Hewden hire company collapses in wake of Brexit warning

Heavy machinery hire company Hewden has collapsed into administration, weeks after warning of a Brexit-related hit to trading. 

Administrators at EY were called in last week and more than 250 of around 750 staff have been made redundant.

In a statement last month, the firm warned it had been "impacted by market uncertainty following the vote to leave the EU", says Sky News. 

The company added: "The vote has adversely affected a number of large construction and capital investment projects."

Sam Woodward of EY confirmed Hewden has "collapsed into administration" says the Daily Telegraph. 

The Guardian says 133 staff will move to rival Ashtead, which has bought parts of the operation in a £29m deal, but the fate of the remaining workers remains in the balance.

It will be argued that the news emphasises the hit to the economy to come from Brexit, which is thought to be slowing business investment, especially in areas such as construction, as bosses wait to see how the UK's relationship with the EU will shape up.

This was cited as a potential factor in the announcement from builders' merchant Travis Perkins that it is closing 30 branches and cutting 600 jobs.

However, Hewden has been struggling for some time. The Telegraph says its most recent accounts, covering the year to December 2014, revealed losses of £16.6m on sales of £105m.

"Prior to its collapse Hewden was struggling to refinance its £190m debt pile, as the terms on the debt came close to expiring," the paper adds.

The Manchester-based company has been owned by turnaround private equity firm Sun European since 2010.

Unite union's national officer Bernard McAulay said: "This is a sickening blow for workers in the run up to Christmas and is the result of a succession of venture capitalists hawking Hewden around the market over a number of years to make a quick buck."

Has Brexit wiped £1.2trn off UK wealth?

22 November

Headlines this morning have put a price on the cost of Brexit on UK households - $1.5trn, or £1.2trn when converted back into sterling.

The claims are based on Credit Suisse's annual Global Wealth Report, which converts each country's aggregate asset worth into dollars in order to rank the richest and analyse the distribution of wealth between and within nations.

In the UK's case to the end of June, in the immediate aftermath of the Brexit vote, total UK wealth was shown to have fallen by around 10 per cent, or $1.5trn. 

This wiped $33,000, or about £26,700, off the average wealth per adult, which now stands at $289,000, or £232,000, says The Times. Dragging this lower is a fall in the number of very rich people, with the UK 406,000 fewer dollar millionaires.

However, this does not mean we are actually poorer since the referendum.

The fall is wholly the result of the drop in value of the pound against the dollar, which Credit Suisse put at 15 per cent up to the end of June.

When measured purely in sterling, the value of UK wealth grew six per cent compared to last year, says Sky News.

Added to that, the FTSE 100, the benchmark UK stock index, languished below 6,000 in the week after the referendum but has since rebounded to more than 6,800 today – and has been above 7,000.

One real effect tracked by Credit Suisse that has been borne out by wider studies is a fall in top-end property prices, although broader house prices have continued to edge higher despite Brexit uncertainty.

The net result of all this is that UK wealth is higher than last year and its distribution is mostly unchanged, with the top one per cent owning around 24 per cent of the total.

Oxfam, the anti-poverty charity, said the figures showed continuing inequality in the UK, but Credit Suisse said it "was no greater than in any other western country", says the Times.

It added: "The pattern of wealth distribution in the United Kingdom is fairly typical for a developed economy."

Pound breaks thorugh $1.25 after retail sales surge

17 November

Sterling enjoyed a mostly strong day yesterday after positive UK retail figures boosted optimism about economic growth and strengthened the case against further interest rate cuts.

At one point the pound broke above $1.25 against the dollar, while against the euro it jumped to €1.11622 this morning.

It has kept on rising against the single currency since then, hitting €1.1693. Against the dollar the rally ran out of steam,however, and the pound fell back below $1.25 before sliding further in New York trading. This morning it was at $1.2416, essentially unchanged.

Retail sales data published by the Office for National Statistics (ONS) yesterday shows that shoppers upped their spending by 1.9 per cent in October compared to September.

That's the fastest rise since April 2002, says Sky News. Online transactions also increased at their fastest pace in five years.

ONS says the October jump, which came after a disappointing September, was driven by colder weather increasing the demand for warmer autumnal clothing. It was also triggered by a strong Halloween period for supermarkets amid continuing food price deflation.

The falling pound could also be having a positive effect on sales, says the International Business Times, as it boosts the spending power of tourists.

As the economy is so heavily dependent on the services sector, of which retailers are a large component, the stronger economic reports in the past month or so suggest growth will be steady in the fourth quarter – and so for 2016 as a whole.

The pound eventually gave up gains against the dollar after the greenback was bolstered by the Federal Reserve's hints of an interest rates rise next month.

Traders are already convinced the central bank will increase borrowing costs again at its next meeting, but comments from its chair Janet Yellen last night have only made them more so.

"Such an increase could well become appropriate relatively soon," said Yellen, according to the Wall Street Journal. She also cited higher forecasts for inflation since the election of Donald Trump.

Brexit fears 'cooling' employment market

17 Nov

Uncertainty following the shock Brexit vote in June could finally be feeding through into the employment market, the Office for National Statistics warns.

For the three months to the end of September, unemployment across the UK fell by 37,000, taking the headline jobless rate (the proportion of people looking for work but unemployed) from 4.9 to 4.8 per cent.

That's the lowest unemployment figure since the three months to September 2005, says the BBC. At the same time the number of people in work has risen by 49,000 to a record 31.8 million.

But while these figures continue to point to a steady employment market post-EU referendum, ONS statisticians did point to some signs that it "might be cooling".

The latest data shows a decline in the employment growth rate, with 106,000 jobs having been added in August and a consensus estimate for 91,000 this time around.

Employment figures are extrapolated from a survey of 40,000 households. The fall in unemployment was well within the margin for error for the data.

Wage growth remained steady at 2.4 per cent excluding bonuses.

The British Chambers of Commerce (BCC) said Brexit was "dampening firms' recruitment intentions" and that this would put "increased pressure on UK employment levels".

BCC head of economics Suren Thiru added: "These subdued labour market and economic conditions are also expected to keep a lid on wage growth over the next year, despite higher than expected levels of inflation."

The Times says the data also reveals a huge increase in the proportion of foreign-born workers who have joined the labour force over the past year.

"The number of people in work increased by 454,000 between July and September last year and the same period this year, workers born overseas made up nearly 95 per cent of the increase – just over 430,000."

But analysts say that with unemployment at very low levels and economic growth ahead of other countries, "it was inevitable that most jobs growth would come from overseas migrants".

In fact, Jonathan Portes, a fellow at the National Institute of Economic and Social Research, says "substantial reductions in immigration, resulting from Brexit or from the government’s efforts to cut immigration more generally, will hit growth and tax receipts.”