13th October 2021
Good morning Last night’s EuroMillions jackpot of £184m is the largest ever lottery prize in UK history. No one won so it will be up for grabs again this Friday. A single winner would become richer than the singer Adele, according to the Sunday Times Rich List. However that’s before taking into account the $$$ she’s likely to make once her long awaited new album 30 is released.
- Brit bounce back – UK forecast for strongest economic growth
- How not to win over investors – Disastrous strategy presentation sinks The Hut Group
UK forecast for strongest economic growth
What’s going on?
In its latest set of economic forecasts, the International Monetary Fund (IMF), has predicted that the UK economy will grow 6.7% this year, faster than any other country in the group of seven advanced nations (G7).
Why is this important?
The IMF is an international body that promotes global economic growth and financial stability. It regularly updates its estimates on how it thinks countries are performing and flags any concerns it has on global growth.
In its most recent reports released yesterday, it’s forecast that the UK will grow more than the US, France, Italy, Germany, Japan and Canada in 2021. But that’s after the British economy shrank 10% last year – more than any other G7 nation.
That means UK GDP will still be smaller than its pre-pandemic level at the end of the year.
The IMF predicts that the global economy will grow 5.9% this year and 4.9% next year but warned that the surge in Covid cases caused by the Delta variant could derail the recovery.
The body also said that the difference in vaccination roll outs and government pandemic support across the world would cause an even wider gap between rich and poor countries.
Developing countries have a vaccine rate of less than 5% compared to over 60% for developed economies.
The strong growth forecast for the UK economy is encouraging but it’s still a couple of years away from surpassing its pre-Covid level.
Although the UK has run a successful vaccination programme the IMF has warned that rising inflation caused by supply chain pressures could become an issue if they aren’t quickly resolved.
Disastrous strategy presentation sinks The Hut Group
Ecommerce cosmetics giant, The Hut Group (THG), hosted an investor day on Tuesday in the hopes that it would win over shareholders to its new strategy.
But it didn’t go according to plan – its shares sank as soon as the meeting started at 2pm and closed down 28% on the day.
THG sells nutrition, vitamins and beauty products online and owns brands such as Cult Beauty, Lookfantastic and Glossybox. In June it struck a deal with Japanese tech group SoftBank that provided it with a $1bn purse for strategic acquisitions.
Last month THG announced it would spin out its beauty business (a major source of revenue) and instead focus on its very new but promising ecommerce platform called Ingenuity that it sells to other companies.
Its shares have fallen by a third since that announcement.
Yesterday’s presentation was supposed to put investors at ease but has instead caused more alarm. Investors were spooked by the update and concerned that SoftBank’s support for THG was declining.
THG debuted on the London stock market last September in a £5bn listing. It seems like it’s still getting to grips with the importance of briefing key external stakeholders, like investors, on major changes to your strategy or else your share price will suffer.
Stat of the day
The UK sends more greeting cards than any other country, last year 75% of Brits sent at least one card
Other stories to keep you in the loop
- Unemployment drops to 4.5%
- Markets pencil in UK interest rate rise in days before Christmas
- UK's early response worst public health failure ever, MPs say
- EasyJet declares aviation recovery ‘under way’ as it forecasts £1bn loss
- Thousands of containers are being diverted from UK amid backlog
- Amazon reverses demands that staff return to office
- Prince Harry and Meghan recruited by US ethical investment firm
- Experts say people now need £10,900 a year to retire - and it includes Netflix
- Gymshark in talks with investors about future IPO
Interesting links from around the web