street giant had fought off rivals including RBS to enter exclusive talks for the business, three months after Tesco said it planned an exit because of challenging market conditions.
The deal will see more than 23,000 residential mortgage customers transfer to Lloyds-owned business Halifax – cementing the bank's position as Britain's biggest lender.
It is expected to be completed by the end of March next year.
Gerry Mallon, Tesco Bank chief executive, said: “Our focus is on how we best serve Tesco customers and align our resources effectively to their needs, while ensuring that our offer remains sustainable in the long term.
“As a result, we made the decision to move away from our mortgage offering.
“Our priority throughout has been to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well.”
A sluggish housing market and low interest rates have helped spark a race to the bottom in mortgages amid strong competition for business between high-street lenders – a fight that has taken its toll on profitability over the past year.
Banks across the board have been reporting weaker margins from intense competition in the mortgage market – though smaller banks have endured the worst of the pain as a result of the weak rates.
Vim Maru, group director of retail at Lloyds Banking Group, said: “This is a good deal for the group, our shareholders and Tesco's mortgage customers.
“We believe our Halifax brand will make a good home for these customers and we look forward to welcoming them to the group.”
Tesco has previously said its mortgage customers needed to take no action as there would be no changes to their accounts.
(qlmbusinessnews.com via cityam.com – – Tue, 3rd Sept 2019) London, Uk – –
UK manufacturing output crashed to a seven-year low in August as Brexit doubts intensify and a wider economic slowdown hurts firms, according to a closely followed measure of sector activity.
Manufacturing output plunged to its worst level since 2012 last month, according to IHS Markit’s Purchasing Managers’ Index (PMI).
Economists recorded a drop to 47.4 PMI, where anything below 50 represents a contraction.
“High levels of economic and political uncertainty alongside ongoing global trade tensions stifled the performance of UK manufacturers in August,” Rob Dobson, IHS Markit director said.
“Business conditions deteriorated to the greatest extent in seven years, as companies scaled back production in response to the steepest drop in new order intakes since mid-2012.”
The output was consistent with a quarterly contraction of around two per cent, IHS Markit warned.
Sterling dropped even further against the dollar as the news came out, falling 0.55 per cent to 1.2089.
Market watchers warned it could sink below 1.20 “because there is no clarity whatsoever when it comes to Brexit”.
“The drop in the UK’s manufacturing sector was at the fastest pace since 2012 and this is going to only become worse if lawmakers don’t get their act together,” Think Markets chief analyst Naeem Aslam said.
Optimism falls to series-low
Business optimism slumped to its lowest level since researchers began asking firms about their expectations for future output in 2012.
The gloomy outlook has stemmed from weakening market conditions, signs of a global economic slowdown, Brexit uncertainty and subsequent knocks to client confidence.
However, manufacturers still expect to see some output growth over the coming year, as highlighted by 40 per cent of companies forecasting expansion compared to only 13 per cent anticipating a decline.
British factories also shed staff last month amid fears of a no-deal Brexit. The report said manufacturing employment fell at one of the fastest rates over the last six-and-a-half years in August.
“Job cuts were driven by cost saving initiatives (including reorganisations and redundancies), slower economic growth and the continued impact of Brexit uncertainty.”
Lloyds Bank Commercial Banking’s head of large corporates manufacturing Steve Harris said: “Further contraction in activity is a significant disappointment for the sector.
“The operating climate remains challenging. UK manufacturing’s exposure to the world economy has been one of its key strengths, but reduced global demand resulting from continued geopolitical uncertainty has created headwinds for export-led strategies.
“On the home front, meanwhile, the question mark over the UK leaving the EU means some manufacturers continue to plan for a number of eventualities, placing pressure on working capital.
Capital Economics analysts said that although the figures suggested the industrial sector was contracting, “we doubt that manufacturing will pull the overall economy into recession”.
“Given the ongoing struggles of global manufacturing and the strong possibility of a no deal Brexit in two months’ time, it is hardly surprising that both domestic and external demand are suffering,” analysts added.
Meanwhile Danske Bank said Brexit had acted as a supply shock.
Eurozone factory slump continues through August
Meanwhile on the continent, manufacturing activity contracted for the seventh month in August as optimism was suppressed by a continued fall in demand.
The Eurozone PMI score came in at 47 – better than July’s 46.5 but still well below the threshold for growth. The results makes it more likely that the European Central Bank goes ahead with monetary easing next week.
The ECB all but promised to ease policy further at their July meeting, as the bloc’s growth outlook gets worse. A further escalation in the US- China trade war yesterday has increased fears of a global economic slowdown, which would hit Europe’s already embattled manufacturers hard.
“Eurozone producers are suffering as the summer slump in factory production persisted into August. A marked deterioration in optimism about the year ahead suggests companies are expecting worse to come,” noted IHS Markit chief business economist Chris Williamson.
New orders fell for an eleventh month, and firms continued turning to completing backlogs of work to stay active.
(qlmbusinessnews.com via bbc.co.uk – – Mon, 2nd Sept 2019) London, Uk – –
UK house prices could drop by 6.2% next year if the UK leaves the EU without a deal on 31 October, according to accountants KPMG.
However, if a deal is reached, KPMG predicts that house prices will rise by 1.3%.
London will probably see a fall in prices with or without an exit deal this year and next, it said, with sharper declines if no deal is reached.
However, the low supply of new housing stock could prop up prices over time.
“Overall, while a no-deal Brexit could dent property values in the short term, it may make less impact on one of the fundamental factors driving the market: the stock of regional housing,” said the report.
“Housebuilders are expected to reduce the supply of new housing in some regions in the short term as a response to a deteriorating economic outlook.
“So, while there will be fallout from the initial economic shock following a no-deal Brexit, the market is expected to recover most ground in the long run,” it said, assuming the economy recovers.
With the housing market hard to predict, KPMG said prices could drop in a no-deal scenario by as much as 10-20%.
“Transactions volumes will likely fall much more than prices – making government housing delivery targets impossible to achieve and slowing new building across the sector,” said Jan Crosby, UK head of housing at KPMG.
Assuming no agreement is reached, KPMG says Northern Ireland will be the hardest hit next year, with average price declines of 7.5%, followed by London at 7%. The least-hit will be Wales and the East Midlands, with 5.4% declines apiece.
This year, most regions will see changes of less than 2%, KPMG says, with the exception of London, down 4.8%, and Northern Ireland, down 2.2%.
If a deal is struck, prices in London and Northern Ireland are still predicted to fall this year, by 4.7% and 1.2%, while most other regions will be largely unchanged. Scotland and the North West will see gains of 1.4% and 1.6%.
And next year, all regions will gain aside from London's predicted 0.2% slide. The average increase will be 1.3%.
KPMG noted that the UK housing market is healthier than it was at the time of the last housing crash – when prices fell by 15% in 2008. House prices are lower as a percentage of earnings in most regions outside London and the South East.
In addition, compared with the aftermath of the 1991 recession – when housing prices dropped 20% over about four years – mortgages are much cheaper. Back then, the Bank of England's base rate was about 14%.