Chaos as global IT outage strikes
Plus, Pret scraps free coffee, retails sales fall and is UK inequality really getting worse, in today's Off To Lunch
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So, this is happening today…
Many of you will already be aware of the problems if your business uses Microsoft Windows as an operating system and CrowdStrike for cybersecurity protection. The problem has been caused by a security update from CrowdStrike for Windows.
For those looking for help and answers, this is what George Kurtz, the chief executive of CrowdStrike has said:
The post at the top of the newsletter is from Troy Hunt, who is an IT expert and consultant based in Australia. He is getting plenty of attention today after being one of the first to warn this morning that businesses were reporting problems with their computers.
The outage is causing widespread disruption. Trains journeys and flights have been delayed or cancelled, banks are struggling to process payments, the London Stock Exchange has warned that stock exchange announcements have been postponed and TV channels have gone off-air.
This is what Sky News was broadcasting this morning:
David Rhodes, the executive chairman of Sky News, posted a message on social media about the outage: “Sky News has not been able to broadcast live TV this morning. Currently telling viewers that we apologise for the interruption. Much of our news report is still available online and we are working hard to restore all services.”
Cybersecurity experts are saying that the outage demonstrates the need for businesses to be more resilient in their approach to IT. Harjinder Lallie at the University of Warwick says: “This IT ‘catastrophe’ highlights the need for greater resilience, a greater focus on backup systems, and possibly even a need to rethink whether we are using the most resilient operating systems for such critical systems.”
Kevin Beaumont, a cybersecurity consultant, has warned that the rebooting of computers and servers will need to be done manually.
CrowdStrike is valued at $84bn (£65bn) on the Nasdaq stock market index in the US, but shares in the company are forecast to fall by more than 15 per cent when markets open in New York later today.
For the latest updates from around the world on the outage, check out the BBC’s live blog on the problems. You can find that here.
Business Question
Which sector has the highest number of private businesses in the UK?
A. Construction
B. IT and communications
C. Retail
D. Manufacturing
The answer can be found at the bottom of the page.
Business in Brief
Everything you need to know
1. Pret A Manger is changing its subscription offering so it will no long offer free drinks, four years after it launched. Rather than provide five drinks a day and a 20 per cent discount on food for £30 a month, it will charge £10 a month for half-price drinks, although an introductory offer that runs from September to March will mean it costs £5 a month for the first six months. You can read more here.
2. Retail sales fell by 1.2 per cent in June, according to data from the Office for National Statistics, as poor weather and election uncertainty caused households to reduce their spending. Department stores, clothing shops and furniture stores were among the biggest contributors to the decrease. Food sales were down 1.1 per cent, while non-food sales fell 2.1 per cent. You can read more here.
3. Netflix subscriber numbers increased by 8 million in the three months to June as a clampdown on password sharing and hit shows including Baby Reindeer and Bridgerton drove sign-ups. It now has 277 million subscribers worldwide and has plans to increase that further through a focus on live sport, with wrestling coming to the service in January. You can read more here.
4. Businesses are concerned that a lack of clarity over how Labour will implement an overhaul of workers’ rights will push up costs and reduce hiring. Prime minister Sir Keir Starmer set out plans for a shake-up of employment law at the state opening of parliament earlier this week. They include proposals to ban zero-hour contracts, give employees protection from unfair dismissal from day one and strengthen trade unions’ influence. You can read more here.
5. Consumer confidence has risen to its highest level in three years, data from Deloitte shows. Its quarterly Consumer Tracker survey shows sentiment was up by 6.8 per cent year on year as the inflation rate continues to fall. Deloitte’s chief economist Ian Stewart says activity is coming back “more quickly than expected” but cautions that prices are about 20 per cent higher than in 2021, which is pulling down spending. You can read more here.
Business Quotes
Inspiration from leaders
“In the simplest terms, a leader is one who knows where they want to go, and gets up and goes.”
– John Erskine
Business Thinker
Ideas on the future of business and leadership
1. ⬇️ UK inequality is getting worse, right? But what if it isn’t? ⬇️
3. ?️ Why ‘underconsumption’ is trending ?️
And finally…
Was Gareth Southgate great, or just lucky? That’s the question posed by the Financial Times in a data deep dive it has done into the eight-year tenure of Gareth Southgate as manager of the England men’s football team.
During that time, he took the team to two major tournament finals and a semi-final. On paper, that makes him one of the team’s most successful managers ever, behind only Sir Alf Ramsay, who won the 1966 men’s World Cup.
But Southgate’s legacy is not as simple as that. There have been questions over his selection choices, tactics and playing style – even when the team has been on a run to a final. Do those questions have some merit?
The piece analyses data including expected goals, how the team fared against superior teams (those ranked higher or were pre-match betting favourites) and how it fared against top 10 teams. By the first measure the Euro 2024 team was the worst under Southgate. And by the latter two, Southgate’s England performed worse than the team under Sven Goran Eriksson.
You can read the full analysis here.
The answer to today’s Business Question is A. Construction.
