Published: 02 February 2023
By Suzanne Evans, Director, Political Insight
The US central bank has raised interest rates again, but by the smallest increase since March. The Federal Reserve said it was raising its key rate by 0.25 percentage points, in a sign it is stepping back from last year's aggressive rate hikes. However, officials warned they did not think rate rises were finished, saying: "Inflation has eased somewhat but remains elevated. The Committee anticipates that ongoing increases in the target range will be appropriate."
The UK's manufacturing sector contracted in January for the sixth month in a row as it was hit by inflation, shortages and weak demand. The S&P Global/CIPS UK Manufacturing PMI scored 47 in January, up from 45.3 in December but still well below the 50 mark which signifies growth. “UK manufacturers faced a tough operating environment at the start of 2023, leading to reducing intakes of new business, declining production volumes and lower staffing levels,” Rob Dobson, director at S&P Global Market Intelligence said. December's score had been a 31-month low for the sector.
The Association of the British Pharmaceutical Industry (ABPI) is today calling on The Department of Health and Social Care (DHSC) to scrap its plans to raise levies on a voluntary scheme that helps keep branded medicines affordable and gets the most effective medicines into use more quickly. Drugmakers who are part of the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) scheme are required to pay a part of their drug revenue to the Treasury, and that levy has risen from around 7% in 2014 under an earlier programme, before rising to first 19% in 2022, and then again to 26.5%. Now, the DHSC plans to raise the revenue clawback rate to 27.5%, a move is likely to send the "worst possible signal" to global investors and boardrooms, the ABPI says. "Hiking these clawbacks to such uncompetitive levels risks undermining the UK's offer to global life sciences companies," ABPI CEO Richard Torbett said in a statement. Pharmaceutical giants AbbVie and Eli Lilly have already withdrawn from the scheme, leaving last month because of the earlier hikes, in what the ABPI said at the time was “a warning signal to the UK government”.
The Financial Conduct Authority said this morning that it is proposing to ban firms who give advice on debt from receiving referral fees from other firms in the sector, citing a conflict of interest which can harm customers. The financial watchdog’s executive director of consumers and competition, Sheldon Mills, said in a statement: "We want to stop this harm by removing the conflict of interest between firms giving advice in the customer’s best interest and recommending an option that makes firms more money”.
British Steel has reportedly been drawing up secret plans to axe hundreds of jobs even as it continues talks with government ministers about £300m in taxpayer-funded state support that is partly predicated upon providing job guarantees lasting for a decade. According to Sky News, the company has been discussing launching a consultation on around 800 redundancies, principally focused on the Scunthorpe plant in north Lincolnshire where it is based.
An undercover investigation by The Times has revealed that British Gashas been employing debt collectors working for Arvato Financial Solutions to break into vulnerable customers' homes to fit pre-payment energy meters when they have fallen behind on energy bills. Having established the property was unoccupied, the newspaper’s reporter witnessed the agents work with a locksmith to force their way in and install the meters. Among those whom the Times found had prepayment meters fitted by force were a young mother with an infant baby; a mother whose daughter is disabled; and a woman described as having mobility problems. Business Secretary Grant Shapps said he was "horrified" by the findings. "Switching customers - and particularly those who are vulnerable - to prepayment meters should only ever be a last resort and every other possible alternative should be exhausted," he said. "These findings suggest British Gas are doing anything but this." Energy firms are required to have exhausted all other options before installing a prepayment meter, and should not do so for those "in the most vulnerable situations," he added. Chris O’Shea, the CEO of Centrica, which owns British Gas, told the BBC: “There is nothing that can be said to excuse it," admitted the buck stopped with him, and confirmed that the firm has now suspended applications to the Courts for a warrant to install a pre-payment meter, a suspension what would last "until at least after winter." He insisted protecting vulnerable people was a priority.
Water bills are set to get the biggest increase in almost 20 years from April, industry body Water UK says. The annual bill for an average household in England and Wales will hit £448, 7.5% increase which means customers will pay on average £31 more than last year.
British Oil giant Shell has announced a record profit for 2022 of £32.2bn, doubling from a year earlier, and far exceeding the previous record of £25.19bn in 2008. The FTSE 100-listed company also posted record fourth-quarter earnings of £7.9bn. The announcement inevitably led to a chorus of disapproval from politicians and pressure groups. Lib Dem leader Sir Ed Davey said: “No company should be making these kind of outrageous profits out of Putin’s illegal invasion of Ukraine”. “The government must tax the oil and gas companies properly and at the very least ensure that energy bills don’t rise yet again in April,” he added, while calling for an increase in windfall taxes on oil and gas companies.
Some Arnold Clark customers have been told their personal information may have been stolen in a cyber-attack on 23rd December last year, the BBC reports. The car retailer, which sells more than 300,000 cars per year, said data that may have been stolen included bank details and ID documents such as passports and driving licences. Customers were emailed on Tuesday about the UK-wide hack, which led the firm to shut down their entire computer network in the early hours of Christmas Eve. Arnold Clark, which has its headquarters in Glasgow, has almost 200 dealerships across Scotland and England. It has not said how many customers have been contacted.
Be At One and Slug & Lettuce owner Stonegate Pub Co., which is owned by private equity firm TDR Capital, is reportedly planning to sell 1,000 of its pubs, or more than a fifth of the total, for an estimated £800m. Bloomberg cited people familiar with the matter as saying that the sale is aimed at paying down debts, with soaring energy bills, persistent labour shortages and decades-high inflation driving up costs.
Former US President Donald Trump's two Scottish golf courses lost £4.4m in 2021, according to accounts released this morning. SLC Turnberry Ltd., which manages the famed Turnberry golf resort, said closure for part of the year due to the COVID-19 pandemic contributed to pre-tax losses of £3.7m. Trump International Golf Club Scotland Ltd,which operates a club Trump built north of Aberdeen, reported a pre-tax loss of £697,00. The results were helped by receipt of just over £1m in Covid payroll support from the government.
Helen Miles, who is currently the capital and commercial services director of water firm Severn Trent, is to take over as Chief Financial Officer in July, a move that will make Severn Trent the first FTSE 100company in history to have women occupying the three key roles of CEO, Chair, and CFO.
The CEO of Heathrow Airport, John Holland-Kaye, has informed the board of his intention to stand down during 2023. He has been in post for nine years.
Airbus and Qatar Airways have settled a dispute over grounded A350 jets, the companies said yesterday, averting a UK court trial after what Reuters calls a “blistering 18-month feud that tore the lid off the global jet market”. The "amicable and mutually agreeable settlement" ends a $2 billion row over surface damage on the long-haul jets., which led to the withdrawal of billions of dollars' worth of jet deals by Airbus and prompted Qatar to increase purchases from Boeing. The cancelled orders for 23 undelivered A350s and 50 smaller A321neos have now been restored under the new deal, which is also expected to see Airbus pay several hundred million dollars to the Gulf carrier, while winning a reprieve from other claims. Financial details were not publicly disclosed.
Meanwhile, Boeing yesterday bid farewell to the iconic 747, delivering the final plane to Atlas Air on Tuesday afternoon, marking an end of an era when the first-ever "jumbo jet" ruled the skies. Thousands of Boeing employees – including some of the so-called "Incredibles" who developed the jet in the 1960s – watched the last delivery of the historic plane, which brought air travel to the masses and represented an indelible slice of Americana.
Investment manager Hargreaves Lansdown (HL) said yesterday that it costs on average £860 more a month if you are single, rather than being part of a couple. The HL Savings & Resilience Barometer found those living alone are worse off financially across the board, being less likely than couples to have enough emergency savings, enough cash left over at the end of the month to be considered resilient, or to be on track for a moderate income in retirement. The lion’s share of the extra costs incurred come down to the rent or mortgage, because while a couple may need exactly the same number of bedrooms as a single person, they can split the cost between them. The same goes for gas, electricity and water bills, to broadband. HL noted that even where bills are cut for single people, they’re not cut enough: Council Tax, for example, is only cut by a quarter when you live alone, rather than halved. Standard food packagingsizes are not designed for single people, HL also said, which often either means buying smaller and more expensive versions, or risking wastage. Then of course there is the tax system, which clearly favours couples, offering tax breaks for people who are married or in civil partnerships, from the marriage allowance to the fact there’s no inheritance tax on assets passed between spouses after death, or capital gains tax on assets passed while you’re alive. There are just under 8.3 million people living alone, and 3 million lone parent families, and while plenty of people will have chosen the freedom and opportunity presented by the single life, millions have had no say in the matter, HL said.
The number of people using Facebook daily grew to an average of two billion in December, about a quarter of the world's population, parent company Meta says. Nevertheless, the social media giant last night reported a 55% per cent fall in annual profits.
A tiny radioactive capsule lost by FTSE 100 Australian miner Rio Tintohas been recovered in the remote Western Australian outback, after sparking an urgent search and a public health warning spanning hundreds of kilometres. Western Australian Emergency Services Minister Stephen Dawson said the potentially dangerous 6mm x 8mm container was found about 50 kilometres south of the mining town of Newman in the state's north west. "When you consider the scope of the research area, locating this object was a monumental challenge, the search groups have quite literally found the needle in the haystack," Dawson said. Apparently, the capsule fell off a truck and landed on the side of the road. found by a team from the Australian Nuclear Science and Technology Organisation and the Department of Fire and Emergency Services.
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