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- Daily business and finance update 13th February 2023
Daily business and finance update 13th February 2023
UK dodges recession
Good morning. If you’re dreading a week of endless meetings then perhaps your workplace should look to Shopify for inspiration. The ecommerce firm announced a ‘calendar purge’ by cutting recurring meetings with three or more participants and urged workers to be "really critical" about what gets on their schedules.
UK dodges recession
New data released on Friday showed that the UK narrowly avoided a recession at the end of last year, defined as two consecutive quarters of negative growth. There was zero growth in the last three months of 2022 after a 0.3% contraction in the previous quarter. Although the economy did shrink by 0.5% between November and December much of which was due to strike action and the post-World Cup comedown.
While the UK swerved the technical definition of a recession by a whisker, the economy is 0.8% smaller than at the end of 2019. This makes the UK, and sanction-hit Russia, the only major industrialised nations yet to fully recover output lost during the pandemic. Economists still expect the UK to enter a recession this year, given the stubbornly high inflation, higher interest rates and waning government energy support plus the impact of strikes.
Adidas’ Kanye cleanse
Last week the sportswear giant announced it was still trying to figure out what to do with the €1.2bn worth of stock from the brand Yeezy, its collaboration with Kanye West. Adidas cut ties with the rapper in October over antisemitic comments he made. If the company decides not to sell the merchandise then it would result in a €500m hit to profits and push Adidas to its first loss in three decades. Over the years Adidas has relied on celebrity partnerships for growth and Yeezy has been the most successful so far. Last week it was revealed that Beyoncé’s Ivy Park line fell short of expectations, generating just $40m in revenue versus $250m forecast.
Russia cuts back
Last week Russia announced it would cut its daily oil production output by 500,000 barrels or 5% next month. The cuts are in response to ongoing Western energy sanctions and price caps. The decision will squeeze global oil supplies further, leading to more competition for barrels from other sources, such as the Middle East, that Europe and other Western countries now need. Oil prices went up in the immediate aftermath of the announcement and could therefore make inflation harder to tackle.
Tech layoffs continue
On Friday Yahoo became the latest tech name to reveal it’s cutting costs in preparation for an economic slowdown. The search engine and email service provider is laying off 20% of its staff or 1,600 workers. It’s part of a major restructuring that will see the veteran tech firm reorganise its unprofitable ‘Yahoo for Business’ advertising division as it gives up on its years-long efforts to compete with Google and Facebook on digital advertising.
Car sales slump: Sales of used cars fell by 8.5% last year, according to industry figures highlighting a squeeze on stocks.
Lights off: The lights in future City of London skyscrapers may be turned off or dimmed at night in order to save energy under proposed plans by the local authority.
Politician pay: MPs will receive a 2.9% pay increase from April, taking their salary from £84,144 to £86,584.
Taxing issues: Understaffing at HMRC is causing unacceptable delays and hindering economic activity, according to a leading accountants' group.
Number Of The Day
The proportion of new cars sold globally last year that were electric vehicles. It was the highest percentage ever and was driven by a massive uptake in China and Europe.