Good morning. Breaking news overnight - EY has ditched plans to break up its audit and consulting businesses after months of internal disputes over the potential new structure. The break up was meant to address regulatory concerns over potential conflicts of interest between the two business areas in what would have been the biggest shake up to the industry since the 2002 collapse of Arthur Andersen, the auditor that was mired in the Enron scandal and whose downfall reduced the Big Five to Big Four.
Big Stories
UK bottom of the pile
The International Monetary Fund has predicted that the UK economy will shrink 0.3% this year, better than the 0.6% contraction forecasted in January but still worse than any other large advanced country and worse than the chancellor expects. The global economic body thinks the UK fare worse than other developed nations - including sanctions-hit Russia – due to the Brexit aftermath, particularly steep energy costs and higher inflation. The news came as the IMF downgraded its outlook for global growth to just 1% if the recent banking sector turmoil was to turn into a more widespread financial crisis.
Lobbying group scandal
The Confederation of British Industry sacked its director general Tony Danker after it was rocked by sexual misconduct allegations. Founded in 1965 the CBI is the UK’s main business lobbying group, representing around 190,000 firms across a variety of sectors. According its most recently published accounts, £22m of its £25m income in 2021 came from membership fees. Danker said allegations against him were “distorted” - but recognised he “made a number of colleagues feel uncomfortable”. In recent weeks several organisations have postponed engagements with the CBI, including the government, in what has been the biggest crisis in its history.
Brits cut back
Persistent double-digit inflation in the UK saw consumers cut back on spending on groceries and dining out in March, according to data from Barclaycard. The country’s biggest credit card provider said consumer spending rose 4.0% from a year earlier, less than half the rate of inflation which mean sales volumes were down. Supermarket spending rose 7.8%, well below the 18% rate of increase in prices of food and non-alcoholic drinks. But consumers spent more on streaming services, likely driven by the latest season premieres of popular shows such as Succession and Ted Lasso.
Tupperware on the brink
The iconic plastic container company announced it could file for bankruptcy and has hired advisors to help find a way to stay in business. The news sent its shares down 50%. Famed for its parties, Tupperware relies on 3m independent sales members to distribute its products into nearly 70 countries. There was a brief resurgence in the popularity of the 77-year-old company during the pandemic when home cooking increased but the return of dining out meant less room for leftovers and it’s been struggling with declining sales since then. Tupperware has also had a hard time attracting younger consumers and competing with newer container entrants.
Elsewhere...
First ever: GCHQ has appointed a female director for the first time in its 104-year history.
Twitter drama: Former Twitter executives, including ex-CEO Parag Agrawal, are suing the social media company over legal fees incurred in a recent storm of legal battles.
Changing names: Twitter has been merged into X Corp and 'no longer exists', a move that could signal the next step towards Elon Musk building his super app.
Changing loyalty card: Sainsbury's is making changes to its loyalty card scheme to rival Tesco's money-saving deals.
New AI: China’s technology giant Alibaba has unveiled a rival intelligence model chatbot to the hugely popular ChatGPT.
Crypto rising: Bitcoin has reached a 10-month high following the worst banking turmoil since the 2008 global financial crash and is now worth more than $30,000.
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Number Of The Day
$201 billion
The net worth of Bernard Arnault - the world's richest person - as calculated by the Bloomberg Billionaires index. He is only the third person ever to top the $200 billion mark, after Elon Musk and Jeff Bezos.