Inflation surprisingly rises after cost of tobacco increases
The annual rate of inflation has surprisingly risen, official figures show.
The consumer price index (CPI) measure of inflation stood at 4% in the year to December, according to the Office for National Statistics (ONS). A fall to 3.8%, had been expected by economists polled by Reuters.
But instead, inflation rose by 0.1% from 3.9% in the 12 months to November.
The full effects of increased shipping costs due to Red Sea diversions will not have been captured by the data.
Houthi fighters have been targeting commercial ships – with the UK and US responding with airstrikes last week. As a result, shipping prices had the steepest rises towards the end of the month.
The greatest contributor to the growth in inflation was the increased cost of tobacco and alcohol – which are categorised together – the ONS said, as the government upped smoking duties in the autumn statement.
“The increase in the annual rate was largely the result of the increase in tobacco duty”, it said.
Money latest: Big price hike expected for broadband and mobile customers
Please use Chrome browser for a more accessible video player
The impact of the Suez crisis on your finances
Effects of shipping disruption and possible delivery delays will be worst felt by consumers in Europe, an executive at the global logistics company DP World said.
“The cost of goods into Europe from Asia will be significantly higher,” said DP World chief financial officer Yuvraj Narayan.
“European consumers will feel the pain… It will hit developed economies more than it will hit developing economies.”
The inflation data comes as a number of chain retailers put more items on sale earlier. Industry data showed a third of all spending in the weeks up to Christmas was on items with some kind of offer.
Similarly, the pace of wage rises has slowed. Official figures published on Tuesday recorded that pay packets were growing at a reduced annual rate than previously – 6.6% compared to 7.3% a month earlier.
Such increases in the annual rate are not what the interest rate setters in the Bank of England will want to see when considering the rates.
The Bank raised the base interest rate 14 consecutive times up to August and then held rates at 5.25%, making lending more expensive, in an effort to bring down price rises.
Another measure of inflation of note to the rate setters has remained the same. Core inflation, which looks at price rises excluding volatile categories such as food and energy, stayed at 5.1%. And food inflation also fell again, to 8% from 9.2% in November.
Markets are expecting the Bank’s base interest rate to come down to 5% in May.
Read more:
See which prices have gone up or down
Responding to today’s figures Chancellor Jeremy Hunt said: “As we have seen in the US, France and Germany, inflation does not fall in a straight line, but our plan is working and we should stick to it.
“We took difficult decisions to control borrowing and are now turning a corner, so we need to stay the course we have set out, including boosting growth with more competitive tax levels.”
Labour’s shadow chancellor, Rachel Reeves, responded: “Any rise in inflation is bad news for families who are worse off after 14 years of economic failure.
“Prices are still rising in the shops, with the average weekly shop £110 more than it was before the last general election, and the average family set to be £1,200 worse off under Rishi Sunak’s tax plan. Britain cannot afford another five years of economic failure.”
And the Liberal Democrats’ treasury spokesperson Sarah Olney said: “Today’s inflation statistics will offer little comfort to people across the country that are seeing their pay stretched as the cost of living crisis continues to rage on.”
The television production company founded by broadcaster Jake Humphrey and former racing driver David Coulthard is in talks with potential buyers about a sale.
Sky News has learnt that Whisper Group, which was established in 2010 and won a BAFTA for its coverage of the Women’s Euros in 2022, is working with advisers on a deal.
The company is said to be open to a range of options, including the sale of a majority or minority stake to either financial investors or a strategic buyer.
Corporate financiers at KPMG are orchestrating talks with potential bidders.
Whisper is already 30%-owned by Sony Pictures Television, which acquired the stake in 2020.
It replaced Channel 4’s Indie Growth Fund as an investor in the business.
A majority of the shares in Whisper are owned by its founders and management team.
Lioness Millie Bright celebrates England’s win at the Women’s Euros 2022, the coverage of which was produced by Whisper. File pic: Reuters
The company is best-known for its sports productions, and is responsible for Channel 4’s Formula One coverage as well as international cricket, boxing and the Paralympics.
Whisper employs about 300 people, and has operations in London, Cardiff, Manchester and Riyadh.
Its chief executive, Sunil Patel, co-founded the producer alongside Mr Coulthard and Mr Humphrey.
It is said to be plotting further expansion in sport in the form of bigger events and rightsholders, as well as in events, where its clients include Red Bull.
Whisper is also focused on growing its presence in the US, where it currently works with Tom Brady’s Religion of Sport, and the Middle East, where it is partnered with Neom and Saudi Pro League teams.
Outside of sports rights, it has produced documentaries about Ben Stokes, the England Test cricket captain, and Sven-Goran Eriksson, the late England football manager.
It has also diversified into entertainment programming, producing the Wheel of Fortune gameshow hosted by Graham Norton.
Its most recent accounts disclosed a £4.3m pre-tax profit for the year to March 31, 2024.
“Whisper has successful diversified into factual, entertainment and events to complement the wider blend of work across its sports broadcast contracts,” it said in a statement accompanying the accounts.
“It has been another successful year for contract wins, with a series of renewals with key clients and a new range of significant projects which will help ensure visibility over the next few years.”
The sale process comes as ITV holds talks about a merger of its Studios arm with RedBird IMI-owned All3Media, one of Britain’s biggest production companies.
A combination of the two businesses could be announced during the spring, according to banking sources.
This weekend, a spokesman for Whisper declined to comment.
Business
Port giant DP World ‘discredited’ by former minister despite £1bn investment in London Gateway
The chairman of P&O Ferries’ parent company DP World has told Sky News he went ahead with a £1bn investment in the UK despite feeling “discredited” by criticism from a cabinet minister.
P&O was widely criticised in 2022 when more than 700 seafarers were summarily fired and replaced by largely overseas workers without consultation.
Last October, the issue threatened DP World’s planned expansion of London Gateway, its deepwater port on the Thames Estuary, when the then transport secretary, Louise Haigh, described P&O as a “rogue operator”.
Her comments came as DP World was in the final stages of negotiating a £1bn investment in the port, due to be announced at the government’s investment summit.
Money blog: Trump car tariffs condemned around the world
In response, DP World pulled the announcement and only relented following a personal intervention by the prime minister to keep his showpiece event on course.
DP World chairman Sultan Ahmed Bin Sulayem
Speaking exclusively to Sky News, Sultan Ahmed Bin Sulayem said the criticism was unexpected given the scale of his planned investment in the UK.
‘Water under the bridge’
“There was a misunderstanding. Someone, unfortunately, said something that was not what we expected.
“We were going to invest in infrastructure, a huge investment, and then we get the person in charge to basically discredit us. But it’s water under the bridge.”
Bin Sulayem confirmed that he had spoken with the prime minister and received “reassurances” that Ms Haigh was expressing a personal view. She subsequently resigned after admitting a fraud offence.
The chairman also defended P&O’s conduct, saying that having received no state support during the pandemic, the cuts were necessary to save the company.
“We had a choice. We either close down the company and 3,000 people or more lose their jobs, or we try to survive by letting 700 or so go. And we felt that was right,” he said.
“Maybe we didn’t follow the procedures, but most importantly, we compensated every employee with more than what the law said.”
Read more from Sky News:
Thousands of British Steel jobs at risk
‘Disgraceful’ amount of sewage dumped in rivers
Rebuilding relations
DP World’s London Gateway container port in Stanford-le-Hope, Essex. File pic: PA
Bin Sulayem was speaking on a flying visit to the UK intended to rebuild relations with the government, meeting investment minister Poppy Gustaffsen at London Gateway to discuss an expansion that will make the port Britain’s largest by volume and offering encouraging words about the UK’s attractiveness to investors.
“We believe in the UK economy, in its strength, and we believe the economic fundamentals are strong. That’s why we invested,” he said.
“The UK has the best stock market in the world. You have English law, and you have the best universities in Oxford and Cambridge. If we look to the future, it will be the economy of the brain, not the economy of the hand.
“The world economy doesn’t want labourers, it wants brains. People want engineers. They want free thinkers. They want innovators. That is what’s here, and that’s why we invested in London Gateway.”
Sky’s Paul Kelso with Bin Sulayem
Tariff trade trouble
With ports and logistics operations in more than 70 countries handling around 10% of global trade, DP World’s chairman has a unique insight into global trade and the likely impact of the tariff war sparked by Donald Trump.
While confident that trade will find a way to navigate the disruption, he warned America’s trading partners to take the president seriously.
“I think psychologically it will [have an impact], but in reality it will not, because trade is resilient. I think of it like water coming from the mountain in the rain, nobody can stop it. If you can’t sell a product in one place, you can sell it somewhere else.
“Trump is a deal maker. He is making threats because that’s the way he negotiates. He comes with impossible demands because he wants people to come to the table.
“But he’s serious. He will do what he’s threatening if nobody makes a deal.”
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports12 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway