This weeks news includes; Brexit Bill defeated by House of Lords, Snap floats on NYSE, Ford announces over 1,000 job cuts, Dyson announces UK investment.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories.
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Opinion articles of the week:
- CNN questions why nobody wants to host the Olympics?
- Business Insider looks at JPMorgan’s claim that ‘cutting corporation tax is ‘no silver bullet for a hard Brexit’.
- CNBC looks at an analysts claim that Morgan Stanley and Goldman Sachs should ‘hang heads in shame’ over Snap IPO.
- Bloomberg claims Economists May be underestimating how fast the robots are coming
- Sky News explores former Chancellor Lord Lawson’s claim that the UK should adopt Trump-style border tax.
1. BREXIT BILL REJECTED BY HOUSE OF LORDS
The House of Lords rejected the Brexit bill put forward by Parliament, by 358 to 256 votes. The bill was rejected on the basis that there was no guarantee of EU nationals’ right to remain in the UK post-Brexit. This is the first defeat for the governments Brexit bill.
The Lords amended the Bill to include these rights, but this bill will go back to MP’s who retain the right to remove the amendments if they see fit. MP’s argue that the rights of EU nationals in the UK must form part of Brexit deal with EU where UK expats in the EU are also protected.
The government is expected to reject the amendments when the legislation returns to the Commons. (BBC News)
2. SNAP OFFICIALLY FLOATS ON NYSE
Snapchat’s parent company Snap was valued at more than $30bn (£24bn) at its IPO and saw a 41% rise in share price. The founder Evan Spiegel is now worth over $5 billion as a result.
Snap’s IPO was the largest listing on the New York Stock Exchange for three years despite the scepticism of many investors. Regardless of Snaps substantial losses ($515m in 2016) and stagnant user growth, investors optimism shined through as it raised $3.4 billion at $17 a share. Snapchat has over 160 million daily users and user growth has been declining. (The Telegraph)
3. FORD TO CUT 1,160 JOBS
Car manufacturer Ford announced that it would be cutting 1,160 jobs at its Bridgend plant by 2021, according to the BBC. Meetings are due to be held between executives and trade unions. Ford declined to comment on the leak but stated that it ” fully understands” the related concerns.
Ford’s Bridgend plant produces around 1/3 of the total number of engines manufacturer in the UK according to Reuters. (The Independent)
4. UK MANUFACTURING FIGURES
The UK manufacturing sector grew less than expected but showed it is still set for the strongest performance in 3 years.
The Markit/CIPS Purchasing Managers’ Index showed a reading of 54.6, down from 55.7 in January and below the City of London consensus prediction of 55.6. This was significantly higher than the 50 mark that separates growth from contraction.
Manufacturing output grew by 1.2 per cent in the final quarter of 2016. This accounts for roughly 10% of UK output, according to the Office for National Statistics. (The Independent)
5. UBER LOSES LEGAL TEST CASE
Uber lost a key court case, where it has now failed to prevent its drivers taking a compulsory English language test that Transport for London seeks to impose. TFL claims that all drivers should prove their ability to communicate in English. This test would also apply to minicab firms as well.
Uber argued that the requirements for the test were exceptionally high and “unfair” and will seek to appeal the decision. Uber’s lawyer estimated that the test would prevent 70,000 applicants from obtaining a licence in three years. He also claimed that the tests would have a disproportionate impact on foreign drivers.
Read more about the court case here… (BBC News)
6. DYSON ANNOUNCES NEW UK INVESTMENT DESPITE BREXIT
UK home technology company Dyson has announced substantial UK investment, opening a new site Hullavington site near its headquarters in Malmsebury. The firm follows the steps of other tech firms like Amazon and Facebook, defiant in the face of Brexit uncertainty.
Dyson, renowned for its hoovers, currently employs over 3500 people in the UK and it plans to double its workforce in the long term. Sir James Dyson was a vocal advocate of Brexit during the campaign and claimed it would liberate the UK’s economy.(The Independent)
7. RECORD NUMBER OF WORKERS ON 0 HOUR CONTRACTS
The number of UK workers on zero-hours contracts reached a record high of 910,000. In the last 3 months of 2016 the figure rose by over 100,000 compared with the same period in 2015, according to Resolution Foundation.
Zero hour contracts have become significantly more common, particularly in the retail sector. Companies such as Sports Direct and McDonald’s have come under scrutiny for using them. Workers are not guaranteed a minimum number of working hours but employers have been known to abuse this system.
Read more about the statistics here… (The Guardian)
8. TESCO TO REPLACE OVER 1,000 DEPUTY MANAGERS
Tesco has announced plans to replace 1,700 deputy managers in their Express stores with managerial tasks being adopted by 3,300 “shift leaders” who will be paid less. This move is to create 1,600 jobs and is part of its general restructuring. In January, it announced that it would cut 1,000 jobs in a move to reduce the number of distribution centres. Despite this, Tesco posted a rise in UK like-for-like sales of 0.7% in the 6 weeks to 7 January. In addition, last month, Tesco acquired wholesale group Booker for £3.7bn.
The big four supermarkets have faced significantly increased competition from budget rivals Aldi and Lidl as consumer spending habits continue to change. Elsewhere in the market, Waitrose announced earlier in the month that it would be cutting 700 jobs and shutting six stores. (BBC News)
9. WALKERS JOB CUTS
It was announced that 380 jobs at a Walkers crisps factory are at risk after the company stated that it needed to find “crucial savings” to remain financial sustainable .
The production plant in Peterlee, County Durham is planned to moved in other UK sites. Walkers was bought by PepsiCo in 1989 by one of its subsidiaries, Lays. (BBC News)
10. ASDA IMPOSES HARSHER TERMS ON SUPPLIERS DUE TO BREXIT
Asda, the UK’s third largest supermarket chain, announced the imposition of harsher terms on its suppliers of clothing. A letter sent by Asda to its international suppliers stated they would now wait 30 days longer than the current period to receive, an extension from 60 to 90 days.
Asda is owned by the American company Walmart and is one of the first retailers to tighten the screw on manufacturers following the Brexit vote. Its clothing business, George has suffered as a result of the falling pound as it buys most of its fashion lines in dollars.
Delaying payment is a common financial planning method for businesses as it allows them to retain more cash in the business. For suppliers it can be damaging and can cause severe cash flow issues because they rely on the payment for general expenditure such as staff salaries so are forced to borrow to fund this. (The Guardian)