Fallout from government U-turns continue

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19th October 2022

Bite-sized business news from the UK and beyond

Good morning Yesterday ticket prices for next year’s Glastonbury Festival were announced, at £340 it’s a 20% jump on 2019, the last time tickets were on sale. Organisers of Europe’s biggest live music event cited soaring inflation and the need to recoup losses incurred during the pandemic as causes. The world-famous festival in Somerset will take place from 21 to 25 June 2023, and tickets - which usually sell out in minutes - will go on sale on 6 November.

Today's stories

Fallout from government U-turns continue
Meta loses battle with UK regulator, again

ECONOMY
Fallout from government U-turns continue

What happened?
The backlash from the government’s reversal of the mini budget continued with stark warnings for households.

Last week the prime minister promised public spending would not be cut
But yesterday the new chancellor admitted "decisions of eye-watering difficulty" lie ahead with thinktanks warning that deep spending cuts were inevitable. The prospect of another era of austerity – the most recent round after the 2008 global financial crisis – led trade unions to call millions of workers to strike in protest.

The country already faces a winter of strikes across industries ranging from the NHS and railways as they fight for pay rises that keep pace with inflation.

The promise on pensions is also under threat
For over a decade the government have increased the state pension at a highest of: inflation, average earnings or 2.5% - the so-called triple lock. Inflation stands at around 10%, whilst the figure for average earnings is just over 5%. Liz Truss committed to the triple lock a fortnight ago but another U-turn is looking more likely.

Mortgage interest rates are at a 14-year high
The average two-year fixed-rate home loan increased to 6.53% yesterday, the highest since August 2008. Rates had been steadily rising this year as central banks raise interest rates to try to get to tackle surging inflation, but have increased sharply since September due to market turmoil over the mini budget.

Zooming out: The prime minister acknowledged that she had gone "too far and too fast" with the £45bn of unfunded tax cuts in last month’s mini budget. But the economic fallout from the plans – now mostly reversed – is likely to have a lasting effect on British households.

Other stories to keep you in the loop

Blackouts may be imposed on cold weekday evenings, National Grid chief warns
IMF welcomes 'fiscal discipline' in UK mini-budget reversal
Union announces November rail strike dates
Uber Eats launches tie-up with Iceland Foods
Netflix reverses subscriber slump
Asda to launch Express convenience stores
Microsoft makes another round of jobs cuts amid slowing economy
Deliveroo offers ‘eat now, pay later’ with Klarna
The Hut Group shares rise after Softbank sells stake to founder and Qatar

TECH
Meta loses battle with UK regulator, again

What happened?
Yesterday the UK competition regulator, the CMA, ruled for the second time that Facebook-owner Meta must sell image platform Giphy.

How did we get here?
Giphy is one of the largest GIF sites on the internet, offering tools for creating and sharing animated images (popular here at Market Loop). Its user-uploaded library of GIFs is already integrated and used widely by Meta's family of social media apps including Facebook, Instagram and WhatsApp but can also be used on other platforms such as Twitter.

Meta announced it was buying Giphy for $400m in 2020 but since then there’s been an ongoing back and forth with the CMA which launched an investigation into the deal.

The concern is that Meta could behave anti-competitively and hurt consumers by cutting off the supply of GIFs to rivals and demanding more data from Giphy’s customers to keep using the service.

Last November the CMA ordered Meta to sell Giphy. It was the first time a global regulator had forced a big tech company to undo a completed acquisition and the CMA was the only major regulator to take a stance on the deal.

Meta then appealed the decision forcing the CMA to reconsider. But yesterday after two years the regulator issued its final decision that the deal must be unwound. Meta said it was “disappointed by the CMA’s decision” but accepted the ruling as “the final word on the matter”.

Zooming out: It could be tricky for Meta to find Giphy a new owner. During the investigation, Giphy said few companies other than Meta were likely to be interested in buying it. It also warned there had been an overall decline in GIF use since the deal, saying they had “fallen out of fashion” with Gen Z users who described the animated images as “cringe”.

Stat of the day

A recent YouGov poll reveals that 80% of Brits view Liz Truss unfavourably, marking the lowest-ever rating of any British PM in polling history

Interesting links from around the web

See Google's top trending searches over the past 20 years
Inside the deserted shopping centre below Britain’s busiest station
5 common water myths, busted

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Fallout from government U-turns continue

Older messages

Mini budget undone as gov U-turns mount

Truss turmoil continues as new chancellor takes the reins

More rate rises on the way after surprising US inflation numbers

Market turmoil continues amid Bank of England confusion

IMF issues stark warning on UK economy

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