Attacks on Red Sea shipping forces 66% decline in Suez Canal traffic – ONS

Published

3 weeks ago

April 24, 2024

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Shipping traffic through the vital Suez Canal artery in Egypt has plunged by 66% since cargo was forced to divert due to attacks on vessels, according to official figures.

The data, from the UK’s Office for National Statistics (ONS), covered the period from mid-December to the beginning of April.

It is important as it represents the scale of disruption to supplies through the artificial channel linking the Mediterranean Sea to the Red Sea since Iran-backed Houthi fighters started firing on ships in the run-up to Christmas last year.

There are fears that soaring costs for insurance, fuel and wages risk stoking a fresh wave of inflation as the diversion to Europe from destinations such as manufacturing powerhouse China, around the southern tip of Africa, adds up to 14 days to transit times.

Separate ONS data covering the pace of price increases is yet to show any real impact on the UK economy but the Bank of England is among institutions monitoring the situation as a number of companies report a hit from higher costs.

Container prices, for example, rose by more than 300% as the disruption gathered pace early this year.

Houthi fighters based in Yemen have been targeting ships which, they claim, have links to Israel.

They argue that they are acting in sympathy with Palestinians and a number of attacks have found their targets despite a US-led naval operation to protect vessels in the Red Sea.

The vast majority of major shipping companies have, for some months, used the diversion around the Cape of Good Hope.

The ONS said volumes started to increase in December 2023 and throughout the first weeks of 2024, more than doubling levels observed in February 2023.

“By the first week of April 2024 (week 14), the volume of cargo and tanker ships through the Suez Canal was 71% and 61% below the level of ship crossings seen in the previous year, respectively.”

It added that weekly crossings through the Strait of Hormuz, off the coast of Iran between February and April, showed a “significant decrease” compared with previous years.

It noted that shipping journeys were particularly low between weeks five and 10, with an average 23% reduction in crossing volumes compared with the same weeks in the previous year.

This was mainly due to lower tanker crossings, it noted.

The prospect of more perilous journeys for tankers has been a factor behind rising oil prices.

Brent crude, which had been trading around the $80 a barrel mark at the start of the year, rose as high as $91 earlier this month amid the see-saw of tension across the conflict in the Middle East.

It culminated in tit-for-tat attacks between Israel and Iran.

It is currently trading at $88, reflecting the lack of escalation since last week.

The AA reported on Tuesday that average petrol costs in the UK had crossed back above the 150p-a-litre mark for the first time since November.

Experts have warned that they probably have further to go, with a weaker pound versus the dollar this month adding to higher oil costs as the commodity is priced in the US currency.

Business

Marks & Spencer’s website and app go down

Published

3 hours ago

May 18, 2024

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Marks & Spencer's website and app go down

Marks & Spencer’s website and app has not been working for several hours, with a message telling shoppers “you can’t shop with us right now”.

“We’re working hard to be back online as soon as possible,” it adds.

All the menus and images have disappeared apart from one showing a model in a green jacket.

Customers trying to use the app got the message: “Sorry you can’t shop through the app right now. We’re busy making some planned changes, but will be back soon.”

The site is understood to have been down for several hours.

Replying to one customer on X, the retailer said: “We’re experiencing some technical issues but we are working on it.”

M&S is the latest high street name to have technical issues – last month some Sainsbury’s shoppers had problems with their online orders.

The outage comes a few days before M&S is expected to reveal a big jump in annual profits.

It’s been a successful year for the brand, with strong sales across the business following a turnaround plan that has included store closures and cost cutting.

Business

Employees at fintech giant Revolut to cash in with $500m share sale

Published

7 hours ago

May 18, 2024

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Employees at fintech giant Revolut to cash in with 0m share sale

Bosses at Revolut, Britain’s biggest fintech, are drawing up plans to allow employees to cash in with a sale of stock valued at hundreds of millions of pounds.

Sky News has learnt that the banking and payments services provider is lining up investment bankers to coordinate a secondary share sale worth in the region of $500m (£394m).

Morgan Stanley, the Wall Street bank, is expected to be engaged to work on the proposed stock offering, which will take place later this year.

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City sources said this weekend that Nik Storonsky, Revolut’s co-founder and chief executive, was determined to seek a valuation of at least the $33bn (£26bn) it secured in a primary funding round in 2021.

“This will not be a down-round,” said one person familiar with Revolut’s thinking.

Although the fintech, which has more than 40 million customers, is not planning to raise new capital as part of the transaction, any sizeable share sale will still be closely watched across the global fintech sector.

It is expected to be restricted to company employees.

Revolut ranks among the world’s largest financial technology businesses, with revenue virtually doubling last year to around £1.7bn, according to figures expected to be published in the coming months.

Founded in 2015, it has experienced a string of regulatory and compliance challenges, with reports last year highlighting its release of funds from accounts flagged by the National Crime Agency as suspicious.

The company’s growth has taken place at breakneck speed, with customer numbers soaring from 16.4m at the point of the Series E fundraising nearly three years ago.

Insiders argued that despite the protracted downturn in tech valuations over the last two years, Revolut’s relentless expansion would easily justify it maintaining its status as Britain’s most valuable fintech.

Monzo, the UK-based digital bank, recently confirmed a Sky News story that it had closed a funding round worth nearly £500m, including backing from an arm of Google’s owner, Alphabet, and a Singaporean sovereign wealth fund.

Elsewhere, however, the funding landscape has been bleaker, with a growing number of tech companies which had attracted unicorn valuations of more than $1bn now struggling to stay afloat.

Revolut has allotted stock options to many of its 10,000 employees as part of their compensation packages, although it was unclear how many would be eligible to dispose of equity in the transaction later this year.

A source close to the company said it had had numerous expressions of interest from prospective investors.

Revolut’s current shareholders include SoftBank’s Vision Fund and Tiger Global.

News of the proposed share sale comes as Revolut’s investors continue to await positive news about its application for a UK banking licence.

The company applied to regulators to become a bank in Britain more than three years ago, but has so far failed to secure approval.

Mr Storonsky has been publicly critical of the delay, and last year questioned the approach of British regulators and politicians, as he suggested that he would not contemplate a listing on the London Stock Exchange.

An initial public offering of Revolut appears to still be some way off, although it would not surprise investors or industry peers if it initiated a listing process in the next couple of years.

One person close to Revolut said board members were among those expected to participate in the secondary share sale, although further details were unclear this weekend.

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The company is chaired by Martin Gilbert, the City veteran who has faced governance and performance challenges at Assetco, the London-listed asset manager he runs.

Its other directors include Michael Sherwood, the former Goldman Sachs executive who was jointly responsible for its operations outside the US and who was regarded as one of the most skilled traders of his generation.

An external shareholder in the company said the exclusion of non-employees from the deal could draw criticism from some investors.

Revolut has conducted secondary share sales of this kind in the past, including after its 2021 Series E round.

This weekend, Revolut declined to comment.

Business

Ex-Post Office head of IT says Paula Vennells ‘hoped to avoid’ inquiry – and reveals she blocked her number

Published

2 days ago

May 16, 2024

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Ex-Post Office head of IT says Paula Vennells 'hoped to avoid' inquiry - and reveals she blocked her number

A former Post Office executive has said she was forced to block ex-boss Paula Vennells’ phone number after the ex-CEO called multiple times asking for help to avoid an independent inquiry into the Horizon IT scandal.

Lesley Sewell, previously the company’s head of IT, told the Post Office inquiry on Thursday that former CEO Ms Vennells had reached out to her four times between 2020 and 2021.

Ms Sewell said that she blocked Ms Vennells’ number due to discomfort with the contact.

In her witness statement to the probe, Ms Sewell said that one of Ms Vennells’ emails referenced the need to fill in memory gaps regarding Horizon and “Project Sparrow”, a committee addressing issues with forensic accountants who identified flaws in the accounting system.

“Paula contacted me on four occasions in total. I recall blocking her number after the last call as I did not feel comfortable with her contacting me,” Ms Sewell said.

“I had not spoken to Paula since I had left POL [Post Office Limited] in 2015.”

According to Ms Sewell’s testimony, former chief executive Ms Vennells said that she had “been asked at short notice” to appear before a parliamentary select committee on “all things Horizon/Sparrow and need to plug some memory gaps”.

Ms Sewell says Ms Vennells added: “My hope is this might help avoid an independent inquiry but to do so, I need to be well prepared.”

Ms Sewell, who struggled to contain her emotions and broke down in tears while giving her oath at the start of her inquiry evidence, was offered support and breaks as needed by chairman Sir Wyn Williams.

Sir Wyn told the former executive: “Ms Sewell, I appreciate this may be upsetting for you, Ms Price will ask you a number of questions in a proper and sensible manner, but if at any time you feel you need a break, just let me know, all right?”

The Post Office has faced significant scrutiny following the ITV drama Mr Bates Vs The Post Office which highlighted the Horizon IT scandal.

The faulty system led to the prosecution of more than 700 sub-postmasters between 1999 and 2015, with many still awaiting full compensation despite government announcements regarding payouts for those with quashed convictions.