Business news - live: Mark Carney issues fresh warning over no-deal Brexit impact, as Royal Mail workers vote to strike
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Mark Carney warned MPs that a no-deal Brexit will likely result in job losses and business closures. The Bank of England governor’s comments came as UK unemployment rose unexpectedly in the latest quarter as the jobs market showed signs of a slowdown amid prolonged economic uncertainty.
However, the pound jumped to a four-month high against the dollar after the EU’s chief negotiator said that it was still possible this week, despite it becoming “more difficult to reach an agreement”.
Sterling rose as Michel Barnier told reporters in Luxembourg: “Even if an agreement will be difficult – more and more difficult, to be frank – it is still possible this week.”
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The pound is up 0.4 per cent against the euro so far this morning to €1.148. It appears to be on the back of comments from Michel Barnier who suggested a Brexit deal could be struck this week, though he hardly sounded confident about it.
Mark Carney is to be questioned by MPs today about the Bank of England's latest financial stability report. No doubt he'll also face a few queries about Brexit.
Royal Mail workers vote on strike action
(Press Association) Royal Mail will discover on Tuesday if it is facing the threat of a national strike by postal workers in a dispute over job security and terms and conditions of employment.
Around 110,000 members of the Communication Workers Union (CWU) have been voting on whether to launch a campaign of industrial action, with expectations of a yes vote when the result is announced.
The CWU says that Royal Mail is not sticking to an agreement reached last year covering a wide range of issues, including plans to reduce the working week, as well as job security.
Industrial relations at the company have worsened this year, with widespread unofficial strikes breaking out virtually every week.
Terry Pullinger, the CWU's deputy general secretary, said the union and its members were facing the "fight of our lives".
Brexit deal not possible before summit, EU leaders tell Boris Johnson
Barnier's comments this morning are in sharp contrast to those made yesterday by a number of European ministers, suggesting that any optimism for the pound that a Brexit deal can be reached may be short-lived.
Finland’s Prime Minister Antti Rinne, whose government currently holds the rotating EU presidency, warned there was no “practical or legal way” to find an agreement before Thursday’s meeting of EU leaders in Brussels – while Spain’s foreign minister said “more time” could be needed.
UK labour market shows 'signs of slowing'
The UK labour market showed signs of slowing, with the level of employment falling by 56,000 and the level of unemployment increasing by 22,000, in the three months to August 2019.
However, compared with the same three months a year ago, the level of employment rose by 282,000, while the levels of unemployment and inactivity declined by 49,000 and 63,000 respectively, the Office for National Statistics said.
Neil Woodford’s frozen fund will be wound up
Neil Woodford’s flagship fund, suspended since June, will be wound up and cash will be returned to investors “at the earliest opportunity”, its corporate director Link Asset Services has announced.
In a letter to investors posted on its website on Tuesday, Link said it expects to start winding up the LF Woodford Equity Income Fund on 17 January once the required three months’ notice period runs out. Mr Woodford will also be removed from his position as the fund’s investment manager with immediate effect.
Mr Woodford, one of Britain’s best-known investment managers, was forced to freeze the fund after a run of poor performance scared investors into withdrawing their cash. That left the fund unable to sell off assets fast enough to meet further redemption requests.
An unusually high proportion of the fund has been invested in illiquid shares, meaning they could be subject to heavy discounts if a sale is required quickly.
Former Thomas Cook bosses start fundraising to help jobless staff
On the morning that five directors of Thomas Cook face a grilling by MPs, two former bosses have started fundraising for staff who lost their jobs when the firm collapsed.
The 178-year-old travel company went bust on 23 September 2019 after a financial rescue plan fell through.
MPs on the Business Select Committee are to question the chief executive, Peter Fankhauser, and four other directors about the failure.
Meanwhile two men who ran the company before it became saddled with heavy debts have launched a campaign to raise funds for former staff who are struggling financially.
Simon Calder has the full story:
UK jobs market buckling as pressures from Brexit and global uncertainty mount
Howard Archer, chief economic advisor to the EY Item Club on today's jobs figures:
The latest jobs data are weaker across the board – indicating that the labour market is now undeniably faltering in the face of overall soft domestic economic activity, a weakening global economy and heightened Brexit and domestic political uncertainties are currently having an increasing dampening effect on the labour market.
Even allowing for the fact that employment is a lagging indicator, the labour market has been remarkably resilient until now.
There is evidence and reports that many employers are currently adopting a “wait and see” approach on employment given the current heightened uncertainties.
The September KPMG/REC Report on Jobs shows permanent placements fell for 7th month running; temporary placements growth picked up a little from August but "modest". Job vacancies rose at the slowest rate since January 2012 with demand for permanent staff at 92-month low.
Thomas Cook boss defends £500,000 bonus
Former Thomas Cook boss Peter Fankhauser has defended his £500,000 bonus to a committee of MPS.
He said he was "deeply sorry" that he was not able to save the travel operator but added that he had worked tirelessly before its collapse.
"Multiple parties" were involved in the failed rescue deal, he said.
Frank Field MP, Chair of the Work and Pensions Committee, was not impressed: “Thomas Cook workers now face a long wait to find out exactly how much they’ve lost from their life savings, and while their former bosses might argue that this isn’t another BHS, Carillion or British Steel, they will have a hard time justifying the millions they pocketed, one eye on the door, while the company collapsed around them.
“If they’ve had a chance to check how their own pensions are affected, perhaps the high-paid executives responsible would like to bolster the retirement of some of the workers they left behind, and give some of it back?"
Carney's latest Brexit warning
A no-deal Brexit is likely to result in business closures and job losses, the governor of the Bank of England has said, sticking to his earlier warning as Britain enters the final fortnight before its planned departure from the EU.
Mark Carney spoke on Tuesday before parliament’s Treasury Committee in a crunch week for Brexit talks. The government has rejected claims a Brexit deal cannot be negotiated in time for the EU leaders’ summit on Thursday. The bloc’s chief negotiator Michel Barnier has said a deal is still possible this week but added that it looks “more and more difficult”.
As a crash-out exit remains a possibility, Mr Carney said: “There are likely to be circumstances in no deal where certain businesses become uneconomic and they close, so for the person who runs that business or works in that business, they will be directly affected … because of a loss of a market or short-term disruption.”
The central bank governor has previously made similar forecasts. In August, he said a no-deal Brexit would deliver a blow to a “potentially substantial number” of companies.
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