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The Independent UK

Business

Ben Chapman

Business news live - UK at risk of 'unnecessarily painful recession' after Brexit because of bad economic policy

The UK faces an “unnecessarily painful” recession thanks to policies pursued by the government and Bank of England, according to a report.

Data out today suggests that the economy may avoid a recession this quarter but growth remains subdued. Low interest rates mean the UK's ability to absorb the shock of a downturn is “blunted”, the Resolution Foundation said

UK household families are already more vulnerable to the impact of a downturn because they have run down their savings while the social safety net has been significantly eroded during years of austerity, the think tank said.

Please allow a moment for the live blog to load...

2019-09-09T08:21:51.860Z

Recession fears grow

Welcome to The Independent's live coverage of global business and economic events.

This morning has seen more warnings of the threats to the UK economy. KPMG says a no-deal Brexit will tip the country into recession.

The Resolution Foundation warns that the risk of recession is at its highest since 2007 but low interest rates mean the UK's ability to absorb any shock is “blunted”.

2019-09-09T08:31:54.050Z

Lloyds faces extra £1.8bn of PPI costs after last-minute surge in claims

A last-minute surge in PPI claims has left Lloyds banking group with up to £1.8bn added to its bill for the scandal.

The lender said it saw a "significant spike" in claims prior to the final 29 August deadline.

Lloyds had set aside an extra £1.1bn but said today that figure will have to rise.

A number of banks experienced a jump in claims immediately before the deadline, raising questions about how many consumers may still be owed redress but will now be barred from obtaining it.

2019-09-09T08:37:19.966Z

Hundreds of BA flights carrying 200,000 passengers cancelled

British Airways has shut down the vast majority of its operation because of a pilots' strike, Simon Calder reports.

Flight crew who belong to the British Airline Pilots’ Association (Balpa) are engaged in a bitter pay dispute with BA. They have gone on strike for 48 hours, triggering the cancellation of almost all the airline’s 1,700 flights to and from Heathrow and Gatwick on Monday and Tuesday.

The travel plans of around 200,000 passengers have been disrupted.

For full details:

British Airways cancels almost all flights in biggest shutdown in history

2019-09-09T08:40:50.000Z

Trucking firm subject to takeover bid

Eddie Stobart Logistics is being lined up for a possible takeover, less than a month after shares were suspended and the chief executive was shown the door.

The haulage company confirmed that DBAY Advisors, which already has a 10 per cent stake in the business, has received an "expression of interest".

It means the suitors now have until 5pm on 7 October to either table a formal bid, or walk away, under stock market rules.

Press Association

2019-09-09T08:56:22.860Z

UK posts solid July growth of 0.3%

Despite warnings of an impending recession, the UK economy grew at its fastest pace in six months in July, official data shows.

The economy expanded 0.3 per cent in July and was unchanged over the May to July quarter, the Office for National Statistics said.

The ONS' Rob Kent-Smith said:

“GDP growth was flat in the latest three months, with falls in construction and manufacturing.

“While the largest part of the economy, services sector, returned to growth in the month of July, the underlying picture shows services growth weakening through 2019.

"The trade deficit narrowed due to falling imports, particularly unspecified goods (including non-monetary gold), chemicals and road vehicles in the three months to July.”

2019-09-09T09:02:44.276Z

UK services sector shows 'subdued growth'

The dominant services sector, which makes up more than three-quarters of the economy, continued to show "subdued growth" in the three months to July 2019, growing by 0.2 per cent.

A number of industries have been driving this decline, including administration and support services, human health activities, education, real estate, and transportation and storage, the ONS said.

Information and communication, on the other hand, driven by computer programming, continued to do well throughout this period.

2019-09-09T09:04:28.960Z

The pound has been given a slight boost by better-than-expected economic growth in July.

Sterling is up 0.16 per cent against the dollar to $1.2302 and has erased most of its losses from this morning against the euro.

2019-09-09T09:15:35.000Z

Co-op and Camelot accused of collusion over scratchcard sales

The Co-op and National Lottery operator Camelot have been accused of "colluding" to restrict competition by a rival scratchcard firm.

Charitable lottery business Nektr said it will be taking both companies to the competition watchdog after it claimed its own displays were stripped from Co-op stores by its competitor, allegedly breaching its own contract with the retailer.

Craig Scott, co-founder of Nektr, said its dispute with the companies has cost it £1.5 million and "effectively killed the business".

Nektr said it is taking the companies to court for damages in relation to the losses it suffered following the alleged "anti-competitive collusion".

Press Association

2019-09-09T09:31:05.440Z

'A reassuring sign'

"The pick-up in GDP in July is a reassuring sign that the economy is on course to grow at a solid—perhaps even above-trend—rate in Q3," says Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

He suggests that services growth was not the result of any one-off stimuli but rather broad-based strength.

A 0.3 per cent month-to-month rise in manufacturing may have been due to firms starting to stockpile again in preparation for Brexit, Tombs says.

2019-09-09T09:58:41.406Z

PwC's chief economist John Hawksworth says the UK economy should avoid a technical recession this quarter but future growth depends on avoiding a disorderly Brexit.

“Looking ahead, much depends on the outcome on Brexit. If a reasonably smooth exit from the EU can be achieved, then we remain optimistic that UK growth could bounce back to over 1 per cent next year as business investment recovers and public spending picks up in line with the plans announced by the Chancellor last week.

"But if there is a disorderly Brexit, the UK economy could be tipped into recession. And if there is a prolonged period of political limbo with no clear resolution of the Brexit issue, then businesses could continue to defer major investment decisions, causing the UK economy to continue to stall."

2019-09-09T10:51:18.613Z

Primark's price pledge

Primark has promised customers it will not raise prices despite seeing costs soar as the pound’s value has fallen.

finance director, John Bason, told the PA news agency that Primark’s costs would rise this year thanks to Brexit hammering the pound while the dollar has remained strong.

But the group as a whole will gain around £10m because two thirds of its profit is made outside the UK.

"Consumers can comfortably expect no price increases,” Mr Bason said. “We are managing the decline in the pound and we accept it will affect margin and take that on board ourselves."

2019-09-09T11:02:33.246Z

Brexit boosts beer prices for Brits abroad

British holidaymakers are paying around 16 per cent more for a pint of beer than before the Brexit referendum, according to a foreign exchange company.

The weakened pound has added 49p to the cost of a beer, taking it to £3.61, on average, Caxton FX said

It compared exchange rates in a range of countries to those available in June 2016.

Visitors to Thailand have seen the cost of a beer soar 38 per cent while tourists to the US are paying around 20 per cent more.

In Norway the price has jumped 9 per cent to £7.66 and in France it is up 16 per cent to £4.69.

Bargains can still be had in Romania and the Czech Republic where the cost is around £1.30, according to the research.

2019-09-09T11:42:20.113Z

British supermarkets say they cannot be blamed if little food left on shelves after no-deal Brexit

“There is a clear attempt [by government] to talk to a narrative which is that companies, if only they prepared properly, would be able to cope and it’s companies' fault if they haven’t,” said Justin King, who was CEO of Sainsbury’s, Britain’s second-largest supermarket chain, for 10 years.

“As night follows day, if 50 per cent of lorries are delayed there will be gaps on the shelves inside seven days,” Mr King, currently a director at Marks & Spencer, told Reuters.

Full story here:

Supermarkets cannot be blamed if little food left on shelves after no-deal Brexit

2019-09-09T11:43:58.800Z

Here's the full story on those July GDP numbers from Economics and Business Editor, Olesya Dmitracova:

UK GDP grows in July, suggesting economy will avoid recession for now

Britain’s economy expanded in July at the fastest pace since January, easing recession fears, although the longer-term trend remained weak.

GDP grew 0.3 per cent, beating economists’ forecasts for a 0.1 per cent rise, according to data from the Office for National Statistics (ONS).

However, in the three months to July, economic output was flat.

Economists welcomed the monthly rise, saying Britain will probably avoid a recession after a surprise economic contraction in the second quarter. A recession is typically defined as two consecutive quarters of falling GDP.

“July figures point at a mild rebound at the start of the third quarter, although continued uncertainty around Brexit date and format will likely see a relatively subdued quarter,” said Yael Selfin, chief economist at KPMG UK.

2019-09-09T12:33:11.203Z

Pound hits six-week high

Sterling has risen to $1.2380, its highest in six weeks, after better-than-expected GDP figures for July indicated that the UK will avoid a recession this quarter.

The pound is also up 0.44 per cent against the euro to €1.1204.

2019-09-09T12:46:02.123Z

Nissan's chief executive resigns

Hiroto Saikawa has resigned as boss of Nissan after admitting he was overpaid as part of a bonus scheme.

The board has approved Mr Saikawa's resignation which is effective from September 16, and a successor will be appointed next month.

Mr Saikawa's resignation comes a year after his predecessor Carlos Ghosn was ousted on the back of financial misconduct allegations, including payments of millions of dollars of hidden income.

Mr Saikawa acknowledged last week that he had received dubious payments in 2013.

2019-09-09T14:27:19.586Z

Lloyds' latest £1.8bn PPI hit once again exposes big investors' failure

James Moore writes: The fresh round of PPI hits flagged by RBS, Virgin, and Co-op were always going to serve as hors d’oeuvres to Lloyds.

The main course has proven harder to stomach than anyone could have expected: a late spike in claims that could cost the bank up to £1.8bn.

Complaints had been running at just under 200,000 a week but that number quadrupled as the deadline agreed between the banks and the Financial Conduct Authority for submitted them approached.

Lloyds latest £1.8bn PPI hit once again exposes big investors' failure to be more than absentee landlords

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