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UK lags behind EU economic growth in Q3

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EU economic growth was estimated to have increased by 0.6% in the third quarter as opposed to the UK’s 0.4%.

The Eurostat figures show the differences in fortunes between Britain and the single currency area during Brexit talks. The 19 members grew 0.2% faster in the three months to September this year.

Eurozone GDP growth of 0.7% in the second quarter of 2017 was ahead of the UK’s 0.3% growth, the weakest rate in the G7.

This has been attributed to factors such as weak investment and potential opportunities across the continent post-Brexit.

Inflation in the UK also grew to 3% last month, the highest since 2012.

Confidence in UK housing sector hits half-decade low

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The Halifax bank survey showed 20% of people think house prices will drop because of rising inflation and the potential of an increase in interest rates.

This is the weakest reading since October 2017 and people under the age of 25 and living in London are the least optimistic. Correlated alongside this is the weak growth in wages, rising inflation rates, and for the first time in a decade, the Bank of England being set to increase interest rates.

The survey, which took in 2,000 British adults, saw two-thirds stating obtaining a deposit as the greatest barrier to buying a new house. Job security was also a major worry. £222,293 was the average price of a house in the UK in August.

Not surprisingly London was the only area with an entirely negative outlook to purchasing right now. The ages of 16 to 24 were the most pessimistic about buying; over 65 was the most positive group surveyed.

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UK car manufacturing falters in September

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The fall in UK car manufacturing was predominantly attributed to an overall fall in demand of 14% in the UK market.

UK car output fell 4.1% to 153,224 vehicles last month. The months of April, May, June and August also saw declines.

Domestic demand declined by a large sum to 31,421 units (14.2%) in September. This contributes to the overall year-to-date production decrease of 2.2%. Alongside this, exports dropped by 1.1% to 121,803.

The first nine months of 2017 has seen 1,259,509 cars manufactured, a decline of 2.2% when compared with last year.

With many looking towards more environmentally-friendly modes of transport and the advent of the e-car, the traditional British car manufacturers are unsurprisingly taking a hit. The beginning of this week saw Mayor Sadiq Khan introduce the toxicity charge (T-charge) to encourage people to drive less polluting cars. This will add to the already-existing £11.50 congestion charge.

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UK economy beats 2017 third-quarter expectations

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The British economy grew by 0.4% in the third quarter but difficulties still lie in the current Brexit landscape.

Gross domestic product (GDP) grew 0.4% from the period July to September, which is up from the 0.3% of the last quarter and 0.1% higher than initially expected, according to the Office for National Statistics figures.

This small growth will boost the chances of the Bank of England’s Monetary Policy Committee raising interest rates when members meet next week.

However, the economy is growing at a slower pace than it was last year. Manufacturing had a slow second quarter but jumped to boost third-quarter figures even with construction slumping to a second-quarter loss in a row. But the greatest contributor to growth during this period was the service sector, which expanded by 0.4% in itself.

Last quarter’s 0.3% growth was only half that of the 19-member eurozone and the lowest amongst the G7 nations.

The new figures shed light on the potential to a rise in rates which, if to occur, would be the first time a rates rise has happened in the UK since July 2007.

Costa losing out to expensive imports and artisan competitors

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The coffee giant’s pre-tax profits dropped around 10% to £59 million.

Whitbread, Costa’s owner, saw group profits rise by 20% to £316 million thanks to its Premier Inn hotel business and a sales growth of 7% to £1.7 billion.

Coffee imports have become more expensive as the product is priced in dollars. This is also due to the fall in the value of sterling.

In the six months to 31 August, Costa’s revenues increased by 8% but this was largely down to the introduction of 108 new stores.

The Premier Inn Hotel saw profits rise by 27% to £295 million due to the addition of 2,000 rooms. It’s also looking to add eight new hotels in Germany.

Costa hopes that the “third wave of coffee” will help boost sales. With more artisan coffee producers reeling in young consumer, the British coffee giant will look into producing a more sophisticated and high-calibre quality of coffee.

Virgin Trains to auction first class seats via app

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East Coast train line operator Virgin Trains is to allow passengers to bid for first class tickets via a smartphone app, in a move it describes as a global first.

The Seatfrog app will enable passengers to bid for upgrades up to 30 minutes before departure, with upgrades potentially costing as little as £5, according to the operator.

“We have a strong record of innovating for the benefit of our customers and we are really excited to be partnering with Seatfrog to offer customers more opportunities to experience first class,” said Suzanne Donnelly, commercial director at Virgin Trains on the east coast.

“Our innovative partnership with Seatfrog means passengers can get last minute upgrades to first class seats from as little as £5 and there are real deals to be had. Plus, the live bidding element means you can decide at the last minute if you fancy treating yourself and, if you do, bidding to bag a bargain is great way to go about it.”

Seatfrog is available on Android and iOS, and the company has offices in London, Sydney and Tokyo. Its CEO, Iain Griffin, said that “modern travel is full of rules and regulations that can make getting to our final destination a frustrating experience.

“Everyone loves an upgrade, but the excitement of it and the ability to just change your mind at the last minute is suffering because of the many complicated processes that exist today. Seatfrog is giving passengers the power to upgrade easily and transparently, in the palm of their hand.

“Plus, because we are firm believers that it should never be too late to change your mind, you can upgrade right up to 30 minutes before you go. We’re delighted to be bringing Seatfrog to Virgin Trains’ passengers and to be helping more people than ever to enjoy the perks of First with zero hassle.”

Michael O’Leary reacts to Ryanair “mess”

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Ryanair CEO Michael O’Leary has responded to the airline’s mass cancellation of flights with an apology, several days after the issue first reared its head.

The Irish airline is in crisis mode, cancelling dozens of flights a day as it struggles with a backlog of annual leave. Media reports this weekend were dominated by inconvenienced passengers voicing their grievances on social media and in airports.

“While over 98% of our customers will not be affected by these cancellations over the next six weeks, we apologise unreservedly to those customers whose travel will be disrupted, and assure them that we have done our utmost to try to ensure that we can re-accommodate most of them on alternative flights on the same or next day,” said O’Leary today.

Confusion regarding the cause of the cancellations mounted over the weekend, with the Irish Airline Pilots’ Association claiming that 700 pilots have left the airline in the past financial year and that issues surrounding annual leave have been known for some time.

“Ryanair is not short of pilots – we were able to fully crew our peak summer schedule in June, July and August – but we have messed up the allocation of annual leave to pilots in September and October because we are trying to allocate a full year’s leave into a nine-month period from April to December,” O’Leary responded. “This issue will not recur in 2018 as Ryanair goes back onto a 12-month calendar leave year from January 1st to December 31st 2018.

“This is a mess of our own making,” he said. “I apologise sincerely to all our customers for any worry or concern this has caused them over the past weekend. We have only taken this decision to cancel this small proportion of our 2,500 daily flights so that we can provide extra standby cover and protect the punctuality of the 98% of flights that will be unaffected by these cancellations.”

The crisis is expected to cost the airline millions in compensation under European regulations.

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Jaguar launches I-Pace one-make racing series

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Luxury carmaker Jaguar has announced a one-make racing series based around its electric I-Pace sports car, with the first race taking place next year.

The series, known as the I-Pace eTrophy, will use an ‘arrive and drive’ format for 20 drivers at each race with full technical support, spare parts and equipment. The modified electric I-Paces will use technology from the manufacturer’s I-Pace SUV, which will go on sale later this year.

“With 20 identical specification production based I-Pace eTrophy race cars going head to head, it comes down to the drivers and their individual driving styles to be crowned champion,” the company said. “Held over ten races and in some of the world’s most celebrated cities, the Jaguar I-Pace eTrophy promises to be the next chapter in our Race To Innovate.”

The new series will appear on the supporting bill of the all-electric Formula E world championship, which Jaguar Racing joined in 2016. The company recently announced that all its new road cars will be electric or hybrid from 2020 onwards.

“Jaguar returned to racing in 2016 with the mission ‘Race to Innovate’,” explained Gerd Mäuser, Jaguar Racing chairman. “With the launch of the Jaguar I-Pace eTrophy, we’ve strengthened our commitment to battery electric vehicles, international motorsport and Formula E. As a British team, we’re proud to announce today the launch of the world’s first production battery electric vehicle championship. We’ve always said we want to prove our electrification technologies on the track – this is the proof.

“I’m looking forward to seeing a full grid of Jaguar I-Pace race cars in late 2018, soon after the first Jaguar I-Pace hits the road in Europe. Ultimately, this innovative series will enhance the technology in our future electric vehicles and benefit our customers. Formula E has grown exponentially since we joined as the first premium manufacturer last year, with recent commitments from Audi, Mercedes-Benz and Porsche,” he said.

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Offshore wind energy now cheaper than nuclear or gas as prices tumble

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The average cost of offshore wind energy has fallen 47% since February 2015, according to the results of an auction of 3,196 megawatts of power generated by three new windfarms.

The three projects, located off the coasts of Yorkshire, Lincolnshire and north-east Scotland, can power the equivalent of 3.3m homes and the results of the auction for contracts for difference were announced by the Department for Business, Energy and Industrial Strategy.

According to trade body RenewableUK, the price comes in lower than nuclear power and gas. The windfarms are scheduled to come onstream between 2021 and 2023.

“We knew today’s results would be impressive, but these are astounding,” said RenewableUK’s CEO Hugh McNeal. “Record-breaking cost reductions like the ones achieved by offshore wind are unprecedented for large energy infrastructure. Offshore wind developers have focused relentlessly on innovation, and the sector is investing £17.5bn into the UK over the next four years whilst saving our consumers money.

“Today’s results are further proof that innovation in the offshore wind industry will bring economic growth for the UK on an industrial scale. The UK needs to establish new trading opportunities as we leave the European Union, and the UK’s offshore wind sector is a world leader in a global renewable energy market currently worth $290 billion a year.”

 

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Brexit on agenda as British Irish Chamber meets Brokenshire

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UK secretary of state for Northern Ireland James Brokenshire discussed Brexit with chambers of commerce from across Ireland at a British Irish Chamber of Commerce working lunch at KPMG in Dublin yesterday.

The UK/EU departure talks were top of the agenda, with Brokenshire reiterating the UK government’s commitment to “frictionless trade on the island of Ireland” as he explained his government’s negotiating position.

“The British Irish Chamber is delighted to be hosting secretary of state Brokenshire in Dublin today,” said director general John McGrane. “Given the number of political engagements the secretary of state has to keep while in town, I think his availability to meet with business groups shows the importance of maintaining the vital trade network that exists on the island.

“The chamber welcomed the publication of last week’s papers and especially the commitment shown by the UK government to borderless trade on the island of Ireland and the continuation of the Common Travel Area,” he said. “While we are happy to see suggestions put forward to maintain both of these, we are still cautious about the feasibility of these proposals and will continue to positively engage with governments on both sides to ensure that a solution is found that works for all concerned.”

Trade between Ireland, Northern Ireland, Scotland, Wales and England is wroth €60bn per annum and supports 400,000 jobs according to the chamber, which represents businesses and employers with interests in both islands.

Shaun Murphy, managing partner of KPMG noted that “there is an urgent need to forge both practical and realistic solutions to address the Brexit issues of relevance to Ireland – North and South – and we welcome all efforts to resolve these matters in the interests of business across the island.”