Daily business and finance update 13th November 2023
UK economy flatlines
Good morning. Today we're talking about the UK’s flatlining economy, Shein’s plans to go public and WeWork files for bankruptcy.
UK economy flatlines
Official data revealed the UK economy stalled between July and September, with GDP remaining unchanged compared to the previous quarter. This marks a slowdown from the 0.2% growth recorded in the second quarter but was better than the 0.1% contraction predicted by economists. The flatlining economy is being attributed to rising inflation, higher interest rates and weakening consumer confidence. Although the new figures mean the UK will avoid a recession this year – defined as two consecutive quarters of economic decline - the minimal growth this year raises concerns about the UK's ability to avoid one in 2024. The Bank of England said it expected zero economic growth next year - a tough backdrop for Prime Minister Rishi Sunak who is widely expected to call a general election in 2024.
Fast fashion giant prepares to go public
Chinese fast-fashion e-commerce giant Shein is reportedly preparing for an initial public offering (IPO) in the US that could value the company at up to $90bn. The move comes as the company faces growing scrutiny over its environmental and labour practices. Founded in 2008, Shein has grown rapidly in recent years, fuelled by the growth of online shopping during Covid and its ability to quickly adapt to changing trends. The company is now one of the largest online retailers in the world, selling in over 150 countries with over 100m active customers. Last month it bought British fashion label Missguided from Sports Direct owner Frasers Group in an effort to increase its foothold in the West and drive sales in the UK.
WeWork files for bankrupt
WeWork, the coworking company once valued at $47bn, filed for Chapter 11 bankruptcy protection after years of struggles that began with a failed IPO in 2019, then compounded by the decline in demand for office space due to the pandemic. Founded in 2010, the company's rapid growth and expansion were driven by massive investments from Japanese conglomerate SoftBank, but WeWork's business model came under scrutiny when it was revealed that the company had overstated its financial performance. Despite its bankruptcy filing, WeWork has said that it plans to continue operating and restructuring its business.
Adding back tills: Supermarket chain Booths is to remove self-checkouts from stores - saying having staff at tills is better for customers.
Mortgage pain: The number of people falling behind on their mortgage payments rose sharply over the summer months.
Number of the Day
How much former NatWest CEO Dame Alison Rose will lose of her payoff as the bank seeks to draw a line under the debanking row sparked by the closure of Nigel Farage's Coutts accounts.
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