This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2018/jan/16/uk-inflation-cpi-poud-carillion-collapse-fallout-business-live
The article has changed 24 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Firms count cost of Carillion collapse; UK inflation figures due – business live | |
| (35 minutes later) | |
| Top UK government ministers are expected to discuss Carillion’s collapse later today, when Theresa May’s cabinet meet at Downing Street. | |
| Last night, ministers held a meeting on the crisis. Afterwards, Cabinet Office minister David Lidington claimed efforts to deal with the crisis had “gone pretty well”. | |
| Lidington added: | |
| “The message today was that day one had gone pretty well, people were turning up to work, we had not had reports of any serious disruption to service delivery.” | |
| UK’s horticultural services company Flora-tec has been badly hit by the collapse of Carillion, giving a chilling example of the ‘domino effect’ that could hit the UK economy. | |
| The firm faces a loss of £800,000 on work carried out for Carillion -- and took the dramatic step of laying off 10 people yesterday after the liquidation. | |
| Andy Bradley, managing director of Flora-tec, told the BBC’s Wake Up To Money programme that his firm provided ‘ground maintenance’ at schools and hospitals. His staff were up at 3am during last month’s cold snap -- clearing snow and putting salt down. | |
| But he doesn’t expect to be paid for that work; a serious blow, as £800,00 is over 10% of annual turnover. | |
| Bradley warns that he now faces “a massive black hole in our accounts” with no guarantee that he will ever be repaid. | |
| He was damning about the government’s role in the crisis. They encouraged small firms such as Flora-tec to get involved in public sector contracts, Bradley explains. And they also kept handing Carillion contracts after last summer’s profits warning; if Westminster trusted Carillion, why wouldn’t a small SME? | |
| Andy Bradley of landscaping firm Flora-tec has taken a £880k hit and cut 10 jobs following Carillion collapse. "The government continued to give them billion pound contracts... and we took comfort from that," he tells #WakeUptoMoney @bbc5live pic.twitter.com/yHdwTyQpb1 | |
| Yesterday’s liquidation was a ‘sucker punch’ says Bradley, adding: | |
| I had to make 10 people redundant yesterday. that’s 10 people with mortgages and car loans It’s an absolute disgrace... | |
| I’ve got people to pay. I’ve not got the money to pay them. | |
| Infrastructure investment company John Laing has told the City that it can handle Carillion’s collapse. | Infrastructure investment company John Laing has told the City that it can handle Carillion’s collapse. |
| John Laing has nine ‘operational PPP (public partnership) projects where Carillion are the Facilities Management provider, 4 schools projects, 4 emergency services projects and 1 road project. | John Laing has nine ‘operational PPP (public partnership) projects where Carillion are the Facilities Management provider, 4 schools projects, 4 emergency services projects and 1 road project. |
| But Carillion’s demise isn’t a shock - John Laing has drawn up contingency plans, and is now seeking to replace Carillion with another facilities management (FM) firm without disruption | But Carillion’s demise isn’t a shock - John Laing has drawn up contingency plans, and is now seeking to replace Carillion with another facilities management (FM) firm without disruption |
| John Laing says: | John Laing says: |
| The Investment Adviser’s asset management team have been aware of the issues affecting Carillion and have had contingency plans in place for some time. | The Investment Adviser’s asset management team have been aware of the issues affecting Carillion and have had contingency plans in place for some time. |
| These have involved discussions with a number of potential replacement providers and the Investment Adviser is in the process of implementing these contingency plans and seeking to appoint alternative FM providers on all of the 9 projects to replace Carillion. | These have involved discussions with a number of potential replacement providers and the Investment Adviser is in the process of implementing these contingency plans and seeking to appoint alternative FM providers on all of the 9 projects to replace Carillion. |
| At this stage the Investment Adviser expects that this can be achieved with minimal service disruption and minimal additional cost. | At this stage the Investment Adviser expects that this can be achieved with minimal service disruption and minimal additional cost. |
| BUT... that may also mean job losses at Carillion, if companies such as John Laing take their business elsewhere.... | BUT... that may also mean job losses at Carillion, if companies such as John Laing take their business elsewhere.... |
| Several construction and engineering firms have updated the City this morning about the Carillion crisis. | Several construction and engineering firms have updated the City this morning about the Carillion crisis. |
| Van Elle, a geotechnical engineering* contractor, told shareholders that it is currently owed £1.6m by Carillion for various contracts in December, and work taking place in January. | Van Elle, a geotechnical engineering* contractor, told shareholders that it is currently owed £1.6m by Carillion for various contracts in December, and work taking place in January. |
| Van Elle says it faces an ‘adverse financial impact’ if it can’t get this money back | Van Elle says it faces an ‘adverse financial impact’ if it can’t get this money back |
| It also had orders from Carillion worth £2.5m of revenue, for this year and beyond [for comparison, the company’s revenues were £94m last year] | It also had orders from Carillion worth £2.5m of revenue, for this year and beyond [for comparison, the company’s revenues were £94m last year] |
| CEO Jon Fenton says Carillion’s collapse is ‘disappointing’. Shares in Van Elle have plunged by almost 10% in early trading | CEO Jon Fenton says Carillion’s collapse is ‘disappointing’. Shares in Van Elle have plunged by almost 10% in early trading |
| * - complicated foundations, ground work, that kind of thing. | * - complicated foundations, ground work, that kind of thing. |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, business and the eurozone. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, business and the eurozone. |
| Britain’s cost of living squeeze may finally be easing, after a tough year for UK households. | Britain’s cost of living squeeze may finally be easing, after a tough year for UK households. |
| New inflation figures, due this morning, are expected to show that price pressures eased a little last month. | New inflation figures, due this morning, are expected to show that price pressures eased a little last month. |
| The Consumer Prices Index is tipped to have fallen to 3.0% in December, down from near six-year high of 3.1% struck in November. | The Consumer Prices Index is tipped to have fallen to 3.0% in December, down from near six-year high of 3.1% struck in November. |
| If so, that would suggest that the slump in the pound after the EU referendum has finally worked its way through the system. And with sterling back at a post-Brexit hit - close to the giddy heights of $1.38 -- inflation might keep dipping in 2018. | If so, that would suggest that the slump in the pound after the EU referendum has finally worked its way through the system. And with sterling back at a post-Brexit hit - close to the giddy heights of $1.38 -- inflation might keep dipping in 2018. |
| However, few citizens will be firing off any leftover party poppers. Wages are only growing at around 2.3% per year, which means people are still getting a pay cut in real terms. | However, few citizens will be firing off any leftover party poppers. Wages are only growing at around 2.3% per year, which means people are still getting a pay cut in real terms. |
| Michael Hewson of CMC Markets suspects that inflation could be ‘stickier’ than some economists expect. | Michael Hewson of CMC Markets suspects that inflation could be ‘stickier’ than some economists expect. |
| He says: | He says: |
| Last month the Bank of England governor found himself having to pen a letter to the Chancellor of the Exchequer explaining the reasons as to why the Bank of England had exceeded its headline inflation target by more than 1%, after CPI came in at 3.1% for November, the highest level since March 2012. Later this morning we’ll find out if the December numbers have fallen back from those heady peaks. | Last month the Bank of England governor found himself having to pen a letter to the Chancellor of the Exchequer explaining the reasons as to why the Bank of England had exceeded its headline inflation target by more than 1%, after CPI came in at 3.1% for November, the highest level since March 2012. Later this morning we’ll find out if the December numbers have fallen back from those heady peaks. |
| While most expectations are for that indeed to be the case, with a drop back to 3%, one can’t help feeling that this optimism might well be misplaced. | While most expectations are for that indeed to be the case, with a drop back to 3%, one can’t help feeling that this optimism might well be misplaced. |
| Airfares were a key component that underpinned the CPI number in November and it is quite likely that could happen again, furthermore fuel prices also rose in December. The one bright spot could well be food and drink with shop price inflation expected to be on the soft side. Core CPI is expected to slip back a touch to 2.6% from 2.7% | Airfares were a key component that underpinned the CPI number in November and it is quite likely that could happen again, furthermore fuel prices also rose in December. The one bright spot could well be food and drink with shop price inflation expected to be on the soft side. Core CPI is expected to slip back a touch to 2.6% from 2.7% |
| It seems more probable that inflation is likely to remain stickier than usual for the next couple of months as the January effect of higher rail fares also bleeds through into the numbers. It should then start to soften towards the end of Q1 assuming the pound stays at its current levels. | It seems more probable that inflation is likely to remain stickier than usual for the next couple of months as the January effect of higher rail fares also bleeds through into the numbers. It should then start to soften towards the end of Q1 assuming the pound stays at its current levels. |
| We’ll also be keeping an eye on the Carillion crisis. | We’ll also be keeping an eye on the Carillion crisis. |
| The demise of the UK construction and services group is turning into a major political row; as we covered last night, Labour are calling it a ‘watershed moment’, and demanding an end to ‘rip-off’ privatisations. | The demise of the UK construction and services group is turning into a major political row; as we covered last night, Labour are calling it a ‘watershed moment’, and demanding an end to ‘rip-off’ privatisations. |
| Thousands of Carillion workers are now nervously wondering about their future, as the government is only protecting staff on private sector work until Wednesday. | Thousands of Carillion workers are now nervously wondering about their future, as the government is only protecting staff on private sector work until Wednesday. |
| Scores of small firms up and down the country also face disruption and the threat of unpaid bills, and may soon be taking tough decisions. | Scores of small firms up and down the country also face disruption and the threat of unpaid bills, and may soon be taking tough decisions. |
| But life goes in on the City; retailer JD Sports, cakes and sauces maker Premier Foods, bakers chain Greggs, and estate agent Savills are all reporting results. | But life goes in on the City; retailer JD Sports, cakes and sauces maker Premier Foods, bakers chain Greggs, and estate agent Savills are all reporting results. |
| JD SPORTS +4%; Christmas sales +3%, sees FY profit ahead of est (£300m v £270-95m) sales growth seen online and thru overseas expansion. | JD SPORTS +4%; Christmas sales +3%, sees FY profit ahead of est (£300m v £270-95m) sales growth seen online and thru overseas expansion. |
| Stat of the day: @PremierFoods_FS sold 220m mince pies last year. Or 3 for every man, woman & child | Stat of the day: @PremierFoods_FS sold 220m mince pies last year. Or 3 for every man, woman & child |
| Greggs says it'll open even more stores in 2018 - after posting its financial figures from last year. Like-for-like sales were up 3.7% #CapitalReports pic.twitter.com/j2bvLUd0tc | Greggs says it'll open even more stores in 2018 - after posting its financial figures from last year. Like-for-like sales were up 3.7% #CapitalReports pic.twitter.com/j2bvLUd0tc |
| Jeremy Helsby to retire as @savills CEO at end of 2018 after a transformational 11 years in the top job. Congrats to Europe CEO Mark Ridley who will succeed him. Here he is (third from left) chairing last night Savills forecast event. pic.twitter.com/w2f31kBIfm | Jeremy Helsby to retire as @savills CEO at end of 2018 after a transformational 11 years in the top job. Congrats to Europe CEO Mark Ridley who will succeed him. Here he is (third from left) chairing last night Savills forecast event. pic.twitter.com/w2f31kBIfm |
| The agenda: | The agenda: |
| 9.30am GMT: UK CPI and RPI inflation figures for December | 9.30am GMT: UK CPI and RPI inflation figures for December |
| 9.30am GMT: UK house price index for November | 9.30am GMT: UK house price index for November |
| 1.30pm GMT: US Empire manufacturing data (tracking factory output in and around New York) | 1.30pm GMT: US Empire manufacturing data (tracking factory output in and around New York) |
| We’ll be tracking all the main events through the day... | We’ll be tracking all the main events through the day... |