January 18, 2023 | Read Online

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Good morning. Backing the right companies to invest in can be difficult. Just ask the Belfer family, a New York oil dynasty known for its philanthropy that previously invested tens of millions in Enron (failed energy company that went bankrupt in 2002) and Bernie Madoff (fraudulent investment manager jailed in 2009). The family is now among the out-of-pocket investors in collapsed crypto exchange FTX too.

Big Stories

Job market remains buoyant

Labour market figures released from the Office of National Statistics showed wages in the UK rose by 6.4% in the three months to November compared to a year earlier, more than the 6.1% expected by economists. It still represents a fall in real terms (ie after inflation currently 10.7%) but is the fastest rise in 20 years and is starting to catch up with the rising cost of living. The data also confirmed a record divide between public and private sector pay (3.3% public versus 7.2% private), which will make the government’s life harder when arguing with unions.

Elsewhere unemployment remained at 3.7%, close to the lowest level in almost 50 years. The number of working age people who are not in work or looking remained at 0.5m a record high. Vacancies fell for the sixth month in a row, but they remain above 1.1m, historically very high. Redundancies rose, but they remain historically very low.

Battery startup goes bust

Yesterday Britishvolt, the battery startup once billed as a vital player in the country’s transition to a greener future, filed for administration letting go of most of its 300 employees. Founded in 2019 it hoped to build a £4bn battery plant in Northumberland that would produce more than 300,000 electric vehicle battery packs and create thousands of jobs. The company has been in trouble since November when a £100m funding pledge from the government was delayed due to key targets for the investment being missed. The collapse marks a major setback to the UK’s transition to electric vehicles ahead of the 2030 ban on the sale of new diesel and petrol-powered cars to tackle climate change. Battery factories take five years to build and there is only other facility in the UK that is Chinese owned.

Ocado customers cut back

Yesterday Ocado shares fell 9% after the online supermarket reported its first ever annual fall in grocery sales with its joint venture with Marks & Spencer. The company said that average basket volume dropped 12% in the year to November as customers bought fewer items per order amid the cost of living squeeze. The shares are now trading below pre-pandemic levels after riding a boom in e-commerce that proved to be short-lived as consumers return to physical supermarkets. Ocado was the worst performer in the FTSE 100 last year.

Paperchase on the brink

The high street stationery chain confirmed it’s in talks with potential buyers amid reports it’s also lined up administrators in the event of a collapse. The company, which has 100 stores in the UK, has changed owners numerous times in its 50 year history, most recently just four months ago. Like other bricks-and-mortar shops it faces stiff competition from online rivals as high street footfall is still well below pre-pandemic levels, affecting impulse purchases at stores such as Paperchase, while the sending of cards has been disrupted by Royal Mail strikes.

Elsewhere...

Walkouts roll on: Train drivers are to strike on 1 and 3 February after union bosses rejected a pay offer from rail companies.

Seeing red: Chemicals billionaire Sir Jim Ratcliffe confirmed his company Ineos has formally entered the race to buy Manchester United.

Slowing down: China’s economy grew at its slowest pace since the mid-1970s bar the Covid-hit 2020 year, as it struggled under tight pandemic restrictions that were ditched late in 2022.

Shutting down: Microsoft is preparing to axe thousands of jobs in the latest move by one of the world's biggest technology companies to reduce its workforce in the face of a slowing global economy.

Less than golden: Goldman Sachs reported a bigger-than-expected 69% drop in fourth-quarter profit as it struggled with a slump in dealmaking, a drop in asset and wealth management revenue and booked losses at its consumer business.

Profit slicing: The struggling online shopping group THG has said its profits will disappoint for the third time in a year, blaming delivery disruption, contract delays and falling sales at one of its key divisions.

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The number of stay at home dads has risen by a third since before the pandemic with 1 in 9 stay-at-home parents now fathers, up from 1 in 14 in 2019, according to the Office of National Statistics.

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Market Loop - Job market remains buoyant

Big Stories

Job market remains buoyant

Battery startup goes bust

Ocado customers cut back

Paperchase on the brink

Elsewhere...

Together with Paramount+

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