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  • Daily business and finance update 25th January 2023

Daily business and finance update 25th January 2023

Government debt hits 30-year high

Good morning. This week staff at Dudley Library were left gobsmacked when a customer returned a book 58 years after it was due. Thankfully the £42,000 late fee was waived on 'The Law for Motorists' book. The man checked it out in 1964 when facing a minor traffic charge although it was not particularly helpful, he said.

Big Stories

Government debt hits 30-year high

Data released yesterday showed that last month UK government borrowing – the gap between public spending and tax income - reached the highest level since records began in 1993. The government borrowed £27.4bn in December 2022, well ahead of the £17.8bn forecasted by economists and almost triple the £10.7bn shortfall a year earlier. The increase in spending was driven by higher borrowing costs and energy bill support for businesses and households. It’s another sign that public finances are under intense pressure not helped by a weakening economy.

Economists think the jump in borrowing could make big spending giveaways less likely at the next budget in March and may delay any previously pledged tax cuts into 2024 and beyond.

Businesses on the brink

A new report by insolvency specialist Begbies Traynor suggests the number of British businesses facing collapse jumped by 36% in the final three months of 2022. It’s the sixth quarter in a row that the figure has risen. Begbies says companies are facing a worrying mix of persistently high inflation and consumers cutting back amid the cost of living crisis. It also warns that rising interest rates and the need to repay Covid loans could push many firms over the edge. Things are especially bleak for the hospitality sector which has faced soaring energy bills while recovering from the impact of pandemic lockdowns.

Festive win for Primark

Yesterday the fast fashion retailer reported strong trading, ahead of expectations, over Christmas and early January thanks to robust consumer spending despite the cost of living crisis. Sales at the discount chain rose by 11% in the four months to 17 January, compared with the same period a year ago as shoppers flocked back to city centre stores with heels, baggy suits and knitwear proving popular. The company said it grew faster than its rivals, as it had invested in its stores and attracted shoppers looking to save money by switching away from online shopping and avoiding costly delivery and return fees.

Running on empty

Eurostar’s new CEO says around 350 out of 900 seats are left unsold on the morning services between London and Europe, and blames Brexit plus a shortage of border guards. Gwendoline Cazenave told the FT that although demand had recovered strongly post Covid, stations in London, Paris and Brussels could not handle more passengers because of the strict passport checks that were introduced in 2021. Since Brexit British passports now must be stamped, adding to boarding times. The situation could get worse when the EU’s entry-exit system for foreign travellers, including Brits, is introduced at the end of the year.


Cashing in: Justin Bieber's back catalogue has been sold in a deal reported to be worth $200m.

Grocery expansion: Amazon Fresh is opening a new grocery store in Croydon, just days after closing one of its stores in Dalston, north east London.

Retirement respite: Insurance giant Aviva is on the brink of an agreement that will guarantee pensions to thousands of former Topshop, Burton and Dorothy Perkins employees.

Search enquiry: The US government is suing Google accusing the company of harming competition in the online advertising market and calling for it to be broken up.

Car cut backs: Hundreds of jobs are at risk amid plunging sales at online car retailer Cazoo.

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