Interest rates down, consumer spending up?
Plus, start-ups are collapsing at an alarming rate, Frasers Group in talks to rescue Ted Baker and the woman transforming pension management
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Evidence is emerging that the Bank of England’s decision to cut interest rates to 5 per cent has boosted the confidence of consumers in the UK. Estate agents have reported that the number of potential buyers getting in touch to view homes for sale is up 19 per cent year-on-year in August, according to a new report by Rightmove.
The uptick in interest from buyers has prompted Rightmove to increase its forecast for the housing market in 2024. It is now saying that it expects asking prices to rise by 1 per cent this year compared to a previous forecast that prices will fall by 1 per cent.
As well as the rise in potential buyers, Rightmove said that the number of sales being agreed is up 16 per cent year-on-year and the number of properties coming to the market for sale is up 5 per cent.
Tim Bannister, Rightmove’s director of property science, said: “As the summer holiday season comes to an end, the conditions are there for a more active autumn market. The reaction from home-movers to what is hopefully only the first of several rate cuts over the next year or two, combined with other positive data and trends, has led us to raise our price prediction for the year.”
You can read the full Rightmove report here.
The Bank of England cut interest rates from 5.25 per cent to 5 per cent on August 1 and has paved the way for further cuts now that the rate of inflation has fallen back towards 2 per cent.
But while businesses up and down the country are keen for positive consumer sentiment to bleed into the rest of the economy, analysts at Cornwall Insight may have found a spanner in the works. The energy consultancy is warning that energy bills could rise by 9 per cent from October, meaning the average dual-fuel household energy bill will rise from £1,568 to £1,714.
Craig Lowrey, principal consultant at Cornwall said: “While we don’t expect a return to the extreme prices of recent years, it’s unlikely that bills will return to what was once considered normal. Without significant intervention, this may well be the new normal.”
That forecast on energy prices shows that, even with positive news on interest rates, consumers across the UK are still being squeezed.
Business Agenda
A summary of the most important business news
1. The number of start-ups that have collapsed in 2024 is 60 per cent higher than last year, according to new research from Carta, the US technology group. This rise in failures is linked to the number of businesses that raised cash during a post-pandemic tech boom in 2021 and 2022 but are now struggling to get more support from investors so are running out of cash. You can read more on this in the Financial Times here.
2. Another sign of how success creates more success: more than 20 employees of Revolut, the UK fintech valued at $45bn (£35bn), have gone on to launch their own business after leaving the company. Revolut is known for a “get sh*t done” culture, according to analysis by Sifted. “The exposure you get as an employee is unmatched — you can take on as much as you can handle,” one former employee says. More here.
3. 7-Eleven, the largest chain of convenience stores in the world, has received a £30 billion takeover bid from Canadian group Alimentation Couche-Tard. 7-Eleven is headquartered in Japan and has 85,000 shops around the world. More here.
4. Mike Ashley’s Frasers Group is in talks about a deal to rescue Ted Baker and add the fashion label to its collection of brands. However, there are growing doubts about whether a deal can be struck, according to a report by Sky News here.
5. From the weekend papers, a brilliant obituary in The Times of Sir George Bull, the former chief executive of Grand Metropolitan (now part of Diageo) and chairman of J Sainsbury. He has died at the age of 88. Bull was one of the first people from a marketing background to become chief executive of a big business in the UK. “It’s no longer just a matter of producing widgets,” he once said. “It’s much more a question of adding value to the widgets and then marketing and selling them around the world.” You can read the full piece here.
Business Question
Who am I?
- I grew up in Colne, near Burnley
- I cut my teeth working for a well-known mobile phone retailer
- My company was founded in Manchester
- I have a 9-year Duolingo Spanish streak
- E-commerce is my game and I don’t mind telling people how I feel
- My company floated in 2020 and was the largest LSE IPO since 2013
The answer can be found at the bottom of the page.
Business Thinker
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An address from 2016 has been going viral every few months. It’s a reading of a letter by the actor Benedict Cumberbatch which has a fascinating backstory. In 1960, pioneering American artists Sol LeWitt and Eva Hesse met for the first time and became close friends. In 1965, Eva found herself facing a creative block during a period of self-doubt and told Sol of her frustrating predicament. Sol replied with the letter read here so perfectly by Cumberbatch. Public speaking coach Alex Merry broke down the address on LinkedIn and revealed lessons from it to make you a more effective communicator.
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From the hidden truth about Bill Gates and how Donald Trump squandered his father’s fortune to Amazon’s ruthless quest to own the world and how business can do the right thing in a turbulent world. More than 600 books have been filtered and reviewed by FT journalists and now, the longlist of the best 16 titles has been revealed.
Are we getting dumber? Or just too easily fooled by data that misleads? Annie Duke, the author of QUIT: The Power of Knowing When to Walk Away, Thinking in Bet, and How To Decide, has written on Substack about how easily we can fall for misleading conclusions backed by data that 100 per cent will survive a fact check.
Business Quote
Inspiration from leaders
“Don’t tell people how to do things; tell them what to do and let them surprise you with their results.”
– General George Patton
Business Leader
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Learning to lead: The woman transforming pension management
Inspired by the difficulty of moving pensions after changing jobs, Romi Savova co-founded PensionBee in 2015 with Jonathan Lister Parsons. Starting with just two people, PensionBee is now a FTSE-listed company managing £5bn in assets for 250,000 customers.
Despite her lack of leadership experience, Savova’s hands-on approach and strategic communication have driven the company’s growth. With 200 employees, a market capitalisation of £350m, and 55 per cent brand awareness, Savova continues to challenge legacy pension providers while staying true to her authentic leadership style.
You can read the article here.
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And finally…
The football Premier League got underway at the weekend. For devoted fans, this means the beginning of a weekly pilgrimage to stadiums around the country for away games.
An important part of this ritual is food. Historically, the eating options at football grounds have been poor. I can testify to this. I supported Heart of Midlothian in Edinburgh as a child in the 1990s. I still shudder to recall the taste of watery Bovril and pies with flaccid pastry walls barely holding in their parcel of grey meat, which bore some resemblance to an Asian dumpling.
But in recent years footie food has both improved and diversified. Tom Sibley set up the FootyScran platform on X in 2020 to document this change and it now has more than 580,000 followers (it’s on Instagram too). Travelling fans use it to rate the food on offer at stadia around the world. They typically take pictures, give a short review and share the cost too. There’s everything from extravagantly long sausages in Czech Republic stadiums to a mixed worm and insect salad at a Bangkok stadium.
It’s a window into the wonderful world of football fandom. You can see the full range of what’s on offer from gravy and chips and ‘pizza-dogs’, to more exotic offerings, like the “Seoul Birdie Sub” at Tottenham Hotspur’s stadium, by checking out the FootyScran site here.
The answer to today’s Business Question is Matthew Moulding.
