The lifting of all remaining Covid-19 restrictions in Britain this week has been overshadowed by business frustration over labour shortages caused by the government’s self-isolation rules.
Hundreds of thousands of people have been “pinged” by the NHS Test and Trace app and told to quarantine for 10 days after being in contact with someone with the virus, placing industries already facing staffing problems under even greater pressure.
Here the FT assesses the impact on three key sectors which have been heavily affected by the “pingdemic”.
Supermarkets have been the most visibly affected by the surge in app-related isolations; images of empty shelves on social media and in tabloid newspapers played a part in pushing the government to announce a test-to-release scheme for the food sector on Thursday night.
But they are among the most reluctant to talk about it publicly, wary of triggering a rerun of last March’s stockpiling frenzy that led to stores being stripped of dried pasta and toilet rolls each day.
“We saw a bit of this movie last year,” said one executive in the sector. “There is a danger of creating the thing we are warning about.”
Ping-related absence rates in the sector of about 3-4 per cent may not sound high, but they are coming on top of existing unplanned absences and staff taking summer holidays.
Although major supermarkets hired thousands more people last year, the growth in ecommerce during the pandemic means many of those workers are spending time picking or delivering customers’ orders. Grocers had budgeted for an easing of Covid-related costs this year, not another surge in absence rates.
So far, instances of stores closing or reducing hours have been rare. With some notable exceptions, absence levels are below last year’s peaks.
Supermarkets have insisted that problems with availability are sporadic rather than endemic, and that a shortage of HGV drivers and a mini-heatwave, which has prompted a surge in demand for salads, soft drinks and barbecue foods are also significant factors.
But it is the pace of increase in ping-related absence rates that scares bosses. “They have grown 150 per cent over the past two weeks,” said one retailer.
Pubs and restaurants were among the first businesses to suffer staff shortages due to self-isolation requirements as people packed into venues when restrictions were eased in May. But the problem is getting worse. UKHospitality, the trade body, now estimates the sector is short of 10 per cent — or 200,000 — employees.
Greene King, the Suffolk-based pub company which operates more than 2,700 pubs, said 33 pubs closed last week and had to reduce trading hours at others. Instead of being open for what would normally be a profitable period in the early summer, pubs such as The Jolly Farmer in Winchester and The Finery off Oxford Circus in London have been closed.
“This is a major problem for us and it’s only going to get worse as cases rise and more people have to isolate,” said chief executive Nick Mackenzie. “Hospitality businesses have seen financial support from government drop away as we reopen but we’re effectively operating now under a new type of restriction that has led to dozens of pub closures and dented consumer confidence.”
Paul Askew, chef and owner of The Art School Restaurant in Liverpool, said the “pingdemic” was affecting recruitment in an industry that is acutely short staffed as a result of Brexit and employees moving into other industries during lockdowns.
“On top of losing staff we already have, this is also impacting on our ability to find new people. We have got seven roles we need to fill and so far out of 12 candidates, four people couldn’t make their interview because they had been pinged,” he said.
Craig Spillard, finance director at Spillard Safety Systems, is seeing the impact of the government’s self-isolation orders at first hand.
His company, a leading manufacturer of vehicle safety equipment and fleet management systems, is experiencing the busiest period in its history. Sales will be more than £1m above what was expected for this year, providing safety cameras for vehicles owned by companies such as DHL and Tesco.
But he is having to meet this demand with up to a fifth of his engineers either off with Covid-19 or isolating after being “pinged” by the NHS Test and Trace app. Currently, five of his 27 engineers are absent.
“It has been the hardest two weeks in the last 18 months,” he said, with his business having successfully worked through most of the pandemic.
“From a business perspective, we have more work than we’ve ever had. The work we are having to postpone is becoming difficult to reschedule.”
He said one engineer had tested positive with a PCR test. On his return from two weeks away he was pinged almost immediately, which meant he had to isolate again for another 10 days.
Indonesia’s B40 biodiesel plan faces new delay due to palm price
Indonesia’s plans to raise the mandatory bio-content in its palm oil-based biodiesel to 40per cent may face further delays, after the high price of the vegetable oil has made the programme too costly, a senior government official told Reuters.
Indonesia, the world’s largest palm oil producer and exporter, has a mandatory biodiesel programme with 30per cent palm oil content, known as B30, but intends to expand the use of the oil for energy to save on fuel imports.
Authorities had planned to increase the mix to 40per cent in July this year, but the timetable for the B40 programme is now unclear.
“We don’t have a timeline yet for B40, although from the technical side, we’re ready,” Dadan Kusdiana, a director general at the energy ministry, said in an interview. He said implementing B40 in 2022 will be “challenging”.
Indonesia funds its biodiesel programme with proceeds from palm export levies.
However, authorities have revised levy rules three times since last year as they sought to support the biodiesel programme after prices soared, but without hurting exports.
Malaysian palm oil futures hit a record of 4,560 ringgit (US$1,089.35) a tonne on Aug. 12 and have been trading around 4,300 ringgit recently, about 60per cent higher than a year earlier.
Dadan said 45 trillion rupiah to 46 trillion rupiah (US$3.1 billion-US$3.2 billion) is needed this year to fund the difference between using regular diesel and the palm-based fatty acid methyl ester (FAME) for B30.
If prices stayed constant, mixing 40per cent FAME would require around 60 trillion rupiah (US$4.16 billion), he said, while noting adopting B40 would likely boost palm oil prices by shrinking global supply, making the programme even more expensive.
“That is what we’re considering, how capable are we in terms of the levies. We have to provide bigger financing, but it doesn’t have to come from higher levies,” Dadan said, without elaborating on alternatives.
The Indonesian Palm Oil Association (GAPKI) had already said in January it expected B40 to be delayed beyond 2022.
On the technical side, Dadan said the water and monoglyceride contents in FAME must be reduced for B40 to work, requiring new investment by biodiesel producers.
Although biodiesel promises lower emissions, the use of palm oil as a feedstock raises concern about deforestation in the clearance of land to grow it. The European Union is planning to phase it out as fuel for transport.
(US$1 = 14,425.0000 rupiah)
(US$1 = 4.1860 ringgit). REUTERS
Indonesia central bank anticipating risk of rising inflation in 2022: Governor
Indonesia’s central bank expected inflation to be within its target range of 2 per cent to 4 per cent in 2021 and 2022, but warned of potential price pressures next year, Governor Perry Warjiyo said on Wednesday (Aug 25).
“We need to anticipate a risk of rising inflation in 2022, in line with a rise in domestic demand and increasing global commodity prices,” he told a coordinating meeting on inflation management.
Indonesia’s annual inflation rate has stayed below BI’s target range since June of 2020 as the coronavirus pandemic dampened domestic consumption.
July’s rate was 1.52 per cent. REUTERS
Dollar settles near 4-1/2 month highs as risk appetite cools
The dollar held near a 4-1/2 month high versus a basket of major currencies on Wednesday as simmering concerns about the global economy forced investors to seek safety in the greenback before the release of the Federal Reserve’s July meeting minutes.
Sterling and the commodity-exposed Australian and Canadian dollars all hovered near recent lows against the dollar as the broad market mood remained cautious. The dollar index held steady around 93.09, just below an early April high of 93.20 hit last week.
“The FX market is trading exactly as one would expect when growth worries are the dominant theme,” said Marios Hadjikyriacos, a senior investment analyst at XM.
Even the New Zealand dollar, which briefly rose after the central bank set out a hawkish outlook for interest rates, swooned as a mild wave of risk aversion swept through markets.
The Kiwi was down 0.5per cent at US$0.6888 in London trading having risen earlier to US$0.6952 after the Reserve Bank of New Zealand said it would keep rates at 0.25per cent, after the country was put into a snap COVID-19 lockdown.
A monthly fund manager survey by investment bank BoFA Securities showed that investors flipped to a net overweight on the dollar for the first time in nearly a year.
That shift in positioning was evident in more high-frequency weekly data as well with hedge funds ramping up their net long bets on the greenback to the most since March 2020.
While the dollar failed to draw any sustained strength from Fed Chair’s Jerome Powell’s comments and mixed U.S. data, markets shifted focus towards the annual Jackson Hole symposium next week where some expect the Fed to signal a change in direction with regards to its asset purchase plans.
U.S. retail sales fell 1.1per cent in July, more than economists expected but industrial production numbers showed that output at U.S. factories surged in July. and
Elsewhere, the Canadian dollar hovered near a one-month low. [CAD/]
In cryptocurrencies, bitcoin traded at US$45,244, not far from Saturday’s three-month high of US$48,190. Ether stood at US$3,042. REUTERS
Tencent Music posts over 15per cent rise in quarterly revenue
China’s Tencent Music Entertainment Group posted a 15.5per cent rise in quarterly revenue on Monday, as its advertising business rebounded and more people subscribed to its music streaming platform.
Total revenue of the Tencent Holdings Ltd-controlled company rose to 8.01 billion yuan (US$1.24 billion) in the second quarter. Analysts were expecting revenue of 8.13 billion yuan, according to IBES data from Refinitiv.
(US$1 = 6.4742 Chinese yuan renminbi). REUTERS
Credit Suisse brings in former UBS executive to head risk committee
Credit Suisse has drafted a former Chief Operating Officer of UBS and heads the Risk Committee of the Board of Directors. The new chair, Antonio Orta Osorio, has been strengthening the bank’s defenses following a series of scandals.
Axel Lehmann, who left UBS in January, will join Credit Suisse’s board of directors on October 1. Juan Columbus, who played a risk role at Lloyds Banking Group and Alter Osorio’s Santander, will also join Credit Suisse’s board of directors.
Credit Suisse’s reputation for risk management has been hit this year by two crises surrounding professional finance firm Greensill Capital and the family office Arquegos. In two incidents, Credit Suisse liquidated a $ 10 billion investment fund, losing $ 5.5 billion in the worst transaction loss in 165 years of history.
NS Damn report Regarding the loss of Arquegos announced last month, it describes the “fundamental failure of management and control” and “lazy attitude toward risk” at Credit Suisse’s investment bank.
Alter Osorio, who escaped Lloyds from the financial crisis, Join Credit Suisse Board of Directors In April, he said the bank’s plight was the worst he had ever seen in his career. He also promised an urgent review of risk management, strategy and culture. The final details of the review are scheduled by the end of the year.
On Friday morning, Alter Osorio said the proposed appointment of Lehman and Columbus to the board would help strengthen Credit Suisse’s risk management.
“With both deep experience in risk management and business leadership and a career of nearly 30 years in financial services, they are in shaping the strategic restructuring of banks and strengthening the culture of risk management and personal responsibility and accountability. Will make an immeasurable contribution. “He said.
Lehman was Chief Operating Officer of UBS and President of Private and Corporate Banks. His career at UBS and earlier in the Zurich Insurance Group included several risk management roles.
Columbus was Lloyd’s Chief Risk Officer and Chief Operating Officer from 2011 to 2020. Previously, he was Executive Director and Chief Risk Officer of Santander’s UK operations. He has been a member of ING’s Audit and Risk Committee since 2020.
Andreas Gottschling resigned from his role as Chairman of Credit Suisse’s Risk Committee in April after several major shareholders have shown that they will do so. Vote against his reelection..
Richard Meddings, TSB Bank’s executive chair, has been the Interim Chairman of the Credit Suisse Risk Committee since April. He will continue to lead the bank’s audit committee.
Last month, Credit Suisse Hired David Wildermas, Former Deputy Risk Officer and Chief Risk Officer of Goldman Sachs. Wildams will move from New York to Zurich to take up his new position by February 2022.
Credit Suisse brings in former UBS executive to head risk committee Source link Credit Suisse brings in former UBS executive to head risk committee. FT
Global shares mixed as caution sets in on coronavirus worry
Global shares were mixed Thursday as caution set in among investors after banks and industrial companies helped lift stocks mostly higher on Wall Street.
France’s CAC 40 inched up less than 0.1% to 6,860.88 in early trading, while Germany’s DAX was virtually unchanged at 15,826.76. Britain’s FTSE 100 slipped 0.2% to 7,205.48. U.S. shares were set to be mixed, with Dow futures up nearly 0.1% at 35,398. S&P 500 futures inched down less than 0.1% to 4,439.25.
Japan’s benchmark Nikkei 225 edged down 0.2% to finish at 28,015.02. South Korea’s Kospi slipped 0.4% to 3,208.38 after seesawing earlier in the day. Australia’s S&P/ASX 200 ended up less than 0.1% at 7,588.20. Hong Kong’s Hang Seng declined 0.5% to 26,517.82, while the Shanghai Composite fell 0.2% to 3,524.74.
Worries continued in the region about the recent regulatory crackdown in China. Analysts said the next target appeared to be the online insurance industry.
“This comes amid increasing COVID-19 risks, with further tightening of restrictions in several cities potentially impacting the services sector near-term,” said Yeap Jun Rong, market strategist at IG in Singapore.
COVID-19 infection cases are also surging in Japan, where a state of emergency has been in place, even as the nation hosted the Tokyo Olympics and plans to do the same for the Paralympics, which open later this month. New cases are reaching record highs in Tokyo and several other regions. Medical officials say hospital facilities are getting stretched thin.
“On the COVID-19 front, worries over growing restrictions are becoming a cause of concern. Growth expectations in the region will likely take a hit in the coming weeks. The recent resurgence of the virus will probably slow the economic recovery,” said Anderson Alves, a trader at ActivTrades.
After a stumbling start to the week, stocks have been moving higher on the back of strong earnings and better-than-expected economic data. Investors’ concerns about inflation and uncertainty about the U.S. Federal Reserve’s future plans to ease up on its support for low interest rates have been hanging over the market.
While the headline figures may seem bad, most of the rise in consumer prices has been tied to very specific goods that are not expected to impact the long-term health of the economy, like used cars, building materials and hotel rooms. These items came into short supply during the pandemic, and the increased economic activity has made prices for them rise faster than usual.
The Federal Reserve has repeatedly said it believes any increase in inflation would be temporary and largely a result of supply disruptions that happened because of the pandemic. Investors will get another inflation snapshot Thursday, when the Labor Department issues its July wholesale price data.
In energy trading, benchmark U.S. crude fell 4 cents to $69.21 a barrel. Brent crude, the international standard, edged up 1 cent to $71.45 a barrel.
In currency trading, the U.S. dollar slipped to 110.40 yen from 110.41 yen. The euro cost $1.1740, up from $1.1738. AP
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