Reeves's tax hikes leave 50,000 firms on the brink as stagflation fears grip Britain
In a bleak update, the CBI said its gauge of how retail sales compared with a year earlier stood at minus 34 this month as customers baulked at rising living costs.
Although that was better than minus 46 seen in June, it was the tenth month of decline in a row, stretching back to October last year, according to the lobby group's figures.
The slump came as firms battered by the Chancellor's £25billion National Insurance tax raid and an increase in the minimum wage pushed up prices – hitting customers in the pocket.
The High Street is also grappling with higher business rates following Labour's failure to reform the hated levy on shops and other business properties.
The CBI report sparked fresh concerns over the state of the economy as corporate restructuring specialist Begbies Traynor warned a record number of companies are in 'critical financial distress'.
Its 'Red Flag Alert' found there are 49,309 firms on the brink – up 21.4 per cent on a year ago.
Begbies said 'consumer-facing industries continued to experience some of the most extreme rises in critical financial distress' and highlighted a 41.7 per cent rise among bars and restaurants and a 17.8 per cent increase in general retail.
A host of household names have been hit, with River Island battling for survival following the collapse of maternity brand Seraphine and fashion chain Quiz.
It is feared Rachel Reeves will hammer households and private business again with another round of tax hikes in the Budget this autumn to pay for Labour's lavish spending on the public sector.
The rising costs faced by business have already pushed up inflation to 3.6 per cent – well above the 2 per cent target – while the economy has also contracted for two months in a row.
That has raised the spectre of stagflation – a period of economic stagnation and inflation that hits living standards and costs jobs.
It has also cast doubt over how far and fast the Bank of England can cut interest rates this year.
The CBI urged ministers to 'seek to build shorter-term confidence' in the Government's economic plans and deliver an autumn Budget 'that acknowledges the burden firms are facing'.
Cautioning over the impact of the new workers' rights Bill, Martin Sartorius, principal economist at the CBI, said: 'Firms reported that elevated price pressures – driven by rising labour costs – and economic uncertainty continue to weigh on household demand.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
9 minutes ago
- The Guardian
Far-right extremists using games platforms to radicalise teenagers, report warns
Far-right extremists are using livestream gaming platforms to target and radicalise teenage players, a report has warned. The new research, published in the journal Frontiers in Psychology, reveals how a range of extremist groups and individuals use platforms that allow users to chat and livestream while playing video games to recruit and radicalise vulnerable users, mainly young males. UK crime and counter-terror agencies have urged parents to be especially alert to online offenders targeting youngsters during the summer holidays. In an unprecedented move, last week Counter Terrorism Policing, MI5 and the National Crime Agency issued a joint warning to parents and carers that online offenders 'will exploit the school holidays to engage in criminal acts with young people when they know less support is readily available'. Dr William Allchorn, a senior research fellow at Anglia Ruskin University's international policing and public protection research institute, who carried out the study with his colleague Dr Elisa Orofino, said 'gaming-adjacent' platforms were being used as 'digital playgrounds' for extremist activity. Allchorn found teenage players were being deliberately 'funnelled' by extremists from mainstream social media platforms to these sites, where 'the nature and quantity of the content makes these platforms very hard to police'. The most common ideology being pushed by extremist users was far right, with content celebrating extreme violence and school shootings also shared. On Tuesday, Felix Winter, who threatened to carry out a mass shooting at his Edinburgh school, was jailed for six years after the court heard the 18-year-old had been 'radicalised' online, spending more than 1,000 hours in contact with a pro-Nazi Discord group. Allchorn said: 'There has definitely been a more coordinated effort by far-right groups like Patriotic Alternative to recruit young people through gaming events that first emerged during lockdown. But since then a lot of extremist groups have been deplatformed by mainstream spaces, so individuals will now lurk on public groups or channels on Facebook or Discord, for example, and use this as a way of identifying someone who might be sympathetic to reach out to.' He added that, while some younger users turn to extreme content for its shock value among their peers, this can make them vulnerable to being targeted. Extremists have been forced to become more sophisticated as the majority of platforms have banned them, Allchorn said. 'Speaking to local community safety teams, they told us that approaches are now about trying to create a rapport rather than making a direct ideological sell.' The study also spoke to moderators, who described their frustration at inconsistent enforcement policies on their platforms and the burden of deciding whether content or users should be reported to law enforcement agencies. While in-game chat is unmoderated, moderators said they were still overwhelmed by the volume and complexity of harmful content, including the use of hidden symbols to circumvent banned words that would be picked up by automated moderation tools, for example, a string of symbols stitched together to represent a swastika. Allchorn highlighted the need for critical digital literacy for parents as well as law enforcement so they could better understand how these platforms and subcultures operate. Last October Ken McCallum, the head of MI5, revealed that '13% of all those being investigated by MI5 for involvement in UK terrorism are under 18', a threefold increase in three years. AI tools are being used to assist with moderation, but they struggle to interpret memes or when language is ambiguous or sarcastic.
Daily Mail
9 minutes ago
- Daily Mail
Rolls-Royce rockets towards £100bn: Engine-maker up 1,000% since Turbo Tufan took helm
Rolls-Royce shares soared to a record high yesterday as its value hurtled towards £100billion for the first time. On a blockbuster day for investors, the stock rose as much as 12 per cent, taking gains for the year to more than 85 per cent. Rolls is up more than elevenfold – or more than 1,000 per cent – since 'Turbo' Tufan Erginbilgic took over as chief executive at the start of 2023 when the engineer was worth just £7.9billion. Last night it was valued at £89.5billion, making it the fifth-biggest London-listed company. The rally came as growing demand for its engines, which power commercial aircraft and military fighter jets, led it to upgrade profit forecasts. Erginbilgic, who has been credited with turning the 119-year-old company around, now expects profits of between £3.1billion and £3.2billion, having previously targeted £2.7billion to £2.9billion. It came after the Derby firm reported a 50 per cent leap in first-half profits to £1.7billion, while revenues rose 11 per cent to £9.1billion. 'Having already delivered a stellar turnaround, Rolls is showing no signs of taking its foot off the pedal,' said Russ Mould of AJ Bell. 'Rolls is the poster child for what's capable on the stock market – a welcome reminder that Britain has plenty of business champions.' Erginbilgic said it had overcome supply chain and tariff challenges, and was on target for profits of up to £3.9billion by 2028. Demand has been boosted by the recovery of international travel since the pandemic. In the first six months of the year, Erginbilgic said it improved the time its engines spend 'on wing' – meaning the hours engines spend powering planes before needing maintenance. That lifts profits, as Rolls makes money from its engines' flying hours. By increasing durability, Rolls is expecting a more-than-80 per cent improvement in flying time for its Trent engines by 2027. Problems with the Trent 1000, which powers Boeing's 787 models, have caused disruption for airlines including British Airways and Virgin Atlantic. An improved blade certified in June is expected to more than double the time engines are in operation. After upgrades, time 'on wing' would rise to as much as six years, Erginbilgic said. The company has shrugged off the US tariff war, including by taking 'pricing actions' and making cost efficiencies. 'By February we were ready,' Erginbilgic said. 'We didn't know what to predict. In an uncertain world, my personal belief is that a company's job is not to predict what's going to happen but to gear up to respond.' The Rolls chief added: 'Our processes were aligned before tariff numbers hit, we were very quick to go to the mitigations.' Microsoft hits the $4trillion mark Microsoft became the world's second $4 trillion (£3 trillion) company last night following blockbuster results. Shares in the technology giant climbed by as much as 9 per cent in early trading to pass the milestone. It comes less than a month after Nvidia became the world's first $4 trillion firm by market capitalisation. Shares in Facebook owner Meta also soared yesterday – rising as much as 12 per cent – after its own upbeat results. The two companies now have a combined value of £4.5 trillion, which is twice the value of the entire FTSE 100.
Telegraph
9 minutes ago
- Telegraph
Air traffic control encourages working from home to reach net zero
The air traffic control company responsible for Britain's skies embraced home working in a drive to 'go green', The Telegraph can disclose. Many staff at National Air Traffic Services (Nats) have been allowed to work remotely after managers decided it would help the organisation reduce its carbon footprint and cut car journeys to reach net zero carbon dioxide emissions by 2035. The 'agile working' policy does not include air traffic controllers themselves, as those people all still work inside secure control centres. However, it extends up to board level including chief executive Martin Rolfe, and also allows some operations staff to work from home. They are allowed to do so despite Nats being criticised for an air traffic control meltdown in 2023, which lasted for four hours in part because an on-call engineer who could have fixed a malfunctioning computer system was working from home and unable to gain full access. A subsequent failure for around half an hour on Wednesday triggered more than 150 cancellations and disrupted tens of thousands of holidaymakers. Nats has repeatedly said that agile working is crucial to help its green ambitions. In a responsible business report from 2021, published as the country recovered from the Covid-19 pandemic, a senior manager described how agile working would help Nats go green. 'The need to reduce our environmental impacts and costs was firmly part of our plans prior to Covid,' he said. 'Now the pandemic has hastened discussions on the amount and type of property and accommodation the business will need in the future, particularly in the context of agile working, which will allow Nats to make better use of people and space. 'A more permanent element of remote working also potentially supports a reduction in car journeys. Creating a new, agile-ready office work environment offers the opportunity to 'go green', and we're encouraging employees to make the most of the 'new office and new start' post-Covid.' Current job vacancies which allow remote working include a military air traffic control specialist, a post described as playing a 'key role within the operations transformation department' and responsibility for overseeing the implementation of a military radar contract. Others include a senior project manager in charge of 'multiple complex and major projects' and a tactical training planner whose roles include ensuring that 'competency is maintained'. In another report in July 2023, shortly before the August bank holiday air traffic chaos of that year, Nats unveiled a five-year plan titled 'our route towards carbon negative'. As part of its plan to reduce emissions 'on the ground' it said that it would reduce 'consumption and improve energy efficiency, reduce unnecessary business and commuting travel emissions, adopt agile working'. It boasted of a 6 per cent reduction in its 'commuting footprint' and said that by not returning all of its staff to the office, it had reduced carbon dioxide emissions. The air traffic control company won a 'climate leaders' award the following year for achieving the highest score in a survey that asked stock market-listed companies how they were reducing emissions. Solar panels Part of that work included installing more than 2,600 solar panels on the roof of Nats' Swanwick air traffic control centre, which was completed a year ago. Bosses hope that the panels will eventually provide up to a fifth of the centre's electricity needs, even though the technology only generates power when the sun is shining. 'This project is the first of three large-scale solar installations at Nats' sites involving some 12,000 panels,' Nats said in a statement about the Swanwick works issued last July. 'Work is underway to fit solar panels to the roof of the Prestwick Centre in Ayrshire and ground-mounted panels will be installed on adjoining land later this year,' it added. Prestwick is the headquarters of Scottish Control, which is in charge of the skies over the northern UK mainland and Northern Ireland. It also hosts Shanwick Oceanic Control, which is responsible for all flights to and from the US that pass over the eastern half of the North Atlantic. However, reliance on solar panels has previously been blamed for blackouts such as those seen in Spain and Portugal earlier this year. In April the solar-dependent Spanish electricity grid became unstable thanks to the large amount of intermittent renewable power connected to it, eventually triggering a total loss of electricity across the entire Iberian peninsula. Fears of aviation meltdowns because of unreliable power supplies came true earlier this year when Heathrow Airport was forced to close after a site-wide power cut that disrupted 700,000 airline passengers around the world. That incident was eventually traced back to the failure of a single National Grid transformer with a fault that had been known about for years. Diversity hiring A focus on air traffic diversity hiring was also criticised by Donald Trump earlier this year after a deadly crash between a military helicopter and passenger plane that killed 67 people in Washington DC. The US president said that employees with 'severe disabilities' had been hired as part of a diversity and inclusion drive and vowed to 'put safety first'. A Nats spokesman said on Thursday: 'Yesterday's issue was radar related and was resolved quickly by switching to the back-up system during which time we reduced traffic to ensure safety. There is no evidence that this was cyber related. 'Regarding our working policies, we adopted 'agile working' in 2020, post-pandemic for appropriate roles. It does not include frontline staff such as controllers and engineers based in our centres.'
