Showing posts with label UK. Show all posts
Showing posts with label UK. Show all posts

Feb 5, 2021

News | UK: Are Energy Prices Will Rise for Millions of UK Households

Energy prices to rise for millions of households

By Kevin Peachey

By Kevin Peachey
Personal finance correspondent, BBC News

Woman examines energy meterimage copyrightGetty Images

Energy prices will rise for millions of people across the UK in April, at a time when finances are squeezed.

Regulator Ofgem said the price cap for default domestic energy deals would be raised to cover suppliers' extra costs.

The typical gas and electricity customer is likely to see their bill go up by £96 to £1,138 a year.

Charities say the timing is a "double whammy", coming at a time when the government's Covid-related support schemes are due to be wound down.

Ofgem said rising wholesale costs were behind the increase, adding that the existence of the price cap meant households saved £100 a year, and they could also switch to a better deal.

breakdown of an energy bill

Jonathan Brearley, chief executive of the regulator, said:  "Energy bill increases are never welcome, especially as many households are struggling with the impact of the pandemic. We have carefully scrutinised these changes to ensure that customers only pay a fair price for their energy.

"As the UK still faces challenges around Covid-19, during this exceptional time I expect suppliers to set their prices competitively, treat all customers fairly and ensure that any household in financial distress is given access to the support they need."

He said a rise in spring, when less energy was used, was better than waiting until the autumn.

Peter Earl, head of energy at price comparison website, said: "Raising energy costs for millions of households by an average of £96 is an extraordinary move in the current environment.

"It calls into question the whole point of a price cap which was designed to protect the most vulnerable households."

Who is affected?

The price cap, set twice a year by the regulator, affects 11 million households in England, Wales and Scotland who have never switched suppliers or whose discounted deals have expired. Northern Ireland sets its own cap.

That accounts for about half of all UK households. The remainder are on so-called fixed deals, which will not be affected.

The cap for prepayment meter customers will go up by £87  to £1,156, affecting another four million customers.

The caps set the prices that suppliers can charge for each unit of energy, but that does not mean there is a limit to how much people can pay. The more gas and electricity you use, the higher the bill.

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Extra layers

Lyn Clark

image captionLyn Clark says she has put on extra layers

Lockdown life means Lyn Clark, like so many others, has been spending a lot more time at home. Her energy bills have been rising as a result.

"I'm trying not to switch on heaters in the rooms that are not being used," she said.

While prices are capped on default tariffs, the amount people pay in total is likely to have risen during more time at home.

Mrs Clark said she had been doing her best to keep the costs down.

"I find myself putting on extra layers," she said. "I also go for a walk each lunchtime to make sure I'm warmer."

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Why are prices rising?

In October, Ofgem lowered the price cap by £84, but it has now more than reversed that with the rise scheduled for April.

The extra allowance for suppliers to raise prices is the result of greater costs on the wholesale markets.

It also includes an allowance to charge an extra £23 a year to cover bills that have not been paid. Ofgem said a further delay in recouping these costs would only create greater costs next winter.

Charities point out that raising prices for everyone on these tariffs is likely to increase the number of people unable to pay.

Are people struggling to pay?

Citizens Advice said its research in December indicated that 2.1 million households were behind on their energy bills, a rise of 600,000 compared with before the pandemic.

It was concerned that the planned removing of assistance for recipients of universal credit, as well as other government financial support schemes being wound down, meant there were serious worries over debt.

Smart meterimage copyrightGetty Images

Alistair Cromwell, acting chief executive of Citizens Advice, said: "This increase will be a heavy blow to a lot of households. For many people on universal credit it will come at the same time as the £20 a week increase to the benefit is set to end.

"With a tough jobs market and essential bills rising, now is not the time for the government to cut this vital lifeline".

Adam Scorer, of National Energy Action, which has also warned of financial pressures on households, said: "People on the lowest incomes and in the worst housing are always hit hardest.

"Heating a poorly insulated home costs around £50 a month more than a decent home. If bills rise by £96, millions of households have two stark choices; stay cold or fall further into debt."

He argued that prepayment meter customers should not have been included in the cap as they found it difficult to switch.

Even if households do switch, the cost of so-called fixed-rate deals has also been rising. The cheapest on the market rose by more than £50 in the last three months of the year to £851.

Emma Pinchbeck, the chief executive of Energy UK, a trade body for energy suppliers, said the price cap was set to be fair to customers and suppliers.

"Today's rise reflects that the cost of buying energy - by far the biggest part of the bill - has risen significantly over the last few months," she said.

"It also includes a greater allowance for debt given the difficulties many customers are facing in paying bills at present."

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News | UK: Deliveries by Peloton are hit by Brexit and Port Deliveries.

Peloton deliveries hit by Brexit and port delays

BBC News

a woman with a Peloton bikeimage copyrightGetty Images

UK consumers who have ordered Peloton exercise equipment may have a frustrating wait, the firm has warned.

Peloton said UK stock had been disrupted by Brexit while global shipping congestion had also led to "significant delays".

The company has struggled to keep up with surging demand for its exercise machines during the pandemic.

"These unpredictable delays have resulted in painful delivery reschedules for many people," it said.

Peloton has been one of the big beneficiaries of lockdown as people have been looking for ways to exercise at-home.

Sales of its technology-focused machines have soared in the past year as the pandemic shut gyms, but the company has struggled to keep up with demand for months, leading to long wait times and frustrated customers.

Mr Foley, co-founder of the company, was very apologetic. "We are (and always have been) a company that is deeply committed to your happiness and we've fallen short of that in this regard," he said.

Significant delays

The company blamed the delays on "a global increase in shipping traffic" which "has added significant delays to all sorts of goods coming into ports around the world, including Peloton products".

It also pointed to port congestion in Los Angeles and Long Beach, where shipping container volume has doubled in the last 12 months.

Mr Foley added: "In Europe, despite our best efforts to prepare for the impact of Brexit on January 1st, we experienced additional disruption to inventory bound for the UK and Germany."

He said the company was shipping some of its products by air instead of by sea to get them to customers, but added that because of its environmental concerns "we will not always fly bikes in airplanes over the ocean ".

"These unprecedented measures are for these unprecedented times," Mr Foley said.

Record sales

On Thursday, Peloton reported record quarterly sales to 31 December of more than $1bn (£0.73bn) and raised its sales forecast for the full year to $4.08bn, up from a previous forecast of $3.90bn.

It said connected fitness subscriptions - users who pay for classes on Peloton equipment - had jumped 134% to 1.67 million and would reach 1.98 million this year.

Paid digital subscriptions - people who subscribe to classes on smartphones and other devices - soared by 472% to about 625,000.

The company said it now has more than 4.4 million users.

It is not only attracting more customers, but they are working out more. Peloton said that workouts on its equipment rose 303% to 98.1 million with an average of 21.1 workouts per month by each user, up from under 13 monthly workouts a year-ago.

Sep 14, 2020

News | Business | Economy | UK | Wales: Slow recovery and uncertainty in towns after virus

Sarah Dickins 

June Phillips
Image caption June Phillips said people from the valleys were not coming into Abergavenny in the same numbers
How is the High Street doing after a turbulent period led many to shut down?
Abergavenny in Monmouthshire is where urban valleys and rural communities meet.
Living standards here are typical of Wales as a whole, in terms of incomes, jobs, benefits and housing.
What better place to start to look at this market town than the market?
Cattle and sheep were sold here until a few years ago but now it has largely bargains on show: cheap meat, cheap clothes and even a pawn broker.
For 40 years, June Phillips has been growing plants with her brother Steve and selling them at the market.
They have loyal customers, she says, made up of country people who come into town and valleys people from as far as Merthyr Tydfil.
When Covid-19 closed the market they delivered to about 100 of their customers. The market has been open again for a month but she says shoppers aren't spending like they did before lockdown.
"They are buying but it's a lot quieter and people are still very nervous about coming out," she said.
"We are still delivering to about 50 people who are not confident that it is all over so it's going to take a long time to get back to normal."
Household finances in Wales have been particularly hit, while Office for National Statistics (ONS) figures out last week showed that, despite shops, pubs and restaurants re-opening, the proportion of people who were actually working at the end of July was lower than before lockdown.
Surjit Singh has been running a stall for five years but Covid-19 left it shut for five months.
"We've been going again for three weeks but it's quiet - people are scared to come out to the market. At the end of this year, I'll finish, it's hard work for little money."
What do we know about Abergavenny?
  • Abergavenny has a population of more than 13,500 - and it has a growing population in the 35 to 64 age bracket, according to the last census in 2011
  • This is the age group which the latest ONS economic survey suggests is particularly vulnerable to pressures on their personal finances
  • Unemployment was around the Wales average but higher than the county average and there were more people in lower-skilled jobs than in Monmouthshire as a whole
  • More people in the town also rated their health as bad or very bad compared to both the Wales and county averages
  • Monmouthshire had 11,300 workers furloughed at the end of July, while 75% of self-employed people in the county had taken advantage of the UK Government's income support scheme, with £2,800 being claimed on average
'We'll see what happens'
On to the town centre and what is the feeling there?
With weddings and big events cancelled with lockdown, there was no-one buying hats nor could they. Alison Tod has been making hats since she was a teenager. She shut up shop and dipped into her savings and had a grant to help towards her rent.
Alison believes money will be tight but believes there will still be a market.
"It's a luxury item for many people but in the context of a wedding, we'll always serve the principal guests but perhaps friends might go for something less expensive or not wear a hat?
"People will find a way to celebrate and want to dress up. We'll see what happens. We have to make sure we have the offer and the product to make it accessible for everybody."

'We'd help anyone we could'

Sophie Kumar, of Angel Bakery, starting using her van for a delivery service, selling bread and flour, but also helping out her own suppliers. She delivered salad, fruit and vegetables from a farmer who normally supplied restaurants, and got a brewery involved.
"We were lucky we were allowed to stay open," she said.
"We knew there was demand for food, it's not a luxury provision - and with our suppliers, you build up relationships, they're friends. We'd help anyone we could to get their products to the market place."
She said it had been a positive experience with customers too. They've now taken back almost all their staff.
During lockdown, deep-fried mozzarella sticks and cheese made by Abergavenny Fine Foods were in demand. The firm has a site in the middle of town and another over the hill in Blaenavon.
They were selling so much that only a handful of the 200 workforce were furloughed.
'For us the future is really bright'
Jason Rees, managing director of Abergavenny Fine Foods, said it has confounded their predictions.
"We budgeted for a slight slowdown in business but saw the exact opposite - double-digit growth since the start of lockdown. More people are enjoying the big night in - snack food they like at home, in addition we saw growth in our vegetarian and vegan lines.
"That means all our retailers are demanding more than we can cope with so we're actually increasing staff and capacity, forecasting another 20% uplift next year. For us the future is really bright."
But that confidence is not shared widely. A recent ONS survey found fewer businesses expected sales to pick up, while the accommodation and food industry consistently expected business to be better than it turned out to be.
'It's a chain'
Igino Spuntarelli, owner of Pizzorante and a nearby tapas bar, said it had been a worrying time but his landlord had helped over the rent and they had some savings. His 12 staff had been furloughed but are back.
The "eat out to help out" scheme also helped a lot, as the lockdown eased and should keep them going for a few months, but they are still not open at lunchtimes.
He is uncertain about the future.
"The problem will be if people start to lose jobs they will not go out, and we won't get business and the suppliers won't get business," he said.
"It's a chain. If someone fails, everybody will be in trouble."
And that's the fear. What will happen when the furlough scheme ends? Will we see mass lay-offs or small groups made redundant by lots of small employers?
In the end, are we spending enough to get our high streets through this and make up for months of lockdown . No-one can know the answer - yet.

Sep 2, 2020

News | Business | The Economy | UK: House prices at all-time high, says Nationwide

Rory Cellan-Jones.

houses for sale Image copyright Getty Images
House prices continued their post-lockdown recovery in August, notching up their highest monthly rise in more than 16 years, says the Nationwide.
"House prices have now reversed the losses recorded in May and June and are at a new all-time high," said its chief economist, Robert Gardner.
Prices rose by 2% last month, it said, taking the average price to £224,123.
The Nationwide said the recovery in housing market activity had been "unexpectedly rapid".
It said the increase in August was the highest since February 2004, when house prices rose by 2.7%.
As a result, annual house price growth accelerated to 3.7%, from 1.5% in July.
Rival mortgage lender, the Halifax, had already suggested a similar summer rise in prices.

The recent increase in prices has been the result of a range of factors, including demand carried over from lockdown or brought forward owing to the temporary suspension of stamp duty for some homes in England and Northern Ireland. In addition, the number of sales is still comparatively low, making prices more volatile.
First-time buyers will not welcome any rise in prices, and many will struggle with securing a mortgage as lenders tighten their criteria for offering a loan.
Anyone unable to offer a relatively large deposit and whose job is a risk amid the economic effects of the virus is likely to find it harder to get a home loan than before the outbreak.
"This rebound reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing," said Mr Gardner.
He added that "behavioural shifts" could be boosting activity, with people reassessing their housing needs after life in lockdown.
"These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.

"However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down.
"If this comes to pass, it would likely dampen housing activity once again in the quarters ahead."
The government's official forecaster, the Office for Budget Responsibility, has predicted house price falls, particularly next year.
The Resolution Foundation think-tank has warned that these predicted price falls could lead to some existing owners becoming trapped by negative equity - when the property is worth less than the mortgage secured on it.

'Bad dream'

Market commentators said the short-term boom in the market had been surprising, but many do not expect it to last.
Lucy Pendleton, director of estate agents James Pendleton, said: "Buyers emboldened by the stamp duty holiday have been engaged in a pitched battle for property, delivering a barnstorming recovery for the market.
"A stunning proportion of properties are now going for asking price or more, and offers are flooding in. It's like lockdown was a bad dream."
But Andrew Montlake, managing director of mortgage broker Coreco, said: "Two words: reality check. As strong as the property market is right now, it will not last.
"Demand is understandably strong after lockdown and the added bonus of the stamp duty holiday, but unemployment is rising by the day and the economic outlook is highly uncertain as the furlough scheme ends.
"In the final months of the year we will start to see a reversal in the current rate of house price growth."

Jun 23, 2020

News | UK | Economy | Economic Growth Policy: Ex-chancellor warns against return to austerity

3-4 minutes - Source: BBC

Sajid Javid Image copyright Getty Images
Former chancellor Sajid Javid has warned against a return to austerity as the UK economy struggles with the effects of the coronavirus crisis.
In a report by the Centre for Policy Studies, he also called for low taxes on business to aid the UK's recovery.
The conservative think tank, which was co-founded by Margaret Thatcher, said this should be based on "a dynamic private sector and low taxes".
Prime Minister Boris Johnson has said there will be no return to "austerity".
However, Labour has said the government should have offered more generous support during the crisis.
The report by the Centre for Policy Studies said that a quick economic bounce back from the coronavirus crisis is is unlikely.
But it said coronavirus emergency spending measures should be stopped, if possible, by April 2021.
It said that polls suggest the UK is "not ready" to return to austerity measures introduced by former chancellor George Osborne, "necessary though they were".
Instead, the report calls for tax to shift away from profits and incomes and towards reformed property tax and tightening tax reliefs "which unduly favour the wealthy".
National insurance should be given a "significant temporary" reduction to make it cheaper for employers to take on staff.

'Optimistic' hopes

Mr Javid, who resigned from the Treasury in February, said "early hopes of a V-shaped recovery" had "proved optimistic".
He predicted that "some long-term damage to the economy" had become "unavoidable", with as many as 2.5 million people out of work due to the Covid-19 lockdown.
But to speed up the rate of people re-entering employment, Mr Javid argued in the After The Virus report, published on Tuesday, that ministers must make it easier for businesses to hire workers.
"If we want to support and stimulate employment, then axiomatically the best option is to cut the payroll tax - employer's National Insurance," Mr Javid said.
"Tax employment less, and all other things being equal you will end up with more of it."
Other recommendations made in the report include temporarily cutting VAT and bringing forward "shovel ready" infrastructure projects, with Mr Javid arguing that the "only way out of this crisis is growth".
He joins fellow former chancellor Alistair Darling in calling for an emergency VAT cut to boost consumer spending, a move undertaken by the Labour peer after the 2008 financial crisis.
Mr Javid said: "If we want to secure the strongest possible recovery, it's essential that no stone is left unturned."
The Labour Party, in a report in March on the economic effects of coronavirus, criticised the government for acting too slowly and said it should underwrite a bigger proportion of wages for those who lose their jobs.

Jun 11, 2020

News | Energy | UK: British Gas owner Centrica to cut 5,000 jobs

Simon Jack 

van Image copyright Getty Images
Centrica, the owner of British Gas, is to cut 5,000 jobs this year to "arrest the decline" of the company.
New chief executive Chris O'Shea said the energy giant would strip out three layers of management to slim down the business.
About half of the jobs to go will be among the company's leadership, management and corporate staff.
This will include half of the senior leadership team of 40 who will leave by the end of August.
The company has seen customers leave to go to smaller suppliers and, in February, blamed a big loss in 2019 on the energy price cap and falling gas prices.
The price cap on electricity and gas bills came into effect in January 2019 and was a flagship policy of former Prime Minister Theresa May to end what she called "rip-off" prices.
A number of energy companies have said the policy has affected their business and profits. Centrica made a loss of £849m in the last calendar year compared with a £987m profit the year before.

'Difficult decisions'

Mr O'Shea was officially appointed as Centrica chief executive in April, having previously been the company's finance director. He took over from Iain Conn, who had said last summer that he intended to leave the role.
"Since becoming chief executive almost three months ago, I've focused on navigating the company through the Covid-19 crisis and identifying what needs to change in Centrica," Mr O'Shea said.
"We've learnt through the crisis that we can be agile and responsive in the most difficult conditions and put our customers at the heart of our decision making.
"I truly regret that these difficult decisions will have to be made and understand the impact on the colleagues who will leave us. However, the changes we are proposing to make are designed to arrest our decline, allow us to focus on our customers and create a sustainable company."
The company also said it would be consulting with staff on "simplifying" terms and conditions for employees in the UK.
It said it had 80 different employee contracts, each with multiple variants, with many of the agreements more than 35 years-old.

Jun 9, 2020

News | UK | Post Brexit Trade Deal:UK to start post-Brexit trade talks with Japan

3minutes - Source: BBC

British Prime Minister Boris Johnson and Japanese Prime Minister Shinzo Abe shake hands during their bilateral meeting on the sidelines of the G7 Summit. Image copyright Getty Images
Image caption Prime Ministers Boris Johnson and Shinzo Abe at the 2019 G7 Summit
The UK and Japan are set to begin talks on Tuesday aimed at reaching agreement on a post-Brexit trade deal.
The negotiations come as London and Tokyo work towards replacing the agreement Britain currently has with Japan through the European Union.
Without a new deal by 1 January 2021 the two countries will default to World Trade Organization trading terms.
That would mean tariffs and obstacles to commerce between the UK and its fourth-largest non-EU trading partner.
After decades of sharing its trade policy with the European Union, Britain is now embarking on free trade negotiations with countries around the world.
Last month the UK launched formal talks with the United States and is also hoping to reach a trade agreement with the EU by the end of this year.
Discussions with Brussels have proved to be particularly difficult, with no agreement so far on even the basic structure of what will be negotiated.
Discussions with Japan will initially be held via video link and be between the UK's International Trade Secretary Liz Truss and Japan's Minister for Foreign Affairs  Toshimitsu Motegi.
Ms Truss said that she hopes to build on the existing pact between Tokyo and Brussels: "We aim to strike a comprehensive free trade agreement that goes further than the deal previously agreed with the EU, setting ambitious standards in areas such as digital trade and services."
"This deal will provide more opportunities for businesses and individuals across every region and nation of the UK and help boost our economies following the unprecedented economic challenges posed by coronavirus," Ms Truss added.
According to British government figures, trade between the two countries totalled £31.4bn last year, with 9,500 UK-based businesses exporting goods to Japan.
The UK hopes that a free trade agreement with Japan will help it to eventually join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Membership of the 11-member CPTPP, a trade agreement that stretches from Australia to Chile, would significantly improve access for UK businesses to markets across the Asia-Pacific region.

Jun 8, 2020

News | Business | UK | Advertising Industry: How coronavirus is changing the adverts you see

Jonty Bloom

A billboard displaying a message in support of the NHS Image copyright Getty Images
Image caption Adverts praising the NHS have sprung up on UK billboards that may otherwise have been empty
The first rule of advertising is that your adverts have to be seen to have any effect.
This is why if you have managed to get out of the house recently in the UK you might have noticed that there are an awful lot of adverts supporting the National Health Service, and key workers on billboards and bus stops.
As Anja Lambrecht, professor of marketing at the London Business School, explains, it is one of the signs that the advertising industry is struggling.
"It is most obvious outdoors with billboards - no-one is driving past them, so no commercial firms are advertising," she says. "That is why they all have adverts for the NHS."
On TV an ever-growing number of us are increasingly watching streaming services such as Netflix and Amazon Prime, which don't have any adverts. Meanwhile on traditional commercial TV channels, there are lots of advertising breaks with very few adverts in them.
In the UK, ITV's advertising revenue was down 42% in April, while Fox in the US has seen revenues halve. It is a similar picture in other markets, because there are many products that are just not selling at the moment. So why advertise them?
Take the car industry - sales in the UK in April fell 97%, and are at the lowest level since 1946. They also fell by almost 50% in the same month in the US.
It may seem obvious therefore that car advertising is a waste of money. But cars are still being advertised - albeit to a lesser extent - on TV, on social media, and even on some billboards.
That is because the advertising and marketing industries have long memories, and worry that their customers don't. Companies with brands that have been around for decades, and which are worth billions, don't let them die in a recession.
"Brands are reminding people that they exist," says Andrew Stephen, L'Oréal professor of marketing at Oxford University's Saïd Business School. "Research shows time and time again in a crisis that turning off advertising altogether slows down the recovery."
So some businesses will always maintain advertising, no matter how bad things get, as Prof Lambrecht explains. "During the 2008 recession, Procter and Gamble and other similar companies kept their advertising constant. Firms try to stay in the consumer's mind, even if consumer spending falls. It pays to keep your brand in the consumer's eye."
In this respect, some companies are treating this pandemic as an economic shock like others they have been through in the past. But in other ways it is different. For a start, advertisers have to work out where to spend what money they do have.
There has long been a move away from traditional outlets such as TV, radio and newspapers, as the advertising industry realised they were no longer reaching their target audiences. The money instead has been spent where audiences and especially young audiences go - online and especially on social media.
But lockdowns also mean we are staying in and watching more TV, so which way should the industry jump? Matteo Montecchi, a fellow in marketing at King's Business School, seems fairly sure.
"Using digital and social media to get information out there, especially to the younger generation, was already a trend before the pandemic," he says. "This situation has just exacerbated that trend."
Which means that advertising executives are now working out where to spend their limited budgets online - not easy when the explosive growth in apps like TikTok means there are more and more places to spend what money they have.
But there is one added bonus - it seems likely that older generations have used the lockdown to increase their use of the internet, and can therefore be targeted more effectively online.
The downside is that some industries that are very dependent on advertising income are in a real bind. Newspaper revenue, for example, is falling dramatically.
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Global Trade

More from the BBC's series taking an international perspective on trade:
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Not only have sales slumped, the Financial Times' print sales fell 39% in April, but advertising revenue has as well. Not least because many firms don't want to put their ads next to stories about the pandemic - rather difficult when that is the biggest story around.
Mr Montecchi believes local press in particular is in a bad way. "Local papers will really suffer and may not survive," he says.
Finally, what of the advertising firms themselves?
All those creative types who usually write catchy slogans, film the latest supermodel's makeup range, and sell multinational industry huge marketing campaigns that will reach every corner of the world.
Now, like almost every other industry they have had to dramatically cut back, work from home, furlough staff, and put their plans on hold. It is pretty difficult to film ads at the moment, even if there is anyone out there willing to spend money on new ones.
And that isn't going to end overnight, we are in the middle of one of the greatest economic shocks imaginable. And although firms want to keep their brands in the public eye, marketing and advertising budgets are going to take a hit for years to come.
But for the "creatives" there is a longer-term worry: their business model has been to produce top quality advertising with the highest production values - exotic locations, famous names, brilliant film work, masterful special effects and seamless editing.
The problem, says Oxford University's Prof Stephen, is that when you look at the audience's reaction to lower production values, "research shows consumers don't really care, especially on digital channels".
To be blunt, if you can get the same result by spending less, why wouldn't you do that?
This pandemic and lockdown will have dramatic effects on all aspects of marketing and advertising, from those dependent on its spending, like newspapers and TV channels, to the companies that make the adverts themselves.
Not least because it has helped to accelerate the change from advertising in mainstream media to digital, which means the industry has had to react ever more quickly to a changing landscape in the middle of an economic catastrophe.

May 25, 2020

News | Business | UK | Coronavirus: Government draws up rescue plan for key companies

4minutos - Source: BBC

A man wearing a mask crosses Westminster Bridge past the Houses of Parliament Image copyright Getty Images
The UK government has indicated it is prepared to rescue large British companies severely affected by the coronavirus crisis.
The Treasury said "last resort" support could be made available if a firm's failure would "disproportionately harm the UK economy".
The move follows indications that a number of big firms are seeking government help to survive the crisis.
These include Jaguar Land Rover, which is in talks to secure a £1bn loan.
The government has already put in place various initiatives to help companies weather the pandemic, including loan programmes, deferring of tax payments and the furlough scheme, which allows workers to receive 80% of their salary paid by the government.
According to latest figures, eight million workers are covered by the furlough scheme.
However, concern is growing that some big firms are still in difficulties even after making use of these options.
The bailout plan, named "Project Birch", was mentioned by Transport Secretary Grant Shapps in Parliament last week when discussing the future of the aviation industry.
It could involve the state taking stakes in companies, although extending existing loans would be preferable.
A Treasury spokeswoman said: "We have put in place unprecedented levels of support to help businesses get through this crisis.
"Beyond that, many firms are getting support from established market mechanisms, such as existing shareholders, bank lending and commercial finance.
"In exceptional circumstances, where a viable company has exhausted all options and its failure would disproportionately harm the economy, we may consider support on a 'last resort' basis.
"As the British public would expect, we are putting in place sensible contingency planning and any such support would be on terms that protect the taxpayer."
The BBC understands the Treasury would have to notify Parliament of any spend incurred, and although companies might seek financial assistance, this does not mean such support will be given.

Companies in trouble

On Saturday, Sky News reported that Tata Steel, Britain's biggest steel producer, had approached both the Welsh and UK governments for financial aid that could run into hundreds of millions.

Earlier this week, Welsh MP Stephen Kinnock told parliament that Tata Steel, which owns the steelworks in Port Talbot, needs around £500m in order to survive the pandemic.
And according to the Financial Times, aviation industry bosses have been asking the government for a "long-term investment facility" that would help to support supply chains.
Jim O'Neill, former Treasury minister and ex-chief economist at Goldman Sachs, told the newspaper he had been in discussion with government officials about creating a public sector-owned funding body to take stakes in firms that would be "inherently stable" in times of normal economic activity.

May 21, 2020

Politics | UK | Facebook: Facebook founder in 'arms race' against vote fraud

By Simon Jack Business editor

Media playback is unsupported on your device
Media captionMark Zuckerberg told the BBC's Simon Jack that Facebook would 'take down' coronavirus misinformation
Facebook founder Mark Zuckerberg has told the BBC that preventing electoral interference is an "arms race" against countries such as Russia, Iran and China.
He admitted that the firm was "behind" in the 2016 US presidential election.
In his first UK broadcast interview in five years, he said that Facebook had been unprepared for state-sponsored interference in 2016.
But he added the company was confident it had since learnt its lessons.
Facebook was previously embroiled in a political scandal in which tens of millions of its users' data ended up in the hands of political interest groups including Cambridge Analytica.
However, he said the social media giant, which also owns Whatsapp and Instagram, was now better prepared than other companies, and even governments, to prevent future attempts to influence political outcomes.
"Countries are going to continue to try and interfere and we are going to see issues like that but we have learnt a lot since 2016 and I feel pretty confident that we are going to be able to protect the integrity of the upcoming election".
On the coronavirus pandemic, Mr Zuckerberg said that while Facebook had and would remove any content that would likely result in "immediate harm" to users it would not stop groups alleging that the infection was state sponsored or connected to the launch of the new digital 5G network.
Facebook took down a claim by Brazilian president Jair Bolsonaro that scientists had "proved" that there was a cure for coronavirus.
"That is obviously not true and so we took it down. It doesn't matter who says it".
He also said that Facebook had removed content from groups claiming that the rollout of the 5G digital network was a cause of the spread of the virus and, in some cases, encouraged those who believed that to damage the networks' physical infrastructure.
Facebook recently removed content from former broadcaster and conspiracy theorist David Icke for "repeatedly violating our policies on harmful misinformation".
Mr Icke had had suggested that 5G mobile phone networks are linked to the spread of the virus and in another video post he suggested a Jewish group was behind the virus.
Mr Zuckerberg said: "Even if something isn't going to lead to imminent physical harm, we don't want misinformation to be the content that is going viral across the network so we work with independent fact checkers.
"Since the Covid outbreak, they have issued 7,500 notices of misinformation which has led to us issuing 50 million warning labels on posts. We know these are effective because 95% of the time, users don't click through to the content with a warning label."
However, Mr Zuckerberg insisted that unless there was the prospect of real imminent harm, then Facebook would and should allow what he called the "widest possible aperture" for freedom of expression on the internet.

Company control

Mr Zuckerberg also defended his level of personal control over arguably the world's most powerful media platforms.
Although Facebook is a public company worth nearly $700bn (£574bn), he ultimately exerts total individual control thanks to an ownership structure that gives him a controlling interest even though he owns a small fraction of the shares.
He said it had allowed Facebook to make longer-term strategic decisions which have proved to be correct such as waiting to improve the Facebook experience before launching it on smartphones and not selling out early to rivals.
"If it had been different then we would have sold out to Yahoo years ago and who knows what would have happened then. "
Yahoo is now worth 1/20th as much as Facebook.
Facebook continues to face criticism over its reluctance to describe or define itself as a publisher and thus embrace the kind of editorial responsibility that newspapers and traditional broadcasters are legally bound by.

Coronavirus impact

However, it would be hard to argue that Facebook, WhatsApp and Instagram have not provided billions of people with the kind of connectivity with friends and family that has been important during this global pandemic and the consequent restrictions on movement and freedom.
In fact, after many years of courting controversy and opprobrium, it seems clear that Facebook and Mr Zuckerberg are feeling more confident about their public roles.
If there are any winners out of this public health emergency, digital companies like Facebook, Netflix and Amazon are among them.
However, no one is totally immune to the deep downturn that is already upon us and the evidence for which is confirmed with every new economic release.
Facebook knows that and is one of the reasons it is keen to help small businesses online through this week's launch of a service called Facebook Shops.
It's a mutually beneficial exchange. Those businesses are Facebook's current and future customers. What's good for them is good for Facebook.

May 20, 2020

News | Business | UK: UK inflation at four-year low as fuel prices fall

4-5 minutes - Source: BBC

Hand at petrol pump Image copyright Getty Images
The UK's inflation rate fell in April to its lowest since August 2016 as the economic fallout of the first month of the lockdown hit prices.
The Consumer Prices Index (CPI) fell to 0.8% from 1.5% in March, the Office for National Statistics (ONS) said.
Falling petrol and diesel prices, plus lower energy bills, were the main drivers pushing inflation lower.
But the prices of games and toys rose, which the ONS said may be due to people spending more time at home.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "While the coronavirus limited the availability of some goods and services, its effect on prices was more muted."
He said that food prices generally rose no more quickly than other goods and services, "though fresh vegetables did see stronger rises".
The ONS said average petrol prices dropped by 10.4p a litre between March and April - the biggest fall since unleaded petrol records began in 1990 - amid a slump in global oil prices.
Energy prices also pushed inflation lower as regulator Ofgem reduced its default tariff cap.
The ONS said clothes retailers, hit during the early days of the lockdown by weaker footfall and then the closure of outlets, resorted to more discount sales than usual to try to shift their stock.
Goods seeing upward pressure on prices included video games and consoles, board games and children's toys, the ONS said. And the price of knitting wool rose, another sign of the crafts and hobbies popular with people staying at home.
Long-life products - such as cook-in sauces and frozen fish - also saw price hikes last month as consumers stocked up for life in lockdown.

Better news for savers

Laura Suter, personal finance analyst at investment platform AJ Bell, said it was likely that as shops start re-opening retailers would deeply discount prices, putting further downward pressure on inflation.
She also pointed to positive news for savers. "For the first time in ages [savers] can now get above inflation interest rates on easy-access savings accounts - from more than one account."
Most economists had expected inflation to fall to 0.9% last month, and have predicted the rate will fall further as the economic fallout of the pandemic continues. CPI is now far below the Bank of England's 2% target.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said inflation had taken a "big leap towards zero by the summer" as he said retailers were planning "further large price cuts".
He predicted inflation would recover next year but was likely to remain below 2% for much of 2021.
"The inflation outlook, then, supports the [Bank of England's] Monetary Policy Committee doing more to stimulate the economy at its next meeting in mid-June - we look for a further £100bn of quantitative easing to be announced," he added.
Core inflation, which excludes energy, food, alcohol and tobacco, held broadly steady at an annual rate of 1.5%.
Inflation as measured by the Retail Prices Index (RPI) - an older measure of inflation which the ONS says is inaccurate, but is widely used in bond markets and for other commercial contracts - dropped to 1.5% from 2.6%.

Apr 30, 2020

Business News | Scotland: Lockdown could cripple builders firms 'in months'

4-5 minutes - Source: BBC

closed building site
Image caption Sites in Scotland have been closed for more than five weeks
Many construction firms in Scotland face the prospect of financial collapse within months unless the lockdown can be eased, an industry body has said.
All but essential construction sites in Scotland have been closed for more than five weeks since the coronavirus restrictions were introduced.
From next week, three of the UK's biggest housebuilders will reopen their sites in England.
The Federation of Master Builders wants the same rules for Scottish firms.
And it has warned that many smaller builders will go bust if they are not allowed to follow suit.
The group is now asking the Scottish government for a timeline - and updated guidance - to allow them to get safely back to work.

'We are adaptable'

FMB Scotland director Gordon Nelson said that financial problems were mounting as each week goes by.
He said: "There's evidence that about two thirds of small and medium-sized construction firms may only have the cash to survive another two to three months if the present circumstances continue.
"We're pleased about the job retention scheme from the UK government for furloughed workers.
"But we're also asking for small grants for more building companies around the country so that they can survive."
"Our members are very keen that we don't unintentionally rush back to work too soon in a way that may lead to a spike in new infections of the coronavirus.
"We're keeping a close eye on, and are in dialogue with, construction firms in England to see what evidence they can demonstrate for safe operating. We want to use that evidence and take it to the Scottish government.
"We are determined to get back to work as quickly as possible so our members can generate work and survive and thrive in the medium to longer term."

'Open the door slightly and get us back to work'

Andrew Haldane's construction firm had to temporarily shut down on 23 March and all its employees are currently furloughed.
He has plenty of orders in his books for when work does resume but says, like all builders, he has serious concerns about the future.
And he believes the Scottish government must "open the door slightly" by agreeing to new working practices that would comply with social distancing instructions.

Staggered breaks

Mr Haldane said: "Only essential works are being done in Scotland, which is understandable given the current situation.
"Down in England they have a different format where contractors are going back to work in the near future.
"I think we just need a collaborative effort from everyone in the business to agree that there is a way we can to go back to work.
"Whether that be our people travelling to work on their own, not using public transport, working in phases with staggered breaks and PPE where that's necessary."

Apr 7, 2020

UK News: PM spends night in intensive care with coronavirus

8-10 minutes - Source: BBC

Boris Johnson Image copyright Getty Images
Prime Minister Boris Johnson has spent the night in intensive care at a central London hospital after his coronavirus symptoms worsened.
Mr Johnson, 55, has been given oxygen but has not been put on a ventilator, cabinet minister Michael Gove said.
Foreign Secretary Dominic Raab has been asked to deputise for the PM. Arriving at No 10 on Tuesday, he said the prime minister was "in very good hands".
World leaders have sent messages to Mr Johnson wishing him well.
The prime minister, 55, was admitted to St Thomas' Hospital with "persistent symptoms" on Sunday evening and moved to the intensive care ward on Monday at 19:00 BST.
He was moved as a precaution so he could be close to a ventilator - which takes over the body's breathing process - BBC political correspondent Chris Mason said.
Mr Gove told BBC Radio 4's Today programme on Tuesday: "The prime minister's not on a ventilator. He has received oxygen support."
If there is any change in his condition "No 10 will ensure the country is updated", Mr Gove added.

The Queen has been kept informed about Mr Johnson's health, Buckingham Palace said.
As the first secretary of state, Mr Raab is the minister designated to stand in for Mr Johnson if he is unwell and unable to work.
Mr Raab arrived at No 10 on Tuesday morning and will later chair the government's daily Covid-19 meeting.
He said earlier there was an "incredibly strong team spirit" behind the prime minister and that he and his colleagues were making sure they implemented plans Mr Johnson had instructed them to deliver "as soon as possible".

Former Conservative leader Sir Iain Duncan Smith said the government will "continue to work" as decisions are made collectively by the cabinet.
He also sounded a warning to people who have broken social distancing guidelines, saying "if the most powerful man in Britain can come down with this, so can you".
Mr Johnson was initially taken to hospital for tests after announcing 11 days ago that he had the coronavirus. His symptoms included a high temperature and a cough.
Earlier on Monday, he tweeted he was in "good spirits".
Mr Johnson's friend and former direction of communications Will Walden told BBC Radio 4's Today programme Mr Johnson is "far fitter than he looks".
"He will whip anybody's backside on a tennis court, he runs regularly, he doesn't smoke, he drinks moderately.
"So I think if anyone is in a good position both physically and mentally to fight off the disease then the prime minister is that person."

After very, very little information was shared today, the prime minister was taken into intensive care at around 19:00 BST.
We've been told he is still conscious, but his condition has worsened over the course of the afternoon.
And he has been moved to intensive care as a precaution in case he needs ventilation to get through this illness.
The statement from Downing Street makes clear he is receiving excellent care and he wants to thank all of the NHS staff.
But something important has changed, and he has felt it necessary to ask his foreign secretary to deputise for him where needs be.
That is a completely different message from what we have heard over the past 18 hours or so, where it was continually "the prime minister is in touch" and "he is in charge" - almost like everything is business as usual.
But clearly being in intensive care changes everything.
Read more from Laura

It comes as the number of coronavirus hospital deaths in the UK reached 5,373 - an increase of 439 in a day.
The Department of Health and Social Care said there were now 51,608 confirmed coronavirus cases.
Also in hospital with coronavirus is veteran Labour MP for Rochdale Tony Lloyd, 70, who is being treated at Manchester Royal Infirmary.

Intensive care is where doctors look after the sickest patients.
We do not know the full details of the prime minister's condition, but his admission to ICU is the clearest indication of how ill he is.
Around two-thirds of patients admitted to intensive care with Covid-19 will need sedation and ventilation within 24 hours of arriving.
This is a disease that attacks the lungs and can cause pneumonia and difficulty breathing. The body is left struggling to get enough oxygen into the blood and to the body's vital organs.
Boris Johnson has already being given extra oxygen support.
There is no proven drug treatment for Covid-19, although there are many experimental candidates.
But the cornerstone of the prime minister's care will depend on getting enough oxygen into his body and supporting his other organs while his immune system fights the virus.

Among those who have sent messages to Mr Johnson was Labour leader Sir Keir Starmer, who described it as "terribly sad news".
"All the country's thoughts are with the prime minister and his family during this incredibly difficult time," he added.
Meanwhile, US President Donald Trump said Americans "are all praying for his recovery", describing Mr Johnson as "a very good friend of mine and a friend to our nation" who is "strong" and "doesn't give up".

Media playback is unsupported on your device
Media captionTrump asks drug companies to assist PM's recovery
French President Emmanuel Macron said he sent "all my support to Boris Johnson, to his family and to the British people at this difficult moment".
Chancellor Rishi Sunak said his thoughts were with the prime minister and his pregnant partner, Carrie Symonds, and that Mr Johnson would "come out of this even stronger".
On Saturday, Ms Symonds said she had spent a week in bed with the main symptoms. She said she had not been tested for the virus.
Scotland's First Minister Nicola Sturgeon said she was "sending [Mr Johnson] every good wish", while Northern Ireland's First Minister Arlene Foster added she was "praying for a full and speedy recovery".
Wales' First Minister Mark Drakeford called it "concerning news".
The Taoiseach - Irish Prime Minister - Leo Varadkar wished Mr Johnson "a rapid return to health", while European Commission President Ursula von der Leyen also wished him a "speedy and full recovery".
For Archbishop of Canterbury Justin Welby, the news "deepens our compassion for all who are seriously ill" and those looking after them.
And Mayor of London Sadiq Khan tweeted that St Thomas' Hospital had "some of the finest medical staff in the world" and that the prime minister "couldn't be in safer hands".

Media playback is unsupported on your device
Media captionDominic Raab: Boris Johnson "still remains in charge of the government"
During the government's daily coronavirus briefing earlier on Monday, Mr Raab stressed that the prime minister had been continuing to run the government from hospital.

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