There is more fuel for the raging debate around UK interest rates this week, with official figures on pay growth out on Wednesday. Investors and policymakers alike are looking for any signs that a tight labour market can translate into faster pay growth, a trend that has so far proved elusive this year. If wages do start to get going again, the pound is likely to rally as traders price in a greater chance of a 2017 interest rate rise.
This month marks a whole decade since the Bank of England last raised borrowing costs. Since then, the only way has been down and interest rates are currently at a record low of 0.25%. But that could be about to change if the latest noises from Threadneedle Street’s policymakers are anything to go by – with the obvious health warning that previous hints of rate hikes have come to nothing.
At the last rate-setting meeting in June, three policymakers voted for an immediate rate rise to 0.5%, which would remove some of the emergency stimulus the Bank injected into the economy after the Brexit vote. The other five members of the monetary policy committee outvoted the hawks, however, preferring to leave the base rate at 0.25% to shore up the economy after a slow start to 2017. But more recently, the Bank’s chief economist, Andy Haldane, and the governor Mark Carney have suggested they may be more amenable to higher rates.
Sparks may fly at M&S AGM as chair bows out
After six years as chairman of Marks & Spencer, Robert Swannell will take to the podium at an AGM for the final time on Tuesday.
The former investment banker will retire in September at a tumultuous time for the retailer. In May, the retailer reported a drop in profits of almost two-thirds at the same time as a turnaround plan by chief executive Steve Rowe brought in a bill of more than £400m in restructuring costs.
Rowe has insisted that M&S is on track for recovery, despite worsening performances in clothing and food. Not that this will be the only thing likely to irk the shareholders, known for taking their opportunity at AGMs to vent their grievances over every facet of the company’s operations.
The last few years have seen shareholders protest about the appointment system for bra fitting, the type of music played in stores (“would the board at least consider changing the irritating songs to something more tranquil?”) and where best to find a cotton dress with sleeves and a high line suitable for “golden oldies”.
A number of questions have focused on socks – one specifically about why they fall to pieces “when you look at them”, according to one shareholder, although this claim was rejected by the chairman.
One hopes Swannell’s replacement, Archie Norman, who takes over on 1 September, is prepared for what is to come.
Hail the new generation of electric black cabs
London’s black cabs have been voted in the past as the best-recognised design in London transport, proving more popular than the Routemaster bus and the Tube map. This week, the look of the next generation of black cabs – electric models – will be revealed by The London Taxi Company (LTC).
This new generation of battery-powered cabs is due to be ushered in from later this year as Transport for London moves to reduce toxic pollution from diesel engines. On Tuesday, the wrapping will come off the new vehicles, which will be moving around the streets of the capital (and other cities at later times). TfL has pinpointed the existing black cabs as one of the major contributors to traffic pollution – 15% of nitrogen oxides are reported to have come from cabs.
LTC will unveil the new design, so far only seen camouflaged in public, at a breakfast event in Wapping led by chief exec Chris Gubbey. From 1 January, all new black cabs will have to be battery-powered electric models and £18m is being spent to upgrade the capital’s power grids, including the installation of 300 fast-charging stations. An initial 75 stations are due to be operational by the end of the year.
Some sites will be exclusively for black cabs but others will be open to owners of other electric vehicles, such as Teslas and electric BMWs. Cab drivers with an existing taxi older than 10 years will be able to claim up to £5,000 from TfL later this year towards the cost of a new zero-emission cab.
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