Business news 20 January 2022

James Salmon, Operations Director.

PM confirms end of Plan B measures. Businesses welcome easing of restrictions. Workers embrace four-day working week. Chancellor announces tech support for SMEs. More on yesterday’s inflation announcement.  And more business news.

PM confirms end of Plan B measures

Boris Johnson has announced that England’s Plan B measures are to end on January 27, with mandatory face coverings in public places and Covid passports no longer required.

The Prime Minister, who also announced that advice for people to work from home will be retracted immediately, said the decision to ease restrictions comes as scientists believe the country’s Omicron wave has peaked.

Meanwhile, the Prime Minister also said ministers are planning to end the legal requirement for people who test positive for Covid to self-isolate, replacing it with guidance when current regulations expire on March 24.

Health Secretary Sajid Javid said that the easing of restrictions announced by the PM should not be seen as the “finish line” in the fight against coronavirus because Covid-19 and future variants cannot be eradicated. Instead, he added, “we must learn to live with Covid in the same way we live with flu”.

Businesses welcome easing of restrictions

Business leaders have welcomed the Prime Minister’s announcement that coronavirus-related restrictions in England will be eased, with measures such as work from home guidance already removed and the legal requirement to self-isolate set to be withdrawn by the end of March.

Shevaun Haviland, director general of the British Chambers of Commerce, said: “News of the end of work from home guidance will be welcomed by business, particularly those based in city and town centres which rely on footfall from office workers.” She added that going forward, business will want the Government to outline longer-term contingency plans on how firms will be supported should a new variant deliver a fresh wave of infections that require restrictions.

Matthew Fell, the CBI’s chief policy director, also welcomed the end of Plan B measures but warned that there is “still a job to be done on repairing confidence and demand,” saying that the Omicron variant “has pushed back the recovery for some key sectors” and insisting: “The focus now must be on how we can grow the economy and stimulate investment.”

Meanwhile, Mike Cherry, national chair of the Federation of Small Businesses, said firms that have seen “two years of chopping and changing” will be “hoping that this marks the beginning of a final winding down of trading restrictions”. He urged people to “get behind” small firms and sole traders, saying they “stand ready to spur our economic recovery from this recession as they did the last.”

Commenting on the return to offices, PwC chair Kevin Ellis said: “After the last lockdown restrictions were lifted, it took us two months to get back to 80% capacity. We’re expecting a faster bounce back now – people know the drill.”

Professionals eager for office returns

A poll by recruiter Robert Walters shows that a majority of white-collar workers plan to quit their jobs this year unless office working returns, with two-thirds of professionals quizzed saying they are “highly likely” to leave their role if they do not get more face-to-face time with their manager.

Almost two thirds of professionals added that they would decline a job offer if they were forced to work from home full-time. The survey also found that a quarter do not communicate with their manager at all when working remotely, up from 3% at the start of the pandemic. The findings come as the Prime Minister announced that the Government’s work from home guidance is being scrapped with immediate effect.

Kevin Ellis, chairman of PwC, said: “To say this is welcome is an understatement. The number one question I’m being asked from our people is ‘when can we get back to the office?’. They value time with colleagues, alongside the flexibility to work from home when helpful.” The Telegraph notes that KPMG has told its UK auditors at the end of 2021 that they will be back in the office four days a week in the future, with the paper saying this is “a sign that bosses are growing tired of a shift to flexible working.”

Workers embrace four-day working week
Over half of British workers feel a four-day work week would increase their productivity, according to research commissioned by Airtasker, with 57% saying they would like to move to a shorter working week.

Six in ten respondents believe it is possible to do their job in four days. On the possible benefits of a reduction in days at work, 63% said it would boost mental health, with the same proportion saying it would help ease employee burnout. It was also found that a third of workers would consider supplementing their salary with a second income if they were offered a four-day work week. Tim Fung, co-founder and CEO at Airtasker, said: “The global pandemic gave many an opportunity to reflect, so it’s not surprising that British workers are supportive of a four-day work week.”

Chancellor announces tech support for SMEs
Chancellor Rishi Sunak has announced that small businesses will be given cut-price access to the latest technology, with firms able to get up to £5,000 off software under the Help to Grow: Digital scheme. Mr Sunak, who said SMEs are “the backbone of our economy, creating jobs and prosperity across the UK,” noted that in his Budget he outlined an ambition to help businesses become more innovative, more competitive and more profitable, adding: “I am excited this programme allows them to do that.” Mike Cherry, national chairman at the Federation of Small Businesses (FSB), said: “Small businesses are often keen to embrace new technologies but we know one in four lack confidence in their basic digital skills.” “For those small firms who are eligible, providing the means to make improvements through projects like this will make a real difference,” he added.

Mr Cherry, who cited FSB research showing that just 40% of small business owners have used applications like cloud services and online data storage or back-up, said it is “crucial that practical changes are put in place to help small firms adopt digital technologies, making improvements to their own business and driving growth.” Business Secretary Kwasi Kwarteng said the scheme is “future-proofing our small businesses and putting the UK at the forefront of the worldwide digital revolution.”

Inflation climbs to 30-year high

As mentioned yesterday in our news blog, official figures show that inflation jumped to 5.4% in December, with this the highest rate since the 7.1% recorded in March 1992.

The consumer price index (CPI) measure of inflation was up from 5.1% in November, with soaring food costs and energy price increases helping drive the rate up. The Office for National Statistics (ONS) data shows that the cost of goods rose by 6.9% while services increased by only 3.1%.

The rising cost of living could put pressure on Bank of England to raise interest rates in a bid to bring inflation closer to its 2% target. The Bank, which raised rates from 0.1% to 0.25% last month, expects inflation to hit 6% this spring.

Reflecting on the report, Grant Fitzner, chief economist at the ONS, noted: “The closures in the economy last year have impacted some items but, overall, this effect on the headline rate of inflation is negligible.” Alpesh Paleja, lead economist at the CBI, said: “We’ve not seen the end of rising inflation yet,” warning that households are likely to face “a cost-of-living crunch for much of this year.”

Commenting on the data, Chancellor Rishi Sunak highlighted that the Government is providing support worth about £12bn this financial year and next to help families cope. Shadow Treasury secretary Pat McFadden said that families are “already feeling the crunch” and will be further hit by a “triple whammy” of a rise in the energy price cap, real wages falling and tax rises “coming down the tracks.”

BoE governor: Inflation will stay higher for longer than expected

Andrew Bailey, governor of the Bank of England, has warned that inflation could last longer than first thought. Mr Bailey told MPs on the Treasury Select Committee that financial markets do not expect energy prices to start easing back until H1 2023, later than had previously been forecast. He described this as a “big shift” that could alter the Bank’s position that higher levels of inflation would be temporary. Mr Bailey also ruled out interest rates returning to levels seen before the financial crash, saying: “That’s not to say interest rates won’t rise, it’s to put it into context of how much.”

Unilever and Glaxo

Unilever said it won’t raise its 50 billion-pound offer for GlaxoSmithKline’s consumer products division, ending the prospect of the mega deal after the U.K. Pharma giant rejected its approaches. The decision to walk away comes after shareholders reacted negatively to the prospect of the deal.


Oil prices started to steady after earlier in the week hitting $88


Deliveroo saw sales jump last year as the number of orders customers placed on the platform continued to increase despite lockdown easing. Deliveroo said that gross transaction value  rose 70% around the world, at the top end of what it had told shareholders to expect. In the UK, growth was only slightly stronger, up 71%, despite the company expanding so it can now deliver to 77% of the UK population, compared to 53% last year.

Associated British Foods

Associated British Foods reported a rise in revenue underpinned by growth in its food and retail businesses despite the impact of cost pressures and omicron.For the 16 weeks ended 8 January 2022, revenue rose 16% year-on-year. Its grocery, sugar, agriculture and ingredients revenues in aggregate were 6% ahead of last year at constant currency, while retail sales were up 36% ahead of last year.


Superdry moved back into profit in the first half of the year as lower revenue was offset by an improvement in margins as the fashion retailer increased prices .For the 26-week period from 25 April 2021 to 23 October 2021, pre-tax profit was £4 million compared with a loss of £18.9 million last year, while revenue fell 1.9% year-on-year and 24.9% on a two-year basis.

Average house price hits £271k
Office for National Statistics (ONS) figures show that UK house prices jumped by 10% in the year to November. The report shows that the average price was £271,000 in November, an increase of £25,000 compared to a year earlier. In England, average house prices increased by 9.8% over the year, reaching £288,000, while the average in Scotland hit a record high of £183,000 on the back of a 11.4% spike. Wales saw its average property price rise by 12.1% to £200,000 and in Northern Ireland the typical price was up 10.7% to £159,000. Regionally, South West England led the way on growth as prices rose by 12.9%. At the other end of the scale, the slowest regional growth was the 5.1% annual increase recorded in London. On factors that could dent the outlook for the housing market, PwC economist Jamie Durham says the “ongoing pressure on the cost of living” poses the most significant risk, saying: “This may impact consumer confidence and limit willingness to make major financial decisions.”

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