Business news 22 April 2022
James Salmon, Operations Director.
Employers try and head off the Great Resignation. Consumer confidence plunges to near all-time low in April. Bailey warns of risk of persistent inflation from strong UK labour market. WFH to reduce reliance on Russia. UK households investing less as cost of living rises. And more business news.
Employers try and head off the Great Resignation
Employers are offering increasingly lavish benefits to workers, reducing working hours and hiking pay in a bid to halt a raft of resignations as employees seek a better work-life balance.
Gaelle Blake, head of permanent appointments at Hays UK&I, says. “If employers don’t get the basics right such as offering competitive salaries along with flexible and hybrid working – the majority of professionals will look elsewhere.”
A recent report from professional services recruiter Dartmouth notes that graduate bankers are now demanding starting salaries of more than £60,000. This comes as Citigroup looks to set up an office in Malaga offering junior analysts an eight hour day with half the salary of their peers in London and New York.
Citi said the hub had been devised to tackle the inflexibility of banking life, a “key driver in junior attrition”. But an ex-Citi staffer said the Malaga shop “is a bit of a red herring” adding that Citi wasn’t a charity. “It’s a bulge bracket bank and they want results.”
Consumer confidence plunges to near all-time low in April
A survey by market research firm GfK has found British consumer sentiment fell in April to its second-lowest reading since records began nearly 50 years ago. Its consumer confidence index fell to -38 from -31 in March, just above the all-time low seen in July 2008.
“This is dire news for consumer confidence and with little prospect of any economic relief on the horizon we can only forecast further falls in the index for the year ahead,” Joe Staton, client strategy director at GfK, said.
Meanwhile, a separate survey from KPMG showed around a third of consumers had cut back on spending this year. There were market drops in spending on clothes and eating out, the firm said. Linda Ellett of KPMG said: “So far in 2022, the cost-of-living squeeze has caused a third of the consumers we surveyed to cut back spending on the things they want, and offset their bills by dipping into their savings, where possible. The majority of consumers haven’t yet had to take action, as the cost of living rises are yet to fully bite. A key question for the UK economy for the remainder of 2022 is as costs continue to rise, how many of this group will remain able and willing to spend?”
Separately, UK Retail Sales fell by 1.4% in March as the rising cost of living hit consumer spending, according to official data. Online sales were hit particularly hard as people tightened their belts, the Office for National Statistics said. Fuel sales also fell as people cut non-essential travel amid record petrol and diesel prices. However, overall retail sales were still 2.2% above pre-pandemic levels, the ONS said.
Bailey warns of risk of persistent inflation from strong UK labour market
Andrew Bailey, the Governor of the Bank of England, said on Thursday that the central bank was walking a “very fine line” between inflation and recession suggesting he did not think interest rates needed to rise as fast as markets are anticipating. Speaking in Washington, Mr Bailey warned that the series of upward price shocks over the past year, combined with a tight labour market, could fuel persistent inflationary pressures.
WFH to reduce reliance on Russia, EU says
The EU is asking its citizens to help reduce the bloc’s use of Russian energy by driving less, turning down air conditioning and working from home three days a week. A nine-point plan drawn up with the International Energy Agency would reduce outgoings for a typical household by €450 (£375) a year and save 220m barrels of oil annually.
UK households investing less as cost of living rises
Rising inflation and the war in Ukraine have led UK households to hold back on investing, says investment platform AJ Bell, with net inflows during the first quarter falling to £1.6bn compared with £1.8bn in the same three months last year. “Customers invested slightly less via our platform than [last year] as they assess the impact of the rising cost of living,” said CEO Andy Bell. However, he said the results were “encouraging” given the “uncertain market backdrop” noting the group had attracted over 20,000 new customers “despite weakened investor sentiment”.
Five Eyes alert warns of Russian threats to critical infrastructure
Five Eyes intelligence agencies have warned that working from home puts private information at greater risk from Russian hackers. The alert states that companies should: “Limit access to resources over internal networks, especially by restricting RDP [Remote Desktop Protocol] and using virtual desktop infrastructure.”
It added that: “RDP exploitation is one of the top initial infection vectors for ransomware, and risky services, including RDP, can allow unauthorised access to your session using an on-path attacker.” The Five Eyes warning reveals that “evolving intelligence” indicates that the Russian government and its supporters are exploring options for “potential cyber-attacks” against critical national infrastructure.
Eight in 10 small businesses want support to be greener
A study of 500 UK SME owners found despite 91% believing it’s important to be sustainable, 43% struggle to be greener due to a lack of guidance while 37% blame insufficient carbon footprint data and a further 37% say they don’t have time. The research, commissioned by climate action firm Ecologi, also found that, while 83% of small businesses think the Government needs to do more to educate and support businesses in their sustainability efforts, 67% have put a strategy in place for their enterprise.
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