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Unemployment and zero-hour contracts down in latest jobs data

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The UK employment rate is at its highest level since comparable records began in 1971, according to the latest data released by the Office of National Statistics today.

The ONS also revealed that 20,000 fewer people are on zero-hour contracts compared to this time last year, with 883,000 depending on zero-hour employment for their main income.

“Estimates from the Labour Force Survey show that, between January to March 2017 and April to June 2017, the number of people in work increased, the number of unemployed people fell, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) also fell,” the ONS said.

The employment rate is at 75.1% and the unemployment rate is now 4.4%, down from 4.9% last year and the lowest since 1975.

“Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.1%, both including and excluding bonuses, compared with a year earlier,” the data revealed.

There are now 32.07m people at work in the UK, 125,000 more than in the first three months of the year and 338,000 more than this time last year.

 

 

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GDP growth and interest-rate rise predicted amid positive UK forecast

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GDP growth of almost 2%, an interest rate hike in Q1 2018 and inflation easing to 2% in 2019 are all part of the National Institute of Economic and Social Research’s latest forecast for the UK economy.

Predicting 1.7% GDP growth this year and 1.9% in 2018, the NIESR has brought forward its prediction of an interest rate increase from Q2 2019 to Q1 2018, a “modest withdrawal of some of the additional stimulus that was injected into the economy after the 2016 EU referendum,” it said. The think tank also predicted an elimination of the fiscal deficit in 2022, and a peaking of debt to ration in 2018/19.

“The economy has slowed each year since 2014 and according to our forecast, 2017 will mark the trough for GDP growth,” it said in its analysis. Thereafter, we envisage a modest recovery that takes economic growth to a level that is close to potential.”

It also described movement in the UK’s labour market as “puzzling”, with employment growing, unemployment dropping and wage growth remaining “muted”.

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Premier makes “world-class” oil find off Mexico

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UK independent exploration firm Premier Oil has announced a “world-class oil discovery” off the coast of Mexico.

The find, made with partners Talos Energy and Sierra Oil & Gas, came at the Zama-1 well, the first private offshore exploration well in Mexico’s history. Premier holds a 25% share in Block 7, where the well is located.

“We are delighted to be announcing this significant new oil discovery offshore Mexico,” said CEO Tony Durrant. “We have encountered a very substantial oil bearing interval which indicates over 1 billion barrels of oil in place, a commercial standalone development which adds materially to Premier’s portfolio of assets worldwide”

The find was made in 166 metres (546 feet) of water, around 60 kilometres (37 miles) offshore the industrial port of Dos Bocas.

“It is particularly pleasing that our strategy of focusing our exploration portfolio on high impact opportunities in proven but under-drilled basins has led to this world class discovery with our first well in Mexico,” said Durrant. “The oil discovered in the Zama-1 well is an extremely important event for Premier, the joint venture and for Mexico and we look forward to working with the government and our partners to realise the full potential of this exciting discovery.”

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£150m aviation investment announced at Rolls-Royce

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Aircraft engine giant Rolls-Royce has announced £150m of investment in its civil engineering facilities in the UK.

The development at new and existing facilities is intended to provide for a plan to double engine production and will come onstream over the next few years, with the company developing and testing the next generation of aviation engines.

“This investment comes at a time of unprecedented growth in Rolls-Royce, said Eric Schulz, Rolls-Royce president. “We are doubling the production of new engines at the same time as introducing three new engines to the market.

“With this investment, we are creating the capacity and flexibility to deliver on our goals, while committing to sustain employment in the UK and I would like to thank the unions for their support in delivering this important package of investment.”

The group employs over 22,000 in the UK and the bulk of the investment will be formed by a civil aero engine testing facility at Derby. Derby’s maintenance repair and overhaul facility, its Derby manufacturing facility and its Nottinghamshire factory are also in line for investment, and the company announced a reversal of previously announced plans to close its Derby precision machining facility.

The news was welcomed by business secretary Greg Clark and Unite negotiator Simon Hemmings.

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British tech firm Imagination for sale amid Apple dispute

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UK computer processor firm Imagination Technologies Group is on the market and has received takeover interest from a number of parties, the group announced in a statement today.

The company, which designs and makes graphics and processing chips for products such as Apple’s iPhone, said that following approaches from potential buyers “the board of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders”.

Imagination’s share price collapsed in April after Apple said it would no longer use its licensed technology in 15 months’ to two years’ time. “Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information. This evidence has been requested by Imagination but Apple has declined to provide it,” the company announced at the time.

“Further, Imagination believes that it would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights, accordingly Imagination does not accept Apple’s assertions.

“Imagination has reserved all its rights in respect of Apple’s unauthorised use of Imagination’s confidential information and Imagination’s intellectual property rights,” it said in April.

The company “remains in dispute with Apple Inc”, today’s statement also said.

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EE to introduce balloon and drone-based masts

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Mobile provider EE has revealed its own patent-pending drone and baloon-based mobile masts aimed at improving coverage throughout the UK.

The company claims that its air masts will be able to serve sites where 4G coverage is absent, or to aid search and rescue operations. EE expects to first use the technology in the UK later this year.

“We are going to extraordinary lengths to connect communities across the UK,” said CEO Marc Allera. “Innovation is essential for us to go further than we’ve ever gone, and deliver a network that’s more reliable than ever before. Rural parts of the UK provide more challenges to mobile coverage than anywhere else, so we have to work harder there – developing these technologies will ultimately help our customers, even in the most hard-to-reach areas.”

The drones and balloons will use small cells to connect into the EE network via satellite or 4G.

“Looking ahead, I see innovations like this revolutionising the way people connect,” Allera said. “We’re developing the concept of ‘coverage on demand’. What if an event organiser could request a temporary EE capacity increase in a rural area, or a climber going up Ben Nevis could order an EE aerial coverage solution to follow them as they climb? We need to innovate, and we need to think differently, always using customers’ needs to drive the way we create new technologies.”

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No ‘rationalisation’ at Vauxhall, says Business Secretary

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UK Business Secretary Greg Clarke has claimed that GM-owned carmaker Vauxhall’s UK future is secure.

“There is some way to go in discussions between GM and PSA but I was reassured by GM’s intention, communicated to me, to build on the success of these operations rather than rationalise them,” he said having met General Motors president Dan Ammann amid reports of a sale of Vauxhall and Opel to the parent company of Peugeot and Citroen.

“We will continue to be in close contact with GM and PSA in the days and weeks ahead,” said Clark.

GM was more cautious in its announcement: “While we have no definitive news to report at this time, we can affirm that our objective in exploring opportunities with PSA Group is to build on the success of Opel Vauxhall and to put the business and the operations in the strongest possible position for the future. We look forward to engaging with our stakeholders as part of these ongoing discussions,” it said.

The proposed deal is facing union opposition and political uncertainty, with details of the plan still thin after news of takeover talks emerged earlier this week.

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Shell in major North Sea oilfield selloff

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Petrochemicals giant Shell has agreed to sell off a major tranche of its North Sea oilfield holdings to private-equity firm Chryasor in a deal valued at $3.8bn.

The deal, which is expected to close in the second half of the year, involves the sale of the Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block,  Greater Armada cluster, Everest, Lomond and Erskine holdings, plus a 10% stake in Schiehallion.

The holding to be sold represents 115 thousand barrels of oil equivalent per day (kboe/d), with the Shell’s total North Sea production last year coming in at 211 kboe/d. “Following completion, Shell will retain a significant, more focused and strengthened presence in the UK North Sea, with production from the Schiehallion redevelopment and Clair Ridge project expected to come onstream,” the company said in a statement.

“Shell has a long and proud history in the UK North Sea, to which we remain committed,” said the company’s upstream director, Andy Brown. “This deal complements the great strides we have made over the last two years in improving the competitiveness of our UK upstream business.

“We believe this deal is a vote of confidence in the UK North Sea and offers proof that the industry’s increasing competitiveness, and improvements to the fiscal and regulatory regime, are starting to produce positive results. It will deliver value to Shell, Chrysaor and the UK as a whole, enabling us to continue to strengthen and optimise our UK portfolio and providing a springboard for Chrysaor to bring new investment and growth into the basin.

“It also contributes to the UK’s goal of maximising economic recovery of oil and gas from the UK North Sea, which will continue to be a source of energy, and revenue, for the country for many years to come.”

The deal will see around 400 staff move from Shell to Chryasor in a deal that is subject to partner and regulatory approvals.

“This deal shows the clear momentum behind Shell’s global, value-driven $30bn divestment programme,” said CFO Simon Henry. “It builds on recent upstream divestments in the Gulf of Mexico and Canada. It is also consistent with Shell’s strategy to high-grade and simplify our portfolio following the acquisition of BG, to ensure the company represents a world-class investment case.

“Importantly, the value here represents a profit against the book values of the assets, and a breakeven oil price above that for the BG acquisition.”

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Nissan Confronts Post-Brexit Reality With SUV Plant Decision

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The Japanese automaker’s decision on building its next car in Sunderland plant hangs in the Brexit balance

Nissan Motor Co., the U.K.’s top auto producer, will decide next month whether to continue producing one of its best-selling vehicles in the country preparing to leave the European Union.

The Japanese automaker is determining whether to build the next-generation Qashqai sport utility vehicle from the Sunderland plant, which employs about 6,700 people, Chief Executive Officer Carlos Ghosn told Ma Jie in an interview with Bloomberg Television. The factory’s competitiveness needs to be protected regardless of Brexit-related discussions, he added.carlos-ghosn

Take care of your competitiveness

“We’re at the eve of a sourcing decision,” Ghosn, 62, said Friday from Nissan’s headquarters in Yokohama, Japan. “If you don’t take care of your competitiveness, one day or the other you lose your sourcing.”

Nissan met with Prime Minister Theresa May last week after having called on the U.K. to compensate the company for any negative consequences resulting from Brexit as a condition for new investment in the country. Nissan built one in three of the vehicles the U.K. produced last year and exports more than half of them to Europe, exposing Japan’s second-largest automaker to risks.

While exporters including Nissan have benefited from the pound’s fall since the June referendum, May has indicated favor for a so-called hard Brexit, gaining greater control over immigration but losing membership in the single market. That’s raised concerns U.K. exports might face tariffs in the EU.

“We and the British government understand each other,” Ghosn said. “The future of Sunderland lies in the competitiveness of Sunderland. We have sent a clear message on that and there’s no confusion about that.”

About 61 percent of votes cast from Sunderland during the June referendum favored leaving the EU.

by Ma Jie

(Bloomberg)

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Four British power firms call for carbon tax extension

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Power generators call on government to maintain carbon tax until 2025

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LONDON, Sept 26 (Reuters) – Four British power generators have called on the government to maintain the country’s carbon tax until at least 2025, according to a letter seen by Reuters, putting them at odds with industrial groups who want it scrapped.

The carbon tax is paid by power generators for each tonne of carbon dioxide (CO2) they emit, and was frozen in 2014 at 18 pounds per tonne until 2021.

British chancellor Philip Hammond is expected to provide details on what will happen to the tax after 2021 in his autumn statement on Nov. 23.

Most British power companies support the carbon tax. Its cost is passed on to consumers through higher electricity bills, meaning companies with low-carbon generation such as nuclear or renewables can then benefit from the higher electricity prices.

“We are calling on the UK government … to maintain the carbon price floor beyond 2021, by keeping the carbon price support rate at least at its current level until 2025 to maintain secure and reliable energy supplies,” a spokesman for power generator SSE, one of the letter’s signatories said in an email on Monday.

The other signatories were Drax, Vitol owned VPI Immingham and Calon Energy.

Industrial groups have called for the government to abandon the tax, saying it has made electricity prices in Britain uncompetitive.

“The UK has some of the highest electricity wholesale prices in the EU and this is in large part due to the carbon price floor,” Richard Warren, senior energy and environment policy adviser at Britain’s manufacturers’ organization EEF, said in an email.

EEF estimates the carbon tax adds around 8-10 pounds per megawatt hour (MWh) to British wholesale power prices, which currently trade at around 40 pounds/MWh.

The power firms said the carbon tax encourages them to invest in low-carbon power generation and said it is central to the country’s efforts to meet its climate change goals.

But EEF’s Warren said the government already helps low-carbon investment though other schemes, such as its contracts-for-difference which provides a guaranteed price for electricity production.

Power generators pay the carbon tax on top of their obligations under the EU’s Emissions Trading System, which forces companies to surrender one carbon permit for every tonne of carbon dioxide (CO2) they emit.

Benchmark prices in the EU ETS have plummeted from around 30 euros a tonne in 2008 to below 5 euros, rendering them too cheap to encourage investment, the power firms said.

Britain has a legally binding target to cut its emissions by 80 percent on 1990 levels by 2050 and has embarked on electricity market reforms aimed at spurring investment in low-carbon nuclear and renewable power.

Britain also plans to phase out coal-fired power generation by 2025.

(Editing by Susan Fenton)

Copyright(c) Thomson Reuters 2016.