Today's business and finance round up 25th August 2021
🚖Chinese ride hailing giant pauses UK entry
25th August 2021
Good morning Fast food chains just can’t seem to catch a break lately. First KFC and Nando’s run out of chicken and now McDonald’s is out of milkshake in England, Scotland and Wales. All three chains have named supply chain issues caused by lorry driver shortages as the reason.
Chinese ride hailing giant pauses UK entry
Record stock shortage
Yesterday's market moves
FTSE 100 +0.2% 7,126 FTSE 250 +0.6% 23,886
UK markets edged higher in quiet day for newsflow, as investors continued to digest the latest Covid-19 developments and macro data ahead of this week’s annual central bankers shindig aka the Jackson Hole Economic Symposium.
TRANSPORTChinese ride hailing giant pauses UK entry
What’s going on?Didi, China’s answer to Uber, has put the breaks on entering the UK and continental Europe as it faces increasing regulatory pressure from the Chinese authorities.
Why is this important?
Launched in 2012, Didi is China's largest ride hailing app with a reported 493 million active users and has been rapidly expanding its global reach, with a strong presence in South America, Australia and Japan. In June, the company made its public market debut in New York, raising over $4bn.Next stop was Europe. Didi had secured licences to operate in four UK cities but has suspended its launch for at least a year and told current staff that they could be made redundant.It’s facing increasing scrutiny from the West with concerns that users could have their data passed to the Chinese government due to its stringent national security laws. China has also been cracking down on the company and other tech firms over cybersecurity concerns, citing fear of user data leaving the country.Earlier this month, Didi was in talks to potentially give control of its data to a firm that the country’s government owns. The company collects data about car locations, trips and indications of when workers in some cities end their shifts, along with what companies have the longest hours.TakeawayThe recent intervention from the Chinese government has caused Didi's share price to plunge by around half since it went public in June. More heat from Chinese and Western governments could but a dampener on Didi’s quest for world domination.
ECONOMYRecord stock shortage
Supplies are at an all time low, that’s according to the latest manufacturing survey by the Confederation of British Industry (CBI).The CBI's index for stock adequacy fell to the lowest since the survey began in 1977, sinking to -14 from July's -11, the third record low in as many months.The issue has been caused by supply chain problems as the pandemic and Brexit has led to skill shortages and transport disruption.Economists are warning that it could put the post-Covid economic recovery at risk if it continues. It comes as more firms stump up hefty sign-on bonuses to fill their vacancies.Amazon, AO.com and Pets at Home are offering up to £1,000 at UK warehouses to attract new workers.And bonuses are extending beyond the logistics sector. Specsavers says it will pay as much as £10,000 for optometrists in some of its locations, British Gas £3,000 for gas engineers, and G4S £500 for security officers and managers.The UK is not alone in its supply problems. Business surveys have shown disruption and staff shortages in several other countries, including the US, Germany, and New Zealand.
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