Good morning. Today up to 500,000 workers will go on strike across the UK in the biggest day of industrial action since 2011. Teachers, university workers, civil servants, train and bus drivers are all due to walkout in a dispute over pay and working conditions. Analysts estimate it could cost the economy £200m.

Big Stories

UK misses upgrade

Yesterday the International Monetary Fund downgraded its economic forecasts for the UK and predicted that it would be the only major advanced nation to shrink this year. The global body predicts that the UK’s GDP will decline by 0.6% in 2023 - even worse than sanction hit Russia – due to higher interest rates and taxes that could make the cost-of-living crisis worse. This came as the IMF raised its economic outlook for the world economy, from 2.7% to 2.9%, driven by resilient US spending and China’s reopening after the end of strict Covid restrictions. The Eurozone economy forecasts were also upgrading to 0.7% growth in 2023.

Although the report did not mention Brexit, the news came the same day the UK marked the third anniversary of leaving the EU. Separate analysis by Bloomberg estimated that Brexit costs the UK economy £100bn a year and GDP is 4% smaller than it might have been.

Tesco’s busy day

Yesterday Britain’s biggest supermarket announced a round of job cuts plus the acquisition of Paperchase assets. Tesco plans to shake up its management and close hot counters and delis in stores resulting in the loss of 2,100 jobs. Since 2019 Tesco said it has seen a steep drop in demand for the counters and that it was no longer a major reason for customers visiting stores. Also yesterday, high street stationery firm Paperchase fell into administration with Tesco buying the brand and intellectual property but not the 106 stores putting 800 roles at risk. The collapse of the chain follows a difficult period of rising costs and disappointing sales.

Mortgage approvals dive

New data from the Bank of England revealed that mortgage approvals in December fell to the lowest level since May 2020, when the housing market was shut because of the pandemic. Approvals dropped to around 35,600, short of the 45,000 expected by economists. It’s the fourth consecutive drop and, excluding Covid impacted months in 2020, was the worst figure since January 2009. It’s the latest sign of a slowdown in the housing market which could be squeezed further as the Bank of England is expected to raise interest rates tomorrow for the 10th time in a row thereby making mortgages more expensive.

Revolut bucks trend

Yesterday the London-based banking app told the Evening Standard that it looking to hire 1,700 people this year, after doubling in size to 7,000 employees in 2022. It comes at a time when several US tech firms, including Amazon, Microsoft and Google, have announced layoffs in preparation for an economic slowdown after expanding quickly during the pandemic. Revolut said it had taken a more measured approach to recruitment during Covid in a bid to avoid over hiring. 

Elsewhere...

Sliding down: The UK has received its lowest ever score and ranking on a corruption index,  falling from 11th to 18th in the global league table.

Spending regrets: The CEO of Spotify admitted he got a 'little carried away' after a splurge of expensive podcast deals drove the streaming service to a $230m loss.

Partner pay: The average UK partner pay at KPMG increased to £717,000 last year thanks to a boom in the deal making market.

Record breaking: US oil giant Exxon Mobil posted a record profit of $56bn in 2022 driven by surging energy prices following the war in Ukraine.

Bill busting: Grocery price inflation has hit a record 16.7% to add a potential £788 to annual shopping bills.

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Number Of The Day

53

Number of years since the Boeing 747 entered service as the world’s first jumbo jet helping bring affordable air travel to millions of passengers. The last 747 will be delivered today as the 777X takes its place. 

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