Good morning. The Lunar New Year holiday began over the weekend with millions of families across Asia, including China, South Korea and Vietnam, celebrating. The festival has been described as the largest migration of people on Earth. China’s Ministry of Transport estimates over 2bn passenger trips will take place as people across the country return to their hometowns for family reunions for the first time without domestic travel restrictions since the start of the pandemic over three years ago.
Big Stories
Retail sales paint bleak picture
Data released on Friday showed that UK retail sales volumes fell more than expected in December, by 1.1% from the previous month versus economist forecasts for a 0.4% increase. It follows a drop of 0.5% in November and is further evidence consumers cut back amid the rising cost of living over the festive period.
Comparing the final quarter of 2022 to the year before, sales volumes were down 5.7%, while sales values were up 4.5%. In other words, inflation meant consumers paid more money but for less things. A separate report showed consumer confidence slid for the first time in four months.
The figures underline a deteriorating outlook for the UK, which is the only G7 country that has yet to recover its pre-pandemic level of output.
Government saves steel industry
This week the chancellor will approve a £300m support package to rescue British Steel, the UK’s second-biggest steel producer, according to reports over the weekend. The bailout is aimed at averting thousands of job losses at the company and many thousands more in the supply chain. The approval is subject to British Steel's Chinese owner Jingye committing to securing jobs and investing £1bn in the business by 2030. In recent years the UK steel industry has struggled to compete with cheaper imports from Asia that are heavily subsidised. Three years ago British Steel was bought out of insolvency by Jingye, which became its third owner in four years.
Google joins tech cuts
On Friday Alphabet, Google’s parent company, unveiled plans to cut 12,000 jobs worldwide, equivalent to 6% of its global workforce. Departing employees will get at least 16 weeks severance and six months worth of health benefits in the US. The company had been under investor pressure to curb spending and shares jumped 5% following the announcement. Alphabet joins Meta, Twitter and Microsoft in a growing list of tech companies slashing jobs in preparation for a slowdown in the global economy after the pandemic hiring spree. The news takes total tech job losses above 200,000 since the start of last year, according to the Financial Times.
Another crypto name bites the dust
Cryptocurrency lender Genesis filed for bankruptcy last week becoming the latest victim of the fallout in the crypto market after the collapse of the exchange FTX last year. According to court documents Genesis listed over 100,000 creditors with total liabilities ranging from $1.2bn to $11bn. The company enabled customers to lend out their crypto assets in exchange for high returns but a run of bad bets last year meant it suspended withdrawals in November, soon after crypto exchange FTX — where Genesis held some of its funds — filed for bankruptcy.
Elsewhere...
Tax trouble: Tory party chairman Nadhim Zahawi is facing mounting pressure over claims he tried to avoid tax and had to pay it back.
Closing down: Lloyds Banking Group said it will close a further 40 branches this year, as the exodus of banking branches from Britain’s high streets continues.
Coming together: Brazil and Argentina will announce this week that they are starting preparatory work on a common currency.
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Number Of The Day
2,300
The number of 'active working' employees at Twitter as confirmed by CEO Elon Musk over the weekend, that compares to the more than 7,000 that worked at the company before the takeover.