This week’s news includes; Ryanair may face legal action over flight cancellations, Dyson announce plans to make electric cars, Netflix shares fall as market becomes saturated.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- City A.M looks at Gordon Brown’s warning that the next financial crisis may come from Asia.
- The Lawyer gives its suggestion of what the law firm of 2025 will look like.
- City A.M claims “Don’t panic: Only one in five jobs are threatened by robots
1. RYANAIR MAY FACE LEGAL ACTION
RyanAir may face legal action in relation to its cancellation of flights. The Civil Aviation Authority has begun an enforcement action against Ryanair for misleading passengers about their rights amid a vast number of cancellations. In many cases, it failed to tell customers about possible alternative routes. Ryan Air has announced that they will be cancelling around 20000 flights over the next 6 months, resulting in disruption for over 400,000 passengers.
If this conduct is deemed to have breached consumer protection law they could face legal action as a result. To find out more about Ryanair’s failings read the Guardian’s report.
2. UBER RIVALS ALREADY PROFITING
New research shows Uber’s main competitors, Addison Lee, My Taxi and Gett have been reaping the benefits of TfL’s decision. The trio have seen a 159% increase in downloads in the 48 hours after the decision according to App Annie, an analytics company. Some companies offered huge discounts to full utilities Uber’s current vulnerability and it appears they achieved some success.
Uber private hire license in London has now expired but because it is appealing the decision it is still operating as normal. It appears these spikes in downloads was in anticipation of Uber shutting down totally. Despite this, Uber still dominates the market and was still the most downloaded.
Read BBC News’ report for more information.
3. DYSON TO MAKE ELECTIRC CARS
Dyson has announced that it will be creating an electric car. The project will cost over £2 billion, with £1 billion spent on development of the car and £1 billion spent on developing the battery alone.
It is still in the preliminary stages as no prototype has been built and a production site has not been selected and no specifications about the car have been finalised. Dyson currently have 400 staff working on the project.
Car developers are investing massively in electric car technology as the electric revolution appears to be under way. Mercedes, Volkswagen and Jaguar Landrover have all announced plans to create all electric/hybrid models of existing and new models.
Read BBC News’ analysis for more information.
4. CHINA TO INTRODUCE VEHICLE PRODUCTION QUOTAS TO DEAL WITH EMISSIONS
The Chinese government has revealed its new rules for vehicle makers to aid the country phase out fossil fuels to reduce emissions. The “cap and trade” policy will require automakers to obtain a new-energy vehicle score and this score will be based on their production of low emission vehicles. From 2019 manufacturers must have a score of least 10% and this goes up to 12% in 2020. Carmakers that produce or import over 30000 standard vehicles a year will be subject to these requirements. Failure to adhere to these rules will either require them to purchase credits to allow them to continue or they will be fined.
China has the largest car market in the world with over 200 million vehicles on the roads but severe pollution levels have forced the government to tackle the issue. As a result, China has pledged to cap carbon emissions by 2030 and these new rules aim to help them achieved this goal and improve the air quality in the world’s most populous nation.
Read Bloomberg’s analysis for more information.
5. COMPARETHEMARKET UNDER INVESTIGATION
The Competition and Markets Authority has allegedly launched an investigation into Comparethemarket.com after concerns arose about its impact on insurance prices.
The price comparison site was suspected of setting up unlawful agreements with insurers preventing the insurers from offering cheaper deals in other places online. This leads to higher prices for consumers and these “most favoured nation clauses” are generally deemed unlawful under EU law.
The name of the site was not revealed by the CMA but the Press Association reported that it was comparethemarket.com. Read Sky News’ report for more views and opinions.
6. UK PRIVATE EQUITY HEADING FOR STRONGEST YEAR SINCE 2008
Private equity in the UK appears to have made a recovery as this quarter saw over £12 billion of investment. There were 44 deals in the UK and their value amounted to the highest that had been seen since 2007. The highest value deal was Blackstone and CVC’s acquisition of PaySafe for £3 billion. If deals like this continue on to the end of the year then it would look like UK private equity has truly bounced back.
Read City A.M’s report for more information.
7. MORE BANKS PLAN FOR POST-BREXIT EXODUS
International investment banks are lining up to move jobs out the UK after Brexit to retain their access in the EU markets. So far, Barclays, JP Morgan, Goldman Sachs, Deutsche Bank, UBS, HSBC and others, have all announced plans to relocate , with Bank of America announcing last week. It is estimated that the UK could lose up to 20,000 financial services roles after Brexit.
The UK government hopes to obtain a two year transitional period with the EU in order to smoothen the exit process. The future trading relationship however, between the UK and the EU is still highly unclear as negotiations stall. Despite this general uncertainty, many banks are now certain that the UK will not have the same access to the EU markets and labour as it currently does so many of them are preparing to move.
Read Bloomberg’s report for more information.
8. ALDI POSTS RECORD SALES
Discount supermarket Aldi posted UK sales figures of £8.7 billion in 2016, a record high. Aldi has successfully added over a million new customers as it looks to close the gap on the larger supermarkets. It recently over took Waitrose to become the UK’s 7th largest supermarket.
Despite these strong sales results, profits were down almost a fifth, to £211.3 million. This was primarily however due to its massive investment programme which will see the grocer open 1000 stores by 2022. It has planned to invest over £450 million to open these new stores and distribution centres.
Read Business Reporter’s report for more information.
9. NETFLIX SHARES FALL
Netflix shares fell by 4.86% on Monday after it was revealed Netflix is struggling to keep up with the volume of competitors. The video streaming market is becoming increasingly saturated with companies like Disney now offering its own streaming service once its contract with Netflix lapses. The shares fell in response to this news.
Another company, FX Networks will now offer cheap on-demand television services which can be purchased through cable TV packages. With such a wide range of producers and streaming services it is clear that the market will become increasingly fragmented and it is unlikely that one service will be dominant.
Read Business Insider’s report for more about the new players entering the streaming market.
10. SHRINKFLATION HITS JAFFA CAKES
McVitie’s have announced that boxes of Jaffa Cakes will contain 10 cakes instead of 12. The price will fall from £1.15 to 99p but this “shrinkflation” in quantity is becoming a common trend, particularly in the confectionary industry. The Office for National Statistics research found the over 2500 consumer products had shrunk over the past five year but were sold at the same price.
The vast majority of products have either risen significantly in price but kept the same size or maintained the same price but have shrunk in size. The prevalence of “shrinkflation” appears as if it will only grow in coming years.
Read BBC News report for more information.
