17th November 2021
Good morning After criticism over the level of its data transparency, yesterday Netflix published a new website where every week it will rank shows by the total number of hours viewed. In the first report Narcos is the number 1 show globally with over 50m hours watched in the past week.
- Jobs market booms despite furlough end
- Insurance takeover battle turns ugly
Jobs market booms despite furlough end
What’s going on?
The latest job market report suggested that the end of furlough did not lead to a big jump in unemployment as previously feared.
The unemployment rate fell more than expected to 4.3% from 4.5% and there were more vacancies than ever.
Why is this important?
Costing £70bn in total, furlough has helped pay the wages of nearly 12m British workers since March 2020. It was the single most expensive part of the government’s pandemic response.
It was introduced after Covid-19 forced large parts of the economy to close. It saw the government pay towards the wages of people who could not work, or whose employers could no longer afford to pay them, up to a monthly limit of £2,500.
At first it paid 80% of their usual wage, but in August and September 2021 it paid 60%, with employers paying 20%.
The scheme succeeded in keeping unemployment numbers down but the question was would the 1.1m people still on furlough when it ended be made redundant.
Official employment released yesterday implies that most people have returned to the workforce with only a small share losing their jobs. The rate of unemployment has now fallen for nine straight months.
There are now more people on payroll than there were before the first lockdown in February 2020.
Concerns are now turning to the record number of job vacancies – 1.3m – that threaten to derail economic recovery as employers struggle to recruit the right staff.
That’s pushing up wages and creates another source of rising inflation in the economy as global supply chains get squeezed.
The labour market is one of many factors the Bank of England considers when deciding whether to change interest rates.
The Bank had said that it wanted to see the impact of the end of furlough before raising rates. With the data suggested there was limited impact to unemployment, a rate hike to curb rising inflation could be on the cards sooner.
Insurance takeover battle turns ugly
Insurer LV has accused rival Royal London of throwing a 'hand grenade' to try to thwart its sale to a US private equity firm.
LV, previously known as Liverpool Victoria, has been owned by its member-customers since being founded 178 years ago. This structure is called a mutual. Last year the insurer received a £530m offer from American buyout firm Bain Capital that if approved would see it lose its mutual status.
This provoked a backlash as the 1.2m members would each only get about £100 while the investment banks advising LV would get millions, one of whom is the Conservative Party treasurer.
Recently fellow mutual insurer, Royal London, stepped in with a counter offer of £540m which LV believes is a way to torpedo the Bain deal weeks before it goes to a member vote.
LV’s board think Bain’s offer is better for customers and staff and that Royal London ownership would see the business split up.
The battle went up another level yesterday when the CEO of Royal London took to BBC Radio 4 to publicly urge LV back to the negotiating table.
LV then released a statement defending the Bain offer and accused Royal London of “grossly misleading” its members.
Members will vote on whether to approve the Bain deal on December 10.
Stat of the day
Obesity among 4 and 5-year-olds rose by the biggest amount during the pandemic from 10% to over 14%.
Other stories to keep you in the loop
- Rents ‘rising at fastest pace in 13 years’
- Two more energy suppliersstop trading as gas price soars
- Vodafone shares jump after it hikes profit guidance
- Gov orders national security and competition probe over $40bn buyout of chipmaker Arm
- Wagamama owner performance boosted as diners return
- YO! Sushi owner scouting for potential buyout bidders as IPO talks swirl
- Billionaire Richard Branson sells off another $300m stake in Virgin Galactic
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