UK regular pay rising faster than inflation again; Goldman Sachs profits fall by a third – business live

Goldman Sachs profits fall by a third

Protest group Oily Money Out have been holding a demonstration in London against the fossil fuel industry.

They have protested outside the InterContinental hotel on Park Lane, where the three-day Energy Intelligence Forum began this morning.

Environmental campaigner Greta Thunberg was anong the protesters, as are Extinction Rebellion.

Two Greenpeace activists scaled the five-star Intercontinental Hotel in Mayfair and unfurled a giant banner over its entrance reading ‘Make Big Oil Pay’.

Maja Darlington, campaigner at Greenpeace UK, says:

“Oil bosses are toasting each other in a luxury hotel and plotting how to make even larger profits, while millions struggle to rebuild after a summer of extreme weather. Big oil is profiting from humanity’s loss and those who have done the least to cause climate change are being forced to pay the price.

“People are sick of watching their energy bills rise and the injustice of floods and wildfires around the world while their elected officials rub shoulders with oil bosses in Mayfair. Letting oil companies like Shell decide our planet’s future is like putting an arsonist in charge of a fire station. It’s time to get their oily influence out of our politics and make Big Oil pay for the millions losing lives and livelihoods because of this industry’s ruthless pursuit of profit.”

Britain’s competition watchdog is investigating boiler maker Worcester Bosch over concerns that it is misleading shoppers with its “hydrogen-blend” boilers.

The Competition and Markets Authority (CMA) will examine if customers are being told confusing or inaccurate green claims.

The CMA is concerned that the marketing of these ‘hydrogen-blend’ boilers, could mislead people into thinking they are more environmentally friendly than they are.

Its investigation will examine:

• Labels or text stating that Worcester Bosch’s boilers can run on a blend of 20% hydrogen and natural gas, which may give the impression this is a special feature despite all boilers in the UK being legally required to operate this way since the mid-1990s.

• Information and messaging on the use of hydrogen for home heating in the UK – despite this not currently being available and its introduction being potentially years away and dependent on future government decisions.

• Descriptions and information about the environmental benefits of ‘hydrogen-blend ready’ boilers which may falsely suggest that these boilers will reduce a household’s carbon footprint.

Last month, Sky News reported that several companies are making confusing and potentially misleading claims about hydrogen, as part of the sales process for standard gas boilers.

The UK government is currently consulting about whether to blend of up to 20% hydrogen by volume into the gas distribution networks. But it’s not clear when, if ever, hydrogen will replace natural gas to power boilers.

George Lusty, senior director for Consumer Protection at the CMA, said:

Businesses need to be clear about the environmental credentials of the products they’re selling. This is especially important for heating products like home boilers, which are an expensive and long-term purchase.

We set out our concerns earlier this year about businesses marketing boilers as ‘hydrogen-blend’. We’ll now be scrutinising green claims from Worcester Bosch to see if they mislead shoppers.

In the meantime, we’ll continue to keep a close eye on practices in the sector.

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Over in Germany, investor morale has brightened unexpectedly.

The ZEW economic research institute’s economic sentiment index rose to -1.1 points from -11.4 points in September, rather higher than the -9.3 forecast by economists.

Investors were more optimistic that inflation will ease, despite concerns that the Israel-Hamas war will push up oil prices.

Those surveyed were more optimistic about the economic expectations for the eurozone, although their assessment of the current situation fell.

ZEW President Professor Achim Wambach says the data suggests “we have passed the lowest point.”, adding:

There’s a noticeable uptick in the economic expectations of financial market experts in October 2023. In contrast, the assessment of the current economic situation in Germany has barely changed.

The heightened economic expectations are accompanied by the anticipation that inflation rates will decrease further and the fact that now more than three-quarters of respondents anticipate stable short-term interest rates in the eurozone.

Negative factors such as the Israel conflict – cited by some respondents as a reason for revising their growth forecasts downward – had only limited impact on the overall more optimistic outlook,

Bank of England policymaker Swati Dhingra says that recent labour market data shows a softening job market.

And that, Dhingra warns, is likely to lead to slower wage growth and reduced inflation pressure.

Speaking at an event organised by the Royal Economic Society, Dhingra – who has opposed recent interest rate increases – says:

“Now when the labour market is really loosening … it’s very hard to imagine where further momentum in wage growth is going to come from.

“We should see some relenting of domestic inflationary pressures.

In the housing market, Bellway has warned it will build rather fewer houses in the current financial year.

Bellway says it hopes to complete around 7,500 homes in the year to 31 July 2024, down from 10,945 homes in 2023.

Ths precise number of homes built will depend on the trajectory of mortgage interest rates and the strength of demand in the autumn and spring selling seasons, it says.

Customer demand continues to be affected by mortgage affordability constraints, Bellway explains, with reservations below the comparative rates in the prior year.

Bellway also reported an 18% drop in underlying profits for the last financial year, saying:

The Group’s programme of accelerating the construction of social homes partially offset weaker private demand, which was impacted by higher mortgage interest rates, cost-of-living pressures and the end of Help-to-Buy.

The Resolution Foundation warns that Britain’s mini pay recovery may not last long, given signs of cooling in the labour market.

Hannah Slaughter, their senior economist, explains:

“Employment and vacancy levels continued to fall over the summer, while the pace of private sector pay growth has slowed.

“Fast falling inflation should help to prop up real pay packets even as the labour market cools down, and monetary policy makers face a tough judgement on the future path of interest rates.”

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Here’s Rachel Reeves, Labour’s shadow chancellor, on today’s jobs report:

“Thirteen years of Conservative economic failure has left working people worse off, with low growth, low pay and high taxes.

“Working people saw pay rise faster under the last Labour government.

“But, with the Conservatives we have seen a decade of stagnant wage growth.”

Chancellor Jeremy Hunt has welcomed this morning’s news on wages, saying:

“It’s good news that inflation is falling and real wages are growing, so people have more money in their pockets.

“To keep this progress, we must stick to our plan to halve inflation.”

The next inflation data, for September, is due at 7am tomorrow – economists predict a small fall in the annual rate of price rises, from 6.5% from 6.7%.

The pound has slipped a little this morning, as traders digest this morning’s jobs data.

Sterling has lost a third of a cent against the US dollar, to around $1.218.

As flagged earlier (see here), the slowdown in regular pay and the drop in vacancies could signal a weakening labour market, and encourage the Bank of England to leave interes rates on hold in November.