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The UK economy returned to growth in November, according to official figures that are being closely watched amid fears the prospect of recession remains on a knife edge.

The Office for National Statistics (ONS) reported an early estimate for output growth of 0.3% for the month – recovering from a 0.3% decline witnessed in October when many weather-sensitive sectors were hit by heavy rain.

The data showed retail was a major contributor to that growth as Christmas shopping got into gear with Black Friday sales.

Despite that, there are two scenarios under which a recession – that’s two consecutive quarters of contraction – could still materialise.

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Revisions to ONS figures have the economy recording zero growth in the second quarter of 2023. Any further determination downwards would tick the box because, as things stand, the economy fell by 0.1% in the following June-August quarter.

The other possibility is that the third quarter of negative growth is followed by another between October and December.

ONS chief economist Grant Fitzner said of the latest data: “The economy contracted a little over the three months to November, with widespread falls across manufacturing industries, which were partially offset by increases in public services, which saw less impact from strike action.

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Breakdown of 2023 UK economy

“GDP bounced back in the month of November, however, led by services with retail, car leasing and computer games companies all having a buoyant month.

“The longer-term picture remains one of an economy that has shown little growth over the last year.”

Growth has essentially been flatlining due to the impact of the surge in costs since Russia’s invasion of Ukraine in February 2022 and Bank of England action to tame the pace of that price growth.

The series of 14 consecutive interest rate rises imposed by the Bank is designed to choke growth by taking demand out of the economy.

That programme was paused late last summer amid evidence it was having the desired effect as the rate of inflation was down sharply from its peak above 11%.

Data has not flagged renewed concerns since with key indicators for the Bank, such as wage growth, also easing from highs seen in mid-2023.

Financial markets and the Bank are at odds, however, on the timing of potential interest rate cuts – a move that would fan the flames of the current mortgage price war even more.

Markets see the Bank cutting its main interest rate from the current 5.25% level to around 4% over the course of the year, likely beginning in May.

A lift in economic growth will not help the Bank’s position move towards that of the markets and members of the monetary policy committee remain worried that inflation – at 3.9% – is still almost double its target rate of 2%.

Upwards pressures remain the risk of higher prices from disruption to shipping in the Red Sea.

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Chancellor Jeremy Hunt said of the ONS data: “While growth in November is welcome news, it will be slower as we bring inflation back to its 2% target.

“But we have seen that advanced economies with lower taxes have grown more rapidly, so our tax cuts for businesses and workers put the UK in a strong position for growth into the future.”

Liberal Democrat Treasury spokesperson, Sarah Olney, responded: “This Conservative government has brought us nothing but stagnation.

“Sunak’s talk of turning a corner has not survived contact with economic reality.

“This no growth prime minister has no plan and no idea how to get the economy moving again.”

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Thousands of jobs to go at Bosch in latest blow to German car industry

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Thousands of jobs to go at Bosch in latest blow to German car industry

Bosch will cut up to 5,500 jobs as it struggles with slow electric vehicle sales and competition from Chinese imports.

It is the latest blow to the European car industry after Volkswagen and Ford announced thousands of job cuts in the last month.

Cheaper Chinese-made electric cars have made it trickier for European manufacturers to remain competitive while demand has weakened for the driver assistance and automated driving solutions made by Bosch.

The company said a slower-than-expected transition to electric, software-controlled vehicles was partly behind the cuts, which are being made in the car parts division.

Demand for new cars has fallen overall in Germany as the economy has slowed, with recession only narrowly avoided in recent years.

The final number of job cuts has yet to be agreed with employee representatives. Bosch said they would be carried out in a “socially responsible” way.

About half the job reductions would be at locations in Germany.

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Bosch, the world’s biggest car parts supplier, has already committed to not making layoffs in Germany until 2027 for many employees, and until 2029 for a subsection of its workforce. It said this pact would remain in place.

The job cuts would be made over approximately the next eight years.

The Gerlingen site near Stuttgart will lose some 3,500 jobs by the end of 2027, reducing the workforce developing car software, advanced driver assistance and automated driving technology.

Other losses will be at the Hildesheim site near Hanover, where 750 jobs will go by end the of 2032, and the plant in Schwaebisch Gmund, which will lose about 1,300 roles between 2027 and 2030.

Bosch’s decision follows Volkswagen’s announcement last month it would shut at least three factories in Germany and lay off tens of thousands of staff.

Its remaining German plants are also set to be downsized.

While Germany has been hit hard by cuts, it is not bearing the brunt alone.

Earlier this week, Ford announced plans to cut 4,000 jobs across Europe – including 800 in the UK – as the industry fretted over weak electric vehicle (EV) sales that could see firms fined more for missing government targets.

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Cambridge college puts O2 arena lease up for sale

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Cambridge college puts O2 arena lease up for sale

Cambridge University’s wealthiest college is putting the long-term lease of London’s O2 arena up for sale.

Sky News has learnt that Trinity College has instructed property advisers to begin sounding out prospective investors about a deal.

Trinity, which ranks among Britain’s biggest landowners, acquired the site in 2009 for a reported £24m.

The O2, which shrugged off its ‘white elephant’ status in the aftermath of its disastrous debut in 2000, has since become one of the world’s leading entertainment venues.

Operated by Anschutz Entertainment Group, it has played host to a wide array of music, theatrical and sporting events over nearly a quarter of a century.

The opportunity to acquire the 999-year lease is likely to appeal to long-term income investment funds, with real estate funds saying they expected it to fetch tens of millions of pounds.

Trinity College bought the lease from Lend Lease and Quintain, the property companies which had taken control of the Millennium Dome site in 2002 for nothing.

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The college was founded by Henry VIII in 1546 and has amassed a vast property portfolio.

It was unclear on Friday why it had decided to call in advisers at this point to undertake a sale process.

Trinity College Cambridge did not respond to two requests for comment.

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Surprise fall in retail sales a sign economy is slowing

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Surprise fall in retail sales a sign economy is slowing

Budget fears and unseasonably warm weather led to consumers spending far less than expected last month, according to official figures.

In a sign of a slowing economy, retail sales fell a sharp 0.7%, the Office for National Statistics (ONS) said.

The fall was larger than expected. A drop of 0.3% was forecasted by economists polled by the Reuters news agency.

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Clothing stores were particularly affected, where sales fell by 3.1% over the month as October temperatures remained high, putting shoppers off winter purchases.

Retailers across the board, however, reported consumers held back on spending ahead of the budget, the ONS added.

Just a month earlier, in September, spending rose by 0.1%.

Despite the October fall, the ONS pointed out that the trend is for sales increases on a yearly and three-monthly basis and for them to be lower than before the COVID-19 pandemic.

Retail sales figures are significant as household consumption measured by the data is the largest expenditure across the UK economy.

The data can also help track how consumers feel about their financial position and the economy more broadly.

Another signal of a slowing economy was the latest growth figures which showed a smaller-than-expected GDP (gross domestic product) measurement.

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Business owners worried after budget

Consumer confidence could be bouncing back

Also released on Friday was news of a rise in consumer confidence in the weeks following the budget and the US election.

Market research company GfK’s long-running consumer confidence index “jumped” in November, the company said, as people intended to make Black Friday purchases.

It noted that inflation has yet to be tamed with people still feeling acute cost-of-living pressures.

It will take time for the UK’s new government to deliver on its promise of change, it added.

A quirk in the figures

Economic research firm Pantheon Macro said the dates included in the ONS’s retail sales figures could have distorted the headline figure.

The half-term break, during which spending typically increases, was excluded from the monthly statistics as the cut-off point was 26 October.

With cold weather gripping the UK this week clothing sales are likely to rise as delayed winter clothing purchases are made, Pantheon added.

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