BUSINESS LIVE: Wage growth beats expectations; Tui swings to profit; MPs warn on nuclear plans

Thomas Pugh, economist at RSM UK:

‘We doubt that the new lower unemployment rate of just 3.8% will lead to a significant delay in the first interest rate cut. The continued uncertainty around employment statistics means that the MPC will place much more weight on wage growth and survey data than it normally would.

‘The news is better here: wage growth is slowing rapidly and almost all unofficial data suggests the labor market is easing. As a result, we continue to think the first rate cut is likely to come in early summer.

‘The new unemployment rate of 3.8% will no doubt raise some alarm bells. However, there are still major concerns about data quality.

‘More important for the inflation outlook are wage figures. Private sector wage growth excluding bonuses, the measure that most reflects underlying wage pressures, slowed from 6.7% to 6.2%. And the 3-month/3-month annualized measure, which is a better indicator of current wage pressures, fell to just 2%, the slowest rate since the pandemic.

‘Equally important for households is that real wages grew by 1.4%. That, combined with potential tax cuts and stronger consumer confidence, could give a boost to spending in the second half of this year, helping to fuel the recovery.

‘Overall, although wage growth remains double the 3% – 3.5% that the MPC considers consistent with 2% inflation, there are clear signs that the economy is on the brink of recession. Wage growth is slowing and inflation is falling faster than expected, so it probably won’t be long before rate cuts are on the table, even if the unemployment rate remains stubbornly low.

The ‘Golden Mile’ in Western Australia was once considered the richest square mile in the world after prospectors flocked here during the gold rush of the late 19th century.

It is now at the epicenter of a global battery metals price crash, as a slowdown in electric vehicle sales has coincided with a surge in supply.

The Goldfields region has become a magnet for a new wave of prospectors, from local billionaires to global mining giants and small-time speculators, all vying for the abundance of lithium that also lies beneath the red earth.

A committee of MPs has warned the Government that the planned deployment of a fleet of small nuclear reactors is unlikely to help meet a key decarbonisation target.

The Environmental Audit Committee said the approach to developing factory-built nuclear power plants “lacks clarity” and its role in achieving the goal of moving Britain’s energy grid towards clean energy by 2035 was unclear.

Chairman Philip Dunne MP said: “This uncertainty risks having knock-on effects for industry confidence: not only for investment decisions relating to initial construction and the construction of factories to build reactor modules, but also for the support and growth of supply chains and skills. .

“We simply don’t yet know how much SMRs will contribute to electricity generation in the country, nor how much their implementation is likely to cost the taxpayer.”

One of America’s most sought-after private oil producers has been acquired in a deal worth £21bn.

Shale producer Diamondback Energy said it would buy Endeavor Energy, which is the largest private oil and gas producer in the Permian Basin, the largest oil field in the United States.

Tui has posted a better-than-expected performance in the first quarter, with Europe’s largest travel group making a profit during the period.

The company posted an operating profit of €6m (£5.1m) against a loss of €153m during the same quarter the previous year.

Tui was expected to report a loss of 102 million euros in the first quarter, according to an LSEG analysis.

TUI maintained its outlook for 25 percent growth in operating profit in fiscal 2024 and also set a medium-term target for a compound annual growth rate of 7 to 10 percent.

European airlines are entering 2024 with strong prospects as travel demand is expected to exceed pre-pandemic levels despite economic uncertainty, delays in aircraft deliveries by manufacturers and rising jet fuel prices.

Aldi has pledged to invest more than £500m in store openings as the supermarket wars intensify.

The discounter is investing £550m this year and hopes to open 500 more stores to take its total number to 1,500. Aldi said its expansion drive will create more than 1,500 jobs this year.

British wages before bonuses grew a more than expected 6.2 percent in the final three months of 2023, while the unemployment rate fell to 3.8 percent, according to new data from the Office for National Statistics.

Wage growth exceeded forecasts of 6 per cent for the quarter and will add to the Bank of England’s concerns about the impact on the overall rate of inflation.

The Bank of England is watching wage growth closely as it tries to gauge how much inflationary pressure remains in the economy and whether it may begin to consider cutting interest rates from their highest level since 2008.