Was there a sense of the zeitgeist changing this week, with months of economic doom being superseded with a decidedly more upbeat outlook? Not only did the FTSE 100 hit fresh highs last Friday, there was also a serious suggestion that the UK might avoid recession. The assumption that we are in for a long economic contraction has been baked into our national psyche of late, but the National Institute of Economic and Social Research has said it expects the UK economy to narrowly avoid recession. It’s no time to celebrate though. NIESR warns higher prices and slow wage growth will mean many families will feel like they’re in one for much of 2023. Read our news story on it here.
Oil is Still Paying Dividends: BP has reneged on its industry-leading commitment to cut oil and gas production by up to 40% by 2030. Given the sky-high cost of fossil fuels, BP appears to have scaled back its green ambitions. The company says it now aims to produce two million barrels of oil equivalent per day by 2030, which would reduce emissions by 25%, when compared to 2019 levels. The move has sparked a political backlash, along with more calls for windfall taxes. Despite cutting its climate pledges, BP is boosting the dividends paid to shareholders — which will be increasing by 10%.
John Lewis is Shaking Things Up
Things may be different at Christmas 2023, as John Lewis has parted company with the ad agency behind its famous festive advert: the somewhat clunkily-named Adam&eveDDB. The company has been the driving force behind John Lewis’s Christmas adverts, which are widely seen as firing the starting gun on the Christmas retail wars. Such adverts have been credited with driving up sales of skateboards, cuddly toys and pianos, as well as boosting streaming revenues for featured artists (or ruining a classic song). Despite the success of the partnership, John Lewis asked Adam&eveDDB to re-pitch as part of its regular re-evaluation of suppliers. The agency declined. Well. That isn’t very Christmassy!
Supermarkets Are Going Round in Circles
Lidl is seeing red, or rather yellow, over an alleged infringement of its trademark by arch rival Tesco. It is pursing legal action in the High Court claiming the yellow circle that Tesco uses to promote its Clubcard scheme is too similar to its own logo. Not to be outdone, Tesco launched a counterclaim last year, arguing Lidl trademarked the logo in “bad faith”. The head of Tesco’s legal team has said Lidl will need to satisfy the judge that “creating a yellow circle involves sufficient artistic skill and labour to comprise the author’s own intellectual creation.” Lidl says it is just protecting its distinctive core brand. The legal action to sort out claim and counterclaim is expected to to cost millions and run for months. Barristers and solicitors may well be seeing stars and pound signs as well as yellow circles by the end.
We Know Which Banks do Well on Cybersecurity
Some mobile and online banking apps could leave customers vulnerable to fraud, according to new Which? research. It found platforms offered by Virgin Money, TSB and Nationwide scored poorly when it came to digital security. In contrast, online banking security and mobile apps offered by HSBC, Barclays, NatWest and Starling had far higher scores. Banks with low scores did not always block insecure passwords adequately or remove phone numbers from notifications. Which? said some banks had outdated web applications that did not perform security checks when users were paying someone new, changing an email address or editing payee details. Eek.
Twitter’s Financials Are Back in the Spotlight
Could the little blue bird soon be singing in the black and making money for its billionaire owner Elon Musk? In a blog update Musk said the platform is “trending towards breakeven”, after reducing staffing levels from 7,400 to 2,300. However, he failed to offer any evidence of this. Investors are perhaps wise not to take too much of what Musk says at face value. He has recently been sued by Tesla investors over a tweet that claimed he’d secured funding to take Tesla private. No deal transpired and shares subsequently fell. A jury last weekend cleared him of fraud over this particular statement, but it is fair to say it is probably best not to base investment decisions on what Musk (or anyone else) tweets.
The CMA Has Another Call of Duty
Is it game over for Microsoft’s planned takeover of Activision Blizzard, the games company behind the blockbuster Call of Duty series? The UK’s competition regulator has stepped in, saying UK gamers were being caught “in the crossfire of global deals” (which almost sounds like a decent premise for a game). In its provisional ruling the Competitions and Markets Authority (CMA) said it wanted to either block the transaction altogether or ask Activision to sell its Call of Duty series. EU and US competition regulators have expressed similar reservations. However, Activision Blizzard has called for the government to step in and overrule the regulators, pointing out the takeover could result in hundreds more jobs being created in the thriving UK games industry.
Nintendo Has Cut its Sales Forecasts
Meanwhile Nintendo, a powerhouse of the console business, has cut it sales forecast after what it describes as a “disappointing” Christmas for the Nintendo Switch. The Japanese company says it now expects to sell one million fewer consoles for this financial year, blaming falling demand and a shortage of computer chips — a problem also plaguing rivals Sony and Microsoft. To add to the gloom, the hotly-anticipated release of “Hogwarts Legacy”, the Harry Potter-themed computer game, has been met with somewhat lukewarm reviews, although after years of delays sales are still likely to be buoyant.
Zoom Has Hit “End Meeting” on 1,300 Staff
Zoom, the video conferencing platform that became a household name during the Covid-19 lockdowns, will make 1,300 of its staff redundant — around 15% of its workforce. Founder and CEO Eric Yuan will also take a 98% pay cut this year. In a blogpost Yuan said mistakes had been made during the company’s rapid recent expansion, and it had failed to ensure it was growing sustainably. He added cutbacks were necessary to allow the company to “weather the economic environment”. It follows similar moves by Meta, Twitter, Dell and Microsoft, all of which expanded rapidly during the pandemic and have cut back since.
Is This an AI I See Before Me?
It might be some time yet before the machines take over if the latest offering from Google is anything to go by. An advert for its new AI bot, Bard, showed it getting facts wrong when asked about astronomy and the James Webb Space Telescope — all of which served to highlight the limitations of human endeavour. As well as being roundly criticised by astronomers on Twitter, Google parent Alphabet was also met with a reduction in the value of its shares totalling around $100 billion. All this sits against the backdrop of the pressure to compete with Microsoft, whose funding of ChatGPT software has helped everyone from students writing coursework to magazine editors looking for an easier week.
