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| Many UK exporters say Brexit trade deal hurts business; price rises loom; US jobless claims rise – as it happened | |
| (32 minutes later) | |
| Rolling coverage of the latest economic and financial news | Rolling coverage of the latest economic and financial news |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| UK businesses are calling on the government for more help exporting to Europe, after new research found that many firms believed the EU trade deal was not helping them grow or increase sales. | UK businesses are calling on the government for more help exporting to Europe, after new research found that many firms believed the EU trade deal was not helping them grow or increase sales. |
| The British Chambers of Commerce (BCC) has surveyed 1,000 businesses, and found that a majority said it has created problems such as pushing up costs, increasing paperwork and delays, and putting the UK at a competitive disadvantage. | The British Chambers of Commerce (BCC) has surveyed 1,000 businesses, and found that a majority said it has created problems such as pushing up costs, increasing paperwork and delays, and putting the UK at a competitive disadvantage. |
| Just 8% of firms agreed that the Trade and Co-operation Agreement (TCA) was ‘enabling their business to grow or increase sales’, while 54% disagreed. | Just 8% of firms agreed that the Trade and Co-operation Agreement (TCA) was ‘enabling their business to grow or increase sales’, while 54% disagreed. |
| For UK exporters 12% (or just one in eight) agreed that the TCA was helping them, while 71% disagreed. | For UK exporters 12% (or just one in eight) agreed that the TCA was helping them, while 71% disagreed. |
| The BCC received 59 comments on the merits of the TCA, which was agreed on Christmas Eve 2020, including: | The BCC received 59 comments on the merits of the TCA, which was agreed on Christmas Eve 2020, including: |
| It had allowed some companies to continue to trade without significant change | It had allowed some companies to continue to trade without significant change |
| It had encouraged firms to look at other global markets | It had encouraged firms to look at other global markets |
| It had provided stability to allow firms to plan. | It had provided stability to allow firms to plan. |
| But this was outnumbered by 320 comments criticising the deal, such as: | But this was outnumbered by 320 comments criticising the deal, such as: |
| It had led to rising costs for companies and their clients | It had led to rising costs for companies and their clients |
| Smaller businesses did not have the time and money to deal with the bureaucracy it had introduced | Smaller businesses did not have the time and money to deal with the bureaucracy it had introduced |
| It had put off EU customers from considering UK goods and services – due to the perceived costs and complexities. | It had put off EU customers from considering UK goods and services – due to the perceived costs and complexities. |
| William Bain, head of trade policy at the BCC, said smaller firms are particularly suffering from the change to trading relationships between the UK and the EU. | William Bain, head of trade policy at the BCC, said smaller firms are particularly suffering from the change to trading relationships between the UK and the EU. |
| The BCC has made a number of suggestions, including moves to reduce the complexity of exporting food, and tackling limitations on business travel and work activities in the EU. | The BCC has made a number of suggestions, including moves to reduce the complexity of exporting food, and tackling limitations on business travel and work activities in the EU. |
| Last week, MPs on parliament’s spending watchdog warned that Brexit red tape has damaged Britain’s trade with the EU. They fear the situation could worsen unless the government works with Brussels to reduce hold-ups at UK ports, | Last week, MPs on parliament’s spending watchdog warned that Brexit red tape has damaged Britain’s trade with the EU. They fear the situation could worsen unless the government works with Brussels to reduce hold-ups at UK ports, |
| A Government spokesperson, though, says businesses are getting support to help with Brexit changes: | A Government spokesperson, though, says businesses are getting support to help with Brexit changes: |
| But there is evidence that UK trade has weakened over the last few years. UK exports of goods to the EU were down £20bn last year compared with the last period of stable trade with Europe, according to official figures marking the first full year since Brexit. | But there is evidence that UK trade has weakened over the last few years. UK exports of goods to the EU were down £20bn last year compared with the last period of stable trade with Europe, according to official figures marking the first full year since Brexit. |
| Elsewhere today, companies such as Nestlé , Reckitt Benckiser and Standard Chartered are reporting results. | Elsewhere today, companies such as Nestlé , Reckitt Benckiser and Standard Chartered are reporting results. |
| European markest are set to open a little lower, with the Ukraine crisis firmly in focus. | European markest are set to open a little lower, with the Ukraine crisis firmly in focus. |
| The US has said that Russia has deployed another 7,000 troops to the border, while Ukraine has denied claims by Russian-backed separatists that it has conducted mortar attacks on their terrirory. | The US has said that Russia has deployed another 7,000 troops to the border, while Ukraine has denied claims by Russian-backed separatists that it has conducted mortar attacks on their terrirory. |
| The agenda | The agenda |
| 7am GMT: European new car registrations for January | 7am GMT: European new car registrations for January |
| 9.3am GMT: ONS weekly survey of economic activity and social change | 9.3am GMT: ONS weekly survey of economic activity and social change |
| 1.30pm GMT: US monthly building permits for January | 1.30pm GMT: US monthly building permits for January |
| 1.30pm GMT: US weekly jobless figures | 1.30pm GMT: US weekly jobless figures |
| Time to wrap up... here are today’s main stories. | |
| UK firms have warned that the Brexit free trade deal is pushing up costs, increasing paperwork and delays, and putting the UK at a competitive disadvantage. | |
| The British Chambers of Commerce, who conducted the survey, urged ministers to tackle the problems, with supplementary deals to smooth trade across the channel. | |
| Consumes have been warned to expect higher prices after Nestlé and Reckitt both warned they would pass on higher costs to consumers. | |
| European sales have hit a record January low, as semiconductor shortages hampered production. | |
| European stock markets have fallen, on fresh concerns that a Russian invasion of Ukraine could be imminent. The FTSE 100 fell by 0.9%, while Wall Street is down around 1%. | |
| US jobless claims have risen, while housing starts dropped in January as bad weather hampered construction workers. | |
| Here are today’s other main stories: | |
| Goodnight. GW | |
| Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdow, sums up the day: | Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdow, sums up the day: |
| All Europe’s markets finished in the red, with Germany’s DAX down 0.75%, France’s CAC off 0.45%, and Italy’s FTSE Mib 1.1% lower. | All Europe’s markets finished in the red, with Germany’s DAX down 0.75%, France’s CAC off 0.45%, and Italy’s FTSE Mib 1.1% lower. |
| Britain’s FTSE 100 index has closed 66 points lower at 7537, down almost 0.9% today. | Britain’s FTSE 100 index has closed 66 points lower at 7537, down almost 0.9% today. |
| Russian steelmaker Evraz finished as the top faller, down 7.5%, with investors concerned by Joe Biden’s warning that a Russian invasion of Ukraine is imminent. | Russian steelmaker Evraz finished as the top faller, down 7.5%, with investors concerned by Joe Biden’s warning that a Russian invasion of Ukraine is imminent. |
| Airline group IAG fell 4%, and Rolls-Royce lost 3%, on concerns that travel could be hit by geopolitical tensions. | Airline group IAG fell 4%, and Rolls-Royce lost 3%, on concerns that travel could be hit by geopolitical tensions. |
| Oil giant Shell also pulled the index down; it dropped 2.7%, following the 2% drop in crude prices today. Financial stocks were weaker too, with Abrdn (-4.1%) and Prudential (-2.7%) in the fallers. | Oil giant Shell also pulled the index down; it dropped 2.7%, following the 2% drop in crude prices today. Financial stocks were weaker too, with Abrdn (-4.1%) and Prudential (-2.7%) in the fallers. |
| On the smaller FTSE 250 index, Eastern Europe-focused airline Wizz Air fell 7.4%. | On the smaller FTSE 250 index, Eastern Europe-focused airline Wizz Air fell 7.4%. |
| Nestlé and Reckitt’s comments today are a sign that consumers will face further price rises this year, says Spencer Brown, senior vice president at procurement and supply chain consultancy Proxima: | Nestlé and Reckitt’s comments today are a sign that consumers will face further price rises this year, says Spencer Brown, senior vice president at procurement and supply chain consultancy Proxima: |
| US retail giant Walmart has overcome supply chain problems to beat profit and sales expectations on Thursday and set a strong full-year earnings forecast. | US retail giant Walmart has overcome supply chain problems to beat profit and sales expectations on Thursday and set a strong full-year earnings forecast. |
| The US’s largest retailer grew revenues by 0.5% in the last quarter, with net sales in the US 5.7% higher than a year ago. | The US’s largest retailer grew revenues by 0.5% in the last quarter, with net sales in the US 5.7% higher than a year ago. |
| Walmart says it “navigated higher supply chain costs and pandemic-related challenges well”. | Walmart says it “navigated higher supply chain costs and pandemic-related challenges well”. |
| It expects to grow net sales and operating profits by 3% this year, despite ongoing supply-chain issues and rampant inflation. | It expects to grow net sales and operating profits by 3% this year, despite ongoing supply-chain issues and rampant inflation. |
| The company may benefit from the inflationary squeeze, as its huge size allows it to offer better deals... or to absorb price pressures to win customers. | The company may benefit from the inflationary squeeze, as its huge size allows it to offer better deals... or to absorb price pressures to win customers. |
| Walmart chief financial officer Brett Biggs told a conference call with analysts that the company expects U.S. consumers to remain in a “generally favorable economic position throughout the year”, Bloomberg reports. | Walmart chief financial officer Brett Biggs told a conference call with analysts that the company expects U.S. consumers to remain in a “generally favorable economic position throughout the year”, Bloomberg reports. |
| Journalist Charles Fishman has more details, and makes some very interesting points about Walmart’s success: | Journalist Charles Fishman has more details, and makes some very interesting points about Walmart’s success: |
| Gas prices are rising too, with the next-day contract for UK wholesale gas up 6.3% at 175p per therm (back towards Monday’s two-week high). | Gas prices are rising too, with the next-day contract for UK wholesale gas up 6.3% at 175p per therm (back towards Monday’s two-week high). |
| Stocks are also lower in Europe. | Stocks are also lower in Europe. |
| The UK’s FTSE 100 is now down 87 points, or 1.15%, back towards the lows seen on Monday, with travel companies, oil firms and miners all weaker. | The UK’s FTSE 100 is now down 87 points, or 1.15%, back towards the lows seen on Monday, with travel companies, oil firms and miners all weaker. |
| Germany’s DAX is down 0.75%, while Italy’s FTSE Mib is off 1%. | Germany’s DAX is down 0.75%, while Italy’s FTSE Mib is off 1%. |
| In New York, stocks have opened lower as the Ukraine crisis continues to worry investors. | In New York, stocks have opened lower as the Ukraine crisis continues to worry investors. |
| The main indices are in the red, shortly after president Joe Biden told reporters that a Russian invasion could happen in the next “several days”. Biden described the chance of conflict in the region as “very high.” | The main indices are in the red, shortly after president Joe Biden told reporters that a Russian invasion could happen in the next “several days”. Biden described the chance of conflict in the region as “very high.” |
| The Dow Jones industrial average of 30 large US companies has dropped by 315 points, or 0.9% to 34,619 points. | The Dow Jones industrial average of 30 large US companies has dropped by 315 points, or 0.9% to 34,619 points. |
| The broader S&P 500 is also down 0.9%, with the Nasdaq Composite off 1%. | The broader S&P 500 is also down 0.9%, with the Nasdaq Composite off 1%. |
| Biden’s comments came after Nato secretary-general Jens Stoltenberg said the alliance is concerned that Russia is “trying to stage a pretext for an armed attack against Ukraine”. | Biden’s comments came after Nato secretary-general Jens Stoltenberg said the alliance is concerned that Russia is “trying to stage a pretext for an armed attack against Ukraine”. |
| In another step, Russia has expelled the deputy US ambassador to Moscow, Bartle Gorman. | In another step, Russia has expelled the deputy US ambassador to Moscow, Bartle Gorman. |
| Associated Press has more details: | Associated Press has more details: |
| Rowan Williams, the former archbishop of Canterbury, has called on the UK government to impose a wealth tax on the super-rich to help tackle “spiralling inequality”, which he said was “deeply damaging to our collective morale and trust”. | Rowan Williams, the former archbishop of Canterbury, has called on the UK government to impose a wealth tax on the super-rich to help tackle “spiralling inequality”, which he said was “deeply damaging to our collective morale and trust”. |
| Williams, who was the most senior bishop in the Church of England from 2002 to 2012, on Thursday joined a growing group of moral leaders demanding a one-off tax on the richest 1% of the population to help close the “staggering” gap between the richest and poorest in society. | Williams, who was the most senior bishop in the Church of England from 2002 to 2012, on Thursday joined a growing group of moral leaders demanding a one-off tax on the richest 1% of the population to help close the “staggering” gap between the richest and poorest in society. |
| “Spiraling inequality is a major issue in our society, and all the evidence suggests this is deeply damaging to our collective morale and trust,” Williams said. | “Spiraling inequality is a major issue in our society, and all the evidence suggests this is deeply damaging to our collective morale and trust,” Williams said. |
| Williams told the super-rich they should not view paying back to wider society as a tax burden but as “an opportunity to build a stable, sustainable economy that works for everyone”. | Williams told the super-rich they should not view paying back to wider society as a tax burden but as “an opportunity to build a stable, sustainable economy that works for everyone”. |
| Here’s the full story: | Here’s the full story: |
| British Gas has set up a scheme to protect the hundreds of millions of pounds it receives in advance payments from customers towards their future energy bills, after the “national scandal” that left households on the hook to pay £500m after a string of energy firms spent consumers’ deposits before going bust. | British Gas has set up a scheme to protect the hundreds of millions of pounds it receives in advance payments from customers towards their future energy bills, after the “national scandal” that left households on the hook to pay £500m after a string of energy firms spent consumers’ deposits before going bust. |
| The Centrica-owned energy firm has pledged to ringfence the £294m it holds in credit balances through direct debits from its 7 million customers in a bank account separate from funds it uses to run the day-to-day business. | The Centrica-owned energy firm has pledged to ringfence the £294m it holds in credit balances through direct debits from its 7 million customers in a bank account separate from funds it uses to run the day-to-day business. |
| “I think that in any other walk of life using over £500m of customers’ money to prop up a business that subsequently failed would be considered a national scandal,” said Chris O’Shea, the chief executive of Centrica. | “I think that in any other walk of life using over £500m of customers’ money to prop up a business that subsequently failed would be considered a national scandal,” said Chris O’Shea, the chief executive of Centrica. |
| New house-building projects fell by 4.1% across America last month, as builders continue to face supply chain disuption, rising materials prices...and bad weather. | New house-building projects fell by 4.1% across America last month, as builders continue to face supply chain disuption, rising materials prices...and bad weather. |
| Housing starts in January fell to an annual rate of 1,638,000, from a December estimate of 1,708,000. | Housing starts in January fell to an annual rate of 1,638,000, from a December estimate of 1,708,000. |
| That could be a sign that rising borrowing costs are weighing on the sector. If so, that would be a blow to efforts to increase housing supply, and address the shortage that pushed prices to record levels. | That could be a sign that rising borrowing costs are weighing on the sector. If so, that would be a blow to efforts to increase housing supply, and address the shortage that pushed prices to record levels. |
| But it’s also due to the freezing weather which hit the US last month, with Winter Storm Izzy bringing heavy snow and damaging ice to the southeastern US, disrupting power supplies and forcing flights to be cancelled. | But it’s also due to the freezing weather which hit the US last month, with Winter Storm Izzy bringing heavy snow and damaging ice to the southeastern US, disrupting power supplies and forcing flights to be cancelled. |
| House completions were down 5.2% in January -- which may also show that work was held up in the freezing weather. | House completions were down 5.2% in January -- which may also show that work was held up in the freezing weather. |
| The number of building permits (giving permission to start construction) rose 0.7% during the month. | The number of building permits (giving permission to start construction) rose 0.7% during the month. |