Inflation has risen back to its highest level since March. The Consumer Prices Index rose from 2.3% in October to 2.6% in November, according to the Office for National Statistics (ONS), pretty much ensuring the Bank of England’s (BoE) Monetary Policy Committee will not be reducing interest rates tomorrow, despite a shrinking economy. It is generally expected that the Central Bank will keep interest rates on hold at 4.75%. The news is a triple-whammy for Chancellor Rachel Reeves, coming as it does on top of figures released yesterday showing a steep rise in wage growth for the first time in over a year, alongside data showing job vacancies have hit a three-year low. Business leaders and the BoE warned the measures announced in Reeves’ maiden October Budget would stoke inflation and derail Britain’s economic recovery because the record tax hikes announced will increase businesses’ costs. Reeves said: “I know families are still struggling with the cost of living and today’s figures are a reminder that for too long the economy has not worked for working people. I am fighting to put more money in the pockets of working people. That’s why at the Budget we protected their payslips with no rise in their national insurance, income tax or VAT, boosted the national living wage by £1,400 and froze fuel duty. Since we arrived real wages have grown at their fastest in three years. That’s an extra £20 a week after inflation. But I know there is more to do. I want working people to be better off which is what our Plan for Change will deliver.” Conservative shadow chancellor Mel Stride said the data showed “working people cannot afford Labour”. “The Chancellor has made a series of irresponsible and inflationary decisions which, as the independent Office for Budget Responsibility said, will leave inflation higher than it was forecasted in March,” he said, adding: “These figures mean higher costs in the shops, less money in working people’s pockets and risks keeping mortgage rates higher for longer.”

Business insolvencies in England and Wales rose by 13% in November, as nearly 2,000 firms went to the wall, reversing a four-month decline in insolvencies. However, the number is still 12% lower than in November last year, when the BoE base interest rate was at its most recent peak of 5.25% and the UK was on the edge of a technical recession. “Fallout from the Budget and ongoing cost issues have driven corporate insolvencies this month,” Tim Cooper, president of insolvency and restructuring trade body R3, told City AM. However, Mark Ford, of Evelyn Partners’ restructuring and recovery team, said: “Even before the Budget tax hikes were announced, some businesses were already under significant strain and saddled with debt following a long period of high borrowing costs, high inflation and low consumer confidence. For some businesses it is only a matter of time before they run out of cash and cease trading.”

Shoe Zone said yesterday it had been forced to close some stores because of measures announced in the Budget, and issued a profit warning to shareholders. The discount shoe retailer highlighted "very challenging" trading conditions for the first two months of its financial year, and said it had noted a weakening of consumer confidence since the Budget, which will lead to the company incurring "significant" additional costs due to the increases in National Insurance and the National Living Wage. "These additional costs have resulted in the planned closure of a number of stores that have now become unviable," it said. "The combination of the above will have a significant impact on our full year figures." The London-listed company added it was not proposing to pay a final dividend for the year ended 28^th September 2024.

The so-called Waspi women, the 3.6m women born in the 1950s who were affected when the state pension age for women was brought into line with men under the 2011 Pensions Act, will not be compensated for the decision, it was confirmed by the Government yesterday. The women claim they were not properly informed of the age rise. The Parliamentary and Health Service Ombudsman (PHSO) recommended compensation of between £1,000 and £2,950 for each of those affected, after a six year investigation but, 28 months later, this recommendation has been formally rejected. Chancellor Rachel Reeves defended the decision, quoting the PHSO finding that "around 90% of women did know that these changes were coming” and saying: "As Chancellor I have to account for every penny of taxpayers money spent". However, Debbie de Spon, membership director of the Women Against State Pension Inequality (Waspi) campaign said: "We're certainly not giving up the fight". Referring to the PHSO report, she said: "It makes rather a mockery of that system if the [government] can cherry-pick which parts of that investigation they choose to accept."

More than half a million adults are now claiming disability benefits for anxiety and depression, a record high, official figures show. Personal Independence Payment (PIP) claims linked to mental health problems rose to almost 525,000 in October, up 14% from 461,000 a year ago, according to data published by the Department for Work and Pensions (DWP). This number has doubled since covid lockdowns. In total, a record 3.6m people claim PIP, up 3% from the previous quarter, with psychiatric and neurological diseases and disorders accounting for more than half of all claims. Musculoskeletal problems, including arthritis, back and neck pain account for a further third of total claims, the data shows.

The Financial Conduct Authority (FCA) has launched a consultation on proposals for a new stock market for private companies - the Private Intermittent Securities and Capital Exchange System or PISCES. PISCES will "open the door to more opportunities" for investors to take stakes in private companies, while helping companies scale and grow through increased confidence in funding, the financial regulator said yesterday, adding that the move comes in response to many companies choosing to stay private for longer, as opposed to initial public offerings on the London stock markets. "Such opportunities come with risk, which is why the FCA is consulting on risk warnings for investors to help them make informed investment decisions," the FCA said.

Motor Finance claims: Barclays bank lost a key court challenge related to its car loans yesterday, in another blow to lenders facing potential multi-billion-pound compensation bills. Barclays' Clydesdale Financial Services was challenging a ruling by the Financial Ombudsman Service (FOS) that it had failed to treat a customer fairly when she bought a used car, having elevated the interest rate on her finance deal by paying £1,320 to a broker in an undisclosed commission arrangement. The High Court dismissed the bank’s appeal, saying the FOS was entitled to make the decision that it did. “The customer’s borrowing costs are increased by the broker’s choice of an elevated interest rate. That is so whether or not, in the self-serving view of the lender and the broker, she is more than compensated for that by other features of the transaction,” Judge Timothy Kerr said in the ruling. A separate Supreme Court case is due to be heard next year addressing the legality of lenders paying commissions to car dealers without the borrower’s consent before 2021, when the FCA banned the practice. Lenders are braced to pay out as much as £38bn in claims should the Supreme Court rule against them.

Thames Water is in the High Court seeking approval for a £3bn emergency loan to prevent it running out of cash by March. Thames, the UK’s largest water utility, is in debt to the tune of some £17bn. According to Reuters, the loan, which is backed by Thames Water's senior creditors, would provide liquidity over two and a half years, but at a steep interest rate of 9.75%. It will give so-called A-class bondholders priority over lower-tier creditors in the event of a default. They are therefore arguing against the loan on this basis, and because they say, it is unnecessarily costly. Concerns have also been raised about the burden the bailout could place on Thames Water customers. Thames, meanwhile, argues that the loan is a prerequisite for attracting a further £3.25bn in equity to fund vital infrastructure investments up to 2030. A decision is expected in January. Tomorrow, sector regulator Ofwat is expected to announce how much Thames, and other water companies in England and Wales, can charge customers over the next five years.

National Grid has unveiled plans to invest up to £35bn in the electricity network across England, Wales and Scotland over a five year period from April 2026. The plan includes the maintenance and upgrade of 3,500km of existing overhead lines, and the construction of new network infrastructure by 2030 to meet Government targets. National Grid CEO John Pettigrew said: "This plan represents the most significant step forward in the electricity network that we've seen in a generation. "Through it we will nearly double the amount of energy that can be transported around the country, support the electrification of the industries of today and tomorrow; create new jobs; and support inward investment for the UK”.

More than 17,000 affordable homes are stuck in ‘development purgatory’ due to a lack of demand from housing providers, according to new research by the Home Builders Federation (HBF) reported by City AM. Under the English planning system, housing developments must set aside a proportion of the site for affordable housing via a Section 106 mechanism, which sees a quota of homes in new developments bought by social housing providers at a reduced price. But, the HBF says, deals have dried up due to a ‘perfect storm’ of economic and policy challenges facing the affordable housing sector. The HBF found at least 139 home building sites are currently delayed due to uncontracted Section 106 houses, totalling 17,432 in number. Without a contracted 106 deal, small builders are often unable to secure the development finance to start a development, while larger sites can be stalled because the planning permission requires the affordable element of the site to be delivered by a certain trigger point. As a result, both private and affordable housing delivery is being slowed or stalled, the HBF concluded.

Luton Airport: Ministers have delayed for a third time a decision of whether Luton Airport will be allowed to expand capacity and increase its passenger cap from 18m to 32m per year. The airport plans to spend £2.4bn developing its existing terminal and building a second one. A decision is now expected on 3rd April 2025. A statement from the Department for Transport (DfT) said the delay would give new Transport Secretary Heidi Alexander time to mull over the “complex” details, following her predecessor Louise Haigh’s resignation in November.

Titanic shipbuilder Harland & Wolff is to be rescued by Spain’s Navantia in a deal worth a headline price of about £70m that will save more than 1000 UK jobs. Whitehall sources have confirmed the deal to Sky News, saying a formal announcement will be made before Christmas. H&W’s parent company collapsed into administration earlier in the year, after the new Labour Government failed to underwrite a £300m loan promised by the Conservatives to allow it to build three Fleet Solid Support vessels for the Royal Navy. Navantia will now benefit from that contract. A government insider hailed the rescue deal as "a victory" for Sir Keir Starmer's administration. H&W has four shipyards in Belfast, Appledore in Devon, Arnish on the Isle of Lewis in Scotland, and Methil, in Fife.

Honda and Nissan are exploring a potential merger, it was reported yesterday. Should the tie-up between the two Japanese car giants go ahead, the deal would create the world's third-largest carmaker after Toyota and Volkswagen, based on sales volumes, worth in the region of £41bn. Nissan employs 7,000 workers in the UK.

DIY group Kingfisher is selling its loss-making Brico Depot business in Romania to retailer Altex Romania for £58m. The FTSE 100 owner of B&Q and Screwfix said the Bucharest-headquartered subsidiary comprises 31 stores across 24 cities, along with distribution operations.

Press Contact

Why Media Press Department
Website: whymedia.com / marketingnewscast.com
Email: press@whymedia.com
Telephone: 020 3007 6002