Latest news with #SimonFrench
Sky News
15 hours ago
- Business
- Sky News
Sky News Business Podcast: Welfare reforms, bond markets and skills
As Prime Minister Sir Keir Starmer backs down over planned cuts to disability entitlements, Paul Kelso discusses the latest developments with Simon French, chief economist and head of research at Panmure Liberum. Paul also speaks to George Lagarias, chief economist at Forvis Mazars, about how the bond markets have reacted to the U-turn. And there is an interview with entrepreneur Simon Squibb on the drop in the number of graduate-level jobs.
Business Mayor
15-05-2025
- Business
- Business Mayor
UK is fastest-growing G7 country in Q1 2025, as exports to US jump ahead of trade war
UK was fastest-growing G7 member in Q1 2025 Britain has outpaced major international rivals for growth in the first quarter of this year, by accelerating in January-March. The UK's 0.7% growth in Q1 2025 shows it was the fastest-growing economy in the G7 during the last quarter – a clear boost for the government this morning. In contrast, US GDP contracted slightly due to a surge of imports to beat Donald Trump's trade war. Now, we don't get Japan's GDP report until tomorrow morning (a small contraction is expected), and Canada's data is only an early estimate. But as things stand, here's the G7 growth league table: UK : +0.7% growth Canada : estimated to have grown by 0.4% Italy : 0.3% growth Germany : 0.2% growth France : 0.1% growth US : -0.075% (or -0.3% on an annualised basis) Japan: reporting tomorrow, -0.1% forecast UK GDP growth of 0.7% QoQ in Q1 2025 (+0.5% on a per capita basis) puts the UK at the top of the G7 league table. Encouraging underlying resilience, although recent surveys (PMIs, labour market surveys) since April tax and trade changes do point to a considerable slowdown in Q2. — Simon French (@Frencheconomics) May 15, 2025 Share Updated at 11.08 CEST Key events Show key events only Please turn on JavaScript to use this feature US retail sales barely rise in April Just in: US retail sales growth slowed sharply last month, after a splurge of shopping to avoid new tariffs. US retail and food services sales rose by just 0.1% in April, the US commerce department reported. That followed a 1.7% surge in spending in March, which was attributed to consumers stocking up on goods before the US trade war kicked in. US Retail Sales (Apr): • Headline: +0.1% (est 0.0%, prev R +1.7%) • Ex-Auto: +0.1% (est 0.3%, prev R +0.8%) • Ex-Auto & Gas: +0.2% (est 0.3%, prev R +1.1%) — Rymond_Inc (@rymondIncKenya) May 15, 2025 US retail sales slowed dramatically to a crawl in April after the surge in front-running purchases in March ahead of tariffs. Spending edged up 0.1% last month. Core sales, however, slipped 0.2% (ex autos, gasoline, bldg mats & food services), which may be an early warning: — James Picerno (@jpicerno) May 15, 2025 Share UK lags behind France for foreign investment, again Phillip Inman Foreign investment in the UK fell below France for the fifth consecutive year in 2024, revealing the failure of successive governments to attract funds from overseas since the 2016 Brexit vote, new data today shows. The UK secured 853 FDI projects last year, according to the EY Attractiveness Index – behind the 1,025 projects registered in France and ahead of Germany's 608. France as gained 50% more projects since 2014 to take the lead on the European leader board, while the UK has seen the number fall. EY, which has monitored foreign-direct investment (FDI) for more than two decades, said the UK secured 352 fewer projects in 2024 than at its high point in 2017, when 1,205 projects were recorded. The study found that all three major European economies – France, the UK and Germany – have struggled to secure foreign investment since the pandemic. Last year they suffered double digit declines on 2023 numbers. The UK's total fell by 13%, France by 14% and Germany by 17%. Europe overall saw a 5% decline in FDI projects in 2024, which EY said was largely due a drought of funds from the US, which declined by 11% for continental Europe and by 7% for the UK. The lack of overseas funding underscores the government's efforts to boost investment from domestic pension funds. Earlier this week the bosses of 17 of the UK's biggest pension funds struck a deal with the government to release up to £50bn worth of investments, with at least half earmarked for British assets including clean energy projects and homegrown startups. EY said there was better news from Greater London, which remained the leading European region for FDI for a second year in a row. The UK also grabbed top spot for technology investment – accounting for 20% of all European tech projects secured last year. Peter Arnold, the firm's UK chief economist, said the UK could bounce back this year. 'Global uncertainty makes it difficult to predict how investment numbers will change this year, but the UK does have some strong fundamentals that could set it apart. 'It now has a government with a large majority in place for the foreseeable future and can project a sense of regulatory and legislative stability. An emphasis on project quality over quantity expressed by policymakers in recent years also appears to be working, with the UK securing a higher number of projects that typically generate greater long-term value such as R&D and manufacturing.' Share Walmart warns it will raise prices because of tariffs US retailing giant Walmart is warning today that it will be forced to raise prices, to pass on the impact of Donald Trump's tariffs to consumers. According to CNN, Walmart CEO Doug McMillon will tell analysts on an earnings call today: 'We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins.' This throws a spotlight on the face that tariffs are paid by importers, not exporters, despite Donald Trump's claims to the contrary. Walmart, which declines to issue guidance for operating income growth and earnings per share for the second quarter of the year, reported revenue growth of 2.5% in Q1, and 4.3% growth in operating income growth. Share Donald Trump hits out at Apple over India expansion plans Over in Qatar, Donald Trump has blasted Apple over its plan to move iPhone manufacturing from China to India, to avoid US tariffs on Chinese-made goods. Speaking during his state visit to the Middle East, president Trump revealed he had 'little problem with Tim Cook yesterday.' Trump explained that he had told Cook about his concerns over Apple's expansion in India, saying: I don't want you building in India. You can build in India if you want, to take care of India, because India is one of the highest tariff nations in the world. It's very hard to sell into India. Trump then revealed that India has 'basically' offered the US a trade deal with no tariffs. 'I told Tim Cook we're not interested in you building (Apple) in India, they can take care of themselves, you up your production here (US),' claimed Trump. He added that India was one of the highest tariff-imposing countries & has now made an offer to reduce tariffs significantly… — CNBC-TV18 (@CNBCTV18News) May 15, 2025 Apple has been aiming to import most of the iPhones it sells in the US from India by the end of next year, as it tries to protect itself from the US-China trade war. Share National Grid relaxed about Trump tariffs Jillian Ambrose When National Grid unveiled plans for £60bn, five-year investment program on both sides of the Atlantic last year, they were simpler times for the FTSE 100 company. Today, Donald Trump's tariffs on imported goods have cast a shadow over the market where it plans to carry out major infrastructure investments, and in the UK high profile power outages at Heathrow and the London underground have raised questions over the resilience of its grids. But John Pettigrew, the outgoing chief executive of National Grid, is confident that the company will continue to deliver after revealing a better than expected 20% hike in pre-tax profits to £3.65bn for the last financial year. He told the Guardian that 90% of its planned spending in the US relies on domestic goods and labour meaning the threat of import tariffs on key grid components is 'pretty marginal' for the business. He is also relatively sanguine about rising concerts over the UK power system's resilience which, he points out, has improved by 50% over the last ten years, according to official measures of unplanned outages. He says: 'As we think about society becoming more reliant on electricity, resilience will become more important. And we have spent a lot of time – particularly when we were owners of the energy system operator – thinking about grid stabilising technologies. But as you've heard me say many times before, the UK is world-leading in grid stability.' Pettigrew will step down from the helm of National Grid in November after almost a decade in the role, and 35 years at the company. He will be succeeded by Zoë Yujnovich, who until recently was a member of Shell's executive committee and the oil company's director for integrated gas and upstream. Share Julia Kollewe Car insurance premiums are coming down, after a turbulent couple of years during which many drivers were hit with record premium hikes and some saw their costs double. The insurer Aviva said its motor prices for new customers fell by 4% between January and March, similar to the rest of the industry. Home insurance prices have been held flat, while other insurers have cut their rates. Claims inflation is running at mid to single digits levels across all areas. Lower speed limits in Wales and parts of England have led to fewer motor claims. However, there is a limit to further price cuts as the cost of claims is still significant – there are more cars on the road and the cost of repairing cars is going up as the incorporate more technology. Aviva is confident that its £3.7bn deal to buy smaller rival Direct Line will be wrapped up this summer, despite the UK's competition watchdog launching an inquiry into the deal yesterday. Put together, Aviva and Direct Line would control 20% of the motor insurance market, similar to market leader Admiral. Aviva's chief executive Amanda Blanc said: 'The acquisition of Direct Line is firmly on track. Direct Line shareholders voted overwhelmingly in favour of the transaction and we expect to complete the deal in the middle of the year.' Aviva, which operates in the UK, Ireland and Canada, reported a 9% rise in general insurance premiums to £2.9bn in the first quarter. Just over a year ago, it returned to the Lloyd's insurance market when it bought the insurance platform Probitas. Aviva's wealth arm posted net flows of £2.3bn, down from £2.7bn a year earlier, because a large workplace scheme switched to another provider. At the end of April, net flows had risen to £4bn, equivalent to 6% of assets under management. Storm Éowyn, which hit Ireland in January, has cost the industry €300m. Aviva's market share is 10%, implying €30m of claims, according to Jefferies analyst Philip Kett. Aviva is among the UK's biggest pension providers that signed a voluntary commitment on Tuesday to invest at least 5% of their assets in the UK. Chancellor of the Exchequer Rachel Reeves told Bloomberg Television in an interview that she didn't rule out mandating pension funds to allocate money to UK assets, as the government seeks to channel more investment into the domestic economy. However, Blanc does not believe that pension funds should be forced to invest in Britain. Share UK mortgage repossessions rise There's been a worrying jump in mortgage repossessions this year. New data from the Ministry of Justice show that, compared to the same quarter in 2024, there were increases in mortgage possession claims from 5,182 to 6,765 (31%), orders from 3,013 to 4,624 (53%), warrants from 2,919 to 3,517 (20%) and repossessions by county court bailiffs from 769 to 1,092 (42%). This is another sign of the financial pressures on households, despite the recent cuts to UK interest rates. Photograph: Ministry of Justice Adam Butler, public policy manager at StepChange Debt Charity, says: 'This is an incredibly uncertain time for mortgage holders. While last week the Bank of England cut the base rate by 0.25%, which could provide some relief for borrowers, it's unlikely it'll have an immediate, meaningful impact for those who are struggling to keep up with mortgage payments. Although overall mortgage arrears remain low, the rise in possessions raises concerns that those already struggling may be especially at risk of falling into problem debt. 'Last year among our clients with a mortgage, we saw average mortgage arrears jump by a staggering 69% – from £6,054 in 2023 to £10,239 in 2024. At the same time, households are being hit with a fresh wave of cost increases, including higher energy bills, council tax, and water bills, further stretching already tight budgets. 'If you are worried about meeting your mortgage payments, don't hesitate to get in touch with your lender, who can offer support and forbearance options. If you're struggling with debt, know that you're not alone – a charity like StepChange is here to help with free and impartial advice.' Share UK cuts stake in NatWest to 0.9% Newsflash: The UK government has moved a step closer to selling all its stake in NatWest bank. The Treasury's stake in NatWest has now fallen to 0.90%, down from 1.98% previously. The government has been trimming its stake by selling NatWest shares back to the market, cutting a stake which it took when it rescued Royal Bank of Scotland (as it was then called) in 2008. Last year, the then-Conservative government. had planned to sell the stake to the public in a flashy 'Tell Sid'-style campaign (harking back to the Thatcher privatisations of the 1980s), but that plan was scuppered by the general election. Share Eurozone growth lowered to 0.3% Disappointing growth news – the eurozone didn't expand quite as quickly as first estimated in the first quarter of this year. Statistics body eurostat has cut its estimate for eurozone growth in Q1 2025 to +0.3%, down from its initial estimate last month of +0.4% growth. Ireland recorded the fastest rise in GDP – up 3.2% in the quarter, due to increased activity at its multinationals. Contractions were measured in Slovenia (-0.8%), Portugal (-0.5%) and Hungary (-0.2%). This updated data confirms that the UK outpaced Germany (+0.2%), France (0.1%) and Italy (+0.3%). Share Direct debt failures on energy and water bills jump The number of UK customers defaulting on their energy and water bills has jumped, a sign of the pressures on households. The Direct Debit failure rate for 'Electricity and Gas' bills rose by 27%, year-on-year, last month, from 2.13% in April 2024 to 2.71% in April 2025. Water bill direct debit failures rose by 14%, from 0.96% to 1.09%. Overall, the seasonally adjusted 'Total' Direct Debit failure rate for April 2025 decreased by 1% from March 2025, but increased by 5% from April 2024. Illustration: ONS Share
Telegraph
14-05-2025
- Business
- Telegraph
Reform's economic plans ‘would trigger run on the pound'
Britain faces an 'immediate and violent' sterling crisis if Nigel Farage takes power and follows through on plans to slash taxes, economists have warned. Simon French, at Panmure Liberum, said proposals by Reform UK to take millions of workers out of income tax, cut corporation tax and reduce NHS waiting lists to zero would trigger a run on the pound. Mr French said enacting Reform's manifesto pledges would blow a £80bn hole in the public finances in a move that would see borrowing costs for households, businesses and the country alike suddenly lurch upwards. Richard Tice, the deputy leader of Reform, dismissed the analysis as 'juvenile claptrap'. He said the findings did not account for the savings a Reform government would make by slashing the size of the state, cancelling net zero levies and charging employers higher National Insurance for employing foreign workers. Panmure said this made bringing immigration down crucial for a Labour Government that is in danger of losing votes to Reform. Recent polling suggesting that the party is in pole position to win the next election. Mr French said Sir Keir Starmer's crackdown on immigration had 'reduced the chance of Reform introducing their economic agenda at the 2029 general election. He said: 'Those plans that we think would create an immediate fiscal gap of £70bn-£80bn per year – would in our view create the high probability of an immediate and violent sterling crisis.' He warned that the crisis sparked by Liz Truss's mini-Budget would pale in comparison to the likely reaction to Reform's economic agenda, which has vowed to increase the personal allowance to £20,000 in a move that would cost at least £60bn and freeze all non-essential immigration. 'Experimentation with an immediately higher fiscal deficit profile – of an additive scale set to be two-to-three times larger than anything attempted by the 2022 mini-Budget or 2024 October Budget – would create sharp rises in UK sovereign, commercial and household interest rates in our view,' he said. The pound fell to a record low of $1.03 against the dollar at the height of the mini budget crisis that threatened pension funds as they struggled to meet cash calls. It is currently trading above $1.32. Mr Tice accused Panmure of failing to 'look at the savings that we'll make' as part of his analysis, as well as their commitment to fiscal responsibility. He added: 'Of course, what we would do is we would make the savings first with a direction of travel to significant tax cuts, right? We're not going to do the tax cuts before the savings, which is why what he suggested is juvenile claptrap.' Sir Keir Starmer warned on Monday the UK risked becoming 'an island of strangers' without stricter border controls as the Prime Minister unveiled plans to ban overseas care workers, tighten access to skilled worker visas and raise the costs to companies of employing foreign workers. Mr French highlighted that both the Treasury and Office for Budget Responsibility (OBR), the Government's tax and spending watchdog, would likely say the policy reduces growth as well as Rachel Reeves's headroom to meet debt targets. He suggested that the Immigration White Paper served as a partial rebuke of these assumptions, 'quoting that migration analysis is highly sensitive to alternative assumptions'. Mr French added: 'Such a Trumpian nod to 'alternative facts' must be another subtle effort at flattery through imitation. But bad political humour aside this does perhaps illustrate a weakening, at least for now, on the primacy of the Treasury view in this policy area. 'It will however have been made in full knowledge within the Treasury that the autumn Budget will put into conflict the OBR's estimate for fiscal headroom and any revised estimate for net migration stemming from the White Paper proposals. An already tricky fiscal event looks to have got trickier still.' Economists have been critical of Reform's tax and spending plans. Analysis by the Institute for Fiscal Studies last year warned that huge spending increases for the NHS 'would not be nearly enough to meet Reform's incredibly ambitious commitment to eliminate waiting lists within two years'. The IFS highlighted that eliminating the waiting list entirely was 'a feat that has not been achieved in the history of the NHS'.
Yahoo
10-04-2025
- Yahoo
Police seize 272 vehicles in crackdown
Police have made 69 arrests and seized a total of 272 vehicles in a six-month operation in the Thames Valley. Operation Scalis involved local neighbourhood and roads policing teams using ANPR technology. Working alongside the Motor Insurers' Bureau (MIB), officers from Thames Valley Police seized 173 vehicles for no insurance, 105 vehicles for no tax and 49 vehicles from people without a driving licence. The arrests were for a variety of offences including drug driving, drink driving, outstanding warrants and immigration offences. In a statement, Thames Valley Police said "The primary targets are uninsured vehicles, but any additional criminal activity discovered is also addressed." Officers used data from MIB to identify uninsured driving hotspots across the region. 254 tickets were issued to people speeding, using their phone while driving or driving carelessly. PC Doug Murphy said: "This enforcement enhances road safety and reduces the financial impact on law-abiding motorists in the Thames Valley." Figures from MIB suggest, every week, at least one person is killed by an uninsured driver. Simon French from MIB said: "Tackling this issue together isn't just about getting people to pay premiums – it's about increasing safety for all road users. "Our message is simple: There is nowhere to hide. Drive with adequate insurance, or you will be caught." You can follow BBC Oxfordshire on Facebook, X (Twitter), or Instagram. Police seize cars involved in illegal street meet Police seize 118 e-scooters and e-bikes over summer West Midlands postcodes top uninsured drivers list Thames Valley Police Motor Insurers' Bureau
Yahoo
06-02-2025
- Business
- Yahoo
Bank of England cuts interest rates to 4.5%
The Bank of England has cut its benchmark interest rate by a quarter point to 4.5%. The Bank's rate setting Monetary Policy Committee (MPC) voted by 7 to 2 to bring rates down. Two members of the MPC voted for a bigger 0.5% cut. However the Bank also downgraded its forecasts for growth projecting that GDP fell 0.1% in the fourth quarter of 2024 and will rise by just 0.1% in the first quarter of 2025. The growth forecast for the year has been halved to 0.75%. The opens the door to a 'Reeves recession' over the winter half of the year if the economy underperforms in the first quarter and also shrinks. A recession is defined as two consecutive quarters of negative growth. The cut - widely anticipated in the City - lowers the cost of borrowing down to its lowest level since June 2023 when rates were rising rapidly during the dramatic inflation spike that followed Russia's full scale invasion of Ukraine. It is the third reduction since the Bank first started cutting from a peak of 5.25% last August. That was followed by another downward move in November. Today's decision will bring immediate relief to the hundreds of thousands of homeowners on variable rate or tracker mortgages with interest rates that move in line with the Bank of England's decisions. On a typical London mortgage of £300,000 repayments will fall around £43 a month from £1,710 to £1,667. Small businesses struggling under a burden of heavy borrowing will also benefit. For the vast majority of mortgaged homeowners fixed deals there will be no immediate change but lenders are expected to start bringing down the cost of the deals over the coming weeks in anticipation of more cuts from the Bank of England. Some economists are now penciling in as many as three or four cuts this year. One leading City forecaster Simon French, head of research at Panmure Liberum, went further this week, suggesting there will be six reductions in 2025, bringing the Bank's rate down to 3.25%. The Bank's Governor Andrew said:' "We expect to be able to cut bank rate further as the disinflation process continues, but we will have to judge meeting by meeting, how far and how fast.' However, he added: "We live in an uncertain world, and the road ahead will have bumps on it." The Bank's decision follows a growing body of evidence that the British economy is struggling to gain any momentum and could even be on course for a shallow recession over the winter. Latest GDP figures showed that the economy only grew by 0.1% in November, disappointingly below economists' forecasts. It followed two months of falling output. The Bank is now expecting no growth at all during the fourth quarter of the year. If the December GDP figure next week is worse than expected then fourth quarter output could even be negative. Economic uncertainty has been heightened by President Trump's introduction of tariffs against China and the threat to impose then against Mexica, Canada and the European Union At the same time inflation has been slightly more muted than expected falling to 2.5% in December, still above the Bank's official target of 2% . Sign in to access your portfolio
