19 March 2024: UK economy continues to bounce back; PM pledges to create 20,000 apprenticeships; record 6.7m Brits in financial difficulty.
Rishi Sunak is promising to create up to 20,000 more apprenticeships. He would do so via a series of reforms including fully funding training for young people and cutting red tape for small businesses. The government will pay the full cost of apprenticeships for people aged 21 or under at small firms from 1 April. To enable this, it is pledging £60m of new investment for next year, the BBC reported.
The number of sectors reporting output growth rose to the highest level in 10 months in February, a new Lloyds survey showed. Ten of the 14 surveys it monitored reported an expansion in output, two more than in January and the most since April 2023. Software services, including data processing firms and software consulting, saw the fastest rate of expansion at 57.5, closely followed by financial services, at 57.4, City A.M reported.
A record 6.7 million people in Britain are in financial difficulty. This comes as the cost of living crisis pushes more households into debt. A Debt Justice survey found 13% of adults had missed three or more credit or bill payments in the last six months, a figure that rose to 29% among 18- to 24-year-olds and a quarter of 25- to 34-year-olds. There has been a surge in a surge in requests for help with problem debts and in the number of people becoming insolvent, the Guardian reported.
18 March 2024: £1.1bn package for tech skills training; 20,000 in UK off work every month for mental ill health; boiler tax delayed to next year.
A £1.1bn funding package has been announced to help skill-up the country. The money from business, charities and academia will train over 4,000 students across the UK, from Edinburgh to Bristol, in 65 Centres for Doctoral Training. It will be focused on qualifications in future tech, such as artificial intelligence, which relates to areas including medicine, 6G and quantum computing. This comes alongside further investment of around £60m for new quantum skills programmes running until 2034.
At least 20,000 people in the UK are being deemed incapable of any work every month due to mental health problems. The record number of incapacity benefit claims are being submitted for mental health problems each month – making up more than two-thirds of the total. About two million people are receiving universal credit health benefits, up 400,000 in a year, with 69% of them judged unfit for any work. Of all the assessments made in the last two years, 69% involved mental and behavioural disorders, the Guardian reported.
The government is delaying the implementation of fines for boiler manufacturers who do not hit heat pump sales targets. The so-called "boiler tax" is designed to encourage households away from traditional gas boilers and towards greener heating methods. The clean heat market mechanism meant boiler manufacturers would have had to match, or substitute, 4% of their boiler sales with heat pumps, or face a £3,000 fine for each missed installation. But, in anticipation of fines, boiler manufacturers have been pushing up the price of gas boilers by up to £120, the BBC reported.
15 March 2024: UK to ban foreign state ownership of newspapers; FCA accelerates motor finance market probe; £35m boost for British semiconductor scientists and businesses.
Foreign governments will be banned from owning UK newspapers and news magazines. The UK government said its proposed legislation would "deliver additional protections for a free press". This follows criticism of a proposed takeover of the Daily Telegraph and Spectator by a United Arab Emirates-backed investment firm, RedBird IMI. The buyout ban is not expected to apply to broadcasters, the BBC reported.
The Financial Conduct Authority (FCA) is looking to accelerate its probe into the motor finance market. The review examines unfair costs on discretionary car finance commissions and could cost UK banks billions in compensation. FCA chief Nikhil Rathi warned it is “improbable we will find nothing to report”. The acceleration is due to the impact the probe has already had on firms, City A.M reported. Since it was first announced in January, billions have been wiped off the value of some banks as investors fret over the size of a potential compensation bill.
British semiconductor researchers and businesses have been granted enhanced access to funding. This comes as the UK joins the EU’s Chips Joint Undertaking – a €1.3bn (£1.3bn) funding pot set aside from Horizon Europe to support research in semiconductor technologies up to 2027. This will be backed by an initial £5m this year from the Department for Science, Innovation and Technology, delivered by Innovate UK. An additional £30m is due to support UK participation in further research between 2025 and 2027. Tens of thousands of UK companies are now eligible for Horizon Europe grants, which are worth £450,000 to a business on average.
14 March 2024: US inflation rises as Fed debates interest rate cuts; boosted UK retail sales trigger GDP rise in January; carbon capture strategy slammed as costs doubled to £20bn.
A surge in high street and online spending helped Britain’s economy return to growth in January. National output rose 0.2% in the first month of 2024, largely due to a sharp 3.4% jump in retail sales after December’s hefty drop. The Office for National Statistics said unless there were revisions to past growth figures, it would now take monthly GDP falls of 0.3% in February and March for the recession to continue into the first quarter of 2024.
The inflation rate in the US picked up in February, as prices for petrol and housing pushed higher. The annual rate, which measures the pace of price increases, was 3.2% in February, up from 3.1% in January, the BBC reported. Inflation has slowed significantly since the Fed started hiking borrowing costs in 2022, and the bank is expected to start reversing course and cutting interest rates sometime this year. However, calls for the first cut to come as soon as March have been revised, as recent inflation readings show progress stalling.
The UK Government’s energy policy centred around carbon capture, usage and storage (CCUS) is outdated and unrealistic. A Carbon Tracker report said cost estimates for deploying CCUS have more than doubled from the £20bn in taxpayer funding initially scoped in December last year. It says the government’s plan to capture 20-30m tonnes of carbon dioxide per year has slimmed by around one-third, and warns the UK is targeting applications where CCUS could lock consumers into a “high-cost and fossil-based future”, despite the existence of cleaner and cheaper alternatives.
13 March 2024: more than a fifth of UK adults not looking for work; CMA review prompts probe into vet pricing; SFO investigates potential £76m care home fraud.
More than a fifth of working-age adults in the UK are deemed not to be actively looking for work. The UK's economic inactivity rate was 21.8% between November and January, marginally higher than a year earlier. It means 9.2 million people aged between 16 and 64 in the UK are not in work nor looking for a job. The total figure is more than 700,000 higher than before the pandemic, the BBC reported.
The Competition and Markets Authority (CMA) is preparing to launch a formal investigation into the £2bn UK veterinary market. An initial review identified repeated concerns from more than 56,000 customers and vet professionals, including that pet owners may be overpaying for treatments and medicines. The CMA is also concerned about competition, as around 1,500 of the 5,000 vet practices in the UK are owned by just six corporate groups, the Guardian reported.
The Serious Fraud Office has launched a new investigation into an alleged £76m fraud involving luxury care homes. It has already raided two sites in Dorset and Buckinghamshire and made three arrests, City A.M reported. The investigation relates to property developer, the Carlauren Group, which collapsed into administration in November 2019. It sold rooms to more than 600 investors, across 23 properties that it planned to turn into luxury care homes. The rooms were reserved for elderly residents. Only nine properties were ever operational, some of which were run as hotels, not care homes. However, the group purchased vehicles for the care home company, including two Lamborghinis, a Mclaren 570GT, a private jet, and two yachts.
12 March 2024: More ethnic minority chief executives at top UK firms; plans for state bank to fund female-led businesses; London remains UK’s strongest region.
Boardrooms are becoming more ethnically diverse but more still needs to be done, according to a review of the UK's largest 350 businesses. The Parker Review said there were now 12 ethnic minority CEOs in the FTSE 100, up from seven in 2022. But overall only 13% of senior management at the top 100 firms were ethnically diverse. In the 2021 census 18% identified as being from a non-white ethnic group, the BBC reported.
Labour plans to set targets for funding female-led businesses through the state-owned British Business Bank if it wins the election. It will also launch a review of the financial exclusion of women. Two new performance targets for the British Business Bank would be planned, the party claimed – an “overall investment allocation target” towards businesses led by women, as well as those led by ethnic minority founders. The bank would also be required to issue reports on the diversity of applicants it considered for funding. In 2019, only 1% of venture capital investment in the UK went to companies founded by women, the Guardian reported.
Business activity in London remained comfortably in expansionary territory. Natwest’s London purchasing managers’ index fell to 56.5 in February from 58.3 the month before. The 50 mark separates growth from contraction. Despite the decrease, the figures still pointed to a “robust expansion in activity” with London remaining the strongest-performing region in the UK. New orders increased for the sixth consecutive month, although at a slower pace than January. This rise helped business confidence hit its highest level in two years with 63% of firms forecasting output would grow in the next year, City A.M reported.
11 March 2024: IFS warns against silence over tax cuts; Government failing targets to fix railway system; US jobless rate hits highest in two years.
The Institute for Fiscal Studies has accused Conservatives and Labour of a "conspiracy of silence". It warned the tax cuts announced in the Budget would not make up for the impact of tax increases and rising prices, adding that households would be worse off at the election than they were at the start of this parliament. Debt as a proportion of the size of the economy was at its highest level in 70 years and "is showing no signs of falling", the BBC reported.
Government plans to overhaul the country’s ailing railway system are significantly delayed while promised savings have yet to be achieved. A report by The National Audit Office (NAO) found the government had failed to meet any of the 12 “high level benefit” targets it set for rail in 2021. It also revealed that the government had not delivered the £2.6bn savings it promised by 2024/2. The NAO instead forecast that only three-quarters of the target would be achieved, the Guardian reported.
America's unemployment rate crept up to the highest rate in two years last month, despite more jobs being created than expected. The jobless rate rose to 3.9%, up from 3.7% in January, even as employers added 275,000 jobs, the Labor Department said. Its monthly report is being closely watched for clues into how the world's largest economy is absorbing the jump in borrowing costs since 2022, the BBC reported.
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