Connect with us

Published

on

The pace of basic wage growth accelerated to a record high in the 12 months to April, according to the latest official employment figures that lock in the prospect of further interest rate increases.

The Office for National Statistics (ONS) said average earnings, excluding bonuses, grew at 7.2% over the 12 months – up from the 6.7% recorded in March and higher than the 6.9% forecast by a Reuters poll of economists.

While that figure is still below the rate of inflation, it represents an improvement for household spending power given that the consumer prices index (CPI) measure of inflation eased sharply to 8.7% in April.

The wider employment figures also showed a surprise fall in the unemployment rate to 3.8% when an increase to 4% had been expected by experts.

That was mainly down to a 250,000 increase in employment over the three months to April.

ONS director of economic statistics, Darren Morgan, said: “With another rise in employment, the number of people in work overall has gone past its pre-pandemic level for the first time, setting a new record high, as have total hours worked.

“The biggest driver in recent jobs growth, meanwhile, is health and social care, followed by hospitality.

“While there has been another drop in the number of people neither working nor looking for work, which is now falling right across the age range, those outside the jobs market due to long-term sickness continues to rise, to a new record.

“In cash terms, basic pay is now growing at its fastest since current records began, apart from the period when the figures were distorted by the pandemic.

The better than expected wage figures can be partly explained by increases to minimum wage levels, of up to almost 10%, that came into effect in April.

The government agreed the increases to help the lowest-paid combat the cost of living crisis.

However, Bank of England rate-setters want to see the ONS wage figure fall rather than rise, and would be expected to cite the data as a reason to hike Bank rate again when it meets next week.

There have been 12 consecutive rate increases to date to help combat inflation.

Governor Andrew Bailey has spoken often of fears that wage increases to offset the rate of inflation can fuel the pace of price growth – inflation – by boosting demand in the economy.

Please use Chrome browser for a more accessible video player

Cost of living pain still to come

Such an economic argument has been dismissed by trade unions seeking improved pay deals in both the public and private sectors.

The hikes in Bank rate are largely responsible for wider borrowing costs, such as mortgages, going up with the UK boss of HSBC telling Sky News on Monday that there is no sign of fixed rate costs starting to go back in the right direction because inflation has proved so “sticky”.

Please use Chrome browser for a more accessible video player

HSBC UK chief’s mortgage warning

Mortgage providers have been temporarily pulling deals to account for rising interest rate expectations.

The Bank had already been widely expected to raise the rate next week given rising core inflation – a measure that strips out volatile elements such as food and energy.

It is seen as the best indicator of how ingrained inflation has become in the UK economy.

Economists and financial markets expect a 0.25 percentage point hike to Bank rate next Thursday, taking it to 4.75%.

But a third of market participants are now betting that the monetary policy committee (MPC) will go even further.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said there was evidence to suggest that the changes to the minimum wage rules in April will have distorted the wage figures and policymakers were likely to look beyond them.

“We think that year-over-year growth in average weekly wages will slow to about 5% by the end of this year, on course for a 3.5% rate in 2024.

“We remain unconvinced, therefore, that the MPC will need to increase Bank Rate all the way to 5.5% by the end of this year, as markets expect.

“A 5% peak still looks more likely to us.”

Continue Reading

Business

Sainsbury’s blames Visa card issues for online payment failure

Published

on

By

Sainsbury's blames Visa card issues for online payment failure

J Sainsbury, the supermarket chain, was on Wednesday racing to resolve an issue with card payments made involving Visa and Barclays which was impacting customers’ ability to pay for online grocery orders.

Sky News understands that Sainsbury’s is working with Visa and Barclays to address the issue after a number of shoppers reported that their card payments had failed.

A Sainsbury’s spokeswoman initially said Visa card payments were to blame for the problems, with the retailer subsequently updating its position to say the technical issue actually rested with Barclays.

Money latest: The best places to retire in Britain

The grocer ruled out the possibility of a cyberattack and said its website and app were functioning normally, with no direct impact on customers.

The issue nevertheless illustrates the extent to which the industry is on high alert for cybersecurity-related incidents after a spate of attacks which have raised concerns about the sector’s resilience.

In recent months, major British retailers including Marks & Spencer, the Co-op and Harrods have been the victim of cyberattacks, with the impact on M&S particularly acute.

More from Money

M&S has said the attack on its systems would cost it at least £300m and forced it to suspend online orders for months.

The Co-op saw in-store availability of thousands of products disrupted for several weeks.

A Sainsbury’s spokesperson said, “We’re working with one of our payment providers to resolve a temporary issue processing some payments for our Groceries Online service.

“We continue to deliver orders for customers and our website and app are working as normal.”

Visa said: “”Visa systems are operating normally. We are working with our partners to help them investigate.”

Barclays has been contacted for comment.

Continue Reading

Business

Gary Neville hits out at national insurance rise – and makes prediction for Manchester United’s season

Published

on

By

Gary Neville hits out at national insurance rise - and makes prediction for Manchester United's season

Gary Neville has criticised the government’s national insurance (NI) rise this year, saying it could deter companies from employing people and “probably could have been held back”.

The former Manchester United and England footballer-turned business owner, who vocally supported Labour at the last election, employs hundreds of people.

But he expressed his frustration at the recent hike on employers’ NI, which has significantly increased the taxes businesses have to pay for their employees.

Speaking to Sky News’ Business Live, Neville said: “I honestly don’t believe that, to be fair, companies and small businesses should be deterred from employing people. So, I think the national insurance rise was one that I feel probably could have been held back, particularly in terms of the way in which the economy was.”

While the Sky Sports pundit thought the minimum wage increase introduced at the same time was necessary to ensure that people are paid a fair wage and looked after, he made it clear the double whammy for businesses at the start of April would be a challenge for many companies big and small.

“I mean look it’s been a tough economy now for a good few years and I did think that once there was a change of government, and once there was some stability, that we would get something settling,” he said. “But it’s not settling locally in our country, but it is not settling actually, to be fair, in many places in the world either.

“I don’t think we can ever criticise the government for increasing the minimum wage. I honestly believe that people, to be fair, should be paid more so I don’t think that’s something that you can be critical of. I do think that the national insurance rise, though, was a challenge.”

Read more:
The industries hit hardest by national insurance hike
Survival guide: How to offset national insurance contributions hike

Neville’s business interests are diverse, spanning property development, hospitality, media, and sports.

He co-founded GG Hospitality, which owns Hotel Football and the Stock Exchange Hotel, and is involved in Relentless Developments, focusing on building projects in the North West. He is also a co-founder of Buzz 16, a production company, and a partner in The Consello Group, a financial services company.

The tax increase is expected to raise £25bn for the Treasury, with employers having to pay NI at 15% on salaries above £5,000, and up to 13.8% on salaries above £9,100.

The rise has already led the Bank of England to warn that it is contributing to a job market slowdown.

Please use Chrome browser for a more accessible video player

NI and tariffs pile pressure on firms

Governor Andrew Bailey warned last month that “the labour market has been very tight in the past few years, but we are now seeing signs that conditions are easing, employment growth is subdued, and several indicators of labour demand and hiring intentions have softened”.

The government has defended the tax increase, announced by Rachel Reeves in last year’s budget and implemented in April, arguing that the money was needed to pay for public services like the NHS to help bring down waiting lists.

‘Can’t get any worse’ for Man Utd

Neville conceded that turning beleaguered football club Manchester United around could prove more difficult than trying to bring about substantial economic growth.

The side finished 15th last season – its worst performance in the history of the Premier League.

“Yeah, that could be a bigger challenge than the economy… I think the two signings are good signings yet, there’s a couple more needed,” Neville said of his former club’s fortunes.

“I think they need a goalkeeper. And I think if they fill those two positions with decent signings, then United can have a lot, I mean, they have to have a better season than last year. It can’t get any worse, really.”

Continue Reading

Business

English cricket goes into bat with bulk of £520m Hundred windfall

Published

on

By

English cricket goes into bat with bulk of £520m Hundred windfall

English cricket’s governing body will on Wednesday hail a landmark moment for the sport when it announces that three-quarters of the deals to bring in new investors to The Hundred have been completed.

Sky News understands that the England and Wales Cricket Board (ECB) plans to issue a statement confirming that it has received proceeds from the sale of stakes in Birmingham Phoenix, London Spirit, Manchester Originals, Northern Superchargers, Southern Brave and Welsh Fire.

The two other franchise deals – involving the Oval Invincibles and Nottinghamshire’s Trent Rockets – will be completed on October 1, the ECB is expected to say.

One insider said a statement was likely to be issued on Wednesday, although they cautioned that the timing could slip.

When all eight deals are concluded, they will generate a collective windfall of £520m for the sport’s strained coffers.

Last week, Sky News revealed that unresolved talks between India’s richest family and Surrey County Cricket Club – which hosts the Oval Invincibles Hundred team – were threatening to delay the delivery of a vast windfall for the sport.

One of the outstanding issues relates to the name under which the Oval Invincibles will play in future years, with the Ambani family keen to use a derivative of the Mumbai Indians brand that it also owns.

More on The Hundred

This week’s announcement will come after months of talks after the ECB and the eight Hundred-playing counties agreed exclusivity periods with their preferred investors.

The backers include some of the world’s most prominent financiers, billionaires and technology executives.

Following protracted talks, the ECB has agreed to revised terms with the investors, with host venues now retaining control of their teams’ intellectual property rights.

The investors will also hold an effective veto over future expansion of the Hundred, while the ECB will be barred from launching any other short-form professional version of the sport while the Hundred remains operational.

Meanwhile, the governing body will retain full ownership of the competition itself as well as controlling the regulation of it and the window within which it can be played each year.

The ECB has been waiting for investors in the eight franchises to sign participation agreements since an auction in February, which valued the participating teams at just over £975m.

Some of the deals involve the investors owning 49% of their respective franchise, while India’s Sun TV Network has taken full ownership of Yorkshire’s Northern Superchargers.

The proceeds of its stake sales will be distributed to all of English cricket’s professional counties as well as £50m being delivered to the grassroots game.

The windfalls are being seen as a lifeline for many cash-strapped counties which have been struggling under significant debt piles for many years.

The most valuable Hundred sale saw a group of technology tycoons, including executives from Google and Microsoft, paying about £145m for a 49% stake in Lord’s-based London Spirit.

This year’s tournament kicks off next week with fixtures including a clash between the two London-based franchises.

The ECB declined to comment.

Continue Reading

Trending