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What's happening in the world of accountancy today

News in brief

Author: ICAEW Insights

Published: 25 Jan 2022

26 January 2022: Inflation surge sends UK interest payments higher; nearly 90% of Londoners cannot afford the average rent; Unilever to cut 1,500 jobs as investors increase pressure.

Interest payments on government debt hit a record high for December as surging inflation increased the cost of borrowing. The Office for National Statistics (ONS) said it reached £8.1bn - up from £2.7bn a year earlier. The increase came as soaring energy costs sent inflation to a 30-year high, while official borrowing last month was a lower-than-forecast £16.8bn. For the financial year to date, borrowing has now reached £146.8bn, the second-highest figure for the period since records began in 1993, the BBC reported. 

Nearly nine out of 10 Londoners can no longer afford the average cost of rent, insurance giant Admiral warns. The demand for rooms to rent is much higher than the available supply (157 renters for 100 rooms), leading to increases that most cannot keep up with. City A.M reported that 86.5% of budgets are too low to afford the average rent (£1,058pm), while 43.4% of London rentals are beyond renters’ average budget (£860pm). 

Unilever has announced plans to cut 1,500 management jobs globally. The move comes amid mounting pressure from shareholders to revive the Marmite maker’s sales growth and simplify the business. Senior management roles will be cut by 15% and junior management posts by 5%, including in the UK. The FTSE 100 company employs about 150,000 people worldwide, including 6,000 in the UK and Ireland, the Guardian reported. 

25 January 2022: John Lewis will not cut unvaccinated staff’s sick pay; UK government to recruit 4,000 new magistrates in biggest drive; COP26 president urges countries to deliver on promises.

Unvaccinated John Lewis staff are entitled to full sick pay for COVID-related absences, the retailer says. “We just don't believe it's right to create a link between a partner's vaccination status and the pay they receive,” operations director Andrew Murphy said. The move comes after Ocado, Next and Ikea revealed they will only pay the legal minimum to unvaccinated staff if they have to isolate due to COVID-19 exposure, the BBC reported

The UK government will recruit 4,000 new magistrates in its biggest recruitment drive in the courts’ 650-year history. The £1m campaign aims to attract new magistrates from a variety of backgrounds, in a bid to make courts more representative and cut the backlog built up during COVID-19, City A.M reported. The drive could see the total number of magistrates increase by a third in coming years and anyone older than 18 is able to apply. As unpaid volunteers, magistrates are only allowed to claim for expenses and do not receive a salary.

COP26 President Alok Sharma is urging countries to work together to deliver on the promises made in Glasgow. In a speech in London, Sharma set out his agenda to turn ambition into action for the rest of the UK’s Presidency this year. Recapping the UK’s pledge to act on the Glasgow Climate Pact, he said “at the moment they are just words on a page.” The presidency passes to Egypt in November. “We will have mitigated no risks. Seized no opportunities… so my absolute focus for the UK Presidency year is delivery”.

24 January 2022: PwC, KPMG and more lead office return; Retailers experience worst Christmas sales figures for 25 years; Electric car battery plant gets £100m surge in funding

Major accounting firms, banks and law firms are leading the charge on returning to the office, says City A.M. Following the dismissal of work from home guidance from the government, PwC, KPMG, Aviva, Goldmanm, Citi and many more have recalled workers back to their London offices. The number of London commuters jumped up 5% between Wednesday and Thursday. 

Sales slumped by 3.7% as retailers experienced the worst Christamas on record, reported Sky News. This was the worst festive season on record dating back to 1996. The Plan B rules which advised more people to work from home contributed to the slump, as it meant a fall in demand for petrol and diesel with less commuting. It appeared that Christmas shoppers chose to make purchases earlier in the year as the 3.7% month-on-month dip in sales, reported by the Office for National Statistics (ONS), followed after a strong November.

The government has signed off on millions in funding for the electric car battery firm Britishvolt, according to the BBC. Through its Automotive Transformation Fund, the government has committed about £100m in funding. This is alongside approximately £1.7bn in private investment from Tritax and Abrdn. The firm is planning on mass-producing batteries at their gigafactory being built in Northumberland, which will create 3,000 jobs.