BETA filters Key events (5) United Kingdom (7) Cineworld (5)
Average pay for FTSE 100 chief executives rose by 39% to £3.4m
One group of workers has managed to achieve pay rises that outpace inflation – Britain’s CEOs. Chief executives at the UK’s 100 biggest companies saw their pay rise by 39% to £3.4m on average, according to research by the High Pay Center thinktank and the Trades Union Congress (TUC). The average pay of CEOs of FTSE 100 companies rose to £3.4m in 2021, compared to £2.5m in 2020 during the height of the coronavirus pandemic, when many bosses took voluntary pay cuts as they placed million employees leave of absence. CEO pay has also surpassed the £3.25m median recorded in 2019, before the pandemic. Here’s the full story, from our wealth correspondent Rupert Neate: Updated at 10.13 BST Bill Bullen, the chief executive of Utilita, has called on the Conservative party to end its leadership race early so the energy crisis can be tackled now. Bullen warned that the crisis cannot wait until Boris Johnson’s successor is chosen in early September. Action is needed this week ahead of Ofgem’s price cap announcement on Friday. Bullen told the Today programme: “All summer long, we’ve been hearing about customers who are at risk, customers who are worried they won’t be able to heat their homes this coming winter. “That’s why we’re saying to the government, you have to take this decision to freeze prices at their current level right now. “He can’t wait until September 5 or 6. The Conservative Party needs to sort themselves out, decide who will be leader this week so that the Ofgem announcement on the 26th doesn’t have to happen. This is so imperative. “Frankly, for the sake of the nation, I think the Conservative Party needs to sort out its leadership race more quickly than it plans to do at the moment. Then at least we will remove the stress of this coming winter for tens of millions of households.” Liz Truss, the front-runner to become the next prime minister, signaled at the weekend that she would provide help “broadly” to households and businesses hit by rising energy prices. Previously opposed to ‘handing out leaflets’ but that position may change as millions of households face a bleak winter [the cap is likely to rise again in January].
Octopus boss: Gas price rise equivalent to £25 pint
If beer prices had risen as fast as gas prices this year, then a pint of beer would cost £25, points out the head of supplier Octopus Energy. Greg Jackson, founder and chief executive of Octopus, told Radio 4’s Today Program that gas prices are currently 9 to 11 times higher than usual. “Look, to put it in perspective, if this was beer, we’re talking about a wholesale price of £25 a pint. “People don’t know what therm is but, underneath that, the price per thermometer has gone from 60p to around £5 at the moment and that’s what’s being passed on to customers if we don’t do something.” Jackson added that there are systemic issues in the energy industry, but that energy suppliers should not be expected to pass on such high wholesale costs to consumers. Energy regulator Ofgem is set to announce the UK’s energy price cap on Friday. Bills could jump by around 80% from October, to £3,600 a year from £1,971 today. Jackson warned that the UK’s energy bill is rising from £15bn in a normal year to £75bn this year – the equivalent of an extra 9p on the basic rate of income tax. He says the government needs to increase its existing support package – one option would be to create a “tariff deficit fund”, which would freeze the cap where it is and repay the cost when wholesale prices return to normal levels. Return from vacation. From August 20 the prices are: 🔥European gas TTF up ~40% 🔌German 1-year electricity up ~36% (record high)⛽️Brent crude down ~3%🏭 API2 thermal coal up ~6% — Javier Blas (@JavierBlas) August 22, 2022
UK gas prices rise on fears over Russian supply
UK wholesale gas prices rose this morning after Russia announced it would halt supplies through its main pipeline to Europe for three days at the end of the month. The price of natural gas for UK delivery next month has risen almost 20% to 550p per heat. This is the highest since the beginning of March after the start of the war in Ukraine. UK gas price one month ago Photo: Refinitiv The UK gas price next day has jumped 27% to 460p per heat. European natural gas prices have also risen, with the benchmark September contract up 5%, and the October contract jumping 10%. The move comes after Gazprom said on Friday it would carry out unscheduled maintenance on a Nord Stream 1 turbine, which pumps gas under the Baltic Sea in Germany. The move deepens the energy standoff between Moscow and Brussels at a time when European countries are trying to build up reserves for the winter. Investec analyst Nathan Piper says worries about natural gas supplies are growing, driving prices up: Gazprom has announced an unscheduled maintenance of a Nordstream 1 turbine. The supply of natural gas through the pipeline will be interrupted for at least three days from the end of August. Russian gas supplies to Europe are already down 75% year-on-year and this announcement pushed UK/European gas prices to all-time highs (10 times the 10-year average) for five consecutive days. We expect spot prices and the forward curve to rise further as uncertainties about gas supply increase ahead of winter, when demand for natural gas for heating increases. Lawyers have voted to go on indefinite strike action from next month, in the latest industrial action to hit the UK. The Criminal Bar Association, which represents barristers in England and Wales, announced that 80% of voting members supported scaling up their industrial action in their ongoing dispute over state funding. They will now step down indefinitely from September 5, the day Boris Johnson’s successor as the new prime minister will be announced. Lawyers began going on strike earlier this summer, warning that cuts to legal aid funding were bringing the criminal justice system to its knees. The CBA says there has been a 28% reduction in criminal legal aid fees over the past decade and is calling for a 25% increase. Updated at 09.16 BST Germany was hit by a drop in exports to countries outside the European Union last month. German exports outside the EU fell by 7.6% in July, the Federal Statistical Office announced this morning. This shows that Europe’s biggest economy got off to a weak start in the second half of 2022 after failing to grow in April-June as the global economy struggled. Reuters has more details: The United States remained the most important trading partner for German exporters in July, with exports of goods to the US market up 14.9% year-on-year. Exports to China rose 6.1% year-on-year. Exports to Russia fell 56.0% year-on-year. The German economy became more dependent on China in the first half of 2022, with direct investment and its trade deficit hitting new highs, despite political pressure on Berlin to distance itself from Beijing, according to a Reuters survey. In China, the central bank cut mortgage rates for the second time this year as it faces a liquidity crunch in the real estate sector. China’s five-year lending rate fell to 4.3% from 4.45%, matching a record decline set in May. The moves suggest the People’s Bank of China is worried about problems in the housing market. Last month, Chinese banks were asked to bail out troubled property developers to help them complete unfinished housing projects and prevent a growing mortgage strike that threatens to seriously damage the economy. Cineworld’s debt has left the company on the brink of collapse, warns Victoria Scholar, head of investment at interactive investor: The company has been devastated by the pandemic. Covid meant cinemas were closed for months, Hollywood couldn’t land hits and consumer preferences shifted towards streaming, which caused permanent damage to ticket demand even after cinemas reopened. On top of that, Sky for example now releases new blockbusters at the same time as cinemas, again reducing the incentive to leave the house and organize a cinema trip. In addition, Cineworld faces its own problems with a £700m compensation bill for abandoning the Cineplex takeover, landing the struggling cinema chain with an unmanageable debt burden. Shares have fallen from over 300p before the pandemic to around 4p a share today. Updated at 08.52 BST The strike at Felixstowe port could add to the UK’s economic turmoil, warns Sophie Lund-Yates, chief equity analyst at Hargreaves Lansdown: “The Port of Felixstowe is a key hub for UK trade and an eight-day strike is likely to disrupt supplies to supermarkets as well as exports. It is a possibility that industrial action will continue until Christmas. This is the latest unwelcome twist in our weekly food shops, with high prices already making the experience more difficult for many shoppers. Economically, a trade disruption is the last thing the UK needs right now. There are already widespread productivity problems keeping a lid on economic growth, with an avoidable blow like port strikes adding to an existing injury. The Times reports that the strike could disrupt £700m of trade and have an immediate impact on companies including Asda, John Lewis, Tesco and Marks & Spencer.
Strike underway at UK’s largest container port
Empty truck parking spaces at the UK’s largest container port Felixstowe on Sunday Picture: Toby Melville/Reuters The UK’s summer of industrial action continues as dock workers in Felixstowe stage an eight-day strike over a pay dispute. Around 1,900 employees at the UK’s biggest company…
