49. Weekly Newsletter

Saudi PIF and Ardian heavy investment 

Ferrovial announced this week that it would be selling its 25% stake in Heathrow airport for £2.4 billion. The stake will be acquired by Saudi Arabia’s sovereign wealth fund who will take a £1 billion stake along with one of Europe’s biggest private equity groups (Ardian) who will buy 15%. Ferrovial are selling after ownership for 17 years with executives growing frustrated at regulations after Heathrow was pressed into cutting its landing charges by 20% due to airlines raising complaints about it.

The airport was lossmaking this year due to both the landing charges along with rising interest rates which raises the cost of reducing debts. Ferrovial had initially bought 56% of Heathrow 17 years ago, however this reduced to 25% in 2013 and finally decided to sell everything that remained to Saudi PIF and Ardian. Ferrovial stated that they remained committed to the UK which accounts for 30% of their earnings with shares in many other smaller airports. This pledge of commitment is in spite of the growing success of investments in the US with a 49% stake in part of New York’s airport.

Newspapers

The UK’s front page news cycle over the last seven days has covered a wide range of topics. Rishi Sunak faces a huge migration dilemma, new ONS experimental data lowers UK unemployment rate to 3.5% and Thames Water owners pile group with debt. Some of the newspaper front pages from this week were:

• Financial Times – ‘Thames Water faces prospect of fresh parliamentary inquiry into finances’
• Financial Times – ‘HMRC urges crypto holders to disclose gains’
• The Guardian – ‘Rishi Sunak accused of hypocrisy after backing phase-out of fossil fuels at Cop28’
• The Times – ‘Microsoft’s £2.5bn data centres a ‘turning point’ for AI in Britain’
• The Times – ‘Britain set to have second weakest growth in the G7, says OECD’
• Sunday Telegraph – ‘Tories urge Sunak to scrap ‘anti-motorist’ net zero vote’

Promising UK unemployment figures released

Early findings from a new survey by the Office for National Statistics (ONS) suggest promising trends in the UK job market. The UK unemployment fell to 3.5% which is the lowest it has been since the 1970s. This data reinforces Rishi Sunak’s belief that the UK has seen a huge economic rebound in many aspects including unemployment and wage growth. However, the ONS has come under some scrutiny with these figures due to them being quite experimental but also because their figures of UK GDP post pandemic turned out to be wide of the mark.