Key eventsShow key events onlyPlease turn on JavaScript to use this featureClosing summaryTrain drivers are to stage a fresh strike in their long-running dispute over pay, threatening more travel chaos for passengers.Members of Aslef will walk out on 1 September and will be subject to an overtime ban on 2 September, the same day as a strike by other rail staff.The National Union of Rail, Maritime and Transport Workers announced a week ago that 20,000 of its members from 14 train operators would halt work on 26 August and 2 September as part of their own dispute.Aslef said its strike will force train companies across England to cancel all services, while the ban on overtime would “seriously disrupt” the network.The typical gas and electricity bill will fall to an average of £1,823 a year from October after the regulator, Ofgem, announces its energy price cap next week, a leading forecaster has predicted.According to Cornwall Insight, the cap will drop from the current July to September level – equivalent to £2,074 a year – but consumer groups have warned that prices remain “dangerously high”.Bills are likely to rise again from January to an average of £1,979 a year as a consequence of the recent surge in global gas market prices ignited by a string of planned strikes at major gas projects in Australia, the analysts said.Our other main stories today:Thank you for reading. Have a great weekend. We’ll be back next week. Bye! – JKUpdated at 15.00 BSTWilko launches 'everything must go' saleSarah ButlerWilko has launched an “everything must go” sale, with significant discounts on Christmas decorations and Halloween gear months before the seasonal events, as administrators try to secure a rescue deal for the collapsed retailer.No bidder is expected to take on the entire 400-store chain, which entered administration last week after running short of cash, but several buyers are looking at parcels of stores, and it is hoped that at least part of the chain can be rescued.With a number of offers for different parts of the business, which employs almost 12,500 people, on the table, talks are expected to drag on well into next week.Andy Prendergast, a national secretary of the GMB union, which represents thousands of Wilko workers, said he believed there were “genuine grounds for hope” about some kind of rescue deal.China's property crisis deepensAmy HawkinsChina’s has property crisis deepened as two major developers faced severe financial difficulties that threaten to send shockwaves through the country’s economy and beyond.Evergrande, the poster child for the woes of China’s property sector, filed for chapter 15 bankruptcy protection in New York yesterday. The provision permits the company to protect its US assets and will allow cross-border bankruptcy proceedings as it undergoes restructuring.The filing from Evergrande, which defaulted in 2021 following a liquidity crisis, came a day after China’s securities regulator notified the company’s Chinese branch that it was being investigated for suspected disclosure violations. It is the world’s most indebted property developer, with more than $300bn (£236bn) in liabilities.Country Garden, which was once China’s largest property developer by revenue, also faces a risk of default in the coming weeks.Country Garden is one of the few major homebuilders to have avoided default since Beijing introduced a “three red lines” policy three years ago that was aimed at reining in the debt levels in the highly leveraged sector. The red lines set limits on liabilities-to-asset ratios and ensure companies hold cash reserves equivalent to at least 100% of short-term debt.Since then, companies responsible for around 40% of Chinese home sales have defaulted. Country Garden, which missed two dollar bond payments last week, has until early September, when the grace period on those payments expires, to quell fears that it is about to tumble into the same fate.The Evergrande logo is seen on residential buildings in Nanjing. Photograph: AFP/Getty ImagesUpdated at 14.03 BSTChina unveils measures to revive stock marketChina’s securities regulator unveiled a package of measures today aimed at reviving the stock market, but investors said they would do little to boost confidence unless the economy picks up.The China Securities Regulatory Commission proposed measures including cutting trading costs, supporting share buybacks and encouraging long-term investment, as the stock market languishes at nine-month lows. They also include boosting the development of equity funds, looking at plans to extend trading hours, and improving the attractiveness of listed companies.The regulator said it did not know if there would be a cut in stamp duty, which falls within the remit of the ministry of finance. It said stabilising the stock market was a priority.
Without a relatively stable market environment, there’s no basis for reviving the market and lifting sentiment.
However, investors weren’t overly impressed. Niu Chunbao, a fund manager at Wanji Asset Management, told Reuters:
The key to lifting market sentiment is to rescue the economy, and the property market is the crux. The market is short of confidence because investors see no concrete measures to fix the economy.
CBI to shut most overseas officesThe embattled CBI business group has told staff that it will axe its operations in Beijing, Delhi and Washington DC in the coming months.This will leave an office in Brussels as the only international presence of the organisation. The move was first reported by Sky News.A CBI spokesperson said:
We have had to take the difficult decision to reduce our number of overseas offices as the CBI shifts to a smaller, leaner operation.
The CBI will however continue to provide a valuable international service to members, including maintaining an international presence.
We shall continue our role as the UK business representative on BusinessEurope, the B7 and B20 as well as BIAC (Business at the OECD).
The CBI is fighting for its survival following a series of sexual misconduct allegations reported by the Guardian that prompted several companies including John Lewis and NatWest to terminate their membership of the business lobby group.Ofgem price cap forecast to fall to £1,823Jillian AmbroseOur energy correspondent has had a look at the Ofgem price cap forecast from Cornwall Insight, a top forecaster. She writes:Energy bills are expected fall to an average of £1,823 a year for a typical household from October as the regulator prepares to lower its cap on energy prices next week, according to a leading forecaster.The energy price cap is expected to drop from an average of £2,074 a year for a typical household over the last three months but consumer groups have warned that prices remain “dangerously high”.Bills are likely to rise again from January to an average of £1,979 a year after a recent surge in global gas market prices was ignited by a string of planned strikes at major gas projects in Australia, according to analysts at Cornwall Insight.Dr Craig Lowrey, a principal consultant at Cornwall Insight, said that despite the small decrease in October’s bills the energy price forecasts would remain far above pre-crisis levels, underscoring “the limitations of the price cap as a tool for supporting households with their energy bills”.The energy price cap was typically set below £1,200 a year before Russia’s invasion of Ukraine triggered a global energy crisis. The rapid rise in the energy price cap has reignited concerns that bills are unaffordable for millions of household living in fuel poverty, and sparked fresh calls for a cheaper ‘social tariff’ for the most vulnerable.“As many, including energy regulator Ofgem have acknowledged, it is essential that the government explore alternative solutions, such as social tariffs, to ensure stability and affordability for consumers,” Lowrey said.OurTrain strikes to bring more chaosHere are more details:Aslef said its strike will force train companies across England to cancel all services, while the ban on overtime will “seriously disrupt” the network.The union maintains that none of the privatised train-operating companies employs enough drivers to provide a “proper service” without drivers working on their days off.The companies affected are Avanti West Coast; Chiltern Railways; c2c; CrossCountry; East Midlands Railway; Greater Anglia; GTR Great Northern Thameslink; Great Western Railway; Island Line; LNER; Northern Trains; Southeastern; Southern/Gatwick Express; South Western Railway; TransPennine Express; and West Midlands Trains.Mick Whelan, Aslef general secretary, said:
We don’t want to take this action but the train companies, and the government which stands behind them, have forced us into this place because they refuse to sit down and talk to us and have not made a fair and sensible pay offer to train drivers who have not had one for four years – since 2019 – while prices have soared in that time by more than 12%.
The government appears happy to let passengers – and businesses – suffer in the mistaken belief that they can bully us into submission.
Train drivers at these companies have not had a pay rise for four years, since 2019, while inflation has rocketed.
We haven’t heard a word from the employers – we haven’t had a meeting, a phone call, a text message, or an email – since 26 April and we haven’t had any contact with the government since 6 January.
It will be the 12th one-day strike by Aslef members since the dispute started more than a a year ago.Whelan warned of further industrial action if the deadlocked row continues, saying Aslef members were pressing the union to go “harder and faster.”The RMT is also striking on 26 August in its dispute over pay, jobs and conditions.The Rail Delivery Group advised passengers that due to the industrial action there will be reduced services across the rail network on 26 August and 2 September.Train companies are doing all they can to keep passengers moving, but those travelling during that period are advised to plan ahead and check before they travel.RMT union members such as station staff, train managers, and catering staff will participate in the strikes, causing some disruption to travel plans.This means trains will start later and finish much earlier than usual, with only around half of services in some areas, while other parts of the country will have fewer or no services at all.It is likely that evening services on some lines will be affected on the days before each strike and on the mornings after strike days.A Rail Delivery Group spokesperson said:
While the industry is working hard to keep as many services running as possible, the strikes called by the RMT leadership are designed to deliberately target passengers who want to enjoy various sporting events, festivals, and the end of the summer holidays, disrupting their plans, hurting local economies and forcing more cars onto the road.
This, despite having repeatedly refused its membership a vote on an offer of up to 13% for the lowest paid over two years, which could settle this dispute.
The rail unions are also campaigning against controversial plans to close most railway ticket offices.Updated at 11.47 BSTTrain drivers to strike in September – AslefTrain drivers are to strike on 1 September 1 and ban overtime on 2 September in the long-running dispute over pay, the union Aslef has announced, PA is reporting.The news came a week after the Rail, Maritime and Transport workers’ union announced that 20,000 of its members from 14 train operators would walk out on 26 August and 2 September, both Saturdays.Updated at 10.49 BSTGMB union: 'genuine grounds for hope' for WilkoThe GMB union has said there are “genuine grounds for hope” over the future of stricken retailer Wilko after expressions of interest from potential buyers during the administration process.Andy Prendergast, GMB national secretary, said:
GMB has met with administrators and the company as part of the formal consultation process.
We can confirm there have been expressions of interest from organisations who are considering taking over at least some parts of the business.
These are still at an early stage, but means there are genuine grounds for hope.Whilst this process continues staff will continue to be paid and kept on. All stores are continuing to trade, and deliveries of new stock will continue.
Wilko photos of store in Stratford, east London Photograph: Joanna Partridge/The GuardianOfgem price cap to fall next week – Cornwall InsightOfgem’s price cap, which governs what millions of people pay for their gas and electricity, is expected to fall to £1,925 when it is announced next week, according to the latest forecast from analysts at Cornwall Insight.This means a 7% reduction in the amount that the average household pays for its energy every year. It will be the lowest the cap has been since March 2022.The cap limits how much an energy supplier can charge per kilowatt hour, or unit, of gas or electricity it sells. People who use more energy will pay more, and those who use less will pay less.Ofgem has changed its calculations for the price cap this time because it expects people to use less energy. Taking into account these new assumptions, the cap is likely to be at £1,823, Cornwall Insight said.The new price cap comes into force on 1 October.Updated at 12.11 BSTJonathan Van-Tam becomes adviser to vaccine maker ModernaSir Jonathan Van-Tam, the UK’s former deputy chief medical officer who became known for his sporting analogies during the Covid pandemic, has become a senior medical consultant to the Covid-19 vaccine maker Moderna.Van-Tam, known as “JVT” during the pandemic, took up the role as part-time adviser to the American company in May, the Financial Times reported, citing official filings.He was a member of the Vaccine Taskforce during the pandemic, which made decisions on vaccine supply contracts and investments in manufacturing and clinical opportunities.A season-ticket holder at Boston United, the Lincolnshire team that plays in the sixth tier of the English football league, he often turned to soccer to find the words he wanted.In late 2020, he told the BBC that in the early stages of the pandemic the “away team gave us an absolute battering” and that we had to hold our nerve and nick a goal back.Van-Tam, a professor who was knighted in 2022, stepped away from his government role in March 2022 for a new role at the University of Nottingham.At the time, the then health secretary, Sajid Javid, praised him for his unique approach to explaining crucial information to the public.
JVT’s one-of-a-kind approach to communicating science over the past two years has no doubt played a vital role in protecting and reassuring the nation, and made him a national treasure.
Jonathan Van-Tam attends the Women's Singles final match at Wimbledon, 15 July 2023. Photograph: Tolga Akmen/EPARouble stable near two-week high at end of volatile weekThe Russian currency has stabilised and is hovering close to a two-week high hit yesterday. It is set to gain more than 6% this week despite all the turmoil, with the market waiting for further measures from the authorities, such as capital controls.On Monday, the rouble plunged through the 100 per dollar mark and was close to 102 at one stage, as markets fretted over the impact of western sanctions on Russia’s trade position. This prompted the Russian central bank to hike interest rates from 8.5% to 12% the following day, ostensibly to fight inflation, which is above its 4% target.Since then, we’ve been waiting for further measures to prop up the rouble. Yesterday, Russian media and Bloomberg News reported that following a meeting between president Vladimir Putin and officials on Wednesday, the government was opting for an informal agreement to get exporters to surrender more of their foreign revenues.The rouble is nearly 0.2% stronger at 93.6 per dollar. The authorities prefer a range between 80 and 90 per dollar.Stock markets have opened lower again.Germany’s Dax is down 0.5% at the opening bell, while France’s CAC and Italy’s FTSE MIB both fell 0.4% and Spain’s Ibex slipped 0.3%. The FTSE 100 index in London has lost 34 points, or 0.5%, to 7,274.July’s weak retail performance pushed underlying three-month-on-three-month growth down to 0.1% from 0.4% in June.Martin Beck, chief economic advisor to the EY Item Club, an economic forecasting group, said:
And with sales in July well below the second-quarter average, there appears to be a good chance that sales volumes could fall in the current quarter. But while the EY Item Club doesn’t think July’s particular weakness is wholly indicative of the outlook for retail, given the weather factor, subdued growth is likely to characterise the sector for the foreseeable future.
On the one hand, falling inflation and still-strong growth in cash pay mean average wages have finally started to rise again in real terms. Regarding price pressures, the latest retail release showed the annual rise in shop prices slowing to 4.3% in July, a 22-month low. Meanwhile, the financial position of households, in aggregate, is relatively healthy, reflecting unplanned savings accumulated during the pandemic and a paying down of unsecured debt in recent years.
But the impact of higher interest rates continues to build. An increasing number of households are reaching the end of fixed-rate deals and those re-mortgaging typically face a rise in monthly mortgage payments of several hundred pounds. And evidence of a cooling in the jobs market from rising unemployment and falling job vacancies mean that what has been a buttress to consumer spending is now looking less solid.
Toy sales benefit from Barbie bounce, says retailerGary Grant, founder and executive chairman of The Entertainer, a chain of toy stores he founded in 1982 with his wife, has been on BBC radio 4’s Today programme.
It is true to say that the weather has affected our summer sales and summer sales are performing below the levels that we would have expected for July and going into August.
But… we’ve got good stable products like squishmallows which have built up and built up and continue to expand as a collectible. We’ve got the benefit of a craze that’s really developing. Loom bands are back…
And then the industry’s benefited from some fantastic film releases, largely Barbie and the Turtles.
At the moment sales have increased on all Barbie items. But the bigger, more expensive priced items will sell as Christmas presents.
He said indoor sales such as stationery, craft items, puzzles and games had gone up, as parent tried to keep their children occupied at home during the rainy summer.
It is true to say that a lot of our families are under financial pressure from the cost of living crisis. But we have a lot of toys that start from from just a few pounds up to some of the more expensive items.
Ryan Gosling, left, and Margot Robbie in a scene from “Barbie.” Photograph: APUpdated at 08.08 BSTFood store sales volumes were 5.1% below pre-pandemic levels, the ONS said. People also bought less furniture and other big ticket items.Non-food store sales fell by 1.7% in July, with retailers reporting that poor weather reduced footfall. Within that, household goods stores posted an even worse decline of 3.8% because of a fall in furniture and lighting products sales.Department stores sales volumes fell by 2.9% over the month, while clothing stores posted a 2.2% drop.According to the Met Office, it was the wettest July since 2009 and the sixth wettest July on record since 1836.Updated at 08.16 BSTHelen Dickinson, chief executive of the British Retail Consortium, said:
July’s poor weather dampened retail sales, with spend stalling in areas such as clothing and footwear and household goods. Weakening consumer confidence also impacted purchases of big ticket items as customers continued to spend more cautiously, especially for computing and furniture. Meanwhile, sales for books and stationery performed better.
Retailers are hopeful that the coming months will provide a boost to spending, as England fans celebrate the Women’s Football World Cup Final this weekend, families start their back-to-school shopping and university students ready themselves for the new academic year. Nonetheless, the economic backdrop will remain difficult, and Government must find ways to create an environment that fosters economic growth.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said:
July’s decline in retail sales likely is no more than a weather-related dip. Average temperatures swung from 2.7 degrees Celsius above their 1970-to-2022 average for the month of the year in June to 0.2 degrees below in July. Rainfall also was 78% above its 1970-to-2022 average in July.
Looking ahead, we continue to expect households’ real disposable income to rise briskly and to be about 2.0% higher in the fourth quarter than a year ago. Month-to-month increases in wages will outpace price rises in the third and fourth quarters, as energy prices fall back and the rate of increase in both food and core goods prices slows, in line with producer prices.
Mortgage refinancing will be a steady 0.2-to-0.3% per quarter headwind to quarter-on-quarter growth in households’ disposable incomes, and most of the drag will be offset at the aggregate level by an increase in the interest rate on the stock of households’ savings.
That said, some households likely will save more, given that the inflation-adjusted level of their bank deposits now is below the level implied by its pre-Covid rising trend, while others will focus more on paying off debt. In addition, consumers’ confidence still is well below its long-run average, despite recovering over the last six months.
All told, then, we think households’ real expenditure will be up around 1.5% year-over-year in the fourth quarter, with retail sales following a similar trend.
The Awful British Summer washed out retail sales in July July UK retail sales -1.2% on month vs -0.5% expectations , -3.2% on the year— Joumanna Nasr Bercetche 🇱🇧 () August 18, 2023Updated at 07.29 BSTIntroduction: Retail sales in Britain fall 1.2% as wet weather hits clothing purchasesGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.Retail sales in Great Britain fell by 1.2% last month, more than expected, as people bought fewer summer clothes during the wet weather but also less food.This was worse than the 0.5% drop forecast by economists. The sharp fall in July comes after a 0.6% monthly rise in retail sales volumes in June, which was revised down from 0.7%, the Office for National Statistics said.Sales at food stores fell by 2.6% with supermarkets saying that people bought fewer clothes, as well as groceries. Retailers also indicated that the increased cost of living and food prices continued to affect sales volumes.Shoppers switched to online shopping because of the bad weather and increased promotions, so 27.4% of sales were made online in July, up from 26% in June, and the highest proportion since February 2022.Heather Bovill, deputy director for surveys and economic indicators, said:
The wet weather did mean a good month for online retailing, as discounting plus consumers shopping from the comfort of their homes boosted sales.
The Agenda
10am BST: Eurozone inflation final for July (forecast: 5.3%)
Updated at 07.33 BST