51. Weekly Newsletter
UK Business activity Rise
Economic output in the final quarter was expected to fall by most economists due to the slump in output from the manufacturing industry. However, the S&P Global flash UK composite output index, which measures the success of both services and manufacturing industries, has shown otherwise. It rose from 50.7 to 51.7 this month
which is the most significant rise in the last 6 months.
The surprising increase in the UK PMI index was boosted by the services sector with more people being on holiday and a feeling that interest rates which decrease in 2024. By contrast, the health of the manufacturing industry has been poor all year and this trend continued in December. This trend has been attributed by manufactures to the volume of output decreasing due to overstocked customers.
The boost by the services industry also indicates a rise in consumer confidence. This has been reinforced by data which showed that UK consumer confidence rose to a three- month high in December. This is despite a volatile environment for consumers due to high borrowing costs and a steep rise in prices. However, this has been balanced out by a consistent rise in wages in recent months. Furthermore, consumer optimism for the new year has been generated by Jeremy Hunt's autumn statements as the announcement of minimum wage being increased by almost 10% will play a factor in consumer financial stability for the new year.
The UK’s front page news cycle over the last seven days has covered a wide range of topics. Gove to raise English council funding by 6.5%, National Grid drops Beijing backed supplier over UK power network fears and NHS waiting list falls for first time this year. Some of the newspaper front pages from this week were:
- Financial Times- ‘Decline in smoking stalled in England with pandemic, new study shows’
- Financial Times- ‘UK Landlord LondonMetric in talks to buy Alton Towers owner LXI’
- The Guardian- ‘Ministers threaten to withhold cash from English councils on four-day week’
- Sunday Telegraph- ‘Bankrupt councils to raise tax by 10pc next April, Michael Gove announces’
- The Times- ‘Rebound in UK growth opens up gulf with Europe
Sky huge investment
Sky, the UK headquarted company owned by Comcast, has secured a £5 billion deal with the Premier league to show 1200 matches per year and increase creative in game coverage such as more access to players and managers. The biggest investment Sky has made in over 30 years will mean an increase of matches broadcasted by 70% compared to the previous deal of a few years ago. This deal will mean Sky can dominate the sports market in the Uk until the end of the decade as Sky also aims to broaden consumer base to strengthen the legacy. The stats show that this will be a very lucrative investment for Sky as the opening weekend of premier league fixtures this year saw a 40% increase in viewership with over 2.5 million of them being under 35s. The importance of this deal is that it reduces the risk of people deeming it not necessary to
have a Sky subscription if they can only see a handful of the matches each week. Sky also announced a 500 million investment in original TV shows which will bring thousands of jobs to the UK.