14th February 2022
Bite-sized business news from the UK and beyond
Good morning The accounts team at Northern Powergrid may need a refresher in customer billing. Yesterday the energy company admitted it accidently sent out cheques for trillion-pound sums to 74 customers in the north of England, with some customers receiving more than £2.3tn. It also thanked “honest” customers who did not try to cash the cheques in.
- UK economy bounces back
- Amazon and Spotify eye UK podcaster takeover
UK economy bounces back
What’s going on?
On Friday data from the Office for National Statistics revealed that the UK economy shrank by 0.2% in December amid tighter Covid restrictions. The fall was less than expected and means that in 2021 the economy grew 7.5%, the highest annual rate since the Second World War.
Why is this important?
It’s official – by the end of last year the British economy had returned to the size it was in February 2020 just before the pandemic hit. This was a year ahead than originally forecast by economists in 2020 who thought it could take up to at least 2022 before output got back to pre-pandemic levels.
The bounce back comes after the economy shrank 9.4% in 2020, the biggest decline in a century and the biggest contraction of all G7 advanced nations. The rebound has equally been the strongest of that same group with the UK beating growth in the US, which came in at 5.7% and both France and Germany at 7%.
Recovery has been uneven though, growth in manufacturing and construction has offset weakness in the services sector as the impact of the Omicron variant limited activity during the festive period.
Looking ahead the UK is again expected to top the G7 league tables for economic growth this year but there are a host of challenges appearing fast on the horizon.
The cost of living crisis is set to impact millions of households: in April the energy price cap will rise by 54%, inflation is forecast to hit 7% and National Insurance contributions will increase by 1.5%. And not forgetting that the Bank of England has started increasing interest rates and could well raise them further in the coming months. This squeeze on living standards is set to be a major hurdle for growth in 2022.
Amazon and Spotify eye British podcaster takeover
British podcaster Audioboom has caught the attention of Amazon and Spotify who are considering a bid for the FTSE listed business, according to reports over the weekend from Sky.
Audioboom’s software that allows podcasters to host, distribute and monetise their content through advertising. In total shows on its platform are downloaded 116m times every month by 32m unique listeners worldwide. Less than two years ago its shares were worth around £24m but has since ballooned to £275m.
So why would two digital heavyweights be interested?
First created almost 20 years ago podcasting has soared in popularity with a quarter of UK adults listening to one regularly. The global industry is estimated to be worth over $1bn.
Podcasts have a much younger audience than other media forms. Most podcast listeners are between 12 to 34 years old which allows companies to target younger audiences for brand awareness and product placement.
Spotify became a major player in the industry in 2019, when it bought two of the largest podcast platforms: Anchor and Gimlet Media. Earlier this month the company faced backlash over controversial comments from its star podcaster Joe Rogan. Amazon also owns podcast platform Wondery.
But Amazon and Spotify could face stiff competition as other media groups are also said to be considering whether to approach Audioboom about a takeover.
Stat of the day
Chanel has raised the price of its Classic Flap bag by $3,000 since 2019, from $5,200 to $8,200
Other stories to keep you in the loop
- NatWest, Lloyds, Barclays and HSBC brace for blowback as profits hit £34bn
- Poundland moves into fresh food
- Half of those who quit during the Great Resignation are living off savings
- Insurance unicorn Marshmallow faces further legal battle over IP ‘misuse’
- Switzerland approve near-total ban on tobacco advertising
Interesting links from around the web