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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Goldman CEO warns of ‘bumpy times’ ahead and recession risk – as it happened

Marston World Cup United States Inflation Covid-19
The Goldman Sachs company logo in the company's space on the floor of the New York Stock Exchange
The Goldman Sachs company logo in the company's space on the floor of the New York Stock Exchange Photograph: Brendan McDermid/Reuters

Closing summary

Time for a recap.

The boss of Goldman Sachs has warned that there are ‘bumpy times ahead’, with the risk of recession next year as central bankers battle inflation.

Speaking to Bloomberg TV, David Solomon said we face a ‘very uncertain time’, with monetary and economic conditions changing very quickly, which is slowing economic activity.

Britain’s construction sector had a tricky November, with new orders falling as rising borrowing costs spooked clients.

The hospitality industry has warned that business will suffer as rail workers strike later this month.

But German factories have reported a bounceback in new orders, despite the economic pressures from high energy prices. It could mean Germany’s downturn will be shallower than feared.

Here’s the rest of today’s main stories:

The aerial view over Canary Wharf in London
The aerial view over Canary Wharf in London Photograph: Gary Yeowell/Getty Images

Ratings agency Moody’s has put UK commercial landlord Canary Wharf’s ratings under review for downgrade due to what it said was the worsening outlook for the real estate sector and the more difficult funding environment, Reuters reports.

Moody’s said it expects drops in office values that could be as high as 10-15% alongside materially increased funding costs and weaker demand for occupational space, and a challenging environment for asset disposal because of weak real estate markets.

WTO urges countrie to resist trade restrictions

Trade restrictions across the world economy have increased, according to a new report from the World Trade Organisation (WTO).

It warns that WTO members are introducing restrictions at an increased pace, particularly on food, feed and fertilizers, in “a context of economic uncertainty” exacerbated by the COVID-19 pandemic, the war in Ukraine and the food security crisis.

WTO Director-General Ngozi Okonjo-Iweala is calling on WTO members to refrain from adopting new trade-restrictive measures, particularly export restrictions.

She warns that such curbs could hurt the global economic outlook.

Countries should cooperate to keep markets open and predictable in order to allow goods to move around the world to where they are needed, Okonjo-Iweala argues, saying:

“Members have increasingly implemented new trade restrictions, in particular on the export side, first in the context of the pandemic and more recently in the context of the war in Ukraine and the food security crisis. Although some of these export restrictions have been lifted, many others persist.

Out of the 78 export restrictive measures on food, feed, and fertilizers introduced since the start of the war in late February, 57 are still in place, covering roughly USD 56.6 billion of trade. These numbers have increased since mid-October, which should be a cause for concern.”

India, for example, has just lifted a three-month long ban on rice exports, judging that it now has enough production to fulfill its domestic demand.

Wall Street opens lower

The New York stock market has dipped at the start of trading, as investors worry that the US Federal Reserve may raise interest rates by another 75 basis points next week.

The S&P 500 shares index has dropped by 0.75%, losing 30 points to trade around 3,968 points. Tech stocks are weaker, pulling the Nasdaq Composite down by 1.25%.

Traders are jittery about further interest rate rises, and not convinced the Fed will achieve that ‘soft landing’ which David Solomon mentioned.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, explains:

‘’Worries that the Fed could unwrap an unwelcome present of another super-sized rate hike when policymakers meet next week are sprinkling Christmas fear on indices. Wall Street registered its worst day in almost a month [on Monday] after a snapshot from the services industry showed consumer resilience was strong.

This has fuelled speculation that the US central bank will have to be more Scrooge-like and make borrowing even more expensive to rein in inflation. Companies still appear to be dealing with pent-up demand with the ISM reading showing the services sector is expanding merrily. With central bank policies so far having meagre impact on the jobs market, the chances of a 0.75% rate hike being announced on the 14th are now considered to be higher. The potential effect of another rapid tightening round has led to jitters about repercussions for the global economy.

Updated

Goldman CEO warns of 'bumpy times' ahead and recession risk

The boss of Goldman Sachs has warned that there are ‘bumpy times ahead’, as central bankers try to crush inflation without crashing economies.

Speaking to Bloomberg TV, David Solomon said we face a ‘very uncertain time’, with monetary and economic conditions changing very quickly, which is slowing economic activity.

“I think you have to assume that we have some bumpy times ahead”, Solomon explained, with activity levels likely to be constrained in a “tougher economic environment”.

Goldman’s economists predict global growth will slow in 2023, to 1.9% growth, Solomon explained.

The big question is whether central banks can orchestrate a soft landing, as they tighten monetary policy to combat inflation, Solomon warns:

I think that’s so uncertain. I think there’s a possibility of that [a soft landing].

But I certainly think we could see a recession in 2023 also, so I think you’ve got to be cautious and prepare.

Faced with this darkening outlook, Solomon signals that Goldman staff should expect lower compensation (ie: bonuses) this year, as 2022 was not as strong as 2021 – which was a record year for Goldman.

He says:

2022 is a different year, so naturally compensation will be lower.

We’re still early in the process of making those decisions. But just like every year, we pay for performance and we will pay people based on the overall performance of the firm.

There’s a clip here.

Sacha Lord, night time economy adviser for Greater Manchester, fears the UK’s train strikes will have a devastating impact on the hospitality sector:

Here’s a handy thread on today’s US trade report, from Chad Moutray, chief economist at The National Association of Manufacturers:

Oil tankers queue up off Turkey as price cap on Russian crude begins

A traffic jam of oil tankers has grown off Turkey after the imposition of a price cap on Russian crude by western powers attempting to hurt the Kremlin’s coffers.

The vessels have come to a halt after Turkish authorities in Ankara demanded that insurers prove that the ships heading through its straits are fully insured.

EU sanctions on Russian oil prices came into force on Monday after tense negotiations last week. The rules state that tankers carrying Russian crude oil must not carry western maritime insurance unless it is sold under the $60 ($49) a barrel G7 price cap.

The cap has been introduced in an attempt to curb Russia’s fossil fuel revenues while ensuring oil continues to flow and the maritime insurance industry, which is dominated by companies in London, was not damaged. Russian oil transferred via a pipeline is not covered by the cap.

About 19 crude oil tankers were waiting to cross Turkish waters on Monday, stopping near the Bosphorus and Dardanelles, which link Russia’s Black Sea ports with overseas markets, the Financial Times reported. It said one tanker had been waiting for six days.

Oil price dips

Recession fears have knocked the oil price lower today.

Brent crude has fallen by 1.3% to $81.57 per barrel, towards last week’s 10-month low.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says this week’s PMI reports have shown economic activity slowing

A wider snapshot of business activity across the Eurozone showed that optimism is also low, with activity falling for a fifth month in a row in November.

It is clear that surging inflation, combined with higher interest rates, is eating into budgets. The data is a fresh indication that the Eurozone is heading into a shallow recession, but a much colder winter and high demand for oil and gas could see energy prices shoot up again, piling on more pressure for companies.

For now, the oil price is being pushed lower, with a barrel of Brent Crude trading below $82, as concerns about the effect of central bank tightening on demand across the global economy take precedence over supply concerns.’’

The US trade deficit has widened to $78.2bn in October, up around $4.0bn from the $74.1bn recorded in September.

US exports dropped by $1.9bn during the month, while imports rose by $2.2bn in the month.

Natural gas exports dropped by $1.4bn while the value of crude oil exports jumped by $1.6bn in the month.

The Commerce Department reports that:

  • The deficit with the European Union increased by $7.1bn to $23.1bn in October. Exports decreased $1.2bn to $28.8bn and imports increased $5.9bn to $51.9bn


  • The surplus with Singapore decreased by $1.9bn to $0.7bn in October. Exports decreased $0.8bn to $4.0bn and imports increased $1.1bn to $3.3bn.

  • The deficit with China decreased by $6.0bn to $26.1bn in October. Exports increased $1.4bn to $13.6bn and imports decreased $4.6bn to $39.7bn.

Full story: UK households will spend 10% more on Christmas dinner, research finds

Households will typically have to spend nearly 10% more on Christmas dinner this year, despite data showing growth in supermarket prices slowed for the first time in nearly two years.

The figures from the market research firm Kantar shows the cost of a traditional Christmas dinner for four – including frozen turkey, carrots, cauliflower, potatoes and Christmas pudding – has risen to £31 this year, up 9.3% from 2021.

That is despite data showing that the rate of grocery price inflation dipped 0.1 percentage points to 14.6% over the past four weeks, thefirst time the annual growth in prices has slowed in 21 months.

“As we move into the busiest time of the year for supermarkets, there are signs that the pace of grocery price inflation is easing off slightly,” Fraser McKevitt, the head of retail and consumer insight at Kantar, said.

Asda is planning to open 300 small convenience stores and create 10,000 new jobs in the next four years as it tries to grab a bigger share of the grocery market and potentially overtake rival Sainsbury’s to become the UK’s second largest supermarket.

The retailer, which is controlled by the billionaire Issa brothers and private equity firm TDR Capital, currently has just two Asda Express stores – in Sutton Coldfield, near Birmingham, and Tottenham Hale, in north London.

It has already said it plans to have 30 by October next year and has now laid out a much bigger ambition. The 300 planned Asda Express sites will be in addition to the 132 convenience stores the group is acquiring from the Co-op.

The UK economy could be hit by an ‘influx of insolvencies’ in early 2023, according to Owen Bassett, retail expert and underwriter at credit insurers Atradius UK.

He warns that retailers will be ht by plumetting demand in the first quarter of 2023, with a ‘bumpy road’ ahead for British retailers and hospitality businesses alike.

Bassett says:

Black Friday and the World Cup will have tempted people to loosen their purse strings, take advantage of discounts, and encouraged them into their local pubs. Retailers will need to pull out all the stops over the next few weeks to boost sales before demand plummets in January.

“The first quarter of the year is usually one to watch for retail and hospitality insolvencies following the post Christmas slump. To avoid getting swept up in what could be an influx of insolvencies in early 2023, businesses will need to make sure they’re effectively managing their supply chains and doing what they can to avoid holding onto excess stock.

We – at Atradius – continue to underwrite retail firms on a case-by-case basis, but it’s crucial that firms have robust and updated financial insight and forecasts. To guard against the domino effect that crumbling supply chains can have on firms, a trade credit insurance policy can play a very important role in maintaining a company’s confidence in its trade debtor book. In a time of high volatility this could be a determining factor as to whether a company flourishes or fails.”

FT: EC to propose sanctions on Russia’s mining industry

The European commission is to propose a ban on new investments in Russia’s mining sector, according to the Financial Times.

The curbs would be part of a fresh package of sanctions against Moscow aimed at further eroding the country’s economy and the Kremlin’s ability to fund its war against Ukraine.

Here’s the details via the FT:

The mining investment ban, which will have exceptions for some specific products, is part of a ninth EU sanctions package that officials plan to discuss with member states in the coming days and hope to have agreed by the end of next week, three people with knowledge of the discussions told the FT.

The package, which requires unanimous approval by the 27 EU states and could still be amended, also includes export controls on technologies that Brussels believes Russia is using to support its arms factories, a ban on transactions with three more Russian banks and targeted sanctions against another 180 individuals, the people said.

More strike news: Thousands of ambulance workers and other NHS staff are to strike on 21 December in a dispute over pay, the GMB, Unison and Unite unions announced.

Our Politics liveblog has the latest developments:

Night time industries such as nightclubs also fear losing business due to rail strikes over the festive period.

Michael Kill, CEO of the Night Time Industries Association, has warned the strike action announced by the RMT yesterday will be “the death knell” for many NTE businesses.

Kill says the government must provide more support for the sector:

“These businesses are suffering heavily, with thousands of bookings being cancelled and some attempting to bring bookings forward to avoid strike action, creating further chaos.”

“In previous strike action days, we have seen in some cases up to 40% lost in trade, with billions of pounds in revenue in the balance over the holiday period, which they are relying on to survive.”

“It is clear public opinion is shifting, with many angry at being unable to enjoy a traditional festive period after 3 years of disruption.”

“The actions of the unions and rail companies in reaching a resolution at such a critical time is unacceptable.”

“Our sector will not survive the current cost inflation crisis and further industrial action, and will require a Government intervention and further support for businesses at the sharpest end of this crisis.”

A Yougov poll published last Friday found that trade unions are seen more negatively following 2022’s summer strikes, but Britons are now more supportive of certain profession’s right to strike, including train drivers and nurses.

Airlines warn of higher fares as industry moves to net zero target

Airline passengers face higher ticket prices as the industry moves towards its target of reducing emissions to net zero by 2050, the head of a global trade association has said today.

Willie Walsh, the director general of the International Air Transport Association, which includes most of the world’s big airlines, called for swifter action in Europe to drive up scarce production of greener sustainable aviation fuel (SAF).

Air fares have jumped this year as a result of higher prices for conventional fossil-based jet fuel.

Walsh told reporters at an annual media briefing that:

“You cannot expect an industry making on average $1 profit per customer to absorb the increases we’ve seen.”

The UK housing sector has also been hit by Rishi Sunak’s decision to drop compulsory housebuilding targets to see off an embarrassing rebellion by his backbench MPs.

My colleague Aubrey Allegretti reported last night that:

The capitulation, which comes in the middle of a national housing crisis, will spark fresh concerns that the prime minister is too weak to take on unruly Conservative backbenchers.

It followed up to 100 Tory MPs threatening to back an amendment that would in effect force the government to abolish the target of building 300,000 homes a year in England.

Instead, the target will be “advisory” and councils will be allowed to build fewer homes if they can show hitting it would significantly change the character of an area, an exemption expected to particularly apply to rural and suburban communities.

The move was described as “extremely worrying” by housing campaigners but saves Sunak and the housing secretary, Michael Gove, a humiliating showdown in the Commons. They were forced to pull a vote on the levelling up and regeneration bill last month when the rebellion first came to light.

Here’s a handy guide to the Christmas dinners on offer at hospitality venues around the UK (strikes permitting), by the intrepid Rich Pelley:

RSM: Construction industry hit by recession

The drop in the UK construction PMI to a three-month low shows that the building industry is being hit by the recession, says Kelly Boorman, partner and national head of construction at RSM UK:

‘Following a surprising uptick in September and October, the latest fall in the headline construction PMI for November paints a truer picture of the major disruption faced by the industry, as business confidence drops to the lowest level in two and a half years.

There has been a significant slowdown in construction activity, with higher borrowing costs adding another layer of financial pressure for businesses as they grapple with reduced demand. In addition, as an energy-intensive industry, energy prices remain a real concern, especially with the impact of inflation on the supply chain.

‘The government has curbed spending on large infrastructure projects, which – along with house building stalling – explains why business confidence is plummeting as the recession takes hold. Commercial activity was the only index to rise slightly, although this is likely due to renegotiation of pricing and power within the supply chain, as costs to retender would be at a significant increase. This is further reflected in input buying sitting at the highest level since July, as raw material availability also improved.’

Boorman adds that the UK’s troubling economic outlook is certainly dampening future activity and business confidence in the sector.

With November 2022 seeing the highest number of insolvencies since February 2020, further challenges lie ahead. There’s significant risk within the supply chains due to higher borrowing costs and falling cash flows, and it’s likely that restructuring activity will continue to accelerate in the marketplace.

Now more than ever, the industry needs government investment to help drive long-term improvement and innovation.

The CBI warned yesterday that the UK has fallen into a recession that will last until the end of 2023:

People struggling to pay their energy bills, or mortgages or rent, are more likely to experience depression than other UK adults, new data from the Office for National Statistics shows.

The ONS reports that around 1 in 4 (or 24%) of those who reported difficulty paying their energy bills experienced moderate to severe depressive symptoms, which is nearly three times higher than those who found it easy to pay their energy bills (9%).

Overall, around 1 in 6 (16%) adults experienced moderate to severe depressive symptoms in the period from 29 September to 23 October, the ONS reports. That’s similar to rates found in summer 2021 (17%), but however higher than pre-pandemic levels (10%).

Adults who were economically inactive because of long-term sickness were more likely to experience depression (at 59%), as were unpaid carers who performed at least 35 hours of caring responsibilities each week ( at 37%), disabled adults (35%), adults in the most deprived areas of England (25%), young adults aged 16 to 29 years (28%) and women (19%).

Around 1 in 4 (27%) adults who reported difficulty in affording their rent or mortgage payments had moderate to severe depressive symptoms; this is around two times higher than those who said it was easy to meet housing costs (15%).

UK construction slowdown may lead to legal disputes

Ally MacKenzie, Construction Disputes Partner at law firm Addleshaw Goddard, predicts there will be a lot of disputes in the construction sector next year, as the economic downturn hits builders.

MacKenzie explains:

Contractors tend to operate on very slim margins so any downturn risks creating a sort of domino effect of cash-flow issues and insolvencies.

“The best thing companies can do right now is ensure that any contracts they have in place properly meet the demands of the current market, particularly in regard to rapid price fluctuations.

Contractors should also stay as close as possible to their supply chains and immediately act on any warning signs.”

UKHospitality: rail strikes will hurt our sector

Britain’s hospitality sector fears it will lose out on vital Christmas takings as railway workers hold strikes this month.

The RMT union has announced fresh rail strikes starting in Christmas eve, which will disrupt celebrations and travel plans over the festive weekend. RMT members will walk out from 6pm on 24 December until 27 December as the dispute over pay and conditions escalates.

UKHospitality chief executive Kate Nicholls says the industrial action will hurt hospitality firms, such as bars and restaurants, in the crucial festive season:

“These further rail strikes will be hugely damaging for hospitality businesses, their workers and their customers as it seems almost guaranteed that we will be facing a heavily disrupted Christmas for the third year in a row.

“Our estimate of the cost of these strikes already stood at £1.5 billion in lost sales and it’s incredibly frustrating that a solution has yet to be reached to avoid this disruption during the golden month of trade for our sector.

“We’re continuing to urge all parties involved in the negotiations to reach a solution imminently to avoid these harmful strikes.”

The RMT’s general secretary, Mick Lynch, has defended rail strikes across the UK over Christmas and said unions have a “duty to coordinate what they do”, saying the government is sending a message that pay rises will only come with worse terms for workers.

Uk construction sector growth hit by rising borrowing costs

Growth at UK construction firms has hit a three-month low, as the surge in borrowing costs hit house-building.

Data firm S&P Global reports that UK construction companies experienced a renewed slowdown in business activity growth during November, due to subdued demand and reduced risk appetite among clients.

A number of survey respondents noted that higher borrowing costs and worries about the economic outlook had curtailed construction activity.

This pulled the S&P Global / CIPS UK Construction Purchasing Managers’ Index down to 50.4 in November from 53.2 in October, close to the 50-point mark which shows stagnation.

That shows the weakest performance since August.

Mortgage costs surged after September’s mini-budget, which scuppered some people’s hopes of buying a house. The Bank of England raised interest rates to 3% at the start of November, as it tried to fight inflation.

Business optimism slumped to the lowest for two and-a-half years, as builders worried that the jump in borrowing costs would hurt the sector. Employment numbers continued to increase in November, but the rate of job creation fell to its slowest since February 2021.

Tim Moore, economics director at S&P Global Market Intelligence, says the jump in mortgage rates led to some house-building projects being ‘curtailed’:

“Stalling house building activity contributed to the weakest UK construction sector performance for three months in November.

Survey respondents noted that new residential building projects had been curtailed in response to rising interest rates, cancelled sales and worries about the economic outlook.

“Construction growth was largely confined to the commercial segment, but even here the speed of expansion slowed considerably since October as client confidence weakened in response to heightened business uncertainty. At the same time, a lack of new work to replace completed projects resulted in another fall in civil engineering activity.

Updated

An Upper Crust in Euston Station, London, as owner SSP returns to profitability.
An Upper Crust in Euston Station, London, as owner SSP returns to profitability. Photograph: James Manning/PA

SSP, which operates food outlets at UK railway stations and airport, has returned to profitability thanks to the pick-up in passengers this year.

The owner of the Upper Crust chain has reported a pretax profit of £25.2m in the year to 30 September, up from a loss of £411m the previous year when Covid-19 restrictions hit the travel sector.

It told shareholders that:

A rapid recovery in passenger demand through the year and disciplined cost management has resulted in SSP delivering a strong set of results.

We remain well-positioned to benefit from the continued recovery and further growth of the global travel market over the medium-term.

Revenues jumped by 162% to £2.18bn, and were 78% of 2019 levels.

SSP said the recovery in passenger numbers has been led by “strong leisure travel demand over the summer holiday season”, which has continued well into the autumn.

The group also reported a particularly strong performance in North America, where business benefited from the sharp recovery in domestic air travel this year.

UK Statistics Authority looking into train cancellation loophole

The UK Statistics Authority, which provides independent regulation of all official statistics produced in the UK, has said it is investigating how train cancellation statistics are reported, following a series of Guardian stories.

Some train companies — with Transpennine Express (TPE) the worst offender — are taking advantage of a loophole which means that cancellations don’t “count” in official statistics if they are announced the night before, by 10pm.

They use something called a p-code, originally designed to allow companies to cancel trains for reasons beyond the operators’ control, for example after a landslide.

But the p-code is open for operators to interpret, meaning some only use it for circumstances that are not their fault, while others, such as TPE, use it when they simply don’t have enough staff. This results in misleading data which only includes on-the-day cancellations.

TPE actually cancelled around 20% of services last month but will only have to report on-the-day cancellations of around 6%.

Work is also underway with the Department for Transport and the Office for Rail and Road to “better display” pre-planned cancellation data.

German factory orders rise, lifting hopes of milder recession

Over in Germany, factories have reported a larger than expected increase in orders, which may cool recession worries.

German factory orders rose by 0.8% in October, driven by increased demand for heavy-duty machinery and equipment. These capital goods orders jumped 3.2% in October, despite the impact of higher energy costs hitting Europe’s economy.

Makers of intermediate goods saw a 1.4% drop in new orders, while demand for consumer goods was down 6.3%.

Economists had forecast a smaller rise in factory orders of just 0.1%, so this indicates the downturn in Europe’s largst economy could be milder than feared.

Germany’s economy ministry says:

“In addition to the slightly improved sentiment indicators, this is a further indication that the recession could be weaker than feared, even if the outlook for the industrial economy remains subdued,”

UK risks sleepwalking into food supply crisis, says farmers’ union

The government risks “sleepwalking” into a food supply crisis unless it provides crucial support for British farmers struggling with the soaring cost of fuel, fertiliser and feed, the National Farmers’ Union has warned.

Rising costs could result in supply problems for energy-intensive crops including tomatoes, cucumbers and pears – which are on track for their lowest yields since records began in 1985 – and rationing at supermarkets as recently experienced with eggs, the union said.

The union said milk prices were also likely fall below the cost of production and that beef farmers were weighing whether to cut down on the number of cows being bred for slaughter in light of surging costs.

Surging input costs linked to the war in Ukraine as well as the pandemic were to blame, the NFU said, having more than tripled the price of fertiliser since 2019, and pushed the cost of fuel and feed up by about 75%. That is on top of a six-fold increase in wholesale gas rices, and increased checks and red tape for importers linked to Brexit.

The union is calling for state support for farmers, who it said had been forced out of business since the Covid outbreak, noting that the UK had lost about 7,000 agricultural businesses since 2019.

Kantar: no big World Cup effect at the supermarkets yet....

The excitement around England’s performance and Wales’ first World Cup showing in 64 years hasn’t translated into rapid sales rises at the supermarkets, Kantar reports.

Beer sales were up in November, but that’s mainly due to higher prices, but sales of snacks have jumped:

Kantar says:

We haven’t seen a big World Cup effect – at least not yet. Take-home beer sales nudged up slightly in the last four weeks, covering the first week of the tournament, by 5% to £230 million, but mostly due to increased prices.

Many people are taking the chance to enjoy a social pint while watching the games in bars and pubs, whereas last year we were in the middle of a COVID resurgence so consumers were limiting their movements and going out less.

We’re likely to be marking the impact of that comparison with higher at-home volumes one year ago. Crisp and snacks have fared better this winter, however, with sales up by 18%.

The cost of a traditional Christmas dinner up 9.3%

The cost of a traditional Christmas dinner has jumped due to soaring food inflation, market research group Kantar reports.

Grocery price inflation in November has dipped by 0.1 percentage points to 14.6% which is the first decline in 21 months, Kantar’s latest grocery report shows.

However, food inflation still remains near record highs and the cost of a traditional Christmas dinner for four has hit £31 this year, with the cost of turkey and vegetables having climbed.

The cost of Christmas dinner in 2022, according to market research group Kantar

Sales of mince pies and Christmas puddings are down year on year based on the number of people buying them and the overall number of purchases made, Kantar reports, suggesting the cost of living squeeze is hitting festive spending.

The surge in food inflation means shoppers will have to spend an extra £60 in December to buy the same items as last year.

December is set to be a record-breaking month for supermarkets, with sales expected to exceed £12bn mark for the first time.

Discount supermarkets have seen another jump in sales over the last month, Kantar reports:

Lidl has achieved a new record market share of 7.4% while Aldi remains the fastest growing retailer with sales up 24.4%.

Fraser McKevitt, head of retail and consumer insight at Kantar, says Friday 23 December is likely to be the busiest day for pre-Christmas shopping.

McKevitt adds:

Sales of mince pies, Christmas puddings and Christmas confectionery are worth 2% more than last year, but this rise can largely be put down to higher prices.

If we look at the amount of people buying these items and the overall number of purchases made, then sales are actually down on 2021.

Updated

Introduction: World Cup boost for Marston's

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The World Cup has lifted beer sales at pub chain Marston’s, as England and Wales fans flocked to the bar to drink in the action from Qatar.

Marston’s has told shareholders that the World Cup has benefited trading, with like-for-like drink sales up around 50% for England’s first two World Cup games (against Iran and the US).

Marston’s also reports that current trading to the end of November has been “positive with encouraging levels of Christmas bookings”, in the first festive season without Covid restrictions since 2019.

In its latest full-year financial results, Marston’s reports that like-for-like sales were 99% of its 2019 levels despite disrupted trading last Christmas due to the Omicron variant. Revenues rose to almost £800m in the year to 1 October, up from £401.7m the previous year, towards its target of a billion pounds.

Pretax profits rose to £163.4m, up from a loss of £171.1m a year earlier.

Andrew Andrea, Marston’s CEO says the company had a a strong performance over the last 12 months.

Demand for our predominantly community-based pubs continues to be encouraging despite ongoing macro uncertainty and our estate is well-placed to benefit from changing patterns in consumer behaviour.

We are managing cost inflation well and remain confident that our commitment to continue to reduce the Group’s debt and return sales to back to £1 billion will drive NAV [net asset value]and shareholder value.

While pub chains are getting a boost from the football, UK retailers have seen a surge in sales of ‘winter warmers’, such as coats, hot water bottles, and hooded blankets to help them through the cold weather.

In its latest snapshot of high street and online spending, the British Retail Consortium (BRC) said sales growth picked up last month compared with October, lifted by higher prices due to inflation.

Retail sales were 4.1% higher in November than a year ago, up from 1.2% in October, although that masks a much larger drop in volumes once inflation is accounted for.

Victoria Scholar, head of investment at interactive investor, tells us:

Discounts around Black Friday encouraged shoppers to do their Christmas shopping early in November to make the most of the sales.

With the cost-of-living crisis and squeezed household budgets, customers are arguably hungrier than ever for a bargain while retailers have been aggressively discounting in an attempt to attract a slice of the slimmed down pot of overall consumer spending.

Despite November’s jump, sales are still falling short of inflation with volumes lower versus last year as the macroeconomic pressures from a looming recession and rising prices continue to weigh on demand. As we approach the most important few weeks of the calendar for retail, it looks like it could be a slimmed down festive season this year for many.”

The agenda

  • 7am GMT: German factory orders for October

  • 8am GMT: UK grocery inflation report from Kantar

  • 8.30am GMT: Eurozone construction sector PMI report for November

  • 9.30am GMT: UK construction sector PMI for November

  • 1.30pm GMT: US trade report for October

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‘I am the industry!’: Keke Palmer on being Hollywood’s queen of content
Singer, gameshow host, podcaster – the actor has built a reputation for doing it all. And with an autobiography/self-help guide coming soon, she’s out to prove there’s nothing wrong with being a jack of all trades
The Guardian - UK
The Guardian - UK
‘Take these attacks seriously’: journalist Imara Jones on the dangerous rise of anti-trans political ads
In her podcast, the Black trans media founder unpacks the harmful wave of rhetoric and laws against US trans people
The Guardian - US
The Guardian - US
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