Whilst this week’s headlines have been dominated by the fall-out of ITV’s Christmas drama, which surely has had more impact than they were expecting, the NTI newsroom have been scurrying around to bring you the news you need to read.
Firstly, figures released today show the UK Economy grew by 0.3% in November having shrunk during October. The Office for National Statistics highlighted the rebound was driven by the services sector, with Black Friday sales lending retailers a timely boost.
However, don’t start popping the champagne corks yet as the ONS said the economy had shown "little growth" over the past year. Furthermore, economists’ reports show a close call as to whether the UK can avoid recession. A recession is typically defined as when the economy shrinks for two quarters in a row. and the UK will meet this criteria if it contracts between October and December, having also done so during Q3 of 2023.
Grant Fitzner, chief economist at the ONS, said that November's rise was driven by "strong retail sales but also car leasing, computer games and fewer strikes than we've seen in previous months. We have had quite a number of companies telling us they saw strong Back Friday sales which had a positive impact not just on the retail sector but also warehousing, couriers and some manufacturing sectors."
When you are relying on workers not striking for good economic news, things aren’t looking good are they? So, on second thoughts, pop those champagne corks this evening – the economy is dependent on you doing so.
One business which enjoyed a good end to 2023 was Greggs, whose sales at established stores rose 9.4%. The UK’s largest bakery chain attributed the good results to less travel disruption (them again), customers liking its seasonal specialities and online ordering. Greggs said it had increased prices by between 5p and 10p on some items last month but you’ll be pleased to hear it has relented from doing so on sausage rolls.
Roisin Currie, chief executive, said the price rises were to help fund a pay increase for workers implemented since the turn of the year, with store staff getting a 9.6% rise to at least £11.62 an hour, ahead of the new legal minimum wage of £11.44 from April.
In a report released yesterday morning, analysts at Investec, Deutsche Bank and The Oxford Economics consultancy have suggested The Bank of England may have to accelerate its program bring forward the date of its first interest rate cut as they suggested the inflation rate will halve to 2% by April. The inflation figure for November 2023 was 3.9%
The Oxford Economics consultancy and analysts at Investec and Deutsche Bank have reassessed their outlook for inflation in 2024 and concluded that the consumer prices index (CPI), which dropped to 3.9% in November last year, will fall below 2% within four months.
Their predictions were based on a fall in both energy prices and the cost of oil on international wholesale markets will happen faster than the Bank of England expected the Monetary Policy Committee last met.
In proof that yesterday’s newspaper will be found around your fish and chips tonight, yesterday saw oil prices rise 2% after armed men seized a tanker bound for Turkey off the coast of Oman and ordered it to sail to an Iranian port. spooked the markets raising concerns fuel prices could increase. Yesterday also saw the UK and US government strikes against Houthi rebels, who are backed by Iran.
The BBC reported Treasury models has considered a rise of at least $10 (around £7.83) per barrel in the international price of crude oil and a 25% increase in the price of natural gas. These rises would feed through to prices at the forecourts, which the AA (the motoring version of that acronym) announced this week had fallen to below £1.40 and £1.48 on average for petrol and diesel respectively. By way of comparison, this time last year, petrol and diesel prices averaged £1.49 and £1.72 a litre.
Finally, the Financial Conduct Authority (FCA) has announced a review into whether those sold loans for cars and vans may be due compensation in relation to mis-selling claims. The new investigation comes amid concerns motor finance firms may be unfairly rejecting mis-selling claims from borrowers who believe their contract was more expensive because their dealer stood to earn a hefty commission by charging more.
The cases surround commission arrangements between lenders and car dealers. Some lenders had allowed dealers to adjust interest rates, which would improve the commission they received. As a result, these arrangements created an incentive for brokers to increase how much people were charged for their car loan.
While this practice has been banned since 2021, independent complaints arbitrator, the Financial Ombudsman Service (FOS), says it's heard from more than 10,000 people who fear they were overcharged. The FOS has also recently ruled in favour of two consumers on the issue, prompting the FCA's)probe.
One to watch we think, in what could become the next PPI.