Top news
- UK inflation forecast to rise in announcement at 7am on Wednesday
- Average wages rise by 5.4%
Essential reads
- Is this the end of the British pub?
- Heinz urged to bring back discontinued snack that sells for £50 on eBay
- Best of the Money blog - an archive of features
Tips and advice
- Save up to half price when visiting top attractions with this trick
- 'I cancelled swimming with weeks of notice - can they keep my money?'
- Where kids can eat for free or cheap
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UK inflation forecast to rise in announcement tomorrow
Economists believe inflation rose above target once again last month, as we await the release of official figures tomorrow.
Those polled by Reuters think the headline figure for July will rise from 2% in June to 2.3% - the first increase since December.
It is thought the fading impact of lower energy prices will contribute to the upward movement.
Though the closely watched services inflation figure is expected to have fallen, it could still remain above 5% due to air fares, package holidays, hotel prices and wage growth (see our 7.22am post for more on this).
Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown, said: "The CPI reading for July is expected to show that headline inflation has veered away from target again, with further rises expected before the end of the year.
"It seems clear that the fight against insidious inflation has not yet been won."
What does this mean for interest rates?
If inflation has risen, it will illustrate the dilemma facing the Bank of England in deciding how quickly to cut interest rates.
The Bank has elevated the base rate to restrict spending and keep inflation at bay.
Ms Streeter said high wage growth remained a "lingering concern" for Bank rate setters.
"The belt to constrain growth is likely to stay in place in September, because some policymakers are still worried about the potential for wage growth to bulge again," she said.
"They're concerned that if it's not held back, it could prompt inflation to run away again if firms pass on higher wage costs to prices charged to customers."
After a first cut to 5% in August, the Bank suggested rates would not fall as quickly as they rose from the beginning of 2022 until August last year.
Markets are currently pricing in a base rate hold in September, followed by consecutive cuts in November and December.
That would leave the base rate at 4.5% at the end of the year.
"The resurgence in headline inflation in the second half of the year will create a challenging backdrop for the BOE," said Dan Hanson, chief UK economist at Bloomberg Economics.
"While the rise can be easily explained by base effects associated with energy prices, the optics of easing policy when inflation is on the rise aren't favourable."
The pound has risen against the dollar this week, partly because traders have shifted their bets slightly on how long it will be before there's another interest rate cut.
Ofgem signs off on £3.4bn electricity 'super highway'
Ofgem has given the green light to a £3.4bn project to build an electricity "super highway" between Scotland and England.
Eastern Green Link 2 - a joint programme between Scottish and Southern Electricity Networks and National Grid - would stretch for 500km (311 miles) from Aberdeenshire to North Yorkshire, transporting major quantities of renewable energy.
It marks the biggest single investment in electricity infrastructure in Britain and is part of a drive to modernise the grid.
Jonathan Brearley, Ofgem chief executive, said the energy regulator was "fully committed to supporting the government to meet its aims of getting clean power by 2030".
"Today's announcement is a further step in putting the regulatory systems and processes in place to speed up network regulation to achieve its aim," he said.
Read the full story here...
Amazon launches its own credit card
Amazon has launched its own credit card that gives 1% back on all purchases through the site.
Partnering up with Barclaycard, the online giant's card gives customers 0.5% back on transactions made elsewhere - this will drop to 0.25% after the first year.
This does not include gambling transactions, cash withdrawals, balance transfers, buying currency or money transfers.
Amazon Prime members also get 2% back from all spending with Amazon during designated shopping event days, including Cyber Monday, Black Friday, and Prime Day.
Those who are approved for the account will get a £20 Amazon gift card as well.
Cardholders will have access to Barclaycard's entertainment perks, including advance pre-sales for selected UK events, and 10% off pre-sale tickets when they use their Amazon Barclaycard to pay.
It comes with 0% APR on all purchases for the first six months.
After this, the card has a representative APR of 28.9%, with lending and rate subject to customers' financial circ*mstances and borrowing history.
At the moment, it is only available to new Barclaycard customers, with existing account holders unable to switch.
However, Barclays and Amazon are aiming to open applications for existing Barclaycard customers in the coming months.
"We're excited to introduce the Amazon Barclaycard - designed to offer cardmembers ways to earn rewards for their Amazon purchases and every day activities with no annual fee,"said John Boumphrey, Amazon UK country manager.
"Delivering value to our customers is incredibly important to us, so we're delighted to introduce a new payment option that allows customers to save and earn on Amazon."
Analysis: What's gone wrong at Asda?
This is an abridged version of Ian's full analysis, which you can readhere
Asda looks to be in a very bad way.
Its market share has fallen to 12.6%, down from 13.7% a year ago, which is an astonishing fall from grace.
What happened?
In short, a great deal of upheaval.
In October 2020, while the pandemic was still raging, Walmartsold a majority stake in Asdato the private equity company TDR Capital and to brothers Mohsin and Zuber Issa.
With Walmart maintaining a strategic 10% stake in Asda, allowing the retailer access to its buying power, there was initial optimism.
But the financial engineering that underpinned the deal - the buyers raised £2.75bn towards the purchase by selling a bond secured against Asda's property assets and put just £780m of their own capital at risk - meant that Asda became a heavily leveraged business as a result.
The warning signs
An early warning sign came when, in August 2021, the well-regarded Roger Burnley stepped down as Asda's chief executive after reportedly falling out with the brothers over strategy.
Asda failed to appoint a successor despite making overtures to several big names in the industry and, in early 2022, the search was suspended. The search is now back on again, led by headhunters Spencer Stuart, amid reports that a £10m-a-year salary is on offer to the right person.
A run of criticism
In the meantime, Asda's high borrowing has weighed on it, something which did not go unnoticed by the Competition and Markets Authority which, in an investigation last year into whether motorists were being over-charged for fuel, singled out aloss of competitivenessat Asda - previously seen as the industry leader when it came to cutting petrol and diesel prices.
There was further embarrassment when, in July last year, the Business Select Committeecriticised the brothersfor their "opaque" accounting after an excruciating hearing during which Mohsin Issa declined to answer several questions on whether Asda had increased its profit margins on fuel since the takeover.
Stability was further undermined by constant speculation that the brothers had fallen out.
This was strenuously denied but, in June this year, Zuber Issaagreed to sellhis 22.5% shareholding in Asda to TDR - giving the latter a controlling 67.5% stake. Reinforcing the sense that the brothers were going their separate ways, EG Group sold its remaining UK forecourts to Zuber for £228m, while the latter stepped down from EG Group's board in the process.
Many of the problems with Asda's operational performance have been laid at the door of Mohsin Issa and his comparative lack of experience in supermarket retailing.
There have been severalclashes with unionsover staffing levels in the business, with long-standing employees complaining at having to do too much, while a push to disentangle Asda's IT systems from those of Walmart also created upheaval.
Losing patience
Trying to keep the show on the road and bring order to the chaos have been Lord Rose of Monewden, Asda's chairman since 2021 andMichael Gleeson, the chief financial officer.
But even Lord Rose, a lauded figure in retailing for his leadership of Marks & Spencer in the 2000s, appears to be losing patience, telling the Sunday Telegraph at the weekend: "I am going to be perfectly honest with you. I've been in this industry for a long time and I am slightly embarrassed. I won't deny that.
"I don't like being second, third or fourth. And if you look honestly now at the comparative numbers of Kantar or whatever index, we are not performing as well as we should be. And I don't like that."
Declaring that Mohsin needed to relinquish day-to-day running of Asda, Lord Rose added: "We need a full-time, fully experienced retail executive to come in… we always said Mohsin was a particular horse for a particular course.
"He is a disrupter, an entrepreneur, he is an agitator. We've added a significant number of stores and we've changed a lot, but it now needs a different animal.
"In the nicest possible way, Mohsin's work is largely complete."
Hopeful signs
All is not yet lost for Asda.
It has a number of new high-profile recruits due to join in coming months. And it also appears to be listening more to its customers, with Mr Gleeson announcing last week an increase in the staffing of checkouts.
It is impossible to avoid the sense, though, that it desperately needs a full-time chief executive and quickly.
Save up to half price when visiting top attractions with this trick
Planning on visiting some of London and the UK's top attractions this summer?
If you're not already aware, you can get 2-4-1 entry or a third off ticket prices to some of the UK's top attractions just by traveling by train.
Many of the attractions in the National Rail deal are in London, but not exclusively.
You only need to follow these four simple steps:
- Choose an attraction from this list;
- Download and print your vouchersorbuy your tickets online;
- Travel by train;
- Present your voucheroronline tickets and train tickets.
By doing so, you can save yourself some serious funds - especially if you were travelling by train anyway.
For example, let's say a family of four visited London to see the waxworks at Madame Tussauds.
They travelled from Basingstoke and headed to the attraction at 1pm on Monday.
If they had bought two adult and two children's tickets for their chosen slot on the official website, it would have cost £144.
But by using the National Rail deal, the cost of entry was £73.32.
That's a saving of £70.68.
Pay your train fare in savings
Train travel isn't cheap - in fact, Sky News found the UK has the most expensive train travel in Europeevenbefore the latest price hike in March.
Train tickets to get two adults and two children (under 15) into London from Basingstoke just before 10am on Monday would have cost a combined £90 (assuming no railcards).
By contrast, if they had gone by coach, it would have cost them £23.30 in total (although the journey would have taken around an hour longer).
This hypothetical family may have saved £70.68 on their Madame Tussauds tickets, but they're still around £20 down - because they're travelling by train.
The good news is that the national rail deal can be used across multiple attractions (if used on the same day) - meaning customers can effectively pay for their train tickets via the savings they'll make by attending multiple venues.
If we apply that to our earlier example, the family could have also visited the London Eye, SEA LIFE Aquarium as well as the waxworks - making savings at each along the way, which would cover the cost of their train tickets and more.
They could also have shaved off pennies on meals out, like 2-4-1 off pizza and pasta atAzzurro Italian Bar & Kitchen Waterloo (when a drink is purchased).
Further savings could have been made with annual railcards and hunting around the best times to travel and to book attractions.
All prices correct as of time of writing. Train/bus tickets were advanced singles.
Outside the capital
As mentioned, the majority of the attractions on the list are in London, but there are plenty outside of the capital.
Thorpe Park, Warwick Castle and Alton Towers are among the attractions listed across the UK - you can read the full list here.
Two major lenders cut mortgage rates - with lowest across market now 3.83%
Nationwide and Halifax have become the latest lenders to announce further mortgage rate cuts as competition continues across the market.
From tomorrow, Nationwide will reduce rates by up to 0.2 percentage points across its two, three and five-year fixed-rate offers.
The lowest rate of 3.83% is part of a five-year fix at 60% LTV deal, which comes with a £1,499 fee and will be available to new and existing customers who are moving home.
This makes it the joint lowest five-year deal on the market, tied with Barclays and Natwest.
The Barclays deal comes with a £699 fee, while NatWest's has a £1,495 charge.
First-time buyers will also be better off under the Nationwide cuts - here are some of the new deals available:
- Five-year fixed rate at 60% LTV with a £999 fee is 4.19%
- Five-year fixed rate at 85% LTV with a £999 fee is 4.46%
- Two-year fixed rate at 85% LTV with a £999 fee is 4.90%
Selected two, three and five-year switcher rates up to 95% LTV will also be cut by up to 0.2 percentage points with rates starting from 4.06%.
Meanwhile, Halifax is reducing its three-year remortgage products by up to 0.37 percentage points.
Brokers have welcomed the cuts, saying "two of the largest players in the mortgage market" are sending a "clear and strong message to borrowers".
"Lenders are hungry for business during the remainder of 2024 and borrowers should take note. With competition between lenders heating up, now is a fantastic time for borrowers to make their property dreams a reality," Stephen Perkins, managing director at Yellow Brick Mortgages, told Newspage.
However, others have pointed out that people with low deposits are still missing out on lower rates.
"Yet again first-time buyers with small deposits of 5-10%, who are the backbone of the housing market, are left out in the cold. Lenders need to bring first-time buyers in to really heat the market up," Darryl Dhoffer, from The Mortgage Expert, says.
Fixing your energy bill might only save you £5 a year as cheaper deals leave the market
By Sarah Taaffe-Maguire, business reporter
A new survey has suggested that fixing your energy tariff could save you just £5 a year - far less than savings in years gone by.
It had been the case that a typical customer could gain roughly £60 to £80 a year by setting bills for a 12-month period, according to research firm Cornwall Insight.
But cheaper deals have left the market amid forecasts of an October increase to the energy regulator's price cap, which places a maximum charge per unit of electricity.
Fixed tariffs have struggled to offer a cheaper alternative since the beginning of the energy price crisis at the outbreak of the Russia-Ukraine war.
Before Russia's invasion, customers could "consistently expect three-figure savings" if they switched to a fixed rate, Cornwall said.
While there had been hopes that the benefits of fixed tariffs could return, "optimism may have been premature", analyst at Cornwall Insight, James Mabey, added.
"Earlier this year, there were glimpses of savings in the hundreds of pounds, but fixed tariffs have since crept back up to around the same annual cost as the price cap," he said.
What is GDP, how is it measured and what is it used for?
Basically, GDP is a tool used to assess the size and health of an economy.
It stands for gross domestic product and measures the monetary value of final goods and services produced in the country over a given period.
Generally, if GDP is growing, and inflation is in check, it's a strong sign that the economy is doing well, with more jobs and better wages available, and people spending more money.
If it's falling, it signals the economy is doing badly, often bringing with it lower incomes and job cuts.
Governments, businesses and economists monitor GDP growth among other indicators to understand where the economy stands - and where it's headed.
How is it measured?
GDP can be measured in three ways:
- Output - the value of goods and services produced by all sectors of the economy - construction, retail, manufacturing etc;
- Expenditure - money invested by businesses and spending by households and the government;
- Income - the total value of income generated by the production of goods and services in terms of company profits and employee benefits.
Output is the most often cited of the three, as it is the measure with the best information available to the Office for National Statistics (ONS).
The ONS, the UK's largest statistics authority, publishes GDP figures every month (we'll get quarter figures this Thursday) - one of only a small number of countries to do so. However, the monthly data is more volatile, meaning the quarterly figures, which cover three-month periods, are seen as more important.
What does GDP not include?
GDP is an important tool - but it's not perfect.
The International Monetary Fund (IMF) cautions there are some things that GDP does not reveal, such as the overall standard of living or wellbeing of the country.
It points out that the quality of life can depend on how wealth is distributed among residents, and not just the overall level. Higher output may also come at the expense of leisure time or the running down of non-renewables, it notes.
GDP also excludes any unpaid work, such as childcare or looking after elderly relatives.
One of the best measures of living standards is GDP per capita - which reflects economic growth per head of the population. This also takes into account the affects of migration.
What's happening with GDP now - and how does it affect me?
According to the latest ONS figures, the UK economy returned to growth in May after flatlining in April. As we said above, new data is due on Thursday.
GDP is estimated to have grown 0.4% month-on-month - double the pace economists predicted.
Labour has committed to having the fastest economic growth in the G7 during their time in office.
But the IMF forecasts suggest the UK will fall far short of this both this year and next, with 0.7% growth this year considerably smaller than the 2.6% expected in the US, and next year's 1.5% smaller than Canada's projected 2.4%.
No growth can lead to recession
If GDP falls for successive three-month periods (quarters), the UK is in a technical recession.
During a recession, there's less money circulating: less money for workers from their employers, less money being spent in shops and restaurants, and less money going to the government in tax from wages to pay for things like benefits and public services.
You can learn more about this in our explainer here...
Read other entries in our Basically series...
Monzo users report banking app is down
Thousands of Monzo users have reported the banking app is down.
Tracking monitor Downdetector said more than 2,000 reports of the app not working had been lodged so far.
More than nine million people use Monzo.
Users have been met with this message when opening the app...
Some have complained on social media.
One said: "Any idea how long before you are back online gotta pay rent and unable to and even your phone lines are down."
Another said: "Just transferred money to my account and have not received it yet."
Sky News has reached out to Monzo for comment, but has not received a reply.
However, Monzo replied to one user, saying they were aware of the issue...
Greggs boss reveals they want to eat up evening meal competition
Not content with being named the UK's top on-the-go breakfast destination this year (ahead of McDonald's), Greggs is now targeting the evening meal market - with pizza potentially the main attraction.
CEO Roisin Currie said the bakery chain's evening sales were "growing faster" than any other time of day.
"We are very focused on evening trading at the moment because we believe this is a really profitable part of the business long term," she told The Grocer.
Ms Currie said the company could offer a "breadth of range" to customers - including hot and cold sandwiches, pizza, bakes and salads.
"Pizza is very important for us when competing with the food-to-go market as a whole," she said.
Up to 160 new sites, set up for evening trading, could be opened each year as part of the plans, The Grocer reports. The stores would be opened near train stations, airports and popular commuter routes.
"If a [Greggs] was open and busy at 7am, the shop would open at 6.30am," said Ms Currie. "The same way, if a shop is still busy at 7pm and there is trade around that shop, we will stretch their hours to 7.30pm."
