More reaction is coming in from trade unions, economists and analysts to the increase in the national living wage and the minimum wage from next April.
Frances O’Grady, general secretary of the Trades Union Congress (TUC) said a boost to the minimum wage was vital “in the middle of a cost-of-living crisis”
But the government must set its sights higher. We need a £10 minimum wage now, and we need ministers to cancel the cut to universal credit. This increase won’t come into effect until next spring by which time many household budgets will have been hammered by rising bills and the universal credit cut – Frances O’Grady, TUC general secretary
O’Grady is also calling on the chancellor to end the pay freeze for public sector workers on Wednesday in his spending review.
Paul Johnson, the director of the Institute for Fiscal Studies (IFS), is also disputing the government’s claim that the rise in the national living wage will see low earners £1,000 a year better off.
And the Women’s Budget Group, an independent non-profit which monitors the impact of government policies on women, is highlighting the impact of the cut to universal credit for people with caring responsibilities.
Small business owners also have a view
In other news today, the UK’s largest mobile phone networks have agreed to start automatically blocking calls made from abroad that look like they are coming from a UK number, in a bid to crack down more on foreign scams.
The communications regulator Ofcom, said it had been working with telecoms companies to tackle the “complex problem”.
It said fraudsters have been getting more sophisticated and able to ‘spoof’ numbers of large companies and organisations, so it looks like a call is coming from them when it isn’t.
Lindsey Fussell, Ofcom’s networks and communications group director, said:
Tackling this complex problem requires a coordinated effort from the police, Government, other regulators and industry. We’ve been working with telecoms companies to implement technical solutions, including blocking at source, suspicious international calls that are masked by a UK number. We expect these measures to be introduced as a priority, and at pace, to ensure customers are better protected.
The announcement comes just days after Ofcom revealed that 45m people in the Uk had been targeted by scam calls and texts over the summer. It added it was particularly concerned about what it called a “significant rise” in fraudulent communication over the past 18 months.
You can read the full story by my colleague Kalyeena Makortoff here:
The UK’s lowest-paid workers aged 23 and over will see their wages rise to £9.50 an hour from 1 April 2022.
The Treasury now says it expects the chancellor Rishi Sunak to confirm the rise in his budget on Wednesday.
The government says this 59p an hour boost means that a full-time worker who earns the National Living Wage will earn an extra £1,000 a year.
Younger people are also getting a payrise. From April people aged 21-22 will see their national minimum wage rate go up by 82p to £9.18 an hour.
The minimum wage for an apprentice is also being increased – moving from £4.30 an hour to £4.81 an hour for an 18 year old apprentice in a sector like construction.
Rishi Sunak, the UK chancellor said:
This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this parliament.
However some warn that people who work and claim universal credit will end up seeing lower pay increases than they might anticipate.
Meanwhile hospitality firms are warning that higher wage bills may lead to firms hiking prices at venues like restaurants and cafes.
We’re waiting for confirmation from the UK government on how much the minimum wage is going to go up by from April 2022.
The increase is expected to be announced soon, and will reportedly rising by more than 5% to £9.42, from the current £8.91 level for people aged 23 and over.
The move would see ministers accept the recommendations of the independent body, the Low Pay Commission, which has been looking at the possibility of raising it by these levels.
Such an increase would mark an above-inflation increase, but coming at a time when consumers are facing higher energy bills and seeing rising prices.
Ministers will also hope that this increase would offset the cut in universal credit which has also hit low-paid workers.
The chancellor Rishi Sunak is expected to confirm in his budget on Wednesday that the government wants the national living wage to move above £10 by the next UK election.
Here’s the full story from our deputy political editor, Rowena Mason:
A quick lunchtime look at the European stock markets which have been climbing slightly again this morning, and holding steady close to six-week highs.
Most European stock indices have inched upwards so far today, led by banking, energy and healthcare stocks. Meanwhile, investors are poised for a full week of earnings reports from some of the world’s biggest companies, including top US tech firms, with Facebook up first later today.
Just before 1300 BST:
- UK’s FTSE 100 is currently up 0.4% at 7,233 points
- Germany’s DAX is up 0.26% at 15,586
- France’s CAC 40 has dipped 0.19% lower to 6,721
- The pan-European STOXX 600 is broadly flat at 472
A busy week of third quarter earnings lies ahead, including results from the likes of Microsoft, Apple and Google parent company Alphabet, and also from financial institutions including Lloyds and Deutsche Bank.
US futures are also nudging higher as investors wait to see Facebook kick off the quarterly round of Big Tech earnings.
Soaring energy prices, supply chain disruption and rising Covid-19 cases are weighing on business sentiment in Germany, just as they have been in the UK.
Catching up on the release of the Ifo institute’s business climate index from earlier this morning, morale among companies in Europe’s largest economy slipped for the fourth month in a row in October.
This combination of challenges is slowing the pace of recovery from the pandemic, pushing down business sentiment. The Ifo reading came in lower than expected and marked the worst level in six months.
Supply problems are giving businesses headaches, said Ifo president Clemens Fuest.
The disappointing October Ifo reading comes as Germany’s central bank, the Bundesbank, warned of economic growth slowing considerably between October and December.
The Bundesbank expects full-year growth in the country to end up “significantly” below the 3.7% forecast it made in June.
Meanwhile Ifo found that half of all German industrial companies are planning to raise their prices as a result of continuing supply problems, a record high reading for the survey.
After Tesco’s website and app were down for most of the weekend, leaving many frustrated customers unable to shop online, HSBC’s business banking portal (called HSBCnet) had some issues this morning.
Large corporate customers only had intermittent access via the website or app for about an hour, from 9.10am, but the problem has been fixed, according to HSBC.
It is currently unclear what caused the issue, which affected hundreds of business customers in the UK.
Record petrol prices in the UK are proving quite the talking point this morning.
It’s a “dark day for drivers” according to motoring organisation the RAC.
According to the RAC’s Fuel Watch data, the price of unleaded petrol has soared by 28p a litre in a year, from 114.5p in October 2020. They calculate this adds £15 to the cost of filling up a 55-litre family car – taking it from £63 this time last year to £78.61 now.
The oil price has risen in the last few months as global demand has rebounded, however the RAC also found that petrol retailers have increased their average margin on each litre of fuel sold as they try to claw back some of the earnings they lost during lockdowns when sales plummeted as people stopped travelling and people stayed at home. Retailers’ average margin has gone up from around 5.5p a litre to 7.5p now, the RAC said.
In addition, the switch in September to greener E10 petrol is also playing a role in pushing up the price of petrol. Last month, the bio content of unleaded petrol saw the ethanol content increase from 5% to 10%. Ethanol is more expensive than petrol, adding around a penny a litre to the cost at the pump.
RAC fuel spokesman Simon Williams said:
This is truly a dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012. This will hurt many household budgets and no doubt have knock-on implications for the wider economy.
Williams added that people on lower incomes who have to drive to work will struggle to find extra money to pay for fuel.
The RAC is calling on the government to temporarily reduce VAT to help ease the burden, and is asking larger petrol retailers to reduce their margin on the fuel they sell back to pre-pandemic levels.
Here’s the full story on the UK record petrol price from our energy correspondent Jillian Ambrose
On oil prices – how high are they expected to go as demand for energy rebounds in the world’s economies?
Brent crude prices might even move above the $90 a barrel – previously forecast to be reached by the end of the year – according to researchers at Goldman Sachs.
The US investment bank said in a research note that it expects demand for oil to soon reach the pre-Covid level of 100 million barrels per day, as appetite in Asia for oil returns after the region was hit by the wave of Delta Covid-19 cases.
The Organization of the Petroleum Exporting Countries and allies, led by Russia and known as OPEC+, said earlier this month they would continue the existing deal of boosting output by 400,000 barrels per day each month until at least 2022.
“We would need prices to rise to $110 /bbl to stifle demand enough to balance the market deficit we currently see in 1Q22 given our expectation that OPEC+ continues on the current path of +0.4 mb/d per month increases in quotas,” Goldman said in a research note which was dated 24th October.
Oil prices are on the rise again, following last week’s climbs, as supply remains tight amid growing demand from economies recovering from the pandemic.
Brent crude futures increased by $0.56 to reach $86.09, hitting a three-year high during Monday morning trading. The move followed on from a 1% increase on Friday.
US West Texas Intermediate (WTI) crude future also climbed early on Monday by $0.62, taking them to $84.38 a barrel. Earlier in the session, they have briefly hit their highest level for seven years.
Global oil supply remains tight, just as demand is increasing in the United States and elsewhere as economies using more energy again as they jerk back to life following the pandemic, when demand slumped.
Meanwhile fuel prices are also climbing again for motorists, and the price of petrol in the UK has hit a new record.
Petrol reached 142.94p a litre on Sunday, according to motorists organisation the AA, slighting edging above the level seen in April 2012.
Diesel has also moved higher to reach 146.5p a litre – just over 1p short of its all-time high from April 2012.
The record petrol price level was recorded just hours before motorists with older cars who live or travel within London’s newly-extended Ultra Low Emission Zone started to face a new daily charge.
From Monday, drivers will have to pay £12.50 each day they drive an older car which doesn’t comply with emissions restrictions anywhere in the capital’s ULEZ.
Tesco’s app and website are back up and running again this morning.
It comes after its services were disrupted over the weekend by hackers, leaving thousands of shoppers unable to buy groceries online.
Britain’s largest supermarket confirmed just before midnight last night that customers could once again fill their virtual baskets, as well as amend existing orders and book deliveries.
A Tesco spokesperson said: “Our online grocery website and app are now back up and running. Our teams have worked around the clock to restore service, and we’re really sorry to our customers for the inconvenience caused.”
Tesco – which receives 1.3m online orders each week – first experienced problems on Saturday.
The retailer said over the weekend it didn’t believe the attempt to interfere with its systems had impacted customer data.
Tesco was hacked previously in 2014, and had to deactivate online customer accounts after more than 2,000 login details, including passwords, were posted online. A separate attack on Tesco’s banking arm resulted in the loss of £2.5m two years later.
In other banking news this morning, the Co-operative Bank has confirmed weekend reports that it had made an approach to the owners of TSB, expressing an interest in buying its competitor.
The Co-operative Bank said in a statement it had sent a letter to TSB’s owner, Spain’s Banco de Sabadell.
However Co-op said “no discussions in relation to a potential transaction are currently taking place between the Bank and Sabadell”.
Nick Slape, Co-operative Bank’s chief executive said:
Our unique brand, underpinned by co-operative values and ethics and the significant progress we have made in returning our bank to profitability is a testament to the hard work of our colleagues and the loyalty of our customers – which we continue to place at the heart of all our decisions.
Spain’s Sabadell said over the weekend it had rejected the Co-op Bank offer. The lender confirmed its board had officially responded to Co-operative Bank that “this is not a transaction that we wish to explore at this moment as we have previously expressed publicly”.
It’s the second time that Co-op has shown an interest in snapping up its rival, a deal which would have created one of the UK’s largest high street banking chains. Co-op originally tried to buy the TSB branch network in 2013, when its then owner Lloyds was looking for a buyer.
However Co-op’s attempt fell apart after it was hit by a string of scandals and it merged that the bank had a £1.5bn black hole.
TSB was then bought by Banco de Sabadell in 2015. Since TSB left the Lloyds banking group, it also hit the headlines for all the wrong reasons amid an IT meltdown in 2018.
My colleague Kalyeena Makortoff has the full story on HSBC’s results here:
British-headquartered bank HSBC managed to shrug off concerns about bad property debt in its key Chinese market as it beat City forecasts with its third quarter earnings.
HSBC surprised with a 74% rise in profits, after improving economic conditions allowed the bank to release hundreds of millions of pounds originally set aside for a potential jump in loan defaults during the pandemic.
The lender said pretax profits rose to $5.4bn (£3.9bn) in the three months to 30 September, up from $3.1bn a year earlier.
HSBC said improving economic conditions meant that customers were able to repay their debts on time, helping it to increase its profits. This has allowed HSBC to release about $700m from the pile of cash it built up during the pandemic, designed to help cushion the blow of any potential surge in defaults.
It has also enabled HSBC to announce a share buyback of $2bn.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Shares in China’s Evergrande Real Estate rose on Monday morning after the embattled firm’s chairman indicated the company would be concentrating in future on its growing electric vehicles unit rather than its troubled core property business.
The company, which has debts of about $305bn, managed to swerve a costly default last week as it came up with the money to pay a bond interest payment at the last minute.
Shares in Evergrande rose by as much as 6% so far during Monday trading, while shares in its electric vehicles unit – China Evergrande New Vehicle Energy Group – leapt by 17% at one point after Evergrande’s chairman said it would make the new vehicle venture its main business, although both firms later lost some of their gains and Evergrande stock is currently flat.
According to state media, Hui Ka Yan said on Friday that electric vehicles would overtake the business’s previous property focus within the next decade, a strategy which looked to prove popular with investors.
Evergrande’s vehicle business was founded in 2019 but hasn’t yet displayed any of its planned models or sold a single car.
Evergrande, which is China’s second-biggest property developer, sparked alarm on global financial markets in September, when it announced that it might not be able to pay its many creditors ranging from homebuyers, building contractors, banks and offshore investors.
On Friday it was reported that the firm had wired a $83.5m bond interest payment that it missed in September.
Evergrande said on Sunday it had restarted work on 10 projects across six cities including Shenzhen. Some construction had been halted during the summer because of delayed payments to suppliers and contractors.
Concerns in Evergrande haven’t entirely gone away, however, although Chinese state media reported on Monday that any spillover from the country’s property debt into the financial industry is controllable.
In a comment published by Xinhua news agency on the Chinese economy, including information attributed to “relevant departments” and “authoritative people”, it was reported that property companies were facing potentially defaulting on their debts because of poor management and a failure to adjust to market changes.
- 9am BST: German ifo business climate index for October
- 2pm BST: Bank of England MPC member Tenreyro delivers a speech at the Centre for Economic Policy Research’s conference on international trade, global supply chains and monetary policy
- 10pm BST: Facebook releases Q3 results