UK consumer confidence drops in November
UK consumer confidence has fallen this month, as households grow gloomier about their financial prospects.
The latest poll of consumer sentiment, just released by data firm S&P Global, shows that households reported that their current finances continued to deteriorate in November, while pessimism about the financial outlooks for the year ahead has risen.
Households across the UK reported further pressure on their everyday spending, which ate into the amount of cash they had available to spend. It has fallen again this month, at a faster rate than in October.
Debt levels rose in November for the first time in three months, the survey found.
A gauge of job security also declined, which could be driven by the increase in employer National Insurance contributions announced in the Budget.
The poll shows that the budget, at the end of October, has not lifted confidence among households.
Worryingly, confidence dropped this month despite the Bank of England cutting interest rates two weeks ago, just as S&P Global began polling households.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said:
“November is seeing households grow somewhat gloomier again, failing to build on the underlying improvement seen in the months leading up to the General Election.
Consumer confidence has fallen back since spiking higher in July amid the election buzz, as ongoing pressure on household finances has resulted in squeezed spending, higher debt and lower savings.
A key concern going forward will be the labour market. Rising incomes and busier workplaces have underpinned much of the improvement in consumer sentiment over the past two years, but job security is showing signs of waning. Any intensification of job worries, spurred perhaps the recent measures announced in the Budget, including higher employer National Insurance contributions, could result in a further loss of consumer confidence. This would likely in turn hit consumer spending and economic growth.
Key events
Closing post
Time to recap….
UK and US sign civil nuclear collaboration deal
Britain and the United States have signed a new agreement to collaborate on civil nuclear technology at the COP29 summit.
The agreement, signed by UK Energy Secretary Ed Miliband and US Deputy Secretary of Energy David Turk today, aims to pool billions in research funds and share information on advanced nuclear technologies.
The goal is to speed up the development of new technologies, such as advanced modular reactors, to help decarbonise industry and boost energy security.
The new agreement will come into force from 1 March 2025.
Energy Secretary Ed Miliband says:
“Nuclear will play a vital role in our clean energy future.
“That is why we are working closely with our allies to unleash the potential of cutting-edge nuclear technology.
“Advanced nuclear technology will help decarbonise industry by providing low-carbon heat and power, supporting new jobs and investment here in the UK.”
The UK government says the agreement builds on a pledge made last year at COP28 to triple nuclear energy capacity globally by 2050.
It expects this new agreement will also be signed by Canada, France, Japan, Republic of Korea, Republic of South Africa, China, Euratom, Switzerland and Australia.
You can track the latest action at COP 29 here:
Grangemouth oil refinery owners reject US-led approach as closure looms
The owners of Scotland’s only oil refinery, which is scheduled to close next summer, have reportedly rejected a US-led approach about a possible bid.
A consortium said to be led by Robert McKee, an American energy industry veteran, wrote to Petroineos, the owner of the Grangemouth site, to express an interest in buying it, according to Sky News.
But the approach has been rejected by Petroineos, which is 50%-owned by Sir Jim Ratcliffe’s petrochemicals empire.
The consortium is understood to comprise The Canal Group, which is reportedly developing a green energy refinery in Texas, and Trading Stack, a Middle East-based commodities trader, Sky say.
Petroineos is planning to shut Grangemouth by the end of June next year, a move that could cost 500 employees their jobs.
Anna Isaac
Thames Water’s IT systems are in the spotlight again today, with sources telling the Guardian they are so antiquated they have been easy for cybercriminals to attack.
My colleague Anna Isaac reports:
“The software we use is older than me, and some of the hardware is older than my dad,” says Siddharth*. He is one of a team fighting a daily battle to sustain ancient IT infrastructure at Thames Water.
Sometimes the defences are breached. Thames, the UK’s largest water and waste treatment company, is on a “knife-edge” according to sources, with its resilience in doubt because it depends on an array of creaking – often Victorian – infrastructure.
While plenty of attention has been paid to its pipes, trunk mains and sewage overflows, less well understood is another big problem: its computer systems. Some IT systems date back to the 1980s, and have long been declared obsolete.
More here:
*Names have been changed
Trading has begun cautiously on Wall Street.
The S&P 500 stock index has inched up by 4 points to 5,874, a gain of less than 0.1%, while the tech-focused Nasdaq is 0.2% higher.
Tesla are among the top risers, up over 7% following reports that President-elect Donald Trump’s transition team are planning to make a federal framework to regulate self-driving vehicles a top priority for the U.S. Transport Department (see earlier post).
Nvidia is a leading faller, down 2.5%, after reports of overheating snags with its Blackwell chip (see earlier post).
Top European Central Bank policymakers are concerned that new US tariffs could hurt growth.
ECB vice-president Luis de Guindos told an event in Frankfurt that trade tensions could damage Europe’s economy, saying:
“The balance of macro-risks has shifted from concerns about high inflation to fears over economic growth.
The growth outlook is clouded by uncertainty about economic policies and the geopolitical landscape, both in the euro area and globally. Trade tensions could rise further, increasing the risk of tail events materialising.”
Bundesbank president Joachim Nagel is also concerned, telling an event in Tokyo that tariffs promised by Trump would upend international trade.
However, Nagel was not too concerned that they could push up inflation, saying:
“Global integration would have to decrease substantially to cause a noticeable rise in inflationary pressures.
“And, so far, we have not seen this.”
Shares in Nvidia are down almost 2% in premarket trading, on reports of an overheating problem with its new Blackwell chips.
Website The Information reported yesterday that the Blackwell graphics processing units – designed to be used in artificial intelligence systems – has an overheating problem when connected together in Nvidia’s customised server racks.
Nvidia has reportedly asked its suppliers to change the design of the racks “several times” as it tries to overcome the problem. More here.
Blackwell, launched earlier this year, is targetted at datacentres that train AI models such as the latest generations of GPT, Claude and Gemini, and which run AI chatbots.
Revolut, Britain’s most valuable fintech firm, has been granted a UK trading licence by the FCA.
The decision will allow Revolut to offer new trading products and features for UK customers next year, thought to include trading of UK and EU stocks and ETFs.
Until now, Revolut has operated its Trading feature in the UK as “an Appointed Representative with a Principal”, meaning it could allow retail customers to buy and sell shares listed in the US.
Yana Shkrebenkova, Head of Wealth and Trading UK at Revolut, explains:
“Today’s announcement is a significant milestone for Revolut Trading. Having launched our successful investment product five years ago, we strive to bring best in class investment products to our customers in the UK. We know that there is so much more our Revolut Trading customers want from our platform and we are working hard to deliver on this, rolling out new features safely and considerately.
Revolut was granted a UK banking licence – with “restrictions” – in July, after a three-year wrangle with regulators.
Bitcoin is slipping back from its recent record highs today.
The world’s largest cryptocurrency is down 2% today, at $89,000, away from the record high of almost $93,500 set last week.
The dip comes after a dormant bitcoin wallet that had been inactive for 14 years sprung into life last week. Some 2,000 bitcoin, worth almost $180m, were moved from the wallet.
The sudden activity caused a lot of excitement in crypto circles, as its last transaction took place in 2010 – when one bitcoin was worth less than a dollar.
Bitcoin has been on quite the rally in the last fortnight; it was trading below $70,000 on 5 November, the day of the US election, but started rallying once Donald Trump’s victory was clear.
Bill Blain, market strategist at Wind Shift Capital, suggests Bitcoin may have been experiencing “a classic greater fool moment”, saying:
As Bitcoin soars 30%, there are signs long-term holders’ wallets are being opened to sell as new buyers are persuaded to pile-in on stories about deregulation, crypto as an asset, and the usual get rich scams. Classic pump and dump.
Tesla shares higher on report Trump could ease self-driving rules
Shares in Tesla have jumped almost 7% in pre-market trading, following a report that Donald Trump’s administration could ease US rules for self-driving cars.
According to Bloomberg, the Trump team plan to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities,
As Bloomberg point out, that’s good news for leading Trump supporter Elon Musk:
If new rules enable cars without human controls, it will directly benefit Elon Musk, the Tesla Inc. chief executive officer and Trump mega-donor who’s become a powerful fixture in the president-elect’s inner circle. He’s bet the future of the EV maker on self-driving technology and artificial intelligence.
While Tesla’s shares are on track to jump when trading begins in under two hours, shares in Uber – who could lose out if Tesla succeeds in launching autonomous robotaxis – are down 2.7% in pre-market.
The Czech Republic’s top central banker is concerned that consumer prices around the worlw will be more volatile than in the past.
This will mean tighter monetary and fiscal policies than before to keep inflation near target, Czech central bank Governor Ales Michl believes.
In remarks posted on the Czech National Bank’s website on Monday, Michl says:
After a period of high inflation, we are now entering a phase of higher inflation volatility around central bank targets, with an upside risk.
Michl argued that there had been excessive money creation in the run-up to the Covid-19 pandemic, because interest rates were kept near zero for over a decade after the financial crisis.
He told a central banking conference in Mexico City:
This has led to persistent inflationary pressures.
To address this, the policy mix should consist of two elements: firstly, maintaining interest rates higher than pre-COVID levels for a prolonged period; and secondly, governments must balance their budgets. Failure to do so could risk a second wave of inflation, with another cost shock potentially acting as a trigger.
Donald Trump’s immigration pledges may be the real macro threat to economic growth, rather than tariffs, suggests Neil Shearing, group chief economist at Capital Economics.
Shearing told clients:
As the dust settles on Donald Trump’s stunning election victory, attention has quickly turned to his policy pledges and their implications for the US economic outlook.
Global policymakers and investors are understandably focused on his pledges to raise tariff barriers across the board – and by significant amounts in some US trading relationships. But the economic hit from efforts to raise trade barriers isn’t likely to be as large as many fear.
The major threat from Donald Trump’s pledges will instead come from his stated intention to remove millions of migrant workers from the US.
Julia Kollewe
One of Britain’s biggest housebuilders, Vistry Group, still reeling from two profit warnings, is also under pressure from shareholders over its boss’s multiple roles and corporate governance concerns.
Greg Fitzgerald, Vistry’s chief executive, also chairs the company, which breaches corporate governance code guidance. It means he is running both the business and the board of directors.
At the company’s last general meeting in May, Fitzgerald’s re-election was only backed by 79.3% of shareholders – with more than a fifth voting against or abstaining.
Vistry, formerly known as Bovis Homes, said in a statement today:
“The board has actively engaged with shareholders both before and after the AGM in respect of a range of corporate governance matters and has a detailed understanding of shareholder views.
The board understands that the primary concerns from some shareholders was in relation to the combination of the role of the CEO and chair, which was a departure from the UK Corporate Governance Code.”
The housebuilder said it had appointed a senior independent director, Rob Woodward, to “provide additional oversight on governance matters and serve as an alternative point of communication for investors and the other non-executive directors”. He has held a series of calls with shareholders to discuss corporate governance.
Vistry said the results of an external assessment of the combined role of CEO and chair will be published in is 2024 annual report. It said that through the process, shareholders “have expressed different perspectives”.
“The company remains committed to ongoing dialogue with shareholders and will continue to engage to ensure that the company understands shareholders’ views and is able to consider feedback, as well as to provide clarity on the company’s approach to succession planning going forward.”
It is not only Fitzgerald’s combined role that has raised eyebrows. He owns a 40% stake in the Devon-based developer Baker Estates and has banked £5.2m in the past three years, while also owning shares in Ardent Hire, which supplies forklift trucks to Vistry, according to the Sunday Times.
Corporate governance experts have raised concerns about Fitzgerald’s multiple roles and stakes in related companies, raising potential conflicts of interest, and “inadequate disclosures” by Vistry, according to the paper.
A Perth-headquartered goldminer has agreed to give the equivalent of £130m – more than its entire cash reserves – to the government of Mali after its chief executive and two other employees were detained by authorities in the West African country.
Resolute Mining CEO Terence Holohan and the other two employees – all British citizens – were unexpectedly detained on 8 November in Mali’s capital of Bamako, at the conclusion of a meeting with government mining and tax officials.
The meeting was to progress what Resolute described as unsubstantiated open claims against the company regarding taxes, custom levies, maintenance and management of offshore accounts.
To resolve the matter, Resolute said on Monday it had paid Mali $80m out of its $157m in cash reserves, and promised to pay another $80m more in coming months.
FCA bans director over GBH conviction and cover-up
Britain’s financial watchdog has banned a company director after he failed to tell them he had been imprisoned for grievous bodily harm.
The Financial Conduct Authority has banned Ari Harris from working in financial services, following his failure to disclose he had been jailed for three years in 2022.
Harris, the FCA says, stabbed a man twice in the neck with a kitchen knife in 2018, during a confrontation in a public carpark, and pleaded guilty to GBH.
He, and his firm Reeds Motors, should have notified the FCA of his offending, conviction and custodial sentence. Instead, the regulator, says they provided false and misleading information to cover up the fact that he was in prison.
In a ruling today, the FCA says:
Following an application in October 2022, the FCA asked the firm why it needed an additional approved person. Both Mr Harris and the firm stated that this was required as Mr Harris was currently overseas and looking into a business abroad.
Mr Harris continued to mislead the FCA during a telephone call, failing to mention that he was actually in prison at the time.
The FCA has concluded that there is “a severe risk of an erosion of public confidence” if those who are convicted of violent offences and who “lack honesty, integrity and reputation” are permitted to continue working in the financial services industry.
Spirit Airlines files for Chapter 11 bankruptcy protection
Over in the US, Spirit Airlines has filed for bankruptcy protection today after being dragged down by mounting debts and losses.
Spirit, which has been struggling to recover from the drop in travel demand caused by the Covid-19 pandemic, has announced it is entering Chapter 11 proceedings as part of a debt restructuring deal.
Spirit, the biggest budget airline. in the US, has lost more than $2.5bn since the start of 2020 and faces looming debt payments totaling more than $1bn, Associated Press reports.
The company has reassured customers it will continue operating while the restructuring is conducted, telling them:
We are writing to let you know about a proactive step Spirit has taken to position the company for success.
Spirit has entered into an agreement with our bondholders that is expected to reduce our total debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value.
Part of this financial restructuring includes filing a “prearranged” chapter 11.
Eurozone trade balance rises as UK imports drop
The eurozone’s trade surplus with the rest of the world has widened, partly thanks to a drop in imports from the UK.
Data firm eurostat has reported that the eurozone recorded a €12.5bn trade surplus with the rest of the world in September, up from €9.8bn in September 2023.
Eurozone exports rose by 0.6%, to €237.8bn, while imports from the rest of the world fell by 0.6% to €225.3bn.
While European companies shipped €28.5bn of goods to the UK, up 2%, there was a 10.7% drop in imports from the UK, to €13.1bn.
Imports from the US, Switzerland, Norway, Japan, India and Brazil also fell year-on-year:
GMB: Thames Water ‘in perilous state’
The UK government is being urged to “act fast” over the Thames Water crisis, after the Guardian reported that water supplies are “on a knife-edge” due to serious underinvestment.
Our investigation has found that Thames has failed to tackle serious safety concerns or upgrade vital IT systems, meaning that £23bn of its assets that are in urgent need of repair.
It appears Thames is in a worse financial state than previously admitted, and neither its managers nor regulators appear to have grasped the perilous state of some of its reservoirs and pipes.
As my colleague Anna Isaac reported:
Sources described how concerns about the company’s governance and operations had been raised at the highest levels of management. Yet they claimed that the problems had not been tackled, suggesting that the scale of the turnaround required at Thames may have been underestimated.
“Operations have been hollowed out and cut to the bone,” a senior source at Thames said. “We’re putting the public at risk by failing to invest in the most basic needs.”
They added that, in their view, management had not moved quickly enough to address problems such as weakening explosive infrastructure – such as containers holding the gas produced by sewage – and cracks in reservoirs. They said Thames’s management and the regulator, Ofwat, had been slow to address these problems, allowing them to escalate.
Gary Carter, GMB National Officer, says Thames’s previous owners have left it “in a perilous state” (it has £15bn of debt), adding that ministers should be ready to put it into a special administration regime if new investment isn’t agreed:
“Thames needs committed long term investment just to keep operating, never mind stop the leaks and cut the sewage spills. “Then it must be held to account and deliver for customers, with its skilled workforce central to the turnaround.
If that investment isn’t forthcoming then the Government must act fast and put Thames into special administration.
Ministers can’t sit back and watch the car crash.”
