Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

As it happenedended1569846901

Business news - live: UK economy shrank 0.2 per cent in last quarter, ONS confirms

Follow live business updates

Ben Chapman
Monday 30 September 2019 09:24 BST
Economic output dropped by 0.2 per cent between April and June, the Office for National Statistics said
Economic output dropped by 0.2 per cent between April and June, the Office for National Statistics said (PA)

Official figures confirmed today that the UK economy remains teetering on the brink of recession.

Economic output dropped by 0.2 per cent between April and June, the Office for National Statistics said, reiterating its earlier estimate.

Elsewhere, Saudi Arabia's crown prince has warned the price of oil could spike to "unimaginably high" levels unless action is taken against Iran, the kingdom's main enemy.

Please allow a moment for the live blog below to load...


Businesses are more pessimistic about the UK economy than they have been at any point since the June 2016 EU referendum, according to a new survey.

Lloyds found optimism had slumped 5 points in September to a net balance of minus 10 per cent. Firms’ concerns about the expected impact of the UK leaving the EU intensified, falling 7 points to a new low of -25.

However, businesses are more positive about their own firm's prospects, with optimism about trading for the year ahead rising 5 points to 13 per cent.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: 

“While overall business confidence this month has remained broadly steady, optimism in the economy has fallen, and both remain significantly below the same period last year, and the historic average.  This month we are also seeing firms’ concerns about leaving the EU intensify against the backdrop of ongoing economic uncertainty.”

ben.chapman30 September 2019 09:44

CVS becomes latest pharmacy to remove Zantac over heartburn fears

US pharmacy chain CVS has become the latest company to withdraw popular heartburn remedy Zantac and other generic products containing the same active ingredient ranitidine over concerns it may be linked to cancer.

US drug regulators announced an investigation into the presence of impurities in ranitidine products that have been identified as carcinogenic.

"Zantac brand products and CVS brand ranitidine products have not been recalled, and the FDA is not recommending that patients stop taking ranitidine at this time," the company said.

Walgreens and Walmart have already removed the products from their shelves while French and Canadian authorities have issued recalls. 

ben.chapman30 September 2019 09:56

Goals Soccer Centres accounting scandal could be much bigger than thought, bosses admit

A £hole in the accounts of Goals Soccer Centres could in fact be much larger than the £12m previously identified, company bosses have admitted.

The five-a-side football pitch operator was de-listed from the stock exchange this morning after failing to resolve an accounting scandal relating to millions of pounds of unpaid VAT.

Goals missed today's deadline for filing its full-year accounts after discovering irregularities over several years.

The company said: "The actual liability may be materially higher than that previously announced dependent on the approach and working assumptions that could be adopted by HMRC in assessing the misdeclaration."

ben.chapman30 September 2019 10:00

Forever 21 files for bankruptcy protection

(Associated Press) - Low-price fashion chain Forever 21, a one-time hot destination for teenage shoppers that fell victim to its own rapid expansion and changing consumer tastes, has filed for Chapter 11 bankruptcy protection.

The privately held company, based in Los Angeles, said Sunday it will close up to 178 stores in the US.

As of the bankruptcy filing, the company operated about 800 stores globally, including more than 500 stores in the US.

In the UK Forever 21 has stores in Oxford Street in London, Liverpool and Birmingham.

ben.chapman30 September 2019 10:01

'No-one really knows' cost of no-deal Brexit, says Chancellor

The Chancellor says no-one “really knows” how much crashing out of the EU will cost the country – undermining repeated ministerial claims that the damage will be minimal and short-term.

Sajid Javid did not dispute his own watchdog’s warning of a £30bn a year hit, saying: “I’ve never pretended that if you leave without a deal it won’t be challenging.”

And he acknowledged the severe impact on businesses, “especially if you a trader with the EU”.

The Independent's deputy political editor Rob Merrick has the full story:

ben.chapman30 September 2019 10:04

UK GDP fell 0.2 per cent in second quarter

UK gross domestic product (GDP) fell by 0.2 per cent between April and June, unrevised from the Office for National Statistics' previous estimate.

When compared with the same quarter a year ago, UK GDP increased by 1.3 per cent, down from 2.1 per cent to Quarter 1 2019.

Production output fell 1.8 per cent – the largest decline since 2012 and worse than the previous estimate.

This was driven by a 2.8 per cent slump in manufacturing. This is likely to have reflected the effects of bringing forward activity in the first quarter of the year and the decline in car production as summer shutdowns for planned maintenance were brought forward to April.

Despite increasing by an unrevised 0.1% in Quarter 2 – the weakest quarterly figure in three years – the services sector continued to provide the main positive contribution to overall GDP growth in the second quarter of 2019.

ben.chapman30 September 2019 10:09

Household consumption worse than previously thought

Household consumption has been revised down in the first two quarters of 2019, which is more in line with some external indicators that point to a more subdued picture.

Growth in household consumption has been revised down by 0.3 percentage points in Quarter 1 2019 and by 0.2 percentage points in Quarter 2 2019, due primarily to actual data replacing forecasts, ONS figures reveal.

The 0.4 per cent increase in household consumption in Quarter 2 2019 in part reflects a 0.9 per cent increase in expenditure on housing

ben.chapman30 September 2019 10:11

Households and government propping up UK economy as firms hold back

As businesses hold off investment in the face of uncertainty around Brexit, households and the government have been doing the heavy lifting, according to analysis by Pantheon Macroecnomics of today's revised GDP numbers.

Chief UK economist Samuel Tombs said:

Government spending rose by 1.1 per cent, while households' spending increased at a steady 0.4 per cent quarter-on-quarter rate.

Households could have increased their spending at a faster rate, but decided instead to increase their saving rate to 6.8 per cent, from 6.4 per cent in Q2.

Following upward revisions to income from self-employment and downward revisions to households’ charitable contributions, the saving rate now is 2pp higher than previously estimated and nearly 3pp above its all-time low in Q1 2017. 

As a result, households have much more scope than previously thought to ride out any future hits to their incomes and still spend more.

ben.chapman30 September 2019 10:26

City watchdog cracks down on funds investing in illiquid assets after Woodford scandal

Retail investors will be given some more protections against  having their money frozen in investment funds, as happened to hundreds of thousands of people who invested their cash with Neil Woodford.

Woodford put significant amounts of money in illiquid assets - ie those that can not be bought and sold quickly - which then meant he couldn't offload them quick enough when a large number of investors asked for their money back.

What are the new rules?

Under new rules announced today by the Financial Conduct Authority, investors must be provided with clear and prominent information on liquidity risks, and the circumstances in which access to their funds may be restricted.

The obvious question is why this was not a requirement before.

The FCA points to risks with "inherently illiquid assets" like property.

In typically jargon-packed fashion the FCA has clarified that the rules will apply to certain types of funds currently defined as "non-UCITS retail schemes" (NURS). UCITS of course is an Undertakings for the Collective Investment in Transferable Securities (ie a fund that invests in things like shares and bonds).

To help retail investors, the FCA has decided it would be a good idea to create another acronym: 'funds investing in inherently illiquid assets’ (FIIA). The new rules will apply to FIIAs, which are a type of NURS.

Got it?

FIIAs "will be subject to additional requirements, including increased disclosure of how liquidity is managed, standard risk warnings in financial promotions, enhanced depositary oversight, and a requirement to produce liquidity risk contingency plans.

"These requirements will not apply where a fund matches the dealing frequency of its shares to the liquidity of its assets."

ben.chapman30 September 2019 10:54

Thomas Cook refunds to take up to two months

One week on from the collapse of Thomas Cook, hundreds of thousands of travellers who bought packages from the failed holiday company have been told they will have to wait another week before even beginning the refund process – with the likelihood of no money back before December, writes Simon Calder.

The travel giant closed down in the early hours of Monday 23 September after a financial rescue deal fell apart. Around 21,000 Thomas Cook staff globally lost their jobs, including 9,000 in the UK.

ben.chapman30 September 2019 11:20

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in