Daily business and finance update 30th January 2023
Chancellor sets out UK growth plan
Good morning. Goldman Sachs is tightening its belt at the expense of its CEO’s salary. The investment bank announced on Friday that CEO David Solomon received a 29% pay cut in 2022. But don’t feel too bad for him, his new pay package still came in at $25m.
Big Stories
Chancellor sets out UK growth plan
On Friday the chancellor Jeremy Hunt announced plans to boost economic growth and identified the technology, green industries and life sciences sectors as the key drivers. In recent years the UK economy has been impacted by Brexit, coronavirus and now double-digit inflation which has left the country lagging behind its peers in terms of growth. The government has faced criticism over the lack of strategy for long term growth. But the chancellor pushed back against talk of a decline, promising that leaving the EU would be the catalyst for new age of growth for the UK.
Flybe grounded
The British airline went into administration on Saturday for the second time in three years. The company operated 21 routes from Belfast City, Birmingham and Heathrow to airports across the UK and to Amsterdam and Geneva. But now all flights have been cancelled, impacting around 75,000 passengers. Budget airlines Ryanair and Easyjet acted quickly to open recruitment to the 300 employees made redundant setting up fast-track hiring processes. Flybe first collapsed in March 2020 blaming the pandemic but once rescued it hasn’t been able to recover and was losing £5m a month.
Rival builds stake in Sainsbury’s
On Friday convenience store operator Bestway Group announced it had acquired a 3.45% stake in Sainsbury’s worth almost £200m. Bestway, which operates Costcutter, Best-one and Bargain Booze, said it may look to buy more, prompting takeover speculation of Britain’s second largest supermarket. The news sent Sainsbury’s shares up 5% on the day. Sainsbury’s has been a takeover target in recent years as investors’ interest in the UK grocery market has grown. In the past two years both Asda and Morrisons have changed ownership.
Asia’s richest man counts losses
Indian billionaire Gautam Adani’s companies lost over $50bn in value on Friday after the publication of a damaging research report. The report from US-based short-selling firm Hindenburg Research accused the Adani Group of “pulling the largest con in corporate history”. Although Adani called the report “bogus” and released a 413 page rebuttal, the market has responded strongly, with some of his companies falling by 20%. Adani became Asia’s richest person by building investments in multiple industries including transport and renewable energy.
Elsewhere...
Last chance: Shares in Rolls-Royce slumped after its new CEO warned staff the aerospace company was a "burning platform".
End of the road: Rishi Sunak has fired Conservative Party chairman Nadhim Zahawi over a “serious breach” of government ethics rules relating to his tax affairs.
Rental rises: Average asking rents in London have hit a record £2,480 per month amid fierce competition for properties in the capital, according to property website Rightmove.
Shutting down: Barclays has announced the closure of 15 branches across the country, meaning over 100 banks are slated to shut down so far this year.
Out of fashion: H&M's profits were almost wiped out in the September-November quarter by soaring costs, which the Swedish company held back from passing on in full to cash-strapped customers.
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Number Of The Day
50%
The proportion of calories rice, wheat and maize provide all humans.