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Royal Mail strike
Landslide victory
Communication Workers Union members employed by Royal Mail (RMG) voted overwhelmingly to go on strike, in a move that could threaten the Black Friday and Christmas shopping periods. “The workforce has completely rejected the company’s plans to set up a separate parcels business,” CWU general secretary Dave Ward said after 97.1 per cent of those balloted voted in favour of industrial action – a date has yet to be agreed for the strike. Parcelforce members were balloted separately in two votes, which also supported the action. Royal Mail said it is “very disappointed” by the outcome.
Sirius mine petition
Nears threshold
A petition to the government calling on the Treasury to provide a loan guarantee to Sirius Minerals (SXX) in support of its construction of a Yorkshire fertiliser mine is nearing the 10,000 signatures it needs to elicit a government response. At the time of writing, more than 8,800 signatures had been registered on the government’s petitions website. The request argues that the mine will “boost exports and create thousands of jobs locally and nationally” at a time of job losses in industry. In a curious instance of nominative determinism, the petition’s creator is listed as an individual named ‘Piers Quarry’.
Ofgem raises axe
Hinckley Point funding threat
The Office of Gas and Electricity Markets (Ofgem) has proposed rejecting National Grid’s (NG.) full funding request to connect the new Hinkley Point C nuclear reactor to the grid, suggesting it reduce this by £80m. Ofgem intends to grant National Grid Electricity Transmission (NGET) £637m to build the transmission link, compared with NGET’s initial request for £717m. Ofgem cut the allowed funding after rejecting £40m in “risk funding” sought by NGET to be included in the upfront cost of the link. “NGET may be in a position to seek additional funding for some risks, such as extreme weather or widespread flooding, if they are efficiently managed and take place during construction,” the regulator said.
Telegraph profits tumble
Subs up
Telegraph Media Group profits plummeted by 89 per cent despite the company hitting 400,000 subscribers as it nears its target of 1m subscriptions by 2023. The group established a subscription-first model last year, targeting 10m registrants in addition to its subscription goal, and said in its latest results update that “we anticipated that this would take some time to achieve, given the challenges faced by our industry”. Pre-tax profits slumped to £1.6m from £14.3m at the end of 2017, although subscription turnover increased by 10 per cent.
Car finance under spotlight
FCA intervenes
The Financial Conduct Authority (FCA) announced proposals to ban the way in which some car dealers and motor finance brokers earn commission. Currently, some motor finance brokers receive commission linked to the interest rate paid by consumers. But the broker can set this rate, and the FCA believes that this can create an incentive for brokers to act against customers’ interests. “Preventing the use of this type of commission would remove the financial incentive for brokers to increase the interest rate that a customer pays,” the watchdog said, “and give lenders more control over the prices customers pay for their motor finance”.
US crude exports to rise
Rystad Energy predicts expansion
At the start of 2009, the US was importing 11.2m net barrels of oil per day (bopd). By June of this year that had fallen to 506,000 bopd. The fracking boom means that the US is now the world’s biggest producer of crude oil. But with domestic refineries operating at or near full-capacity to absorb shale growth, Rystad Energy predicts that US crude exports could grow from current levels of 2.9m bopd to nearly 6m bopd by 2022. Previously, US crude exports were limited through the regulatory framework, but growing production and a more commercially-focused White House has changed all that.
Brexit hits manufacturers
Uncertainty continues
Nearly two-thirds of manufacturers say that delays over the UK’s departure from the European Union has had a “direct negative impact” on their profit margins over the past two years, according to joint analysis by manufacturing trade body Make UK and law firm Squire Patton Boggs. Almost half of manufacturers have already experienced a “noticeably negative change in EU customer/supplier appetite towards doing business with them”, while only 2 per cent think a no-deal Brexit will improve their ability to do business with the EU.
The International Monetary Fund (IMF) cut growth forecasts set in April for a host of key developed and emerging economies. In its October World Economic Outlook, the organisation cited “the sharp and geographically broad-based slowdown in manufacturing and global trade”, attributing this to higher tariffs and prolonged uncertainty surrounding trade policy.
The IMF pointed to a contracting automotive industry, which has been hampered by the “idiosyncratic shocks” of Chinese weakness and new emissions standards in Europe. It added that the services sector has helped many economies sustain labour markets and wage growth.
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