Business news 18 April 2023
James Salmon, Operations Director.
Unemployment unexpectedly up. PM hits out against anti-maths mindset. Workers should learn not to fear AI. Fraud, Royal Mail, Cash, inflation and more business news.
Unemployment unexpectedly up
The UK Unemployment Rate unexpectedly ticked up in the three months to February, official figures showed. The UK jobless rate was 3.8% in the three months to February. This was higher than market consensus, which had expected the reading to remain unchanged from 3.7% in the three months to January.
“The increase in unemployment was driven by people unemployed for up to six months,” ONS explained. Meanwhile, average wage growth continued at the same pace as the preceding three-month period, coming in higher than market expectations but still well short of UK consumer price inflation.
ONS also noted there were 348,000 working days lost to strikes during February, rising from 210,000 the month before. Three-fifths of the strikes occurred in the education sector, ONS said.
PM hits out against anti-maths mindset
The Prime minister, Rishi Sunak hit out at what he called an anti-math mindset in Britain that is holding back growth, and said numeracy should be prized as highly as ability to read. He pledged to boost math education in UK secondary schools to boost the economy. A new advisory group will examine math content in schools and assess whether a new qualification is needed for 16 to 18-year-olds. The prime minister has previously said students should study some form of math until the age of 18.
The UK is one of the least numerate countries in the OECD, with more than 8 million adults having skills below those expected of a 9-year-old and around a third of young people failing to pass GCSE maths exams, normally taken at age 16.
Workers should learn not to fear AI
The BBC’s Josie Cox reports on the growing anxiety among workers about how AI could replace their jobs. But experts say, as in the past, people are better off embracing the change and developing new skills to work alongside new technologies. PwC’s Scott Likens says: “In order to feel less anxious about the rapid adoption of AI, employees must lean into the technology.” Stefanie Coleman, a principal in consultancy EY’s people advisory services business, adds: “Recognising the unique value of humans in the workforce, when compared to machines, is an important step in navigating the fears that surround this topic.”
Meanwhile, Google chief Sundar Pichai told CBS’s 60 minutes programme that AI can be “very harmful” if deployed wrongly and that his worries about the technology kept him up at night. Pichai admitted that society did not appear to be ready for rapid advances in AI adding that “knowledge workers” such as writers, accountants, architects and software engineers would be affected by the technology.
Contactless high street will drive decline of cash
The deputy governor of the Bank of England has warned that cash will become harder to spend as shoppers buy more goods online and high street retailers increasingly reject bank notes in favour of contactless payments. Sir Jon Cunliffe said that as cash continues to decline, new, non-bank financial institutions are likely to start issuing private money such as stablecoins. The Bank of England could use a digital pound to back these cryptocurrencies, in lieu of cash. Sir Jon told an audience at the Innovate Finance Global Summit in London’s Guildhall that the Bank may need to introduce limits on how stablecoins can be adopted at first to protect financial stability. Also speaking at the event, City minister Andrew Griffith announced a new push for Open Banking and called on finance firms to use AI to combat fraud and create chatbots to enhance customer service. In a piece for the FT, Griffith says the Government’s planned financial services reforms “will help drive growth in the economy, while maintaining crucial safeguards for financial stability.”
BoE “hopelessly” wrong on inflation
The Bank of England is wrong to identify the conflict in Ukraine as the driver for high inflation and this misreading is pushing the UK into recession as a result, says Tim Congdon, an adviser to Margaret Thatcher when she was Prime Minister and later the Treasury. “They’ve got it wrong — hopelessly so,” Congdon said. He told Bloomberg that excessive money supply is the cause of medium- and long-term inflation, and that a plunge in money supply and bank lending now will trigger a sharp downturn in the economy. “The evidence overwhelming, and it’s puzzling in a way that the central bank has continued to resist this,” Congdon said. “I find I’ve been commenting on the Bank of England best part of 50 years now. I have to tell you, the current lot are some of the worst I’ve ever commented on.”
Royal Mail
Royal Mail and union leaders have come to an agreement after a bitter dispute over pay, jobs and conditions, according to a joint statement on Saturday. Royal Mail said it had reached a negotiators’ agreement in principle with the CWU, with more details expected to be confirmed this week. The statement said: “After almost a year of talks, Royal Mail and the Communication Workers’ Union are pleased to announce they have reached a negotiators’ agreement in principle.
Transaction Fraud rising
The latest NICE Actimize Fraud Insights Report reveals that attempted banking fraud transactions have jumped by 92% and the values of attempted fraud transactions have soared by 146%. Now that’s inflation!
Man Utd
In New York, Manchester United shares fell sharply as news reports disclosed that the Glazers will stay as majority owners and obtain finance for the much needed refurbishment of the Stadium and the training grounds. It has been suggested from numerous sources that a private equity buyer will pick up a stake possibly from some of the Glazer siblings. However the acquisition of the entire company is now seen as unlikely, instead the Glazers themselves will hold on the business, predicting they to increase its value to £10 billion.
Larger companies see confidence rise
Confidence among finance chiefs at the UK’s biggest companies has seen its sharpest rise since 2020. The Deloitte survey of chief financial officers showed sentiment rebounded as their concerns about energy prices and Brexit problems eased. There were 25% more CFOs feeling better about the future than worse, compared to 17% more feeling the opposite three months ago. Ian Stewart, chief economist at Deloitte, said: “Since the beginning of the year, energy prices have fallen, inflation looks to have peaked, relations with the EU have improved since the Windsor framework and there has been a period of comparative political calm after the turmoil of last year.” However, Stewart concedes that smaller firms are feeling less confident than their larger peers, adding: “In many ways it mirrors what we are seeing at household level. The difference between the haves and the have nots is widening.”
China
China first-quarter gross domestic product rose sharply while global peers face slowing growth as central banks hike rates to tame inflation. GDP grew by 4.5% in the first quarter, China’s National Bureau of Statistics said Tuesday. That marks the highest growth since the first quarter of last year — when China’s economy grew by 4.8% — and better than the 4% forecast in a Reuters poll. Quarter-on-quarter, the economy grew 2.2%.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
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