The pound has dropped below $1.30 for the first time since November 2020 as Putin’s invasion of Ukraine clouds the outlook for central banks.
Sterling fell as much as 0.6pc to $1.2999, extending a two-day loss against the US currency.
The Bank of England began lifting interest rates in December, but has recently softened its guidance for further moves amid heightened uncertainty caused by the war.
By contrast, the Federal Reserve, which has moved more slowly than its UK counterpart, has signalled a rapid series of interest rate rises in a bid to curb surging prices.
The business blog is closing for the weekend, but we will see you on Monday! Before you go, have a look at today’s stories from our reporters:
Ethical investing losing steam as Ukraine crisis sparks energy security concerns
A boom in green investing has started to run out of steam as the war in Ukraine sparks a wave of money being plunged into defence and oil and gas stocks. Tom Rees has more:
The amount of money being ploughed into ESG (ethical, social and governance) investment funds halved to $75bn (£58bn) in the first three months of 2022, according to the Institute of International Finance.
Just $15bn was pumped into ethical stock and bond funds in March, the weakest total since March 2020 when Covid lockdowns first struck, while sustainable debt issuance has fallen 30pc to $285bn in the first quarter compared to the previous three months.
There has been a stampede into ESG-friendly investments in recent years with the amount of money in sustainable funds rising by more than 50pc to $2.7 trillion in 2021, Morningstar data suggests.
However, the war has sparked debate over the importance of ethical investing as countries scramble to arm Ukraine and ramp up fossil fuel production to wean themselves off Russian energy supplies.
FTSE 100 touches two-month high
The FTSE 100 has closed at a eight-week high, lifted by commodity and banking stocks at the end of a volatile week that saw concerns about higher US interest rates and the Ukraine conflict rattle investors.
The blue-chip index added 1.6pc to 7,669, its highest level since mid-February, with oil majors BP, Shell and miner Anglo American leading the gains.
“The make-up of the FTSE 100 is the biggest reason why the market is outperforming,” said Maarten Geerdink, head of European equities at NN Investment Partners.
“We’ve a very different landscape for commodities at this time … and the natural reaction from equity investors is if you want to hedge yourself against inflation, you want to buy into commodity exposure.”
1MDB fraud scheme alleged mastermind Jho Low still at large
The alleged mastermind of the 1MDB fraud scheme, Jho Low, is still at large.
The US says he bribed government officials to win the business for Goldman and a $1.4bn (£1bn) jackpot for himself. Proceeds from the scam were used on items including a $200m super-yacht and to finance “The Wolf of Wall Street.”
Roger Ng’s conviction is a hard-won victory for the US in the aftermath of fraud surrounding the sovereign wealth fund, set up to help Malaysia’s people and economy but instead was used to line the pockets of government officials, bankers and intermediaries with an estimated $2.7bn.
The case was a black mark on Goldman. In 2020, a Goldman unit admitted it had conspired to violate US anti-bribery laws, the first guilty plea ever for the firm, founded in 1869.
Former Goldman banker Ng found guilty in 1MDB fraud scheme
Roger Ng, the only Goldman Sachs banker to go to trial over the global 1MDB scandal, was found guilty for his role in the epic looting of the Malaysian fund.
Ng, 49, was convicted of all three counts in the case, including conspiring to violate US anti-bribery laws and conspiring to launder money. He faces as many as 30 years in prison.
The verdict came after an eight-week federal trial in New York that featured startling confessions from Tim Leissner, Ng’s boss at the time.
Leissner, who pleaded guilty, was the key witness against the former Goldman Sachs banker. On the stand, he admitted to telling a raft of personal and professional lies in the multibillion-dollar plunder of 1Malaysia Development, for which Goldman arranged a trio of bond deals.
British supermarkets struggle with oil supplies
Supermarkets in Britain have been struggling with oil supplies due to the war in Ukraine.
Ukraine and Russia account for 80pc of global exports of sunflower oil, widely used by households to cook and by manufacturers in products such as chips.
Deliveroo suffers setback in dark kitchen expansion plan
Deliveroo has suffered a setback to its dark kitchen expansion plan as councillors rejected permission for a North London site after a flood of complaints.
The rapid delivery specialist applied for permanent commercial kitchens and delivery centre on Finchley Road, Swiss Cottage.
Council planning officers recommended the councillors sign off on permanent permission before a meeting yesterday evening.
However, residents raised concerns over riders coming out of the site and submitted objections documenting about 1,800 alleged breaches of conditions over a nine-month period, according to the Hampstead & Highgate Express.
Deliveroo said it will appeal the decision and said there are no implications for other sites as a result of the decision.
Decision on Chinese takeover of Newport Wafer Fab delayed
Kwasi Kwarteng has delayed a decision on the Chinese takeover of microchip plant Newport Wafer Fab until ministers outline their wider plans for Britain’s semiconductor industry. James Titcomb writes:
Officials at the Department for Digital, Culture, Media and Sport are drawing up a semiconductor strategy, which is expected to be published next month.
The strategy is expected to contain plans to improve the supply of semiconductors to key UK industries as well as measures to support domestic production.
World’s oldest building society posts record results
The world’s oldest remaining building society has posted record results for the last financial year.
Scottish Building Society, established in 1848, has seen its balance sheet grow by nearly 40pc in the last two years, leading to profits of £2.4m and mortgage assets worth £454m for the financial year ending in January.
Chief executive Paul Denton praised staff for their “immense work” during the pandemic as one of the reasons the mutual has performed strongly.
“It has been without doubt two enormously difficult years from an economic and operational perspective, but our staff have delivered outstanding results despite these major challenges,” he said.
That’s all from me for the week – thanks for following! Giulia Bottaro will take things from here.
Lord Drayson ousted from Sensyne Health as investors secure rescue deal
The Labour peer and former science minister Lord Drayson has been ousted from the healthcare company he founded as it scrambles to secure a lifeline that will all but wipe out its shareholders.
Hannah Boland has more:
Lord Drayson, who was science and business minister under Gordon Brown from 2008 to 2010, will quit his role as chief executive with immediate effect.
His departure was announced alongside a major refinancing which would hand control to three of Sensyne Health shareholders and result in the company being delisted.
Activist Gatemore, Lansdowne and Sand Grove Capital are understood to be in line to end up with between 90pc to 95pc of the business under the mooted rescue deal.
Sensyne has been battling a dwindling cash pile and has been racing to find a buyer. The company was set up to help use NHS data better, striking deals with various NHS Trusts for anonymous data to help pharmaceutical companies discover new medicines.
However, it has struggled to turn a profit and has been fast running out of cash.
Travel chaos continues
The start of the Easter school holidays continues to be mired by travel chaos today, with more queues building up on motorways and at ports and airports.
Thousands of lorries are queueing on the M20 in Kent due to delays in crossing the Channel. Operation Brock has been in place to manage traffic since P&O ferry services were suspended at the end of last month.
Meanwhile, passengers at Manchester, Heathrow and Gatwick airports are facing long waiting times to check in amid staff shortages, while BA and easyJet cancelled more than 100 flights again today.
Wall Street drifts after tough week
US stocks drifted as markets opened, with stocks deepening losses amid concerns about aggressive tightening of monetary policy by the Federal Reserve.
Wall Street’s main indices have had a tough week after the Fed outlined plans to pare its balance sheet by more than $1 trillion a year alongside interest rate rises.
The benchmark S&P 500 opened 0.2pc lower, while the Dow Jones was little changed. The tech-heavy Nasdaq fell 0.5pc.
Proxy adviser hits out at Goldman Sachs boss’ special bonus
A high-profile shareholder advisory firm has raised the alarm over a special bonus granted to Goldman Sachs’ boss and a top deputy.
Glass Lewis is recommending investors vote against a pay package that puts David Solomon and John Waldron, the bank’s president, in line for around $50m (£38.4m) in one-off bonuses.
The group questioned whether the reason for the payouts – guaranteeing leadership continuity and talent retention – warranted such large payouts.
In a note to clients seen by Bloomberg, Glass Lewis wrote: “We are critical of the awards given their excessive sizes. Such awards have the potential to undermine the integrity of a company’s regular incentive plans, the link between pay and performance or both.”
Banks across Wall Street are splashing out to find and retain top talent amid huge pandemic profits.
But rising pay hasn’t gone down well with shareholders. Goldman’s shares are the worst performing among major US banks, losing 18pc in value this year.
Russia slashes interest rates in surprise move
Russia’s central bank unexpectedly announced the biggest cut to its key interest rate in nearly two decades, suggesting it’s shifting focus to rebuilding the economy.
The central bank lowered rates to 17pc from 20pc at an unscheduled meeting today and said further cuts could be made in the mounts ahead.
The rouble briefly halted its rebound against the dollar following the move.
Tough western sanctions have fuelled inflation in Russia and put the country on track for a two-year recession, while pushing the government to the edge of a debt default.
But continued revenue from energy combined with a raft of capital controls have helped to prop up the rouble.
The central bank said:
External conditions for the Russian economy are still challenging, considerable constraining economic activity.
Financial stability risks are still present, but have ceased to increase for the time being, including owing to the adopted capital control measures.
Traders panic over prospect of Marine Le Pen victory
Market fears of Marine Le Pen pulling off a shock upset in the French presidential election are mounting after a key risk gauge jumped to its highest level since Covid struck.
Tom Rees reports:
Tightening polls have caused investors to ditch French government debt, widening the gap between yields on its bonds and German bunds ahead of Sunday’s vote.
The gap between German and French bond yields is regarded by investors as a key measure of political risk in Paris and has widened substantially in the past week.
Fears are mounting of the far right Le Pen achieving a surprise victory after one poll put her in front of Emmanuel Macron in the second round.
France’s 10-year bond yield has jumped 23 basis points this year to hit a seven-year high of 1.25pc while Germany’s 10-year yield has climbed 14 basis points to 0.68pc. It is the widest this spread has been since March 2020.
Economists warned of big moves in the euro and French borrowing costs if Ms Le Pen is elected president.
Zelensky shares graphic video slamming Russian energy buyers
Ukrainian President Volodymyr Zelensky has shared a damning video on Twitter that accuses buyers of Russian energy of financing war crimes against civilians.
The graphic video cuts between drivers filling up their cars in the sunshine and images of bloodshed in Ukraine.
A caption states: “You don’t pay in euros or roubles for Russian gas and oil. You pay in the lives of the same Europeans as you.”
In the tweet, Mr Zelensky wrote: “By buying Russian oil and gas, you are financing the killings of Ukrainians. Act more decisively. It is enough to feed the Russian military machine.”
Germany warns it will step in if gas storage isn’t filled
Germany will step in if gas storage operators fail to fill facilities sufficiently to comply with new requirements, as the government takes a tougher line to secure supplies for next winter.
Under new rules that come into effect in May, operators must fill storage facilities to 90pc capacity by the beginning of November.
Energy Minister Robert Habeck said that with gas storage 26pc full now, the current daily additions of 0.3 to 0.5 percentage points mean it could take until late October to reach capacity.
He warned that the government would take action if sufficient progress isn’t made over the summer.
Mr Habeck said: “I would never have thought that an energy minister would have to say such things in the Bundesrat, but that’s the hard, brutal mathematics of energy policy.”
The new legislation is part of Berlin’s reaction to concerns about energy security following Russia’s invasion of Ukraine.
Chancellor Olaf Scholz’s government has said it wants to cut the share of Russian gas to around 10pc of total imports of the fuel by mid-2024, from around 40pc now.
Why the affordable family car is an endangered species
Car makers’ shift to more profitable models amid higher costs, a crippling shortage of parts and the push for electric vehicles is threatening the death of the budget family car, writes Howard Mustoe.
Volkswagen, the German pioneer of the people’s car, is slashing its combustion engine range by the end of the decade to focus on fewer, more high-end vehicles. It abandons a long-held ambition to make the most cars in the world and a departure from its roots of offering ordinary families an affordable option.
The move makes financial sense in the scramble to increase profits, as rivals such as Mercedes, BMW and Volvo prioritise pricier models.
Russian billionaires flee UK fintechs
Two British fintechs are exploring sale options after sanctions on their Russian billionaire backers left them struggling to find funding.
FIBR Tech, and online lender to businesses, and Anna Money, which offers business accounts and administrative services, began searching for buyers in recent weeks.
It comes after indirect shareholders including Mikhail Fridman and Petr Aven were hit by sanctions, Bloomberg reports.
The sale process comes amid efforts to find new sources of capital for the tycoons. It mirrors other deals taking place throughout the financial world as a number of Russians looks to sell assets.
US futures steady as stocks recover
Markets appear to be ending the week on a positive note, with US futures holding steady after inflation fears rattled investors.
Futures tracking the S&P 500 and Dow Jones rose 0.1pc and 0.2pc respectively, while the Nasdaq was little changed.
It follows gains for stocks across Europe, with the FTSE 100 and Stoxx 600 indices both up more than 1pc.
Manchester Airport admits it can’t hire staff quickly enough
Manchester Airport bosses have admitted they have not been able to hire staff quickly enough after a week of disruption that has left passengers forced to queue for hours and others facing last-minute cancellations.
Hannah Boland has the story:
Charlie Cornish, chief executive of Manchester Airports Group, apologised to customers in an open letter, saying he understood “passengers’ frustrations with the queues and congestion they’ve experienced in recent weeks”.
Earlier this week, the airport urged passengers to arrive three hours early for flights, after complaints that the queues meant some were missing their flights.
Mr Cornish said: “The simple fact is that we don’t currently have the number of staff we need to provide the level of service that our passengers deserve. Despite our efforts since last autumn, the tight labour market around the airport has meant we have just not been able to hire people quickly enough to establish a full-strength team.”
This had resulted in too few security lanes operating, a problem that was likely to persist over the next few months, with waiting times rising to between 60 and 90 minutes from less than 40 minutes.
Mr Cornish said the airport was struggling to recruit at pace given the “rightly demanding”, more difficult vetting process.
Europe’s power crunch set to continue into 2023
The energy crunch rattling European markets is set to extend into at least next year, with benchmark German power contracts for 2023 trading at the highest level ever.
A more downbeat outlook for energy supplies to Europe following sanctions targeting Russian imports mean German power has surged 63pc this year to nearly 400 per megawatt-hour.
That would be more than twice as high as last year’s average price in the daily market.
With a new ban on Russian coal, and potential future sanctions against oil and gas imports, the EU has been forced to find new sources of energy.
The UK this week unveiled its new energy security strategy, aimed at speeding up the shift to renewable sources and reducing reliance on Russia.
But Business Secretary Kwasi Kwarteng warned it could be five years before household bills start to come down.
Ukraine ambassador blasts Germany over ‘shameful’ reliance on Russia
Meanwhile, Ukraine’s ambassador to Berlin has accused the German government of half-hearted support for Kyiv and said his country had become a victim of Germany’s “shameful” energy dependence on Russia.
Andrij Melnyk said: “It’s not just Russian gas, it’s oil, coal, metals, diamonds and other raw materials. We have become the biggest victim of this perverted relationship. Ukrainians are paying for this failed German policy with their lives.”
The comments mark the growing frustration with Chancellor Olaf Scholz’s government, which has dragged its heels over energy sanctions.
Mr Melnyk told Reuters: “This kind of hypocrisy with Russia dates back to Nord Stream 1 [gas pipeline]. Germany’s huge dependence on Russia, at a time of the worst aggression since the Second World War, is shameful.”
Germany has put the Nord Stream 2 pipeline on hold, but has been urged to shut down the original Nord Stream 1 as well.
The EU this week agreed to ban imports of Russian coal as part of a wider range of sanctions, but the measure was watered down by Germany.
German regulator to prop up Gazprom operations
Germany’s energy regulator has said it will ensure ongoing operations at Gazprom Germania and urged market operators not to cut ties.
The Russian state energy giant abandoned the division earlier this week, prompting the German state to step in and take control.
It’s the parent company of UK-based Gazprom Marketing & Trading and other subsidiaries across Europe, so its activities are key to ensuring supplies for businesses and households across the continent.
In a letter to operators, seen by Reuters, the regulator said: “The Bundesnetzagentur will ensure that all payments of Gazprom Germania GmbH may only be made to maintain business operations and will thus prevent an uncontrolled outflow of funds.
“It will also ensure that the company can, and will, meet its payment obligations to continue its business operations.”
Vodafone among suitors in TalkTalk takeover rush
The owners of telecoms firm TalkTalk are said to have received takeover approaches from a number of suitors, including Vodafone.
The company, which was taken private by asset manager Toscafund in a £1.1bn deal in 2020, has hired Lazard to review potential options, according to reports from the Financial Times and Sky News.
Vodafone is said to have looked at a potential deal multiple times in the past, but progress has been impeded by questions over the value of the business.
Tories accused of betraying the countryside in net zero revolution
Nestled on the western edge of Devon, the pretty but obscure village of Pyworthy has made a name for itself.
For years, its most notable feature has been a 13th-century church. Today, however, it is on the frontlines of Britain’s energy revolution in a battle over the construction of several gigantic solar farms.
My colleague Matt Oliver delves into the row overshadowing the UK’s energy shift.
EU adopts new sanctions including coal ban
The EU has formally adopted its fifth package of sanctions against Russia, including a ban on coal imports.
The measures also prevent many Russian vessels and trucks from accessing the EU, further crippling trade, and will ban all transactions with four Russian banks, including VTB.
It came as EU leaders headed to Kyiv in a show of support for President Volodymyr Zelensky.
Josep Borrell, the bloc’s foreign affairs chief, said the visit was a sign that “Ukraine is in control of its territory” and the government was still in charge.
UK sanctions Putin’s daughters
Britain has added Vladimir Putin’s daughters to its list of sanctioned individuals, following the same move by the US earlier this week.
Katerina Tikhonova and Maria Vorontsova will now be subject to an asset freeze, alongside the daughter of Russian Foreign Minister Sergei Lavrov, Yekaterina Vinokurova.
The UK warned that Russia was headed for the deepest recession since the collapse of the Soviet Union, estimating that over £275bn of Russian money had been frozen by international sanctions in recent weeks.
The Government said: “The lavish lifestyles of the Kremlin’s inner circle will be further targeted from today as the UK sanctions the adult daughters of President Vladimir Putin and his Foreign Minister Sergey Lavrov.”
Russian inflation will keep rising, warns central bank
Russia’s central bank has warned that inflation in the country will continue rising “due to the base effect”.
The central bank decided to cut its key rate by 300 basis points to 17pc from April 11. It said the tightening of monetary policy already in place would help to limit inflation.
Russia’s economy has been plunged into chaos amid sweeping western sanctions imposed following its invasion of Ukraine.
While the rouble has now recovered its post-invasion losses, analysts have described the rally as “artificial” due to a string of restrictions on trading put in place by Moscow.
CMC Markets surges as trading boom continues
CMC Markets shares jumped almost 9pc this morning after the retail trading platform continue to cash in on stock market volatility.
The company said it expected full-year operating profit to hit the top end of previous estimates at £280m.
Analysts said CMC would deliver revenue and profit well above consensus, driven by a strong end to the year.
Startup Netomnia raises £295m to take on BT
British broadband startup Netomnia has raised £295m as it looks to challenge BT’s dominance in the telecoms market.
The funding round was led by DigitalBridge Investment Management, alongside previous investors Soho Square Capital and Advencap, and takes its total cash raised so far to £418m.
Netomnia was founded by Jeremy Chelot, who previously led London-focused internet firm Community Fibre, which was sold in 2020 to private equity firm Warburg Pincus and Deutsche Telekom.
Mr Chelot and Community Fiber co-founder Callum Dick used money from that deal to start Netomnia, as well as a new broadband firm called YouFibre, which will share the funding.
The Netomnia boss told Bloomberg her wants to build fibre broadband to a million homes across the UK in the next two years.
Pound falls as interest rate bets boost dollar
Sterling has dropped to its lowest in more than three weeks as expectations of aggressive monetary policy tightening by the Federal Reserve boosted the dollar.
The pound fell 0.3pc to $1.3030. Against the euro it was down 0.3pc to 83.33p.
The dip followed hawkish comments from Fed officials, who indicated the US central bank would start to reduce its balance sheet from next month.
Volvo takes £320m hit from Russia exit
Volvo has revealed it’s taken a 4bn krona (£323m) hit from its decision to pull out of Russia.
The Swedish carmaker has halted all sales, service and production in the country, which accounted for around 3pc of its net sales last year.
Volvo said it has total assets worth about 9bn krona related to Russia, of which 6bn krona are classified as cash items, which are related to its leasing business that is financed through the bond market.
A spokesman said: “As we believe that customers’ credit losses will increase, we will of course receive lower income from clients but still pay on the bonds as they mature.”
Volvo is one of a number of major car brands to suffer losses after halting business in Russia, including Volkswagen, Ford and Renault.
Ukrainian miner Ferrexpo jumps despite war
Shares in Ukrainian iron-ore miner Ferrexpo have surged this morning after delivering what analysts described as a “surprisingly strong” first quarter.
The company reported total iron ore pellet production of 2.7m tonnes in the first three months of the year – similar to the same period last year.
Analysts at Liberum said the numbers implied 70pc of capacity in March despite the “horrific” conditions in Ukraine.
Shares leapt as much as 13pc to the top of the FTSE 250.
Jet2 hails summer booking boost
Holiday group Jet2 said the relaxation of travel restrictions has sparked a sharp rise in bookings over the last two months, but it’s still expecting to post a big loss for the year.
The company said bookings had approached seasonal norms over the period, while huge summer holiday demand meant its flight capacity was 14pc higher than pre-pandemic levels.
Still, an extended period of restrictions and a resurgence in Covid cases over the festive period mean Jet2 expects a pre-tax loss of up to £383m for the year to the end of March.
Shares rose 4.3pc in early trading.
FTSE 100 heads for fifth week of gains
The FTSE 100 looks set to end the week on a high after inflation worries and the Ukraine war rattled investors.
The blue-chip index jumped 1pc in early trading, putting it on track for its fifth consecutive week of gains.
Shell was the biggest driving force behind the rise, clawing back yesterday’s losses after it said its withdrawal for Russia has cost it as much as $5bn so far.
Rival BP also pushed higher, alongside miner Anglo American and financial stocks.
The domestically-focused FTSE 250 rose 0.6pc. Ferrexpo leapt 13.5pc after it said it was looking at alternative methods to deliver its iron ore pellets to seaborne markets, as ports in Ukraine remained shut due to Russia’s invasion.
Deloitte resigns as Polymetal’s auditor
Accounting giant Deloitte has resigned as auditor of Polymetal International over the miner’s ties to Russia.
The London-listed firm, which mainly operates in Russia, has seen its shares nosedive since Vladimir Putin launched an invasion of Ukraine in February.
Last month Deloitte said it would no longer operate in Russia and started a process to sever ties with its operations in Russia and Belarus.
The auditor confirmed today that it is unable to work with the Anglo-Russian gold and silver miner.
Polymetal’s shares fell a further 4pc to around 277p. They were trading at around 1,100p before the invasion.
The company has been hammered by western sanctions, while it was forced to appoint a string of new directors after its entire board walked out.
FTSE 100 opens higher
The FTSE 100 has made a strong start to the day, jumping firmly into positive territory after Wall Street closed higher overnight.
The blue-chip index rose 0.9pc at the open to 7,616 points.
US sanctions world’s biggest diamond miner
The US has slapped sanctions on the world’s largest diamond miner in its latest financial assault on the Kremlin.
The Treasury last night said it had blacklisted Alrosa, which accounts for 28pc of global diamond mining and 90pc of Russia’s capacity.
It also targeted United Shipbuilding Corporation, which develops and constructs the majority of Russia’s warships.
Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, said:
These sanctions will continue to apply pressure to key entities that enable and fund Russia’s unprovoked war against Ukraine.
These actions, taken with the Department of State and in coordination with our allies and partners, reflect our continued effort to restrict the Kremlin’s access to assets, resources, and sectors of the economy that are essential to supplying and financing Putin’s brutality.
Tesco hikes pay; Sainsbury’s set to follow
The latest job figures come amid planned wage increases at the UK’s two biggest supermarkets.
Louis Ashworth has more details:
It came as Tesco announced a 5.8pc hike in pay for shop floor and warehouse staff, the biggest increase by the supermarket in at least a decade. Those workers will see their hourly pay increase from £9.55 to £10.10 from July 24.
Britain’s biggest supermarket, and largest private employer, said it had made the increase, which will cost £200m, “despite significant cost pressures across our industry”.
Tesco said the rate, which was agreed following negotiations with trade union USDAW, would last one year, rather than two, owing to “uncertainty in the economic environment”.
Daniel Adams, national officer at USDAW, said the agreement “delivers the highest hourly rate of pay in the sector”.
He said: “This deal is both a welcome boost and testament to the value of employers working positively with trade unions.”
Meanwhile, Sainsbury’s is expected to announce a pay rise for retail staff in outer London today, taking their wages from £10.50 an hour to £11.05. The increase means those Sainsbury’s and Argos staff will be receiving the Real Living Wage for their location, in line with the supermarket’s staff elsewhere in the UK.
Employers struggle to fill jobs
The fall-off in staff supply was the most severe since November, with companies mentioning the generally tight job market, as well as uncertainty related to the pandemic and the war in Ukraine.
Claire Warnes of KPMG, said:
Once again this month, job vacancies are increasing while there are simply not enough candidates in all sectors to fill them.
With fewer EU workers, the ongoing effects of the pandemic, the economic impacts of the war in Ukraine and cost of living pressures, many employers will continue to struggle to hire the talent and access the skills they need.
Skills shortage and inflation drive up wages
The latest survey from the REC and KPMG has revealed starting salaries surged last month at the fastest pace since records began in October 1997.
The jump in pay reflects both huge demand from employers and the impact of soaring prices, with firms stepping up salaries for all staff to compensate for the fastest inflation in three decades.
Companies in sectors from IT to hospitality are struggling to fill vacancies, citing low unemployment, fewer EU workers and uncertainty over the war in Ukraine, which has made many employees hesitant about switching jobs.
While sharp wage increases would usually be positive news for workers, soaring energy prices and inflation mean most will still suffer a sharp fall in living standards.
5 things to start your day
1) Sunak orders Bank of England to drop opposition to fossil fuels Bank of England should consider “important role” of lenders in boosting North Sea investment
2) Cambo oil field back in play as developer snapped up for $1.5bn Ithaca, which is buying Siccar Point Energy, will look into the controversial North Sea project
3) Globalisation is dead, declares Levi’s boss Supply chain issues and geopolitical forces have thrown businesses into disarray
4) Tories risk shires backlash over wind and solar push Government’s renewable energy push means building unpopular projects near countryside homes
5) P&O’s Dubai owner loses crucial role in Brexit freeports initiative Role of DP World questioned amid anger over mass sacking of 800 seafarers
What happened overnight
Asian markets have ended Friday limping following a tough week dominated by the Federal Reserve’s hawkish tone that set up an aggressive tightening of monetary policy, while oil drifted after another series of losses.
The region struggled to take a lead from Wall Street, which recovered from steep intraday losses to end on a positive note, having plunged in previous sessions as traders fretted over the prospect of higher interest rates.
Tokyo, Hong Kong, Shanghai, Seoul, Singapore, Bangkok and Wellington were in the red, though Sydney, Taipei, Manila and Jakarta edged up.
Coming up today
- Corporate: CMC Markets, Ferrexpo (trading update)
- Economics: No major scheduled events