- Market Loop
- Daily business and finance update 22nd January 2024
Daily business and finance update 22nd January 2024
Google’s UK investment
Good morning. Today we're talking about Google’s big investment in the UK, falling retail sales and a blow for the steel industry.
Google’s UK investment
Google will invest $1bn in a new data centre in the UK to help meet growing demand for its services. The 33-acre site, located just north of London, will house a cutting-edge facility packed with servers. These servers will power essential Google services like Search, Maps, YouTube and Google Cloud, for users in the UK and around the world. Building work has started on the site and is expected to be completed by next year. The announcement is a boost for the government as it tries to position the UK as a world leader in tech.
Retail sales dip
UK retail sales unexpectedly fell 3.2% in December, marking the steepest monthly decline since January 2021 during the height of the pandemic. This significant drop, exceeding economist forecasts, raises concerns about the UK's economic trajectory and the potential for a recession. Despite a temporary boost from Black Friday discounts, non-food stores bore the brunt of the downturn, with sales declining 3.9%. Even traditionally resilient food sales dipped 3.1%, and e-commerce sales followed suit with a 2.1% decline. Analysts attribute this widespread slump to: rising inflation eroding household purchasing power, waning consumer confidence, and the Bank of England's interest rate hikes aimed at curbing inflation, which may have inadvertently dampened consumer spending further.
Steel industry blow
Tata Steel is shutting down two blast furnaces at its steelworks in South Wales meaning the loss of up to 2,800 jobs. The company said that the Port Talbot site is loss-making, and with government funding it’s being converted into a greener plant that requires fewer workers. Competition from Asian imports has made it harder than before to make a profitable steel business in the UK. Unions have condemned the move, calling it "devastating" and criticising the lack of government support for the vital industry. The closure threatens not only the immediate workforce but also the wider supply chain, potentially impacting thousands of additional jobs.
Postal changes: Royal Mail could be allowed to scrap Saturday post deliveries, as part of an Ofcom review into how the postal service may need updating.
Cutting back: American sports magazine Sports Illustrated has laid off most of its staff after losing its licence.
Topping the table: For the first time since 2010 Apple beat Samsung to become the world’s top smartphone seller.
Number of the Day
How much the world’s five richest men have increased their wealth by since 2020, according to Oxfam.
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