UK house price growth slows, as households suffer longest income squeeze on record – business live

UK’s biggest recruiters warn ministers not to hire agency staff to replace strikers

Julia Kollewe

Britain’s biggest recruitment and staffing companies have written to the government to protest against plans to replace striking workers with agency staff, warning that this would further inflame strikes.

In a letter to Kwasi Kwarteng, the bosses of 13 companies including Hays, Adecco, Randstad and Manpower called on the business secretary to reconsider plans to repeal a decades-long ban on using agency workers to cover for picketing staff.

“We can only see these proposals inflaming strikes – not ending them,” the 13 groups warned in their letter, which was sent by Sarah Thewlis, chair of the Recruitment & Employment Confederation (REC).

Here’s the full story:

The Government is being urged to put in place support for businesses to help firms weather a “perfect storm” of spiralling costs and problems recruiting workers.

Shevaun Haviland, director-general of the British Chambers of Commerce (BCC), said action is needed to save the economy as the cost of doing business crisis continues to worsen.

She told the BCC’s annual conference in London that ministers must not to impose any more tax increases on businesses, and should provide more assistance in the autumn budget.

“Increasing costs of raw materials over last summer, supply chain and shipping issues, problems in recruiting people, and, by this March, spiralling energy prices. It really is the perfect storm for businesses, firmly putting the brakes on recovery.

“This has to change; we are on limited time. The Government has until the autumn Budget to reset, rethink and get their house in order.

“First, they need to put in place support for businesses now to weather this storm, and they need to work in partnership with us to develop a long-term economic strategy for growth.”

Britain racked up a record shortfall in its current account in early 2022, in part due to the soaring cost of its fuel imports.

The UK’s balance of payments deficit widened to £51.7bn in January-March, which is 8.3% of GDP, the ONS reported this morning.

Economists polled by Reuters had expected a deficit of just under £40bn pounds.

The shortfall was the biggest in records going back to 1955.

Samuel Tombs, an economist with Pantheon Macroeconomics, warned Britain’s current account gap would come under further strain as tourism resumes — which causes money to flow out of the country.

“With the current account deficit set to remain large over coming quarters, sterling will remain very sensitive to global trends in risk appetite.”

The ONS cautioned that the current account figures were subject to more uncertainty than usual, due to the impact of post-Brexit changes in how data is collected.

As Reuters’ Andy Bruce explains:

Airline passengers have complained of “total chaos” at Heathrow today after the airport made a last-minute order to cancel flights because it could not handle them.

Thousands of travellers were disrupted by a rare “schedule intervention” on Thursday morning, which led to the scrapping of 30 flights during the morning peak.

Some passengers did not find out their flights were cancelled until they arrived at the airport, the UK’s busiest.

The travel writer and broadcaster Andy Mossack tweeted: “Total chaos at Heathrow this morning. British Airways flights cancelled and zero customer service!”

Another affected passenger, Andrew Douglas, said he was due to be on a flight but had “spent the last four hours in multiple queues at Heathrow airport because it’s been cancelled”.

He added:

“Absolute shambles, complete chaos and only found out at check-in with no prior notification. Horrific service.”

Sarah Butler

Peter Cowgill, the former boss of JD Sports, more than halved his pay last year to £2.4m and continues to wrestle over his exit package after losing out on more than £1m in bonuses following a series of corporate governance mishaps.

Cowgill, who stepped down from JD last month, missed out on a share bonus related to long term performance at the fashion and outdoor kit retailer worth more than £850,000 because of his early exit from the business.

His annual bonus was trimmed by about £180,000 after the company was handed fines by the competition watchdog according to the group’s annual report published this week.

JD’s remuneration committee said it had “exercised discretion” to reduce the annual bonus pay out for Cowgill from 200% of salary to 180% after the corporate governance issues came to light.

The report says that executives are entitled to a pay off worth up to a year’s salary, benefits and “incidental expenses” but it is not clear if Cowgill will be awarded such a payment. Cowgill’s annual salary increased about 4% to £906,000 in April and his annual benefits were set at £3,000 indicating the potential size of any pay off.

JD is currently being run by an interim chair and chief executive as it searches for new permanent bosses.

The nominations committee said JD would “continue to further strengthen corporate governance” and would “specifically measure” corporate governance related issues as part of the annual bonus of executives in the current financial year.

Russian gas giant Gazprom has shocked the markets by scrapping plans to pay out a record dividend.

Gazprom’s shareholders have voted against paying a dividend for 2021 at its annual meeting, sending shares tumbling by a quarter.

Deputy CEO Famil Sadygov said.

“The shareholders decided that in the current situation it is not advisable to pay dividends based on the 2021 results.

“Gazprom’s priorities currently are implementation of its investment program, including Russian regional gasification,” he said.

Gazprom, which is majority state owned, had proposed a dividend of 52.53 roubles per share, which would have been its biggest payout, after making record earnings in 2021 due to surging energy prices.

European stock markets are ending the month in the red, as recession worries continue to swirl.

The FTSE 100 index of blue-chip shares has lost all this week’s gains, shedding 125 points or over 1.7% to 7189.

Nearly every stock is down, led by discount retailer B&M (-5.3%), luxury fashion group Burberry (-4.6%) and online grocery technology business Ocado (-4.5%).

Housebuilders are also weaker, a sign of concerns over the UK’s economic outlook.

Germany’s DAX and France’s CAC have both fallen over 1.8%, as stocks stumble.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says:

‘’A sense of foreboding is again gripping financial markets, with anxiety rising that by attacking inflation, central banks risk severely weakening economies.

Following fresh falls on Wall Street, Asian markets retreated and European indices also opened lower. The FTSE 100 slid 1.8% with risers very few and far between.

As worries about a global downturn have increased, oil has dipped amid expectations of lower demand, with Brent Crude falling slightly to below $116 a barrel. But it’s still at an eye-watering level, up 51% since the start of the year due to intense supply pressures.

Japan’s factory’s posted the biggest monthly drop in output in two years in May, as China’s COVID-19 lockdowns and semiconductor and other parts shortages hit manufacturers.

Factory output slumped by 7.2% in May, from the previous month, official data showed on Thursday.

Production of items such as cars as well as electrical and general-purpose machinery dropped sharply.

The decline — the biggest since a 10.5% tumble in May 2020 — was much bigger than a 0.3% fall expected by economists in a Reuters poll.

The slump shows that the world’s third-largest economy is being hit by supply disruptions and persistently high prices of raw materials and energy — factors which are threatening a global slowdown.