Month: October 2024

More than 4,000 Boeing employees in the UK are facing uncertainty as the American aerospace giant prepares to cut 17,000 jobs globally, roughly 10% of its workforce.
Boeing’s UK operations, including its only European manufacturing facility in Sheffield, may be impacted by the sweeping job cuts, as the company grapples with financial challenges.
Boeing’s UK workforce is spread across 30 locations, with approximately half working on defence contracts, delivering helicopters such as the AH-64E Apache and planes like the C-17 Globemaster. The company’s Sheffield site employs 125 people who produce wing components for Boeing’s 737 aircraft, while Boeing Global Services operates maintenance facilities at Gatwick airport.
Boeing’s chief executive, Kelly Ortberg, announced the job cuts on Friday, citing ongoing financial difficulties exacerbated by production delays and worker strikes. Regulators have also slowed down Boeing’s manufacturing after a door panel incident on a 737 Max jet earlier this year. The crisis deepened after 33,000 workers went on strike in Seattle over pay disputes, causing further production halts.
Ortberg stated, “Restoring our company requires tough decisions, and we will have to make structural changes to ensure we can stay competitive.” Alongside the job cuts, Boeing has delayed the launch of its 777X jet until 2026 and will halt production of its 767 cargo planes by 2027.
While the specific impact on UK jobs remains unclear, sources suggest that job losses may be skewed toward the US. Hypothetically, if Boeing applies the cuts proportionally, approximately 400 UK workers could be affected. However, Boeing has yet to formally inform its UK employees about how they will be impacted.
The financial strain on Boeing has led to mounting pressure from airline customers, including Ryanair, which had to downgrade its passenger forecasts due to delayed aircraft deliveries. Credit ratings agency S&P has placed Boeing on “negative” watch, raising the possibility of its debt being downgraded to junk status.
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Thousands of UK Boeing jobs at risk as manufacturer plans global cuts

Growing concerns about tax increases have led nearly 30% of business owners in the UK to accelerate plans to sell their companies, according to new analysis from wealth management firm Evelyn Partners.
The survey, conducted among 500 business owners with turnovers of at least £5 million, found that 29% of respondents had sped up their plans to exit their businesses over the past year, with 23% citing fears of higher capital gains tax as a primary factor.
The findings come as the government continues to hint at tax hikes ahead of the budget on October 30. Labour leader Sir Keir Starmer has also suggested that wealthier individuals and businesses may face a heavier tax burden to help manage the UK’s challenging financial situation.
Laura Hayward, tax partner at Evelyn Partners, said that business owners are increasingly “on edge” due to concerns over potential changes to capital gains tax and inheritance tax. She noted that many entrepreneurs are looking to secure the value of their businesses before any unfavourable tax changes come into effect.
“The business environment for many owners has already been tough enough in recent years as they’ve worked to rebuild after the pandemic amidst cost-of-living pressures and high inflation,” Hayward said. “Now, with the potential for unfavourable tax changes in the upcoming budget, it’s understandable that some are looking to realise the gains of their hard work sooner rather than later.”
The analysis also coincides with a decline in both business and consumer confidence. The Institute of Directors’ economic confidence index fell sharply from -12 in August to -38 in September as business leaders expressed concerns about the tax burden. Additionally, the GfK consumer confidence index dropped from -13 in August to -20 in September, with more people reporting a less optimistic outlook on their personal finances and the economy overall.
As the budget date approaches, businesses are bracing for potential changes, hoping for clarity on how any new tax measures might affect their plans for growth, investment, or selling their businesses.
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Business owners speed up plans to sell amid fears of tax rises in upcoming budget

Iberdrola, the Spanish energy group and owner of Scottish Power, has announced a £24 billion investment to upgrade the UK’s energy infrastructure over the next five years.
This marks a doubling of its commitment to Britain and makes the UK the largest destination for Iberdrola’s global investments.
The investment will focus on enhancing the UK’s high-voltage cables, increasing the capacity of electricity transmission and distribution networks, and building new wind farms. The upgrades aim to meet the growing demand for clean energy, which is expected to rise by 50% by 2035 as the UK transitions to electric vehicles and heat pumps.
Ignacio Galán, executive chairman of Iberdrola, described the move as a “vote of confidence” in the UK, citing greater regulatory stability and clear policy direction as key factors. Keith Anderson, CEO of Scottish Power, noted that the UK’s ambitious targets to decarbonise its electricity system by 2030, combined with plans to overhaul the planning system, have provided the clarity needed for large-scale investments.
Of the £24bn, about two-thirds will be spent on enhancing the UK’s electricity grid, particularly in Scotland where renewable energy is concentrated. This will include a new subsea superhighway, the Eastern Green Link 1, connecting Torness in Scotland to Hawthorn Pit in England. The remaining £4bn will fund the construction of two new wind farms off the coast of East Anglia, set to power around one million homes.
This announcement comes ahead of the UK’s first International Investment Summit in London, where international business leaders will meet to explore new opportunities in the country. Ministers hope the summit will secure deals worth tens of billions of pounds for the UK economy.
With global concerns about missing out on investment due to competition from the US, following President Biden’s $369 billion Inflation Reduction Act, Anderson stressed that the UK’s strengths lie in offering regulatory stability, transparency, and a clear market framework for green energy projects.
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Scottish Power owner Iberdrola commits £24bn to upgrade UK’s green energy infrastructure

Annual inflation in the UK is expected to fall below 2% for the first time since April 2021, according to data anticipated to be released next Wednesday.
Official figures are predicted to show a decline in consumer price inflation (CPI) from 2.2% in August to between 1.8% and 1.9% in September, marking the first time inflation has dipped below the Bank of England’s 2% target in more than three years.
The expected drop in inflation comes as a result of falling global energy prices, the resolution of supply chain issues following the pandemic, and the impact of aggressive interest rate hikes. Annual inflation has been steadily declining since peaking at 11.1% in October 2022.
Economists suggest the September inflation figure may be even lower than the Bank of England’s forecast of 2.1%, driven by a sharp reduction in energy and oil prices last month. Analysts at Barclays suggest inflation could fall to 1.7%, while Deutsche Bank points to broader energy price deflation and dips in food, tobacco, and services costs pushing inflation down to 1.8%.
Sanjay Raja, chief UK economist at Deutsche Bank, said, “After headline CPI moved sideways in August, we expect inflation to drop to a new cyclical low in September.”
This anticipated decline in inflation will increase pressure on the Bank of England’s monetary policy committee (MPC) to consider further interest rate cuts. Andrew Bailey, the Bank’s governor, recently warned that ratesetters may need to be “a bit more aggressive” with interest rate reductions if inflation continues to weaken and the economy shows signs of slowing.
The UK economy has seen a marked slowdown in growth in recent months, with GDP stagnant in June and July, and growing only by 0.2% in August, compared to 0.7% quarterly growth at the start of the year.
Konstantinos Venetis of TS Lombard said, “Inflation is settling lower, leaving the economy struggling to maintain momentum. Evidence of a soft patch taking shape is becoming clearer, pointing to the need for a shot in the arm from looser monetary policy.”
Traders now expect the Bank to cut interest rates twice before the end of the year, potentially bringing the base rate down to 4.5%.
However, inflation is likely to rise again in the coming months, with household energy prices increasing by 10% in October and oil prices climbing due to tensions in the Middle East. Additionally, measures from Rachel Reeves’ upcoming budget on October 30, such as introducing VAT on private school fees and potential duties on alcohol and tobacco, could also push inflation back up.
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UK inflation expected to dip below 2% for first time in over three years

The UK economy returned to growth in August, expanding by 0.2% after two months of stagnation, according to official figures from the Office for National Statistics (ONS). This growth was in line with economists’ expectations, following 0% growth recorded in June and July.
The ONS data showed that the economy also grew by 0.2% over a rolling three-month period to August and expanded by 0.8% over the past year. Growth was driven by a 0.5% increase in manufacturing production and a 0.4% rise in the construction sector, both of which had declined in July. The services sector, which constitutes three-quarters of the UK economy, recorded a 0.1% increase in August, matching its growth in July.
Notably, half of the 14 subsectors of the services economy, including scientific, technical, and professional services, experienced growth in August.
After a strong rebound at the start of the year, with 0.7% and 0.5% growth in the first and second quarters respectively, growth has cooled in recent months. Economists predict GDP expansion of 0.3% to 0.4% for the last two quarters of the year, bringing the annual growth rate to between 1.2% and 1.3%, below the government’s G7 growth target. The US is expected to outpace the UK with an estimated 2.6% growth in 2024.
“All main sectors of the economy grew in August, but the broader picture is one of slowing growth in recent months, compared to the first half of the year,” said Liz McKeown, director of economic statistics at the ONS.
August’s return to growth followed the first interest rate cut in four years, with another rate reduction expected in the coming months. Consumers have benefited from a decline in borrowing costs, mortgage rates, and inflation, which dropped to 2.2% in August and is projected to fall further to 1.9% in September, boosting real income growth for households.
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UK economy returns to 0.2% growth in August after months of stagnation

Angela Rayner, Deputy Prime Minister, is set to grant an additional 9 million UK workers the right to sue their employers for unfair dismissal from the first day of their employment, as part of a sweeping overhaul of workers’ rights.
Currently, employees must be with a company for two years before they qualify for these powers.
Business leaders have criticised the reform package, calling it “chaotic” and warning that it risks damaging companies’ willingness to hire new recruits. The Federation of Small Businesses and the Recruitment and Employment Confederation have expressed concerns about potential economic inactivity and reduced business confidence.
The reforms, described as the “biggest upgrade” to workers’ rights in a generation, include measures such as banning fire and rehire practices and ending exploitative zero-hours contracts. However, elements of the package have been watered down, including extending the recommended probationary period for new hires.
Labour’s new measures aim to drive productivity by modernising workplaces, with Rayner stating: “We’re replacing a race to the bottom with a race to the top.” However, critics argue that the changes will empower unions to hold businesses to ransom and stifle investment, with shadow business secretary Kevin Hollinrake warning that Labour’s policies may negatively impact business confidence.
The new Employment Rights Bill is expected to be introduced this week, with further reforms, such as access to flexible working and improved parental leave, also on the agenda.
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Rayner’s employment rights overhaul to grant 9m workers the right to sue employers

Barclays, one of Britain’s largest mortgage lenders, has called on the government to introduce tax breaks and financial incentives for downsizers to encourage them to move into smaller homes, potentially freeing up 3.8 million properties for families.
The bank suggests allowing downsizers to offset moving costs against their stamp duty bill when purchasing a new home.
In a report released on Thursday, Barclays emphasised that reducing the financial burden of moving house could encourage “under-occupiers” to relocate, helping to ease the housing crisis. Alongside financial incentives, the bank called for measures to simplify the moving process and build more retirement housing.
Barclays estimates that this could significantly increase housing market liquidity, benefiting growing families in need of larger homes. “A stronger, more holistic strategy is needed to tackle the immense issues faced by the housing market,” said Mark Arnold, head of mortgages and savings at Barclays.
The call for downsizers’ support follows a report by Savills showing that over-60s account for 44% of homeowners, yet downsizers make up less than 10% of market activity. Lucian Cook, director of residential research at Savills, said reducing the stamp duty burden on downsizers could encourage more people to move, making better use of existing housing stock.
However, critics argue that such tax breaks would disproportionately benefit wealthier homeowners rather than first-time buyers or hard-pressed families. Mortgage broker Martin Stewart questioned the fairness of the plan, asking, “Why incentivise the generation that have been the biggest beneficiaries of house price inflation over the past few generations?”
Aneisha Beveridge, head of research at Hamptons, echoed these concerns, suggesting that subsidies may be better targeted elsewhere, particularly as downsizers are often mortgage-free and have benefited the most from house price growth in recent decades.
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Barclays calls for downsizers tax break to free up 3.8m homes

Rachel Reeves, the Chancellor, is expected to introduce a £25 billion tax increase in this month’s budget to avoid plunging Britain back into austerity, according to the Institute for Fiscal Studies (IFS).
The IFS has warned that the tax rises will need to be twice as large as those introduced by George Osborne in 2010 to ensure public spending can rise as promised, even with looser fiscal rules.
Reeves is said to be exploring an increase in employer national insurance contributions as a key option, after Sir Keir Starmer declined to rule out the move. Labour’s manifesto pledge to avoid raising taxes on “working people” does not cover employer contributions, and a 1% increase could generate an estimated £8.9 billion. Labour is also considering measures such as adding VAT to private school fees and imposing a tougher levy on oil and gas companies, but the IFS cautions that these measures alone will not raise enough to protect public services from further cuts.
The IFS estimates that even if Labour’s proposed tax reforms generate £9 billion, an additional £16 billion in tax rises would be required to ensure departmental budgets grow in line with national income, making a total tax increase of £25 billion necessary. This would exceed the tax hikes imposed by both Gordon Brown in 1997 and Osborne in 2010.
Paul Johnson, director of the IFS, said, “The first budget of this new administration could be the most consequential since at least 2010. The new chancellor is committed to increasing investment spending, and to funding public services. To do so, she will need to increase taxes, or borrowing, or both.”
Reeves is also reportedly exploring changes to pensions, such as reducing the tax-free lump sum people can take out at retirement from £268,275 to £100,000, and adjusting rules around pension pots passed on after death.
The IFS predicts that even with optimistic economic forecasts, significant tax increases are needed to balance the books, especially as welfare costs rise due to an ageing population and growing debt interest payments. A Treasury spokesperson said the government is focused on making the UK’s economy more pro-growth despite the challenges.
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Rachel Reeves faces £25bn tax hike to avoid austerity, says IFS

eBay is set to ban the sale of e-bikes and their batteries by private individuals in the UK from 31 October, citing rising concerns over battery fires.
From this date, only “eligible business sellers” will be permitted to list these items, though the company has not yet clarified the specific criteria for eligibility.
E-bikes, which use battery-powered pedals, have become increasingly popular, but the surge in usage has coincided with a sharp rise in incidents involving battery fires. The London Fire Brigade recorded 155 e-bike fires in 2023, a 78% increase from the previous year. This rise has led to warnings from safety authorities, with e-bike battery packs being officially classed as “dangerous” products by UK regulators.
In June, a coroner called for government action after a fatal fire caused by an overheating e-bike battery pack. These incidents have intensified scrutiny of e-bike safety standards.
“Consumer safety is a top priority for eBay,” a spokesperson for the platform said. Earlier this year, eBay announced plans to audit sellers to ensure their products carry the necessary CE safety documentation.
The change has been welcomed by safety advocates. Electrical Safety First, a UK charity, praised eBay’s decision but called for more robust legal frameworks to ensure that all products sold online meet safety standards. “Whilst this voluntary move is welcome, we continue to call for online marketplaces to be legally obligated to take reasonable steps to ensure products sold via their sites are safe,” said a spokesperson.
The UK’s Product Regulation and Metrology Bill, which is progressing through Parliament, could establish such legal obligations in the future, providing a further safeguard against the risks posed by unsafe e-bike batteries.
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eBay to ban private e-bike sales over fire safety concerns