GDP rose in April – business news 11 June 2021.
GDP rose in April, Hospitality, Reopening could be delayed by four weeks, UK economic recovery lags other G20 nations, return to the office, Brewdog, Naked Wines, BA, BT, house prices and more.
James Salmon, Operations Director.
Breaking News – GDP rose 2.3% in April
The UK economy grew 2.3% in April, its best monthly growth since July 2020. Analysts had predicted a 2.2% jump.
Compared with April 2020 monthly GDP is estimated to have risen 27.6%
Driven by non-essential shops reopening, and rising sales of cars and caravans.
The Office for National Statistics also cited more spending in pubs, cafes and restaurants as restrictions eased.
However despite the growth, the UK economy is still 3.7% below its pre-pandemic peak.
Hospitality
UK Hospitality Sales slide more than a quarter below pre-pandemic levels last month despite the reopening of thousands of venues, according to new figures. The latest Coffer CGA business tracker revealed that hospitality operators reported a 26% decline for May against the same month in 2019.
Reopening could be delayed by four weeks
The Times reports that ministers are considering announcing a two-week or four-week delay for the lifting of coronavirus restrictions, currently scheduled for June 21. The paper reports that ministers are concerned that a two-week delay that could have to be extended would not give businesses sufficient certainty to prepare to reopen, while a four-week delay would allow more time for under-40s to be vaccinated and for already-delivered vaccine shots to take effect.
A source told the paper that the final decision would be about “giving people certainty”, and that the “worst-case scenario is that we ease restrictions and then have to implement them again. This has to be a one-way ticket.” However, a cabinet source contended that by “June 21 everyone over 50 who wants a second jab should have had one … you just have to wait another couple of weeks so that they all have full antibody protection. At that point you really have protected the vulnerable.”
Elsewhere, Dr Jenny Harries, the chief executive of the newly-established Health Security Agency, has warned that case numbers “are progressing, and probably as a country not quite in the right direction that we’d all want to”, with some pockets of unvaccinated people at greater risk.
UK economic recovery lags other G20 nations – OECD
Figures from the Organisation for Economic Co-operation and Development (OECD) show the UK’s recovery from the pandemic lagged behind other G20 economies in the first three months of 2021. Comparing Q4 2019 to Q1 2021, the UK and Italy recorded the largest falls in GDP, down 8.7% and 6.4% respectively, while Germany, France, the euro area and the European Union all recorded declines of more than 4%. China, by contrast, was up 7.1% and Turkey 6.8%.
Minister: Return to office will be up to ‘personal discretion’ when restrictions ease
Small business minister Paul Scully has said it will be up to “personal discretion” whether businesses return to the office after the 21st of June. Scully said he could not say if the Government is on track for the 21st of June deadline for easing coronavirus restrictions and that the question of whether to scrap the ‘work from home message’ is still being reviewed by the Cabinet Office.
Goldman bankers ordered to report vaccine status before return to office
Goldman Sachs bankers in the US have been ordered to disclose their Covid vaccine status ahead of a return to the office. While the firm has strongly encouraged staff to get a vaccine, a memo to staff said: “We understand that the choice to get vaccinated is a personal one.” It went on to say that registering vaccination status would help plan for a safer return to the office
Brewdog
Brewdog has promised to listen and learn after 60 ex-staff said in an open letter, that they had “suffered mental illness as a result of working at Brewdog” and that there was a toxic culture at the brewing firm.
Naked Wines
Naked Wines has been one of the few winners during the pandemic, reporting a surge in both customers and sales off the back of a strong performance in the US. With pubs and bars shut for most of the year, the online wine retailer reported a 68% increase in annual sales to £340.2m. It also boasted a 53% rise in customer numbers in the year to March.
BA puts thousands of staff back on furlough
British Airways is to place thousands of staff back on furlough as the company awaits a meaningful return to international travel. The carrier has already cut more than 8,000 jobs in a bid to cut costs amid the worst downturn in aviation history.
John Lewis staff to be given equal right to parenthood leave
The John Lewis Partnership is to offer equal parenthood leave and paid leave for employees who experience the loss of a pregnancy. The employee-owned company is the first UK retailer to introduce the measures.
RICS: House prices will continue to rise
A monthly survey by the Royal Institution of Chartered Surveyors shows house prices in all parts of the country are expected to rise further as buyers rush to meet the deadline for the end to partial stamp duty relief. Demand continues to outstrip supply with RICS stating that the disparity between new buyer enquiries and new instructions was at its widest since November 2013.
Amigo warns of insolvency
Subprime lender Amigo has warned that it was basically insolvent without an appropriate scheme to compensate hundreds of thousands of current and former borrowers who had complained about being sold loans that they could not afford. Analysts suggest the alert is designed to pressure the Financial Conduct Authority to give the company some leeway in devising an alternative scheme to that dismissed by a court last month.
Italian police home in on Booking.com
Booking.com is being probed by Italian tax authorities who believe the platform evaded €153m of VAT. The Genoa police said in a statement they uncovered a massive tax evasion relating to Italian VAT charges … from 2013 to 2019 by a multinational online travel agency based in the Netherlands.
US Inflation
US Inflation continued to surge in May as prices for used cars and energy picked up. Consumer prices jumped 5% in the 12 months to the end of May, up from 4.2% the month before. The new figures from the US Labor Department mark the biggest year-on-year increase since August 2008.
BT
Altice UK SARL, a new company wholly owned by billionaire Altice Europe founder Patrick Drahi, said it has bought a 12% stake in BT Group as the firm represents a “compelling opportunity” to roll out fibre broadband across the country. BT is in a position to “deliver one of the UK government’s most important policies” in expanding broadband networks, and benefits from a regulatory framework which offers it incentives to invest, Altice UK said.
Wm Morrison
Wm Morrison Supermarkets noted that shareholders at the annual general meeting rejected the directors’ remuneration report by 70% to 30%. The revolt was over the board remuneration committee’s decision to apply “selective discretion” in calculating bonuses and other executive rewards. The committee adjusted for direct costs of Covid-19 as sales rose during the pandemic but associated costs meant profits fell.
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