Daily business and finance update 30th August 2023
Food prices cool
Good morning. Today we're talking about food price inflation cooling, Wilko’s last minute reprieve and China’s property slump.
Food prices cool
Food inflation cooled to its lowest level in almost a year, according to new data from the British Retail Consortium. Grocery bills rose by 11.6% in August from 14.3% the month before, it helped to ease overall shop price inflation from 7.6% to 6.9%. The decline was driven particularly by lower price increases of meat, potatoes and cooking oils. Soaring food costs have been impacting British households for more than a year driven by the energy and grain supply issues related to the war in Ukraine. But with grain exports from Ukraine in jeopardy, a rapid slowdown in price rises is unlikely. Ukraine accounts for almost a third of global grain exports.
PwC, the administrators for the collapsed discount chain Wilko, have received two last-minute bids for the retailer. One bid is from private equity firm M2 Capital for £90m, which would keep the entire Wilko chain trading. The other bid for an undisclosed sum is from Canadian businessman Doug Putman (saviour of music retailer HMV), who would look to keep the majority of Wilko stores open. The administrators are expected to make a decision on the bids in the coming days. The bids mean that the closure of 400 stores and job losses affecting 12,000 employees are on hold. The bids come after Wilko fell into administration two weeks ago. The company had been struggling with rising costs and competition from online retailers.
Chinese property slump
The share price of China’s Evergrande Group, the world's most indebted property developer, plunged 87% after it resumed trading for the first time in almost 18 months. The sell-off wiped out more than $2bn of the company's market value and raised concerns about the health of the Chinese economy. Evergrande has been struggling to reduce its debts pile - which stands at $328bn - for months, and its crisis has cast a shadow over the Chinese property market. The real estate sector accounts for about a quarter of China's economy, so any problems in the sector could have a significant impact on the world’s second largest economy.
Back to the office: Amazon’s CEO has told workers “it’s probably not going to work out” for them at the tech company unless they are prepared to come into the office at least three days a week.
Housing slump: The number of houses sold in the UK this year is on track to be the lowest since 2012, according to property website, Zoopla.
Retail return: Marks & Spencer is on track to re-enter the FTSE100 for the first time in four years amid hopes of a permanent revival at the high street stalwart.
The age when you make your best financial decisions, according to a recent study. The research says that financial literacy also peaks at around 54, before it starts declining.
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