Business news 8 November 2022

James Salmon, Operations Director.

British families suffer biggest hit to incomes in G7. Millions have no savings as prices soar. October retail figures. Bigger tax hikes could mean lower interest rates.  And more business news.

British families suffer biggest hit to incomes in G7

Figures from the Organisation for Economic Co-operation and Development (OECD) show real UK household income dropped by 3.5% between the end of 2019 and the second quarter of this year. This means Britain is suffering the worst cost of living crunch of any G7 nation.

France experienced a drop of 0.3% over the same period while real incomes rose in countries including Germany and the US. However they are also starting to suffer under the weight of rising energy prices and other costs. Overall, OECD nations have seen real incomes per capita drop for three consecutive quarters so far – the longest squeeze suffered since 2007.

Millions have no savings as prices soar

A quarter of adults in the UK have less than £100 in savings, while one in six people have no savings at all, according to a survey by Money and Pensions Service (MAPS). It means that millions of people in the UK are facing soaring bills with nothing to lean on.

October Retail figures

UK Retail Sales slowed last month in October as prepared for a budget xmas with consumers opting for pre-loved gifts and holding to  strict budgets this Christmas to cope with massive energy bills and inflation. British Retail Consortium figures showed like-for-like retail sales during October grew by 1.2% year-on-year, driven by inflationary pressures and masking falling sales volumes as shoppers bought fewer items per visit.

Paul Martin, the UK head of retail at KPMG, explains: “This increase is being driven by inflationary pressures and does not tell the true picture of sales volumes dropping as consumers purchase fewer products per shop.

Separate figures from Barclaycard showed card spending was up 3.5% on last October – higher than September’s 1.8% but well below the 8.8% rise in consumer inflation.

Bigger tax hikes could mean lower interest rates

Bank of England chief economist Huw Pill said on Monday that a bigger tax raid by Jeremy Hunt in next week’s Autumn Statement could dampen down demand and lower the peak for interest rates. “We would set interest rates a little bit lower, we speed the economy up, we boost spending through monetary policy in order to offset that effect and we still ensure that inflation is back at 2%,” he said, discussing a scenario where the Chancellor puts up taxes by more than the Bank expects.

‘Money saving expert’ more trusted than banks

A survey by Deloitte reveals that 47% of people would rather turn to Martin Lewis’s MoneySavingExpert website for financial advice than call up their own bank and ask for help. The same proportion said they would seek advice from friends and relatives, but only 41% felt comfortable seeking help from their main current bank or building society. Just under a third said they would consider the opinion of social media influencers. Women are less likely to look to banks for advice than men by a considerable margin.


Primark has pledged not to raise prices anymore, than previously announced despite rising costs.

Associated British Foods posted an annual earnings surge and said like-for-like sales at its Primark high street retail chain in the UK are now in-line with pre-virus levels. AB Foods said revenue for the financial year that ended September 17 climbed 22% to £17.00 billion from £13.88 billion. Pretax profit jumped 48% to GBP1.08 billion from £725 million.

The company said in a statement: “Given a context of a likely reduction in consumer disposable income we have decided this year not to implement further price increases on the autumn/winter and spring/summer ranges beyond those already implemented and planned. We believe this decision is in the best interests of Primark.”

The group added that cold weather items like thermal leggings and “snuddies” had been selling “incredibly well” as people have delayed turning their central heating on. But rising prices, interest rates and ” general economic uncertainty” were making consumers cut back more broadly, it said in its full-year results.


Housebuilder Persimmon back its annual volume target but did note the housing market is seeing some sign of distress in the face of rising UK interest rates. Rising rates are “clearly impacting mortgage lending and customer behaviour”, hitting Persimmon’s weekly sales rates.

Oil companies warn Chancellor against increasing windfall taxes

The UK has been described by oil and gas producers as one of the most “fiscally unstable” regimes in which to do business as the industry warns the Chancellor against increasing windfall taxes on fossil fuel companies. In a letter to Jeremy Hunt, Brindex, the North Sea body that represents 20 British oil and gas producers, said increasing levies on producers would undermine its ability to boost the UK’s energy security with more projects and exploration. It said: “Windfall taxes create fiscal shock and uncertainty which, for investors, make the basin riskier, harder to predict and which negatively impact on decisions to invest in the UK. Windfall taxes may deliver increased short-term revenues but they negatively impact longer-term energy security and the appetite and financial ability to deliver on the energy transition.”

Welfare and pensions set to rise with inflation
Rishi Sunak is set to increase pensions and benefits in line with inflation in an effort to ensure the budget is seen as “fair and compassionate”. The Times reports that assumptions sent to the Office for Budget Responsibility over the weekend included the two pledges, which would cost a combined £11bn in 2023-24.

BCC boss: No evidence of Brexit dividend yet

Shevaun Haviland, director-general of the British Chambers of Commerce, said on Monday that British firms are yet to see any upside from Brexit. The Prime Minister Rishi Sunak and the Chancellor Jeremy Hunt should cut post-Brexit paperwork for exporters and simplify tax rules via new agreements with the EU, she said, explaining that these were cost-free ways to help struggling British companies. Regarding the prospect of Britain diverging from EU regulations post-Brexit, Haviland said UK firms had spent a lot of time and resource aligning with EU. “Generally, deregulation doesn’t excite people,” she said.

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