Author: Independent

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Use of physical cash one for the up for first time in at least a decade Business News

The use of physical cash has increased for the first time in at least a decade, as households return to using coins and banknotes to manage their finances in the cost-of-living crisis.

Across the UK, cash accounted for 19 per cent of transactions in 2022, according to the British Retail Consortium (BRC) – up from 15 per cent in 2021.

It is the first time since the BRC’s annual Payments Survey reports started in 2013 that it has seen a year-on-year increase in cash usage.

“Faced with rising living costs, cash was a useful tool for some people to manage their finances and track their day-to-day spending,” the report said.

Also reflecting spending pressures, consumers began making smaller but more frequent payments last year as they sought to manage their budgets.

The number of transactions increased from 17.2 billion in 2021 to 19.6 billion in 2022, and the average transaction value fell from £24.49 to £22.43, as consumers shopped around.

The rebound of physical cash also reflects a natural return to coins and banknotes following the abrupt move to contactless during the coronavirus pandemic, the report said.

However, cash usage remains well below 2020 levels, when it accounted for 30 per cent of all transactions.

Card payments fell to 76 per cent of all transactions in 2022, down from 82 per cent the previous year

( Dominic Lipinski/PA)

This led the BRC to note that, “whilst a small percentage of people have returned to pre-pandemic habits, for a large portion of the population, the pandemic has had a lasting impact on how much we transact in cash”.

The trade association also said the recovery in cash use in retail settings was “fairly minimal”, with “only a relatively small increase as a share of total sales by value” – up from 8.2 per cent in 2021 to 11 per cent in 2022.

Card payments were used for 76 per cent of transactions in 2022, down from 82 per cent in 2021 – with debit cards accounting for around four in five of these transactions.

Alternative payment methods increased in popularity in 2022, from 2 per cent of transactions in 2021 to 5 per cent in 2022. This category includes options such as buy now, pay later.

Hannah Regan, payments policy adviser at the BRC said: “We are now seeing a return to many of the pre-pandemic trends in payments, including smaller but more frequent purchases, and a slight return of cash payments.”

Additional reporting by PA

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Source: www.independent.co.uk
This notice was published: 2023-12-07 08:57:33

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Thames Water asked to explain how dividend payment does not break Ofwat rules Business News

Ofwat has asked Thames Water to explain how a £37.5m dividend it paid to a parent company does not break rules designed to protect customers and the environment.

The water regulator said it was investigating whether the dividend, which was announced on Tuesday, was in line with the company’s licence requirements. It has not yet opened a formal enforcement case.

Ofwat was told in advance about the dividend, and said it had written to the water supplier last Friday, asking for a reply by the end of the month.

Thames Water said the money was simply being moved to a parent company in order to help pay its debts, and that no dividends were handed to “external shareholders”.

The letter’s existence was first reported by The Guardian.

The regulator said: “Following notification that Thames Water has paid a dividend to shareholders, Ofwat is investigating whether this payment meets its licence requirements.

“Ofwat has requested Thames Water provide more information to demonstrate how, specifically, the dividend payment meets the licence requirement to take account of service delivery for customers and the environment, as well as investment needs and financial resilience.

“We will review any additional information the company provides and decide whether there is a case for further action.”

New rules were introduced in May this year to ensure that water companies do not pay dividends unless they have delivered for customers and the environment.

The regulator is able to impose penalties of up to 10 per cent of Thames Water’s relevant turnover.

The company said it was working with Ofwat “to provide further context and clarification” about the decision to pay the dividend.

“No distributions have been made to external shareholders of the group and they have not taken an external dividend for six years (since 2017) to prioritise investment in improving service for customers and to protect the environment,” it said.

“Our plans assume no external dividends to shareholders until at least 2030, to support our turnaround.”

It comes as MPs said they planned to bring Thames Water into parliament to answer questions.

The Environment, Food and Rural Affairs Committee said it wanted the company to come in next Tuesday to explain its finances. Ofwat has also been invited.

Earlier on Tuesday, Thames Water warned that its turnaround will “take time” and said that its debt had continued to grow in the first half of the financial year.

The UK’s biggest water supplier reported a 54 per cent drop in pre-tax profits to £246.4m in the six months to 30 September.

Revenues rose 12 per cent to £1.3bn but it spent a record £1bn on improving its network.

The results also revealed its debt pile swelled by 7 per cent to £14.7bn.

Interim bosses said “immediate and radical action” is needed to improve its environmental and financial performance.

They added: “Turning around the Thames will take time. We simply cannot do everything that our customers and stakeholders wish to see at a pace and for a price that everyone would like.

“We will continue to make the tough choices required to deliver what matters most to our customers and the environment.”

The results come just days after it emerged that auditors of Thames Water’s parent company Kemble Water Holdings have warned it could run out of money by next April if shareholders do not pump in more cash.

PricewaterhouseCoopers (PwC) warned in accounts published last week at Companies House that there is a “material uncertainty” over the future of Kemble – the main company behind Thames Water – amid worries there are no plans in place to refinance a £190m loan at one of its subsidiary companies.

Thames Water shareholders agreed in the summer to inject £750m of new funding to bolster the supplier’s finances and stave off the threat of nationalisation.

Last year the company had asked investors for £1bn.

A Thames Water Utilities spokesperson said: “We are in a robust financial position and are extremely fortunate to have such supportive shareholders.”

The firm said the funding package agreed in the summer “is subject to satisfaction of certain conditions, including the preparation of a business plan that underpins a more focused turnaround that delivers targeted performance improvements for customers, the environment and other stakeholders over the next three years”.

Shareholders have also “acknowledged” the need for around another £2.5bn in equity investment needed in future regulatory periods, the group added.

The water supplier’s former boss, Sarah Bentley, stepped down abruptly in June amid concerns over the firm’s financial security.

It was revealed in June that the government was drawing up contingency plans for an emergency nationalisation should Thames Water collapse as concerns grew that it would…

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Source: www.independent.co.uk
This notice was published: 2023-12-05 18:20:19

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Deal to sell Telegraph and Spectator to UAE fund referred to UK media watchdog Business News

An Abu Dhabi-backed takeover of The Daily Telegraph, The Sunday Telegraph and The Spectator has been referred to media watchdog Ofcom.

The Barclay family have been hoping to sell the publications to a consortium. But on Thursday, culture secretary Lucy Frazer issued a public interest intervention notice (PIIN) into the bid.

On Wednesday, 18 Conservative MPs wrote to deputy prime minister Oliver Dowden, urging him to use national security powers to review the potential sale.

Lucy Frazer has referred the matter to Ofcom

(PA Wire)

Ministers were asked to intervene after RedBird IMI, an investment fund owned by Sheikh Mansour bin Zayed Al Nahyan, vice-president of the UAE, reached a deal to purchase the publications. The MPs said they believed that the proposed transaction presented “a very real potential national security threat”.

The backbenchers said ministers should not be “railroaded” into clearing the change of ownership and should instead pause the deal to review its impact on Britain’s security and press freedom.

Ofcom is now being asked to investigate whether the deal would breach requirements including “the need for the accurate presentation of news and free expression of opinion in newspapers”.

Highlighting human-rights charity Amnesty International’s concerns over the “serious implications” for media freedom if the deal went ahead, the objecting MPs said the sale could “imperil these publications’ ability to report freely, which clearly poses a national security risk”.

The sale of Telegraph Media Group and The Spectator is on hold

(PA Archive)

When asked to respond to the letter, RedBird pointed to remarks by head of the fund Jeff Zucker, who told the Telegraph on Tuesday that concerns over the takeover were “misplaced”.

“I am here to say that the editorial independence of the Telegraph is guaranteed,” Mr Zucker said.

In the last two months the Barclay family has lodged a series of proposals to repay roughly £1bn of debt it owes the high street bank, with most of those tabled at a significant discount to its face value.

Until June, the newspapers were chaired by Aidan Barclay, the nephew of Sir Frederick Barclay, the octogenarian who along with late brother Sir David engineered the takeover of the Telegraph 19 years ago.

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Source: www.independent.co.uk
This notice was published: 2023-11-30 19:01:02

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Customers can’t resist a great deal – or can they, if it’s too good to be true? Business News

Findings from a new survey suggest that pursuing received retail wisdom could actually be a risk to your business.

The world of retail in 2023 is saturated with tantalising deals and irresistible discounts. Brands big and small employ discount strategies to attract customers and boost sales. But in the race to offer the most enticing deal, are businesses unintentionally driving potential customers away? A recent survey conducted by Aimondo Pricing Solutions, in collaboration with the market research agency PeopleFish, unveils a rather startling revelation: over-discounting might not be as attractive as many retailers believe.

Context and background

In October 2023, Aimondo conducted a survey of a sample of 500 UK shoppers. Among the insights derived, one caught immediate attention: a significant portion of British shoppers have grown wary of online stores that seemingly offer too-good-to-be-true discounts.

One might imagine that unfamiliar brands offering steep discounts would generate the most scepticism. But, intriguingly, the caution was even more pronounced when recognised brands dangled mammoth discounts. This heightened mistrust from the general populace can perhaps be attributed to a recent online scam which attempted to rip off customers using spoof websites associated with homewares brand Wilko, which had stopped selling online after going into administration.

The perception of discounts

To delve deeper into this psyche, participants were asked: “What’s your first thought when you see an unexpectedly massive discount (like 80-90 per cent) on an unknown store’s website?”

The results were compelling. A significant 61 per cent said they would seek out peer reviews before considering a purchase, and only 7 per cent felt inclined to buy immediately.

When posed the same question but with the context of a well-known store, the dynamics shifted a little, yet remained cautionary. More than half (52 per cent) said they would investigate the authenticity of such a deal, while 15 per cent said they’d go as far as reporting it as a potential scam.

Savvy: Customers may be more skeptical than brands think when it comes to mega-deals

(Courtesy of Aimondo)

Re-evaluating market assumptions

Looking at the Q3 reports released by some major UK retailers in September 2023, it’s clear that many were grappling with revenue drops. The common culprits cited ranged from geopolitical shifts and adaptations to the post-Covid “new normal,” to an assumption of an insatiably deal-hungry customer base.

However, the findings from the Aimondo survey challenge this narrative. While the traditional belief in retail has been that customers are always on the lookout for the next big discount, it appears that excessively hefty deals trigger more alarm bells than shopping impulses.

When making a choice about where to shop, many other considerations come into play for UK shoppers. Notably, our survey pointed out that the most significant factor wasn’t discount-related at all. Instead, aspects such as a store’s return policy and the overall quality of customer service held more weight in their decision-making process.

Further emphasising this point, the survey results indicated that even the allure of a big discount could not override the power of habit. For many shoppers, habitual patronage, or staying loyal to brands they’ve previously shopped with, held more influence than a transient deal. This reiterates a long-held belief in consumer psychology: changing habitual behaviour is always a tall order.

Between the rock and the hard place

These revelations are not just the unintended consequences of over-discounting. What’s even more striking is that many companies are acutely aware of the damage excessive discounts can inflict on their reputation and revenue. Yet, ensnared in the dichotomy of burgeoning stock and dwindling demand, these businesses resort to sweeping discounts, believing it’s their sole lifeline.

This may indicate a missed step in their strategy – perhaps they should have sought feedback directly from their clientele. The survey’s insights could provide a beacon. From its responses, one promising strategy emerges: personalised pricing. Delve into our survey to discover how consumers perceive personalised pricing and how it stacks against other pivotal retail elements like return policies and customer service.

To read the results of Aimondo’s UK customer survey, click here.

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Source: www.independent.co.uk
This notice was published: 2023-11-29 16:52:20

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Behind the curtain: meet the brains behind one of the UK’s most exciting and innovative TV production companies Business News

Content Kings is a Business Reporter client.

Content Kings co-founders Jonathan Levi and Gavin Hay are the driving force behind the company’s meteoric rise in the world of entertainment. With an impressive portfolio of groundbreaking shows and a reputation for crafting thought-provoking content that resonates across the globe, we look at how their unique skillset and creative prowess has resulted in multiple awards and a roster of TV shows across global markets.

Content Kings is one of the UK’s most exciting and innovative production companies, making programmes for top broadcasters and online platforms. Since opening its doors for business in 2020, Content Kings has worked both on and off screen with some of the world’s biggest names in entertainment, including Neale Whitaker and Ed Westwick.

Gavin Hay and Jonathan Levi originally joined forces thanks to their complementary skills, extensive expertise and vast industry network. This collaboration has empowered them to consistently create premium content across digital, TV and film. Their impressive portfolio includes some of the UK’s most prominent shows, and now they’re set to take the magic to the United Arab Emirates with the upcoming launch of the second Content Kings office in Dubai, with the new appointment of Darren Arturi as Director – Middle East and Asia Operations. Their first project is with a major US star.

Dream Team: Jonathan and Gavin originally joined forces thanks to their complementary skills, extensive expertise and vast industry networks

(Courtesy of Content Kings)

Dividing Content Kings into three main divisions – television, feature films and branded content – the duo has carved a niche in each area, producing content for global audiences.

One of the hallmarks of Content Kings’s success is its ability to create primetime content that leaves a lasting impact. Its impressive track record includes collaborations with major channels such as ITV, Channel 5, Paramount + and Sky History.

CEO Gavin Hay, who started Brighter Pictures in 1992 and later sold it to Endemol for a reported £10 million, shares his vision for Content Kings: “We are storytellers with a passion for both entertainment and enlightenment,” he says. “Our mission is to craft, shape and deliver premium content with a global reach that speaks to diverse audiences.

“We have a profound focus on real-life, emotionally charged human narratives. Our viewers are inherently inquisitive and intellectually curious. Whether it’s our historical and specialist factual programs such as Secrets of the Lost Liners or the poignant Princess Diana documentary we produced on the 25th anniversary of her passing that sold to 25 territories, we consistently strive to engage our audience with thought-provoking content. These are universal themes that transcend borders, resonating equally in Africa, the Middle East, or right here in the UK and Europe.”

Gavin Hay, CEO, Content Kings

(Courtesy of Content Kings)

Jonathan Levi, Managing Director, Content Kings

(Courtesy of Content Kings)

The duo was attracted to expanding into the UAE as it is a magnet for talent and investment from all over the world. They recognise a significant opportunity to infuse vitality into the UAE’s more corporate, commercial style of content. Content Kings aspires to introduce broadcast-quality storytelling and entertainment, heralding a pioneering approach to content creation and programme making in the region. One of their first commissions is a major entertainment show to be filmed in Saudi Arabia at the end of January 2024.

“The traditional thing for a UK production company might be to look over to the US and to set up in New York or LA, but those ponds feel very overfished,” says Managing Director Jonathan Levi, whose credits include ITV’s Broadmoor, Hatton Garden starring Timothy Spall, and Tulisa: The Price of Fame. “A lot of people have done that over the years, and there aren’t so many people looking east. It felt really exciting to us to build an infrastructure and forge fresh relationships, enabling us to extend our reputation for producing excellent content across genres to a brand-new audience within the Arabic and Middle Eastern region.”

The upcoming months and the outlook for 2024 promise to be a thrilling and busy period for Content Kings. With numerous projects in various stages, including an eight-part history series for Channel 5, a six-part series for Sky History, a three-part consumer series and a feature documentary for a major UK broadcaster. Content Kings is also engaged in funded development with Channel 4 for a new reality series, while series two of Secrets of the Lost Liners is already in the works. The production company is also working on an access documentary about a prominent comedian, delving into themes such as cancel culture, class, and the world of comedy.

But it’s not just the mainstream this dynamic duo can produce, they also have a new digital, first…

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Source: www.independent.co.uk
This notice was published: 2023-11-29 16:52:40

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Unleashing the power of customer data: the role of CDPs Business News

Zeotap is a Business Reporter client.

Business Reporter: Zeotap

In today’s fast-paced digital landscape, understanding your customers has never been more critical. The ability to utilise data efficiently, optimise marketing budgets and provide customised customer experiences across all channels is the key to success. In a world full of information, having a clear vision of your customers is paramount. Without it, businesses risk wandering aimlessly in the data wilderness of an increasingly dynamic and demanding landscape.

In this scenario, where customer journeys are more complex than ever, brands face the challenge of showcasing return on investment while meeting ever-greater customer expectations for high-quality experiences. Marketers find themselves leaning heavily on data for strategic planning, precise audience definition, efficient resource allocation, holistic orchestration and effective evaluation.

Data is the key to uncovering customer preferences and digital journeys. However, given the increasing number of data sources, channels and direct-to-consumer options, brands must onboard new technologies and data management capabilities to cope with exponentially growing customer data silos. Nowadays, the issue at stake is not a lack of data but the ability to analyse the wealth of data that companies gather efficiently and turn it into actionable and valuable insights.

As a consequence, customer data platforms (CDPs) have emerged as a crucial foundational implement in the marketer’s toolbox, enabling businesses to keep track of their customers and deliver personalised experiences across an ever-expanding set of touchpoints.

Unravelling the data maze

CDPs are software that aggregate customer data from various sources, unify it into a central customer profile and share it with other marketing technology systems.

These platforms build customer profiles by combining data from a variety of sources, including first-, second- and third-party sources. They collect and organise data from a company’s customer relationship management system, data lakes or warehouses, websites or mobile apps and point-of-sale systems.

Marketers can then use these combined profiles to create audience segments and activate them across various channels such as paid media, SMS marketing, customer service tools and website personalisation. This ability to manage data compliantly and efficiently deliver targeted, personalised experiences enhances digital engagement and conversions.

The CDP in action: driving business growth

To illustrate the power of a CDP, let’s consider a real-world scenario. Meet Sarah, an avid online shopper.

Sarah frequently browses your e-commerce website and adds items to her cart but often abandons her purchase. She’s also subscribed to your newsletter and follows you on social media. With a CDP in place, you can track every step of Sarah’s journey.

When Sarah visits your website, the CDP identifies her, recognises her past behaviour and dynamically adjusts the content she sees. She receives personalised recommendations based on her browsing and purchase history, enticing her to complete her abandoned cart purchase. If she opens an email from your brand, the CDP ensures it’s tailored to her preferences.

In this way, the CDP enables you to engage with Sarah in a relevant and personalised manner, increasing the likelihood of conversion and strengthening her loyalty.

Leveraging the power of customer data

A CDP can harness the potential of your customer data by:

  • Creating a 360-degree view of the customer by stitching together online and offline data. This enables better marketing strategies, improved customer service and prevents customer churn. It also simplifies access to the latest customer data for business analysis and predictive modelling.
  • Defining the relevant audiences and creating better segmentation for optimising the media budget and reducing media wastage.
  • Ensuring data security and customer privacy compliance to avoid regulatory issues with significant consequences.
  • Enhancing data-driven marketing through machine learning, facilitating the identification of patterns and enabling marketers to cross-sell and upsell.
  • Improving customer understanding to offer unique, personalised experiences across preferred media platforms, even in real-time.
  • Enhancing loyalty and satisfaction through personalisation by identifying high-value customers, predicting potential churners and tailoring on-site promotions for different customer segments.

It’s crucial to recognise that not all CDPs are identical. While their core function of unifying and activating data remains consistent, their capabilities and features can vary significantly. In this ever-evolving MarTech ecosystem, it’s essential to choose a CDP that offers flexibility for brands to adopt the best-of-breed technologies in the long run.

Zeotap CDP: Your path to data-driven success

In this landscape, Zeotap CDP stands out as an accessible, user-friendly solution…

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Source: www.independent.co.uk
This notice was published: 2023-11-29 16:53:25

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Harnessing Industrial DevOps to minimise risk and maximise efficiency in industrial automation Business News

Copia Automation is a Business Reporter client.

For the manufacturing sector, these are the best of times and the worst of times.

While overall the state of the industry trends upward, there are challenges – both new and old – on the horizon. From inflation and a general sense of economic uncertainty to a scarcity of skilled labour, lingering supply chain issues and the threat of cyber-attacks, manufacturers are struggling to stay the course. Applying a DevOps model to the industrial automation process is a sound way for manufacturers to help address these challenges and to ensure many productive years ahead. Industrial DevOps is the perfect marriage of industrial automation with modern software development practices.

Keeping the wheels in motion

The most critical task of any manufacturer is to establish and maintain consistent production. Operational outages can be triggered without notice from socio-political unrest, natural disasters or any of the more localised problems mentioned above. Whatever the cause, the result is the interruption of productivity and the potential for crippling financial losses.

In digitised plants, where manufacturing is automated for speed and efficiency, the effects of halting production can quickly wreak havoc on stock value and corporate image. A major car manufacturer suffered a shutdown at several of its assembly plants due to a glitch in one of its parts-ordering systems. The cause was attributed to a software update – just one example of how the technology that helps us can also impede us.

As the CEO of Copia Automation, I see first-hand how easily manufacturing operations are disrupted. I also see how risks can be mitigated by equipping teams with the right tools, providing visibility into their code and code changes, and giving them the control to spot issues and recover quickly. By applying pertinent strategies of the software development model to industrial automation processes, plant operations can be managed more efficiently, increasing stability and security and enabling faster recovery from system outages.

What is Industrial DevOps?

DevOps is a widely used set of practices that has revolutionised the way software development teams perform their jobs, enabling them to work more quickly and efficiently. Aspects of a DevOps environment include collaborative tools and standards for dividing up the labour, planning and executing code development, storing files and testing and deploying software. All of these practices keep development moving forwards, and allow for quick identification and correction of errors.

Industrial DevOps applies these concepts to the industrial automation process, providing powerful tools and a highly defined, collaborative environment for managing automated manufacturing systems. From design and programming of automated components and storage and management of source code, to testing, production and troubleshooting, Industrial DevOps provides a single source of truth for overseeing your industrial automation workflow. It enables the faster deployment and maintenance of robotic devices, programmable logic controllers (PLCs) and other equipment, and provides the ability to proactively anticipate and recover from crippling problems and outages.

What does Industrial DevOps look like?

An Industrial DevOps platform such as Copia provides a full-featured source control repository for your automation projects. For example, a factory may use PLCs to control how long cookies bake before heading to the cooling rack, or how thick a coat of paint is applied to a car door. Copia provides actionable visibility and precise control over PLC code development. When it comes time to deploy the newly programmed PLC, it can be swapped in, tested and further modified to exacting specifications within a single multi-vendor platform that offers an infallible source control/change management for PLCs and control devices.

Goodbye, tedious jobs: Industrial DevOps eliminates manual and repetitive tasks

(Courtesy of Copia Automation)

Any future tweaks to the code are automatically updated in the source control repository, avoiding any errors caused by manual updates, with automatic alerts for unauthorised changes. In the contemporary industrial landscape, safeguarding control data through robust backup strategies is of paramount importance. While IT departments have long prioritised business data backups, the intricate manufacturing environment has been heavily reliant on workers physically connecting PCs to PLCs with backups not happening on a regular and consistent basis. Even with these manual processes to backup machines and devices, in addition to diverse automation programs, there is no way to know if code was changed, when, why or by whom, leading to vulnerabilities in the system.

Industrial DevOps eliminates these manual and tedious tasks and enables the visualisation of code that is running on the plant floor to provide visual comparisons to previous versions….

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Source: www.independent.co.uk
This notice was published: 2023-11-29 16:53:42

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Blow for Sunak as OECD says UK to have second-slowest growth in G7 Business News

Rishi Sunak has suffered a major blow as a major international forecast showed that Britain is set to suffer the highest inflation and the second-slowest growth rate in the G7.

The Organisation of Economic Co-Operation and Development (OECD) has slashed its economic growth forecast for the UK while increasing its expected inflation rate.

The forecaster said the UK economy will grow by just 0.5 per cent this year – making it the worst-performing of all advanced economies in the G7 group bar Germany.

Growth will average just 0.7 per cent next year – downgraded from an earlier forecast of 0.8 per cent – followed by an expected economic uptick to 1.2 per cent in 2025.

Inflation – the rate at which prices are rising – is set to average 7.3 per cent across this year, compared with an earlier forecast of 7.2 per cent. It is then expected to fall to 2.9 per cent next year, and 2.5 per cent the year after.

The figures represent a big setback to Mr Sunak and his chancellor Jeremy Hunt just a week after they claimed the economy had “turned a corner”.

After cutting personal taxes in a pre-general election giveaway, the PM had claimed that there is “positive momentum” behind Britain’s recovery.

But the latest figures show British families will still be grappling with spiralling prices in the year ahead, while Britain’s economy is outgrown by G7 countries like France, Italy, the US, Canada and Japan.

In its report, the OECD said growth in the major European economies “is expected to remain weak in the near term but improve gradually as inflation wanes, monetary policy easing gets underway and real incomes recover”.

The organisation said GDP growth in the UK is “projected to be subdued, with higher fiscal pressure weighing on household disposable incomes, but to improve from 0.5 per cent in 2023 to 0.7 per cent in 2024 and 1.2 per cent in 2025”.

Rishi Sunak and Jeremy Hunt cut taxes at the autumn statement in the hope of boosting growth

(PA Wire)

Rachel Reeves, Labour’s shadow chancellor, said the OECD figures “blow a hole in Rishi Sunak’s claims that he has fixed the economy”.

She said Britain was “worse off after thirteen years of economic failure under the Conservatives, with low growth, high tax and prices still rising in the shops” – promising Labour would be “the party of economic growth”.

The Liberal Democrats’ Treasury spokesperson Sarah Olney said the Tory government had “condemned the UK to near the bottom of international league tables with all their chaos”, adding: “Jeremy Hunt has no plan to fix this mess.”

The grim forecast comes after the governor of the Bank of England Andrew Bailey said the UK’s growth outlook is the worst he has ever seen.

Mr Bailey offered a scathing assessment of immidiate future, saying interest rates will remain at 15-year highs for the foreseeable future. “It does concern me that the supply side of the economy has slowed. It does concern me a lot,” he said earlier this week.

The governor added: “If you look at what I call the potential growth rates of the economy, there’s no doubt it’s lower than it has been in much of my working life.”

Keir Starmer and Rachel Reeves claim Labour is ‘party of growth’

(PA)

The Bank of England kept interest rates at 5.25 per cent earlier this month and has insisted that it is too early to think about cutting rates.

There were some encouraging figures on the housing market from the Bank of England on Wednesday, however. The number of mortgages approved picked up last month after interest rates were held steady.

Bank of England figures showed that 47,400 mortgages were approved for house purchases in October, up from the eight-month low of 43,300 recorded in September.

Jason Tebb, chief executive of property platform OnTheMarket.com, said: “Borrowers are daring to believe that base rate may have peaked, giving them a better idea of where they stand and what they can commit to when it comes to a property purchase.”

The OECD warned that the concerted push by central banks to tackle persistent inflation risks tipping Britain and other major economies into recession next year. The body said the chances of getting the balance on interest rates wrong was “pretty high”.

Higher borrowing costs are still weighing on the housing market and business investment, the OECD said. Meanwhile, the growing tax burden is squeezing household incomes.

Heightened geopolitical tensions are also adding to uncertainty about the outlook in the near term, with the Israel-Hamas conflict raising concerns over disruption to energy markets, according to the organisation.

A Treasury spokesman said: “While inflation is falling, now we are taking the long-term decisions needed for growth. As the chancellor set out at the autumn statement last week, we are making sure work always pays and backing…

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Source: www.independent.co.uk
This notice was published: 2023-11-29 12:17:43

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Brexit red tape risks extending inflation crisis, retailers warn Business News

Rishi Sunak has been warned that his approach to Brexit red tape and the tax burden risk extending the UK’s cost of living crisis into 2024.

Britain’s biggest retailers said the hopes of cutting inflation next year was under threat because the cost of doing business was still too high.

The British Retail Consortium (BRC) said the struggle with costly post-Brexit bureaucracy risked prolonging ongoing price rises in the shops.

The retailers’ umbrella body also said measures set out by chancellor Jeremy Hunt at the autumn statement could also fuel inflation.

The BRC’s measure for shop price inflation eased to 4.3 per cent in November, down from 5.2 per cent the previous month.

But the organisation pointed out that the easing only means that prices in the shops and supermarket shelves are only rising less rapidly.

And the BRC said “hidden costs” of complying with post-Brexit rules had made it more difficult for businesses to keep prices down.

“Retailers are committed to delivering an affordable Christmas for their customers,” said the BRC’s chief executive, Helen Dickinson.

“They face new headwinds in 2024 – from government-imposed increases in business rates bills, to the hidden costs of complying with new regulations,” she added.

Rishi Sunak and Jeremy Hunt have come in for criticism over high tax burden

(PA Wire)

Ms Dickinson said: “Combining these with the biggest rise to the ‘national living wage’ on record will likely stall or even reverse progress made thus far on bringing down inflation, particularly in food.”

The BRC also said Mr Hunt’s decision to keep a planned increase in business rates from April would cost companies £400m next year, despite some breaks for smaller firms.

It comes after Bank of England governor Andrew Bailey suggested the UK economy’s potential to grow was among the worst he had seen in his lifetime.

The governor repeated his warning that interest rates would not be cut in the “foreseeable future” – having declared it was “much too early” to say inflation had been beaten.

It comes as Office for Budgetary Responsibility (OBR) chairman Richard Hughes told MPs that Mr Hunt’s autumn statement’s implied spending plans – which are set to involve major public spending cuts – were “a very big fiscal risk”.

The watchdog chief told the Treasury committee on Tuesday that it was “very difficult to assess the credibility of the government’s spending plans, because after March of 2025 the government doesn’t have any spending plans”.

Jeremy Hunt delivered some tax cuts, but faced criticism for overall tax burden and public spending cuts ahead

(Getty)

A spokesperson for the Treasury said: “It is thanks to our action that we’ve achieved our target of halving inflation this year, but we are continuing to stay the course to get inflation all the way back down to 2 per cent.”

“The OBR have confirmed that our policies will reduce inflation next year while boosting growth and rewarding people for their hard work.”

Meanwhile, in other Brexit news, foreign secretary David Cameron is expected to try to meet EU Commission vice president Maros Sefcovic as he heads to Brussels for a two-day summit.

In his first trip to the EU capital since his fateful Brexit referendum, Mr Cameron will join a Nato meeting of foreign ministers set to discuss the Ukraine war.

But Lord Cameron is reportedly ready to raise the issue of post-Brexit tariffs set to be imposed on the automobile industry into force in January if he meets Mr Sefcovic this week.

Mr Sunak’s government is pushing the EU Commission to agree to delay the costly new “rules of origin” set to damage the electric vehicle (EV) market due to come in at the start of 2024 as part of Boris Johnson’s trade deal.

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Source: www.independent.co.uk
This notice was published: 2023-11-28 13:51:24

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Business

Hunt’s tax cuts mean interest rates won’t drop until summer, economists warn Business News

Jeremy Hunt’s move to cut national insurance risks interest rates remaining high until the summer of 2024, economists have warned.

The chancellor cut national insurance contributions (NIC) by 2 per cent, but financial experts say the Bank of England may now have to hold high rates for longer.

The Office for Budgetary Responsibility (OBR) has said there will be higher levels of inflation than previously expected, revising its estimates after Mr Hunt’s autumn statement.

There are now fears that the central bank will have to hold the base rate of interest at 5.25 per cent into the summer, despite widespread hopes it would be cut in the spring.

“While the degree of extra fiscal support is a little more limited than that of March, it helps at the margin to support the case for keeping interest rates on hold for longer,” George Buckley, economist at Nomura, told The Telegraph.

Benjamin Nabarro, an economist at Citi, also forecast a delay in the Bank of England bringing down the interest rate, predicting Mr Hunt would cut taxes again in the spring.

“We expect both [sets of tax cuts] to push back the start of Bank of England cuts to the third quarter,” he said, expecting tax cuts to tip the balance towards a more “hawkish” stance on interest rates.

Richard Hughes, chairman of the OBR, suggested the watchdog was relaxed about the potentially inflationary impact of the autumn statement. “In essence, because borrowing is unchanged,” he explained on Thursday.

The chancellor and PM at the Nissan factory in Sunderland

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At a post-statement briefing with reporters, Mr Hughes declined to say if inflation could have come down more quickly without Mr Hunt’s tax cuts.

But the OBR has revised its official estimates – saying inflation would fall to 2.8 per cent by the end of 2024, before finally hitting the Bank of England’s 2 per cent target in 2025.

This indicates higher inflation than previously projected by the OBR in the spring, after it guided towards an inflation rate of 0.9 per cent for 2024.

Meanwhile, a senior Tory minister has rejected suggestions that Mr Hunt is planning to engage in a George Osborne-style austerity drive.

Mel Stride, the work and pensions secretary, told ITV’s Good Morning Britain: “I really don’t see us going into any era of austerity.”

The Institute for Fiscal Studies (IFS) warned that the autumn statement puts Britain on course for public sector cuts even more “painful” than the Tory austerity period of the 2010s.

Sunak and Hunt are expected to slash taxes in the spring Budget

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The IFS and other big economic think tanks have pointed out that the chancellor had in effect found £20bn for tax cuts in the autumn statement by choosing not to protect some departments.

But Mr Stride said: “I don’t think we’re heading into that at all,” when asked on LBC whether Britain was headed for “austerity mark two”.

Challenged on the huge public spending cuts ahead, Mr Hunt told the News Agents podcast that was “so left-wing” to ask such questions – insisting greater growth helped by tax cuts would “unlock” more money for government.

“You are saying the only way to increase resources going into public spending is to give more of the cake to public spending and less to tax cuts,” he said. “What Conservatives believe is that you can grow the size of the cake.”

Meanwhile, in a boost for Mr Sunak and Mr Hunt, the government has confirmed that Nissan will produce two new electric vehicle models at its Sunderland plant.

The PM dismissed concerns that investor confidence in the UK has been harmed by his net zero policies, highlighting commitments made to Britain by “company after company”.

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Source: www.independent.co.uk
This notice was published: 2023-11-24 18:11:01