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| Many UK exporters say Brexit trade deal not helping – business live | Many UK exporters say Brexit trade deal not helping – business live |
| (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. | |
| 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. | |
| 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. | |
| 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 encouraged firms to look at other global markets | |
| It had provided stability to allow firms to plan. | |
| But this was outnumbered by 320 comments criticising the deal, such as: | |
| 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 | |
| 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. | |
| 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, | |
| 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. | |
| 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. | |
| 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 | |
| 7am GMT: European new car registrations for January | |
| 9am GMT: ECB publishes economic bulletin | |
| 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 weekly jobless figures | |
| Sovereign dollar bonds issued by Ukraine and Russia have dropped this morning, after reports of clashes in Ukraine’s eastern region. | |
| Reuters has the details: | |
| The selloff came as Russian-backed separatists in eastern Ukraine, and Ukraine’s military, blamed each other for the shelling reported this morning. | |
| The Russian rouble has also weakened, dropping around 1.5% to reverse Tuesday’s recovery. | |
| In the City, the FTSE 100 index is down around 0.66% as the Ukraine crisis weighs on markets. | |
| The blue-chip index has lost 50 points to 7553, with Russia’s steelmaker Evraz leading the fallers (-6%). | |
| Travel companies are also lower, with British Airways parent company IAG down 2.2%, and Rolls-Royce (which makes and services jet engines) off 2.5%. | |
| Bankers at Standard Chartered have shared a $1.37bn bonus pot for 2021, up 38%, even as it said it was trying to cut fixed costs. | |
| It’s a sign of how banks were returning to bumper payouts after weathering the Covid-19 pandemic in better shape than expected, as most workers face a painful squeeze on their finances. | |
| London-headquartered Standard Chartered said the payout increase reflected a normalisation of bonuses after a lean 2020, but it also reflected a hot hiring market as lenders worldwide paid up to retain key staff. | |
| The bigger bonus pool came as Standard Chartered set out plans to cut annual expenses by $1.5bn, as part of a broader goal to achieve double-digit returns by 2024, which it outlined on Thursday as it reported annual results. | |
| This bonus season is expected to be the most lucrative since the 2008 global financial crisis, as banks benefit from the economic recovery and a boom in takeover deals. | |
| Immigration changes due to Brexit will not deliver the ‘high wage‘ economy that Boris Johnson has promised, a new report from the Resolution Foundation shows. | Immigration changes due to Brexit will not deliver the ‘high wage‘ economy that Boris Johnson has promised, a new report from the Resolution Foundation shows. |
| Resolution has analysed UK migration trends, and concluded that the economic impact of ending freedom of movement has been exaggerated by both its supporters and opponents. | Resolution has analysed UK migration trends, and concluded that the economic impact of ending freedom of movement has been exaggerated by both its supporters and opponents. |
| The new regime is driving changes in the UK labour market, particularly in lower-paying industries which rely on migrant labour and typically see high staff turnover, such as farming or food production | The new regime is driving changes in the UK labour market, particularly in lower-paying industries which rely on migrant labour and typically see high staff turnover, such as farming or food production |
| Overall, total migration was responsible for 77% of labour market growth between 1994 and 2019. EU workers made up 34% of total growth, and were increasingly likely to have worked in lower-paid roles by the time Brexit happened. | Overall, total migration was responsible for 77% of labour market growth between 1994 and 2019. EU workers made up 34% of total growth, and were increasingly likely to have worked in lower-paid roles by the time Brexit happened. |
| But Resolution report’s found that while the Government’s policy is likely to reduce migration into the UK, it is unlikely to significantly boost productivity or deliver a big hit to the public finances. | But Resolution report’s found that while the Government’s policy is likely to reduce migration into the UK, it is unlikely to significantly boost productivity or deliver a big hit to the public finances. |
| But, the reporst says we shouldn’t expect a reduction in migrant workers to automatically drive up wages for UK-born workers in these same sectors. Firms may look to use labour-saving technology instead -- leading to fewer jobs. | But, the reporst says we shouldn’t expect a reduction in migrant workers to automatically drive up wages for UK-born workers in these same sectors. Firms may look to use labour-saving technology instead -- leading to fewer jobs. |
| If they can’t, they must choose between raising wages and raising prices (hitting incomes elsewhere in the economy), leading to production falling over the medium-to-long term. | If they can’t, they must choose between raising wages and raising prices (hitting incomes elsewhere in the economy), leading to production falling over the medium-to-long term. |
| If low-productivity, migrant-reliant sectors like farming and food manufacturing shrink, then average productivity could rise. Even so, the Prime Minister’s claims that controlled migration is the key to a new high wage economic strategy “are overdone”, Resolution says. | If low-productivity, migrant-reliant sectors like farming and food manufacturing shrink, then average productivity could rise. Even so, the Prime Minister’s claims that controlled migration is the key to a new high wage economic strategy “are overdone”, Resolution says. |
| Kathleen Henehan, Senior Research and Policy Analyst at the Resolution Foundation, explains: | Kathleen Henehan, Senior Research and Policy Analyst at the Resolution Foundation, explains: |
| Late last year, the government extended the UK seasonal agricultural workers’ visa scheme for another three years , meaning fruit and vegetable growers will be able to recruit overseas workers to help bring in harvests, following warnings that crops would rot in the fields otherwise. | Late last year, the government extended the UK seasonal agricultural workers’ visa scheme for another three years , meaning fruit and vegetable growers will be able to recruit overseas workers to help bring in harvests, following warnings that crops would rot in the fields otherwise. |
| One-in-five workers in food manufacturing in 2017-19 were from the EU and would be ineligible for a SWV, meaning the sector is likely to need to change significantly or shrink in the years ahead, Resolution’s report found. | One-in-five workers in food manufacturing in 2017-19 were from the EU and would be ineligible for a SWV, meaning the sector is likely to need to change significantly or shrink in the years ahead, Resolution’s report found. |
| The food and accommodation sectors who rely on EU-workers in SWV-ineligible roles for 10% of their workforce have seen vacancies double as the economy reopened. | The food and accommodation sectors who rely on EU-workers in SWV-ineligible roles for 10% of their workforce have seen vacancies double as the economy reopened. |
| Data this week has shown that inflation has outpaced wage growth, with the consumer prices index expected to rise above 7% by April. | Data this week has shown that inflation has outpaced wage growth, with the consumer prices index expected to rise above 7% by April. |
| Brexit trade frictions have also been cited as a factor pushing down business confidence in Scotland. | Brexit trade frictions have also been cited as a factor pushing down business confidence in Scotland. |
| Scottish businesses are less optimistic than elsewhere in the UK, according to the ICAEW (Institute of Chartered Accountants in England and Wales) Business Confidence Monitor, released this morning. | Scottish businesses are less optimistic than elsewhere in the UK, according to the ICAEW (Institute of Chartered Accountants in England and Wales) Business Confidence Monitor, released this morning. |
| This may be because domestic sales and export performance have been more subdued than the UK average over the last year. | This may be because domestic sales and export performance have been more subdued than the UK average over the last year. |
| Over the last year, Scottish domestic sales increased by 4.6%, compared to 5.3% for the UK, ICEAW reports. Export growth was weaker too, with sales rising by just 1.5% over the same period, below the UK average (2.2%). | Over the last year, Scottish domestic sales increased by 4.6%, compared to 5.3% for the UK, ICEAW reports. Export growth was weaker too, with sales rising by just 1.5% over the same period, below the UK average (2.2%). |
| ICEAW says: | ICEAW says: |
| Scottish exports of fresh fish and seafood were quickly disrupted when the Brexit trade deal came in last year, with delays due to new paperwork such as health certificates and customs documentation. | Scottish exports of fresh fish and seafood were quickly disrupted when the Brexit trade deal came in last year, with delays due to new paperwork such as health certificates and customs documentation. |
| Businesses do expect exports to rise this year, by 3.7% - but again, that lags behind their UK counterparts. | Businesses do expect exports to rise this year, by 3.7% - but again, that lags behind their UK counterparts. |
| The survey also found that Scottish firms are facing recruitment challenges and rising costs, | The survey also found that Scottish firms are facing recruitment challenges and rising costs, |
| For the first time since the BCM survey began, the availability of non-management skills and staff turnover were the most prominent growing challenges for companies. | For the first time since the BCM survey began, the availability of non-management skills and staff turnover were the most prominent growing challenges for companies. |
| The Herald newspaper has more details: | The Herald newspaper has more details: |
| The Herald: Brexit ‘friction’ cited as Scottish business confidence plunges to lowest level in UK | The Herald: Brexit ‘friction’ cited as Scottish business confidence plunges to lowest level in UK |
| The British Chambers of Commerce have identified five issues holding back the flow of goods and services into the EU - and proposed five solutions to address some of these complexity, bottlenecks and pressures on firms. | The British Chambers of Commerce have identified five issues holding back the flow of goods and services into the EU - and proposed five solutions to address some of these complexity, bottlenecks and pressures on firms. |
| Dr Philippa Whitford MP, the SNP’s Europe spokesperson, said: | Dr Philippa Whitford MP, the SNP’s Europe spokesperson, said: |
| The BCC’s survey results are “extremely worrying”, says Nick Thomas-Symonds, shadow international trade secretary: | The BCC’s survey results are “extremely worrying”, says Nick Thomas-Symonds, shadow international trade secretary: |
| 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 |
| 9am GMT: ECB publishes economic bulletin | 9am GMT: ECB publishes economic bulletin |
| 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 |