Business News – Business Bulletin

Cost of Living Crisis Restricts Consumer Spending in UK

On: November 19, 2023 By: milanoadmin

The global cost of living crisis is having an adverse effect on public health with many unable to afford basic necessities like food and fuel, especially those on low incomes or living with long-term conditions. Consumer spending in the UK has decreased due to this crisis resulting in adverse business impacts.

rising inflation while wages fail to keep pace

High energy bills, food price inflation and the Russian invasion of Ukraine have all played major roles in precipitating this crisis. Many individuals have lost significant portions of their disposable income and must choose between paying bills or buying food – this forces people into less fulfilling lifestyles while restricting access to healthcare services.

UK households are experiencing one of their greatest financial strains ever seen in generations. Due to rising inflation while wages fail to keep pace, consumers’ purchasing power has decreased by PS50 billion since October 2021 – and with rates set to increase further and inflation continuing its upward trajectory, households could experience further erosion before spending power begins recovering.

Short term, the cost of living crisis will lead to increased demand for goods and services in areas such as housing and food, driven primarily by Russia’s invasion on global supply chains which has already led to some retailers raising prices and cutting back stock levels.

Consumers have shown remarkable resilience throughout the cost of living crisis; however, in the long term this could lead to reduced household spending that in turn may impact businesses negatively. Health providers are already struggling with patients having to visit hospital less frequently while many social care users have reduced the frequency of visits due to limited transport options.

The cost of living crisis will have lasting repercussions in society, particularly amongst those most at risk such as seniors, those living with long-term conditions

such as cancer or asthma, young children and disabled individuals. Low income individuals may also feel the effects, as they tend to devote a greater proportion of their funds towards essentials like food and energy and have less room to increase expenses. These people are at greater risk of experiencing a decline in their state of wellbeing, which has an adverse impact on the level of support from healthcare, social care, and voluntary organizations. If efficiency savings cannot be identified then services provision may have to be reduced as a result. Public health will be severely impacted, as this has an adverse impact on both physical and mental wellbeing of our nation. A plan must be devised in order to safeguard and promote the wellbeing of those most at-risk within society – this requires cooperation among government, local authorities, businesses and community organisations.

Retail Sales Drop to Lowest Level Since February 2021

On: November 19, 2023 By: milanoadmin

Retail sales dropped to their lowest point since February 2021 as cost-of-living pressures, poor weather and reduced footfall took their toll on consumer spending. According to data provided by the Office for National Statistics (ONS), goods purchased online and offline both fell by 0.3% month-on-month last month – more than twice what analysts had forecast and marking retail sales’ lowest level since the Covid-19 pandemic began in 2020.

Danni Hewson, head of financial markets research for AJ Bell, stated: “Despite decreasing headline inflation rates, household budgets continue to be pressured from all angles. Rising energy costs, higher food costs and an expanding housing market are all taking their toll on household finances, forcing people to tighten their purse strings and spend less on non-essential goods. As a result, consumers are making choices to limit spending.”

Retail sales have taken a serious hit this holiday season as consumers opt to save instead of spend freely. We expect this trend to persist well into 2019, diminishing retailers’ expectations of sales revenue growth.

Retailers attributed their poor performance to factors including inclement weather, increased costs of living and diminished footfall. Clothing and household good stores reported sales volumes fell 1.1% after experiencing a 2.1% decline the prior month; fuel sales also saw decline due to increasing costs discouraging customers; food sales also saw decrease as consumers focused on essential purchases over treats; however non-food store retailers saw sales rise 0.8% due to rebound sales at jewellery and watch stores.

Online retailing experienced a 0.8% sales volume increase due to various factors. An unseasonably warm start to October delayed purchases of winter warmers while rain reduced footfall at the end of the month. Furthermore, shoppers may have taken advantage of discounts and promotions from retailers like Amazon Prime Day to take advantage of them and boost online retailing sales volumes further.

The ONS report noted that although sales volumes decreased slightly in October, their value remained consistent – this suggests the UK economy experienced around one percent growth during this quarter when compared with its prior one. On Wednesday, GDP figures may be revised down after initial estimates suggested the UK experienced negative GDP growth during Q3. An economic downgrade would add further concern about the health of the global economy, particularly at a time of increasing climate emergency that has already led to increasing utility costs, insurance premiums and food costs. The ONS data follows a sudden slowdown in the US economy, compounded with rising house prices and an overheated stock market. This has amplified fears of another recession – many Americans now fear losing their jobs or seeing their stock investments collapse altogether.

Billionaire Ratcliffe Placed to Take Over Manchester United

On: November 19, 2023 By: milanoadmin

Manchester United are set to welcome billionaire Ratcliffe as an INEOS Sport businessman soon, who could take control of 25 percent of the club in coming days if an agreement comes together with its 12-strong board voting as soon as this week on this matter. Ratcliffe may receive 25 per cent stake and be allowed to oversee sporting activities while Glazer family retains ownership over remaining shares.

Since November 2022 when Glazers began soliciting offers from potential bidders for control of Manchester United FC, the takeover process has been drawn-out and arduous. Sheikh Jassim, a Qatari royal who had long been considered as a potential frontrunner, eventually withdrew after they refused his offer of purchasing all shares outright. Initial plans had Ratcliffe purchasing majority ownership worth $5 billion while now his bid has changed and will instead include less than $1.5 billion for 25% minority share ownership.

Ratcliffe founded INEOS in 1998 after growing up as a Manchester United fan. Since then, his company has owned various sporting teams, including Ligue 1 outfit Nice and Switzerland’s FC Lausanne-Sport. Furthermore, this 70-year-old entrepreneur has amassed interests in Mercedes F1 team as well as various sailing and cycling teams associated with INEOS-branded teams under his control.

Ratcliffe has brought in his own experts to restructure Old Trafford’s football structure, including Paul Mitchell who recently left AS Monaco’s transfer guru role after successful spells at Southampton and Tottenham. Senior appointments may also be made within United itself with both Ed Woodward and Cliff Baty likely leaving.

Ratcliffe does not intend to sack either David Moyes or Louis van Gaal as part of this reshuffle at boardroom level, but instead intends to overhaul coaching structure so as to give more support for improving results on the pitch.

Apart from an underwhelming league record, Louis van Gaal’s Red Devils are currently suffering on the continent as they attempt to overcome an inferior group in the Champions League. Van Gaal has yet to find success this season in Europe and have lost three out of their opening five matches so far this campaign.

Ratcliffe’s arrival will be met with much enthusiasm by supporters who have long advocated for new ownership to save the club from financial ruin. However, many expect the new board will also need to reduce costs and player numbers rapidly in January as some current stars could potentially leave. With annual accounts showing over PS1 billion in debt already, pressure will likely mount to reduce this deficit quickly and responsibly.