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NatWest Group is to hand its chief executive a potential multimillion pound pay boost as it returns to full private ownership after nearly 17 years in state hands.

Sky News has learnt that the chair of the bank’s remuneration committee, Lena Wilson, is consulting leading institutional shareholders about an overhaul of its boardroom pay policy.

The details will be put to a vote at NatWest’s annual meeting next spring, in accordance with rules requiring investors to vote on remuneration policies every three years.

Under the plans, Paul Thwaite, who took over as the bank’s interim chief executive in July 2023 before being handed the role on a permanent basis in February, would be in line for an increase in his maximum annual bonus from 100pc of his base salary to 150%.

NatWest also intends to replace its restricted share plan (RSP) for Mr Thwaite, which awarded him stock worth a maximum of 150% of his salary, with a performance share plan (PSP) which could pay him up to three times his basic pay each year.

Assuming his salary of just under £1.2m remains unchanged, that would mean him being in line for a maximum reward package – excluding pension contributions and other items – of about £6.6m, up from roughly £4.2m today.

Last year, he was awarded a total package of just over £2.4m.

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The prospective increase would bring Mr Thwaite’s compensation more closely into line with peers including Charlie Nunn at Lloyds Banking Group and CS Venkatakrishnan at Barclays.

“CEO target pay will continue to remain lower than UK banking peers and is positioned around the FTSE-50 mid-market level,” Ms Wilson wrote in her letter to shareholders.

Mr Thwaite replaced Dame Alison Rose after she was forced to step down over the debanking row involving Nigel Farage, the Reform Party leader.

Leading City investors who have been part of the consultation process are said to be overwhelmingly supportive of the pay overhaul, particularly in the wake of NatWest’s performance this year, which has seen its shares surge by 90% during 2024.

Regulators have also begun to relax rules imposed on bankers’ pay imposed after the 2008 crisis, with the Bank of England recently signalling plans to reduce the period over which share awards vest and must be held.

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A NatWest Group spokesperson said: “Our remuneration policy is subject to shareholder approval at our AGM and we would not comment on the detail of any proposed changes.

“Our objective with our remuneration policy is to ensure alignment between executive pay, performance and the long-term value created for our shareholders.”

Executive pay has been a sensitive subject for NatWest, which was previously called Royal Bank of Scotland Group, ever since it was rescued with £45.5bn of taxpayers’ money during the financial crisis of 2008.

The pension package of Fred Goodwin, RBS’s former chief, and bonuses awarded to Stephen Hester, who was parachuted in to replace him and stabilise the bank became huge political headaches for the governments of Gordon Brown and David Cameron.

Since the sale of the taxpayer’s majority stake in RBS kicked off in 2015, bonuses have become a less contentious issue for the bank.

On Friday, NatWest announced that the Treasury’s stake had fallen below 10% for the first time since the bailout.

“We are pleased with the sustained momentum in reducing HM Treasury’s stake in NatWest Group,” it said.

“Returning the bank to full private ownership is a shared ambition and one that is in the interest of all our stakeholders.”

Sky News revealed in October that the government was on track to fully exit its NatWest shareholding by the middle of 2025 – or sooner if it launches an institutional placing of part of its remaining stake.

Even after the partial recovery in its valuation, taxpayers will see a loss running to billions of pounds from the emergency bailout.

On Friday, shares in NatWest closed at 405.5p, giving it a market capitalisation of £32.6bn.

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Rent prices reach record high in England

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Rent prices reach record high in England

English rent prices have reached another record high, growing by close to 10% in the past year, official figures show.

The typical private rental price in England rose 9.3% in the year up to November, costing £116 more than 12 months earlier, according to the Office for National Statistics (ONS).

English renters paid an average of £1,362 last month – a steep increase from the 8.8% hike seen a month earlier.

UK rent rises were not far behind, growing 9.1% across the year, just below the record-high annual rise of 9.2% in March.

Money blog: Big shoe retailer blames budget for closures

Londoners saw the biggest rent raises. In the capital, rent bills were up 11.6%, bypassing the previous record high.

Cheaper housing could be found in Scotland and Wales during the period. Their mean monthly rents were £980, up 6.5% and £772, 8.0% higher respectively.

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What is Labour’s Renters Rights Bill?

Data for Northern Ireland is only available up to September, during which period rents rose 9%.

Analysis by Sky News found most people in the UK were renters and mortgage holders were in the minority.

Rent increasing disproportionately

Rent increases far surpass house price rises, mortgage rates and the overall rate of inflation.

People remortgaging at the end of November could secure a typical five-year fixed deal for 5.28% or a two-year fixed deal for 5.52%.

Meanwhile, the consumer price index measure of inflation stood at 2.6%.

Also published on Wednesday were average house prices, which were far below rent increases.

Average UK house prices rose 3.4% in the year to October 2024. In England, house prices are up 3%, in Wales 4% and in Scotland 5.5%, the ONS said.

Why are prices rising?

The increase comes due to there being more renters than rental properties available, the National Residential Landlords Association (NRLA) said.

“The biggest pressure on rents remains a chronic shortage of housing to meet demand,” NLRA’s policy director Chris Norris said.

“According to Savills up to one million new homes to rent will be needed by 2031 to meet growing demand. Despite this, government data shows that one in three landlords are now planning to sell properties they rent out over the next two years.”

London Renters Union has been contacted for comment.

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Spending calculator: Which prices are rising and falling fastest?

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Spending calculator: Which prices are rising and falling fastest?

Inflation has risen for the second month in a row to 2.6% in November.

Today’s percentage is above the Bank of England’s 2% target and marks an increase from October, when inflation climbed to 2.3% after three months of decline.

This is due to the higher cost of clothing, petrol and diesel, compared to last year, the ONS said.

But how does all of this affect the cost of groceries, clothing and leisure activities? Use our calculator to find out.

Which prices are increasing fastest?

Olive oil was the item with the largest price increase, with prices for 500ml to one litre rising from £7.22 to £9.21, an increase of 28%.

Olive oil has consistently had high price increases and experts have put that price rise down primarily to poor olive yields due to last year’s heatwaves in southern Europe.

However, they expect a significantly better harvest in the 2024-25 season, thanks to significant rainfall in Spain. The harvest could be double the size of last year’s, which may lead to lower prices in the coming months.

With Christmas fast approaching, many festive staples are seeing price increases, with carrots and potatoes up by nearly a fifth. On the drinks front, a 70cl bottle of cream liqueur has risen by 4%, but there’s good news for Champagne lovers with a bottle now costing 0.5% less.

Food and drink products are responsible for seven of the 10 biggest increases since last year.

Of non-food items, hair gel increased the most, by a fifth from £3.33 to £4.11.

Top five price rises:

• Olive oil (500ml-1litre): up 28%, £7.22 to £9.21
• Iceberg lettuce (each): up 24%, 80p to 99p
• Hair gel (150-200ml): up 23%, £3.33 to £4.11
• Hand rolling tobacco pack (30g): up 22%, £20.46 to £24.97
• Plums (per kg): up 20%, £2.91 to £3.48

Overall, 50 of the 156 types of food and drink tracked by the ONS have actually become cheaper since last year.

Crumpet lovers have reason to celebrate-prices for a pack of 6-9 crumpets have dropped by 8%, along with some dairy-free spread to top them with.

Overall, 142 out of the 444 products in our database are cheaper than they were 12 months ago.

Top food price decreases:

• Pulses (390-420g): down 12%, 76p to 67p
• Frozen prawns (per kg): down 9%, £18.87 to £17.20
• Canned tomatoes (390-400g): down 8%, 72p to 66p
• Dairy free spread/margarine (450-500g): down 8%, £2.17 to £1.99
• Crumpets (pack of 6-9): down 8%, £1.00 to 92p

Of non-supermarket items, kerosene has been the biggest price faller – by a more than a fifth.

What is the effect of long-term inflation?

The price changes described above compare the cost of items to where they were a year ago.

However, inflation has now been at high levels for an extended period of time.

The war in Ukraine, COVID, Brexit, and other supply chain pressures have all contributed to spiralling costs in recent years.

Inflation reached a 40-year high of 11.1% in October 2022.

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While the headline inflation figure has come down markedly, any amount of inflation means that prices are still rising, and building on already inflated costs.

We’ve compared the costs of shopping items with what they were three years ago to see what the cumulative impact of inflation has been.

The biggest price rise for groceries over that time has been for olive oil (500ml to one litre), which has increased nearly two-and-a-half times (146%), from £3.74 to £9.21 in the past three years.

Iceberg lettuce is up by four-fifths, with one costing 99p now compared with 54p in October 2021.

Use our calculator to see how much prices in your shopping basket have risen in total since three years ago.

Who is worst affected?

Richard Lim, chief executive of Retail Economics, says: “It’s the least affluent households that are going to see much higher rates of inflation as they spend more of their income on food and energy.”

We’ll continue to update our spending calculator over the coming months so you can see how you’ll be affected.

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Methodology

The ONS collects these prices by visiting thousands of shops across the country and noting down the prices of specific items. There are upwards of 100,000 prices published every month, from more than 600 products.

The items that form the “official shopping basket” change each year to reflect how the purchasing habits of the population have changed. For example in March 2021, after a year of the pandemic, hand gel, loungewear bottoms and dumbbells were added, while canteen-bought sandwiches were among the items removed.

Where there aren’t the exact equivalent items available at a survey shop, ONS officials pick the best alternative and note that they’ve done this so it’s weighted correctly when the averages are worked out.

Shops are weighted as well, so the price in a major chain supermarket will have a greater impact on the average than an independent corner shop.

We will be updating these figures each month while the cost of living crisis continues.

During the pandemic, more of the survey was carried out over the phone and work is ongoing to digitise the system to be able to take in more price points by getting data from supermarket receipts, rather than making personal visits.


Data journalists: Daniel Dunford, Amy Borrett, Ben van der Merwe, Joely Santa Cruz and Saywah Mahmood
Interactive: Ganesh Rao
Design: Phoebe Rowe, Brian Gillingham


The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open-source information. Through multimedia storytelling, we aim to better explain the world while also showing how our journalism is done.

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Inflation rises for second month in a row

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Inflation rises for second month in a row

Inflation has risen for the second month in a row, according to official figures.

The overall rate of price rises – as measured by the consumer price index (CPI) – grew by 2.6% in November, a significant rise.

It’s a further move away from the Bank of England‘s target 2% inflation rate after the rate ticked up to 2.3% in October, the first increase in three months.

 

This is due to the higher cost of clothing, petrol and diesel, compared to last year, the ONS said.

Costlier tobacco products elevated through higher tobacco duty announced in the October budget also contributed.

Acting to slow price rises were plane tickets, which had the largest drop in the month since records began.

While the main measure of inflation, CPI, was as economists expected, other measures were lower than forecast.

A look behind the headline figure

Another important measure of inflation watched by the rate-setters at the Bank is core inflation, which measures price rises but excludes food and energy costs as they’re liable to sharply fall or rise.

Core inflation rose to 3.5%, less than the 3.6% anticipated by economists polled by Reuters.

Similarly, services inflation, which is impacted by rising wages, remained at 5% despite a forecast rise.

While the 2.6% figure was expected by economists, it is above the 2.4% rate the Bank had predicted.

What does it mean for interest rates?

Borrowing costs were already deemed unlikely to be changed by the Bank at their next meeting on Thursday.

But the likelihood of a February interest rate cut is now higher. Traders are pricing in a 53% chance of a drop at the Bank’s Monetary Policy Committee meeting after next.

Before this morning’s inflation announcement that was a 48% chance.

In response to the data Chancellor Rachel Reeves said: “Today’s figures are a reminder that for too long the economy has not worked for working people”.

“At the budget we protected [working people’s] 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.”

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