Business news live - UK at risk of 'unnecessarily painful recession' after Brexit because of bad economic policy

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What happens next with Brexit

The UK faces an “unnecessarily painful” recession thanks to policies pursued by the government and Bank of England, according to a report.

Data out today suggests that the economy may avoid a recession this quarter but growth remains subdued. Low interest rates mean the UK's ability to absorb the shock of a downturn is “blunted”, the Resolution Foundation said

UK household families are already more vulnerable to the impact of a downturn because they have run down their savings while the social safety net has been significantly eroded during years of austerity, the think tank said.

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[9 September 2019 11:51 · ben.chapman]

Primark's price pledge

Primark has promised customers it will not raise prices despite seeing costs soar as the pound’s value has fallen.

finance director, John Bason, told the PA news agency that Primark’s costs would rise this year thanks to Brexit hammering the pound while the dollar has remained strong.

But the group as a whole will gain around £10m because two thirds of its profit is made outside the UK.

"Consumers can comfortably expect no price increases,” Mr Bason said. “We are managing the decline in the pound and we accept it will affect margin and take that on board ourselves."

[9 September 2019 12:02 · ben.chapman]

Brexit boosts beer prices for Brits abroad

British holidaymakers are paying around 16 per cent more for a pint of beer than before the Brexit referendum, according to a foreign exchange company.

The weakened pound has added 49p to the cost of a beer, taking it to £3.61, on average, Caxton FX said

It compared exchange rates in a range of countries to those available in June 2016.

Visitors to Thailand have seen the cost of a beer soar 38 per cent while tourists to the US are paying around 20 per cent more.

In Norway the price has jumped 9 per cent to £7.66 and in France it is up 16 per cent to £4.69.

Bargains can still be had in Romania and the Czech Republic where the cost is around £1.30, according to the research.

[9 September 2019 12:42 · ben.chapman]

British supermarkets say they cannot be blamed if little food left on shelves after no-deal Brexit

“There is a clear attempt [by government] to talk to a narrative which is that companies, if only they prepared properly, would be able to cope and it’s companies' fault if they haven’t,” said Justin King, who was CEO of Sainsbury’s, Britain’s second-largest supermarket chain, for 10 years.

“As night follows day, if 50 per cent of lorries are delayed there will be gaps on the shelves inside seven days,” Mr King, currently a director at Marks & Spencer, told Reuters.

Full story here:

Supermarkets cannot be blamed if little food left on shelves after no-deal Brexit

[9 September 2019 12:43 · ben.chapman]

Here's the full story on those July GDP numbers from Economics and Business Editor, Olesya Dmitracova:

UK GDP grows in July, suggesting economy will avoid recession for now

Britain’s economy expanded in July at the fastest pace since January, easing recession fears, although the longer-term trend remained weak.

GDP grew 0.3 per cent, beating economists’ forecasts for a 0.1 per cent rise, according to data from the Office for National Statistics (ONS).

However, in the three months to July, economic output was flat.

Economists welcomed the monthly rise, saying Britain will probably avoid a recession after a surprise economic contraction in the second quarter. A recession is typically defined as two consecutive quarters of falling GDP.

“July figures point at a mild rebound at the start of the third quarter, although continued uncertainty around Brexit date and format will likely see a relatively subdued quarter,” said Yael Selfin, chief economist at KPMG UK.

[9 September 2019 13:33 · ben.chapman]

Pound hits six-week high

Sterling has risen to $1.2380, its highest in six weeks, after better-than-expected GDP figures for July indicated that the UK will avoid a recession this quarter.

The pound is also up 0.44 per cent against the euro to €1.1204.

[9 September 2019 13:46 · ben.chapman]

Nissan's chief executive resigns

Hiroto Saikawa has resigned as boss of Nissan after admitting he was overpaid as part of a bonus scheme.

The board has approved Mr Saikawa's resignation which is effective from September 16, and a successor will be appointed next month.

Mr Saikawa's resignation comes a year after his predecessor Carlos Ghosn was ousted on the back of financial misconduct allegations, including payments of millions of dollars of hidden income.

Mr Saikawa acknowledged last week that he had received dubious payments in 2013.

[9 September 2019 15:27 · ben.chapman]

Lloyds' latest £1.8bn PPI hit once again exposes big investors' failure

James Moore writes: The fresh round of PPI hits flagged by RBS, Virgin, and Co-op were always going to serve as hors d’oeuvres to Lloyds.

The main course has proven harder to stomach than anyone could have expected: a late spike in claims that could cost the bank up to £1.8bn. 

Complaints had been running at just under 200,000 a week but that number quadrupled as the deadline agreed between the banks and the Financial Conduct Authority for submitted them approached. 

Lloyds latest £1.8bn PPI hit once again exposes big investors' failure to be more than absentee landlords