Global economy ‘turning a corner,’ says OECD; Boeing workers ‘not interested’ in 30% pay rise – business live

The CBI has appointed two female business figures to its board, as it tries to rebuild itself and its reputation.

The business lobbying group was rocked by allegations of misconduct by senior managers published in the Guardian last year. Recently, the Guardian revealed that the CBI has used gagging clauses to prevent staff from discussing their experiences of sexual misconduct and bullying at the organisation.

Ruth Cairnie, chair of Babcock International Group and the senior independent director at BT Group, and Lesley Ann Nash, non-executive director at St James’s Place, Workspace Group and Homes England, are to join the CBI board as non-executive directors.

Along with current board members, who are re-elected annually, Cairnie and Nash will stand for election by members at the CBI’s annual meeting on 22 October.

Cairnie’s executive career was at Royal Dutch Shell spanning research, B2B businesses, strategy, supply Chain and M&A and her previous roles include senior independent director at Associated British Foods and chair of the POWERful Women initiative.

She said:

Having effective dialogue and partnership between government and business is critical to securing meaningful progress in addressing issues and driving dynamism into the UK economy. To achieve that, the CBI has a unique and essential role to play.

It can bring a cross-economy perspective, speaking for large, listed companies as well as the trade associations and SMEs who make up supply chains across the country.

Nash is a qualified accountant who worked in investment banking at UBS and Morgan Stanley, including spending two decades on the trading floor. In 2013, she left the private sector to join the Cabinet Office where during her seven years as a senior civil servant, she worked under three prime ministers and six different cabinet office ministers.

Nash said:

In the first 100 days of a new government, facing economic challenges and tough fiscal decisions, the role of the CBI as a single voice of business to government is more important than ever. I am delighted to join the CBI Board to help them take the voice of business to the heart of government.

Rupert Soames, the CBI’s chair, said:

Ruth and Lesley Ann bring immense knowledge and experience to our board. Their diverse experience across the private and public sectors in both executive and non-executive roles is what we need to help lead the CBI into our 60^th anniversary year.

Our members want to see us partnering with the new Government, bringing business’ innovation and optimism to the table to implement practical measures that will bring about growth. Ruth and Lesley Ann possess both the insights and enthusiasm to ensure that we deliver for members.

Petrol and diesel prices have hit a three-year low, reflecting lower oil prices and a stronger pound.

The average unleaded price was 135.87p yesterday, according to the RAC motoring group. We are now a long way from the record highs of July 2022 when the average price of a litre of unleaded hit £1.92.

RAC fuel spokesperson Simon Williams said:

To see pump prices drop to this level is really positive news, both for households who depend on their vehicles for getting about, and for the wider economy – as there’s a clear link between the cost of fuel and the headline rate of inflation. Depending on where drivers fill up, they can be paying as little as £1.26 for a litre of unleaded – making the cost of refuelling a typical family car come in at under £70.

A relatively low oil price, caused by lower demand globally, and a relatively strong pound are the two factors that are contributing to pump prices falling.

We believe there is scope for pump prices to come down further in the next few weeks to reflect the lower wholesale costs retailers are paying when they buy fresh fuel stocks.

We continue to look forward to the new government proceeding with its plans to introduce greater pump price transparency with the Pumpwatch scheme, along with an official monitoring function that can help ensure drivers are charged a fair price every time they fill up.

The news that rich donors have bought thousands of pounds’ worth of clothes for the prime minister and the chancellor has a particular sting for Saira.

The single mother of three girls, aged from five to 17, she has been struggling to clothe them this month because of the two-child benefit limit, the rule that means most benefit recipients don’t get extra universal credit payments for third and subsequent children. Labour has so far chosen not to repeal this austerity-era initiative, which the Conservatives introduced in 2017.

In early September, with a new school term starting, Saira bought a waterproof coat for each of the girls (£150 in total), two sets of school uniforms and a PE kit each for the two younger ones, plus one pair of school shoes and one pair of trainers each. She took out an advance budgeting loan from the benefits office and spent well over £400.

Even with the loan, the surge of back-to-school expenditure left her with £7 in her account this Monday, to last until 30 September. Because she is not working, her bank will not let her go into her overdraft without imposing a fine. When we spoke on Monday morning, a fortnight after meeting in person at her home, she said she had spent the past hour trying to gather the emotional energy needed to send a WhatsApp message to her sister-in-law to ask for a loan – anything between £20 and £100 to tide her over until her next universal credit payment is made in a week.

Because of the two-child limit, she has been allocated universal credit for her two older children, but not for her youngest daughter, leaving the family with about £3,455 less every year than they would have had before the policy was introduced. Her youngest daughter, Aminah, is one of about 500,000 third or subsequent children born since the Conservatives brought in the cut on 5 April 2017 who has been ruled not entitled to means-tested support payments.

When she looks at her universal credit account on her mobile phone, Saira sees Aminah’s ineligible status underlined in the monthly breakdown of payments, which states, under Children: “You get support for two of your three children.” She senses here a subtext that the state considers the child should not have been born and does not count for much. “It looks harsh when you see it there,” she says.

Saira, who worked in retail and call centres before losing her job when her employer said he was unable to accommodate her request for part-time hours, finds that her universal credit payments routinely fail to stretch to the end of the month. “It’s the last 10 days that are the hardest,” she says.

The Co-operative Group has laid bare the impact of shoplifting as it said the cost of crime in its stores soared by almost 20% to £40m in the first half of the year.

The member-owned mutual has spent £18m so far this year on measures to protect staff in its food business, including rolling out body-worn cameras and fortified kiosks.

Despite this, the grocery chain took a hit of £39.5m from theft and fraud in the first six months of 2024 – up 19% on a year earlier – even as it increased campaigning on the problem.

Matt Hood, the managing director of food operations, said:

It isn’t going away. The reality is that every day four of our colleagues are attacked, up 34% on 2022, and scarily, a further 115 of my colleagues will be seriously abused, up 37% on two years ago.

A new high-speed train linking Paris and Berlin is to launch in December, operators have announced.

The daytime service will complement a popular night train route between the two capital cities that relaunched last year to much fanfare but has since been beset by technical problems.

The daytime train service, which has been delayed by logistical issues and will take an hour longer than originally announced, will run between Berlin Hauptbahnhof and Paris Gare de L’Est, stopping in Strasbourg, Karlsruhe, and Frankfurt Süd, and will take about eight hours.

The fastest train journey now running between the French and German capitals takes just under nine hours, but requires two or three changes, making for a clunky and often unreliable experience.

Workers have manned a picket line outside Boeing’s airplane factory in Renton, Washington, around the clock since tens of thousands walked off the job earlier this month. Almost two weeks into the strike, the largest now under way in the US, nobody knows when it will end.

Orlando, a quality inspector at the aerospace giant, arrived at 3.45am on Saturday, long before dawn. On the outskirts of a city as expensive as Seattle, the cost of living is “always going up”, he said. “And I guess the biggest part is making sure our wages reflect that.”

When Boeing tabled a new “best and final” offer on Monday, the International Association of Machinists and Aerospace Workers (IAW) declined to put it to a vote ahead of a Friday deadline imposed by the company, complaining it had been “thrown at us without any discussion”.

Striking workers held up signs and waved to passing cars and trucks. Drivers whizzed by honking horns to show support, occasionally pulling over to chat with workers. A semi-trailer truck let off a loud blast from its horn drowning out all other sounds.

Orlando, 25, was among several workers who declined to give their full name for fear of retaliation when they return to work.

“We are feeling pretty good, and we feel that we have the strength,” said Maden, 39, a 12-year quality control employee at the Renton facility. He believes the public, by and large, is behind them.

“It looks like we always want money, but behind the scenes, it is a lot more than that,” Maden said. “I believe that the public is getting more understanding of why we are on strike and what has been done to us.”

Last weekend, workers brought along a portable charcoal barbecue and a poster with the cartoon likeness of Boeing’s former CEO Dave Calhoun grinning and carrying away stacks of $100 bills. “WE MAKE THEM BILLIONS THEY GIVE EACH OTHER MILLIONS,” it read.

‘Davos on the Mersey’: key conference takeaways as Labour tries to woo business

Richard Partington

Meanwhile, the Labour party’s annual conference carries on in Liverpool, dubbed by some insiders “Davos on the Mersey” because it is so packed with company executives.

Like last year, the exhibition and conference fringe had sponsored events, lounge areas and advertising from exhibitors including Gatwick, National Grid, Ikea and Specsavers. This year, however, business leaders were looking for clues about how Labour will govern after July’s election landslide.

After less than 100 days in power, and a month before the first Labour budget in almost two decades, many still await clarity on a range of policy priorities. But there were some hints of what the government is planning.

Rachel Reeves, the chancellor, dropped the broadest possible hint in her conference speech that the budget, on 30 October, would include a relaxation of the government’s self-imposed fiscal rules to prioritise investment in the UK economy.

Reeves told delegates on Monday:

It is time the Treasury moved on from just counting the costs of investment in our economy to recognising the benefits, too.

Sources confirmed she could change the way the government’s five-year debt rule is assessed to allow more spending on housing, roads and hospitals.

The chancellor hinted that next month’s budget would include a relaxation of the government’s self-imposed fiscal rules to prioritise investment in the UK economy.

This could involve excluding losses for the Treasury on the Bank of England winding down its crisis-era quantitative easing bond-buying programme, which experts say could open up headroom in the public finances worth up to £15bn.

It could also include moving Labour’s new investment institutions, the National Wealth Fund and GB Energy, off the government’s books.

The British furniture retailer DFS has fallen to a full-year loss, after it was hit by consumer caution amid high borrowing costs, and Red Sea disruption to shipping, and warned of a “long road to recovery” in the upholstery market.

The retailer, which specialises in sofas, reported a loss before tax of £1.7m, due to “record low market demand and Red Sea shipping disruption”. This compares with a £29.7m profit in the previous year. Revenues fell by 9.3% to £987m, with orders down by 1.8% year-on-year.

Delays to shipments due to cross the Red Sea – which have been rerouted around the African continent because of attacks on ships by Houthi rebels – were partly to blame.

Many UK consumers have been unable to buy bigger ticket items like new sofas as they have struggled with high interest rates. Those who have ordered were hit by delays.

DFS is expecting “a gradual market recovery over the course of the year”.

Tim Stacey, the chief executive, said:

Despite the challenges that the business has seen, we are optimistic for the future and see signs that market growth could soon return. We expect recent improvements in housing transaction data and strengthening consumer balance sheets to lead to increased upholstery market demand across the 2025 financial year.

In addition, thanks to the success we have had growing our gross margin and improving our operational efficiency we expect to deliver profits in line with market consensus, weighted to the second half.

It is clear that the upholstery market has a long road to recovery given the 20% decline on pre-pandemic levels that we have seen.

OECD: Global economy ‘turning a corner’

Phillip Inman

The global economy is “turning a corner”, according to the latest outlook from the Organisation for Economic Cooperation and Development as it upgraded the UK’s growth forecast for this year to faster than Japan, Italy and Germany.

The OECD ranked Britain joint second among the G7 developed countries behind the US in its latest outlook on the global economy, but the UK is still expected to have the highest inflation in the group.

Describing the UK’s economic growth as “robust”, the OECD upgraded its growth for 2024 to 1.1% from a forecast of 0.4% made in May, as the country recovers from a mild recession at the end of last year. The forecast of 1.2% growth in 2025 was maintained.

In the May forecast, the UK was behind all other nations in the informal bloc but is now expected to outpace Japan, Italy and struggling Germany. Britain is now on a par with Canada and France but behind the US.

However, Britons are still expected to face headwinds from rising prices, with inflation expected to increase from 2.2% in August to 2.7% by the end of the year. UK inflation is on course to remain at 2.4% for 2025, rising at the fastest rate in the G7.

Overall, the OECD said that the global economy was “turning a corner” and lower inflation and cuts to the cost of borrowing by central banks would support “ongoing momentum” in most major economies. Those conditions will allow the global economy to return to health after the shocks caused by the coronavirus pandemic and Russia’s invasion of Ukraine, it said.

The OECD’s chief economist, Álvaro Pereira, said he was surprised by the strength of the recovery earlier in the year after the UK economy contracted in 2023.

The OECD was among the most pessimistic economic forecasters when it made a judgment in May that low consumer spending and weak business investment would drag on Britain’s growth.

Business investment has remained low, but rising wages and low inflation boosted consumer spending by more than expected.