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☆ UK inflation surprises for all the wrong reasons
▼ + stars: | 2023-05-24 | by ( Hanna Ziady | ) edition.cnn.com time to read: +3 min

Britain’s stubbornly high inflation is a major drag on its economy because it increases the cost of everyday goods and services, dampening consumption. At the same time, interest rate hikes to combat inflation make loans and mortgages more expensive, which further weighs on spending by businesses and consumers. “The indirect impact of energy prices on business costs means lower gas and electricity prices should eventually feed into lower core inflation. But strong wage growth is likely to keep services inflation high throughout this year,” he added. But it cautioned that high inflation is still a considerable risk to the UK economy.

Persons: Grant Fitzner, Britain’s, ” Paul Dales, Martin Beck, ” Organizations: London CNN —, National Statistics, Bank of England, International Monetary Fund, Bank, Capital Economics, IMF, Bank of England’s Locations: United Kingdom

☆ Premarket stocks: Debt ceiling woes could kill Wall Street dealmaking
▼ + stars: | 2023-05-22 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

Before the Bell spoke with Mitch Berlin, EY Americas Vice Chair, Strategy and Transactions, to discuss the effect the debt ceiling drama is having on dealmaking:This interview has been slightly edited for clarity. Uncertainty around the debt ceiling is threatening to stall any momentum in the M&A market. If the debt ceiling is not raised within the next few weeks, dealmaking will largely be put on hold and [it] could set M&A dealmaking back to the lows of the early pandemic or worse. Janet Yellen stands by June 1 debt ceiling deadlineUS Treasury Secretary Janet Yellen on Sunday reaffirmed June 1 as the “hard deadline” for the United States to raise the debt ceiling or risk defaulting on its obligations. “There will be hard choices to make if the debt ceiling isn’t raised,” reiterated Yellen after Biden’s warning.

☆ VistaJet CEO defends company's financials as auditor raises liquidity, debt concerns
▼ + stars: | 2023-05-19 | by ( Natasha Turak | ) www.cnbc.com time to read: +5 min

watch nowVistaJet CEO Thomas Flohr defended his company's financial standing following reports that the fast-growing private charter jet company is facing liquidity and debt trouble. All documents and data was always available to our equity and debt holders," Flohr said. "We as a company, both shareholders and bondholders, [are] only focused on EBITDA, the cash creation of the company," Flohr said. That's as a private company the choice we're making as this conservative policy in place, but we might change it going forward." "Going forward, this infrastructure really allows us to grow the company from approximately $800 million EBITDA to $1.5 billion EBITDA," he said.

☆ Retail sales rose 0.4% in April, less than expected as consumers struggle with inflation
▼ + stars: | 2023-05-16 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Consumers barely kept up with inflation in April, as retail sales increased but fell short of expectations, the Commerce Department reported Tuesday. The advanced sales report showed an increase of 0.4%, below the Dow Jones estimate for 0.8%. Excluding auto-related figures, sales increased 0.4%, which was in line with expectations. As the numbers are not adjusted for inflation, the headline increase equaled the 0.4% monthly rise in the consumer price index. Miscellaneous store retailers led gainers with a 2.4% increase, while online sales rose 1.2% and health and personal care retailers saw a 0.9% rise.

☆ These retailers are most at risk for a margin squeeze this earnings season thanks to cautious consumers, heavy promotions
▼ + stars: | 2023-05-16 | by ( Gabrielle Fonrouge | In Gabrielle-Fonrouge | ) www.cnbc.com time to read: +4 min

The price worries could suggest trouble for retailers that are relying on promotions to win over cost-conscious customers. Retailers that largely sell apparel, shoes or home goods are most likely to see squeezed margins due to promotions this earnings season, according to analysts and research. In a Thursday research note, UBS analysts reported softline promotions increased to 17% in April, a 2 percentage point jump year-over-year. Softline retailers are those that sell "soft" goods such as apparel. "This is likely a bad sign for Softline retailers' 1Q23 gross margins."

☆ The future of growth
▼ + stars: | 2023-05-15 | by ( Sponsor Post | Sponsor Content Ey | ) www.businessinsider.com time to read: +6 min

But even when there's an economic recession, we invariably find a way to spend ourselves back to growth. New product launches, seasonal fashion, increasing portion sizes and an endless aisle of choice have collectively supported growth in consumer spending. It's become an accepted principle that progress is measured through growth and growth is driven by consumption. These changes are weakening the links between consumption, growth, and success. Today, growth and margin are indicative factors of how well a consumer company has delivered to the needs of the market.

To revive its fortunes, the government late last year published its Edinburgh Reforms agenda comprising over 30 proposed changes to existing rules. "There are a variety of factors that keep somewhere attractive in terms of investment, listing and being an international finance centre." "We want the UK to be the world's most innovative and competitive global financial centre," the spokesperson added. CHALLENGING ASSUMPTIONSSupporters of a more vibrant UK stock market are also increasing pressure on bankers managing IPO processes to challenge assumptions about London's poorer liquidity or post-IPO performance, relative to rival venues. Proposed changes to UK listings are encouraging, but may not be enough, said Steve Bates, BIA CEO.

☆ Stocks are set for more volatility as the 'unlucky 13' months of strong job growth complicates the Fed's mission to cool the economy
▼ + stars: | 2023-05-06 | by ( Carla Mozée | ) www.businessinsider.com time to read: +4 min

A blowout jobs report and could make the Fed's job of tamping down inflation harder. The April US jobs report showed nonfarm payrolls grew by of 253,000 and a fall in the unemployment rate to 3.4%. Wages are key to the Fed's inflation outlook, and April brought a 0.5% rise in average hourly pay – the biggest monthly increase in a year. "This is a market that's really going to struggle. "It's too early to assess the likelihood of an additional Fed rate hike in mid-June, but this latest jobs report will push the excessively data-dependent Fed towards further tightening – a mistake in our view."

☆ Slower US job growth expected in April; unemployment rate seen rising to 3.6%
▼ + stars: | 2023-05-05 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

The unemployment rate is forecast to have risen to a still historically low 3.6%. "The labor market is slowly bending, but not breaking," said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina. "There is continued resilience in the labor market right now, but the trend is one that is continuing to see a decelerating pace of momentum." The service-providing sector likely accounted for most of the anticipated job gains in April. WAGE GAINS MODERATEAverage hourly earnings are expected to have risen by 0.3% in April, matching March's gain.

☆ Hong Kong's IPO market expected to rebound in 2023, but the biggest one so far flopped in its debut
▼ + stars: | 2023-05-05 | by ( Sheila Chiang | ) www.cnbc.com time to read: +1 min

Hong Kong's largest IPO so far this year flopped last week suggesting the market still needs time to rebound, despite positive signs pointing to a recovery. "The sentiment in the IPO markets has not built up yet," Ringo Choi, Asia-Pacific IPO leader at EY, told CNBC. We still need some time," said Robert Lui, Hong Kong offering leader of Deloitte China's Capital Market Services Group. Hong Kong's stock market was among the worst-performing last year, shedding 15% in 2022 for its third-straight year of declines. Chinese companies tend to launch secondary listings in Hong Kong as another venue to access investors and capital.

The latest case in point: The Federal Deposit Insurance Corp (FDIC) chose JPMorgan Chase & Co (JPM.N) as the winning bidder in an auction to buy collapsed lender First Republic Bank on Monday. FDIC officials, however, say would-be buyers risk losing out if they allow the value of an acquisition target to deteriorate over time while waiting for an FDIC receivership. SWEETENERSU.S. bank mergers were already sluggish as interest rates rose and recession loomed, analysts at Raymond James wrote in an Apr. The first quarter was the quietest opening to a year for bank deals in a generation, they said. Market volatility stops bank buyers from pulling together enough money to cover writedowns on struggling assets, which would be triggered by a traditional acquisition, said David Sandler, co-head of financial services investment banking at Piper Sandler Companies (PIPR.N).

☆ What to expect from the jobs report
▼ + stars: | 2023-05-04 | by ( Alicia Wallace | ) edition.cnn.com time to read: +7 min

Minneapolis CNN —If the latest employment trends continue and economists’ forecasts prove true, Friday’s jobs report could bring back that pre-pandemic feeling. Economists expect the US economy to have added 180,000 jobs in April, according to consensus estimates on Refinitiv. It could also hammer home the fact that the US labor market has indeed cooled down from its red-hot recovery over the past two years. What a rising unemployment rate meansEconomists are expecting the unemployment rate to tick up to 3.6% from 3.5%, according to Refinitiv. Mixed signalsPayroll processor ADP’s monthly look at private-sector employment activity, released two days before the BLS’ employment report, is sometimes looked at as a preview of what to expect from the federal data.

☆ Exclusive: Google's VC firm just led a $12 million Series A investment in Range, a startup that's training AI to give financial advice
▼ + stars: | 2023-05-03 | by ( Darius Rafieyan | ) www.businessinsider.com time to read: +7 min

The company is training an AI model to give financial advice and hopes to make human advisors obsolete within a decade. Enter Range, a startup that's looking to use artificial intelligence and machine learning to make human financial planners obsolete. The company is building out a suite of financial planning tools aimed at aging millennials and designed to help streamline investing, saving, and estate planning. 'We're looking to replace you'These recommendations are reviewed and "massaged" by human advisors before being passed on to clients. She said she's excited about the prospect of making her own job obsolete if it means more people having access to financial planning.

☆ Consumers are ‘retrenching.’ What that means for recession fears
▼ + stars: | 2023-05-03 | by ( Alicia Wallace | ) edition.cnn.com time to read: +7 min

But for consumers, the lengthy spell in the crossfire of persistently high prices and rising interest rates has taken its toll. Inflation-adjusted consumer spending was flat in March, marking the fourth time in five months that expenditures held steady or declined. “Further deterioration in the job market — the last remaining leg propping up the consumer — is bound to accelerate the downshift in consumer spending in the coming months. Private label growth is one of six indicators that Allison tracks to determine a consumer recession. “If you ask the economists, ‘Are we in a recession?’ they’re going to say ‘No, we’re not in a recession,’” he said.

☆ Ending the retailers’ crisis has a high price tag
▼ + stars: | 2023-05-02 | by ( Aimee Donnellan | ) www.reuters.com time to read: +5 min

BARCELONA, May 2 (Reuters Breakingviews) - High-street retailers are facing a heavy bill to weather the cost-of-living crisis. The cost of heating stores and staff requests for pay rises are squeezing operating margins at top players like H&M (HMb.ST) and Next (NXT.L). Shrinking disposable income is making it hard for these retailers to boost sales to protect margins. Most bricks-and-mortar retailers trade on higher multiples than they did before the war in Ukraine sparked soaring inflation. But that leaves a squeezed middle of retailers like H&M exposed to the brunt of the retail crisis.

☆ China’s Midea regains outbound deal appetite
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, May 2 (Reuters Breakingviews) - Midea (000333.SZ), a $58 billion Chinese white goods champion, made waves in Europe in 2016 when it bought German robot maker Kuka for nearly $5 billion. Seven years later, the company is eyeing Sweden’s home appliance brand Electrolux (ELUXb.ST), a complementary asset currently worth around $7 billion including debt. A successful tilt could mark the beginning of a revival in outbound M&A by Chinese firms after offshore deals touched a historic low of $29 billion in 2022, per EY estimates. To close the Kuka acquisition, Midea offered a 36% price premium and generous guarantees including leaving management in place until 2023. Nevertheless, it seems likely that more cash-rich Chinese companies like Midea, seeking to hedge weak domestic demand with overseas customers, will gingerly test cross-border M&A markets this year.

EY is dealing with the aftermath of an effort to split the firm’s auditing and consulting operations. Photo: MAJA SMIEJKOWSKA/REUTERSWhen Ernst & Young dropped its breakup plan, the firm’s executives said they remained committed to achieving the split. Since then, it has become clear that the effort is dead, at least for the next few years, according to internal webcasts and people familiar with the matter. Leaders of EY’s dominant U.S. and U.K. operations are focused on repairing the damage from the 18-month effort to split the firm’s auditing and consulting operations, known as Project Everest.

☆ Forget the pension protests. France’s economy has momentum
▼ + stars: | 2023-04-30 | by ( Anna Cooban | ) edition.cnn.com time to read: +8 min

France’s economy grew 0.2% in the first quarter of this year, its national statistics agency said Friday, after stagnating in the previous quarter. Yet the long-running protests are unlikely to leave a lasting dent in France’s economy, according to Charlotte de Montpellier, a senior economist at Dutch bank ING. But its $2.8 trillion economy has held up comparatively well. Office buildings illuminated in the La Defense business district of Paris, France, on Monday, Feb. 6, 2023. ‘Momentum’ building for banksBritain’s exit from the European Union has also been a boon for France’s financial sector.

☆ Consultancies are coming off a pandemic boom. Are they still worth hiring?
▼ + stars: | 2023-04-27 | by ( Anna Cooban | ) edition.cnn.com time to read: +9 min

Management consultancies helped design vaccination programs during the pandemic and are currently providing advice on how to rescue one of the world’s biggest banks. The $230 billion management consulting industry is a broad church: it includes companies offering everything from project management expertise to designing new organizational structures. Many big firms — think EY and KPMG — also conduct audits and advise on their clients’ tax issues, though these services are generally seen as distinct from their consulting work. In The Big Con, published in February, prize-winning economist Mariana Mazzucato and her co-author Rosie Collington argue that management consultancies “infantilize” governments by keeping them dependent on their services. Nearly 80% of firms surveyed globally have told the think-tank that consultants’ work is either of high or very high quality, she noted.

☆ EY’s failed split raises stakes for Plan B: podcast
▼ + stars: | 2023-04-27 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, April 27 (Reuters Breakingviews) - The Big Four professional services firm called off a plan to separate its audit and consulting arms. In this Viewsroom podcast, Breakingviews columnists discuss what went wrong, the implications for its rivals, and the pressure on EY bosses to show the intact business can thrive. Listen to the podcastFollow @aimeedonnellan on TwitterSubscribe to Breakingviews’ podcasts, Viewsroom and The Exchange. Editing by Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

BARCELONA, April 25 (Reuters) - Europe's cost of living crisis has benefited discount retailers but mid-market names are being squeezed as shoppers watch their spending, executives and analysts at an industry conference said on Tuesday. Although price rises are slowing, retailers globally are still worried inflation will dampen consumer spending and are looking for new ways to attract customers. In Europe especially, some have seen sales slow as high energy bills lead customers to buy less or cheaper food and clothes. And passing higher costs on to shoppers is likely to become harder: 72% of respondents said they expected consumers to be more price-sensitive this year. "It's a very positive moment," said Ying Xu, president of Chinese supermarket chain Wumart, referring to the reopening.

☆ Deloitte to cut 1,200 jobs in the US - FT
▼ + stars: | 2023-04-21 | by ( ) www.reuters.com time to read: +1 min

April 21 (Reuters) - Deloitte will cut around 1,200 jobs or 1.5% of its U.S. workforce, the Financial Times reported on Friday, citing internal employee communications. As growth in select practices moderates, we are taking modest personnel actions where necessary," Deloitte said in an emailed statement to Reuters. Several financial firms have slashed jobs in recent months including major Wall Street banks, asset managers and fintechs amid a turbulent macroeconomic environment that has pressured consumers and soured demand in several mainstay business units. Deloitte is part of the Big Four accounting firms that include EY, KPMG and PricewaterhouseCoopers. Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Shailesh KuberOur Standards: The Thomson Reuters Trust Principles.

☆ EY Confronts Slowing Growth After Breakup Deal Fails
▼ + stars: | 2023-04-20 | by ( Jean Eaglesham | Alexander Saeedy | ) www.wsj.com time to read: 1 min

Growth at EY’s U.S. operation has slowed every month since December. Photo: PETER NICHOLLS/REUTERSOn a staff call this week, a senior Ernst & Young executive delivered an exhortation to the troops: Bill clients “every hour we can get our hands on.”A failed breakup attempt cost the company $600 million. Employees are angry. But that might be the least of it: The outlook for EY’s business of charging for advice and accounting is getting weaker in the U.S. by the month.

☆ Ernst & Young, After Its Failed Split, Could Find Itself Vulnerable to Staff Poaching
▼ + stars: | 2023-04-19 | by ( Mark Maurer | ) www.wsj.com time to read: 1 min

The botched split attempt, after more than a year of work on it, has raised questions over whether rivals will more aggressively seek Ernst & Young talent. Photo: MAJA SMIEJKOWSKA/REUTERSErnst & Young risks losing staff to competing firms after scrapping its plan to split into separate businesses and then announcing a round of layoffs, blemishes that rivals could say reflects a wounded firm. The Big Four accounting giant last week decided not to move ahead with plans to separate into one firm focused on consulting and another centered on auditing, after a revolt led by some U.S. partners and urged by a group of EY retirees. Then earlier this week, in a move the company said was unrelated to the split, EY announced it would cut about 3,000 U.S. employees, or less than 5% of its U.S. workforce.

☆ UK inflation stays at 10% as bread rises at record clip. Here’s why it’s proving hard to beat
▼ + stars: | 2023-04-19 | by ( Hanna Ziady | ) edition.cnn.com time to read: +5 min

London CNN —UK inflation remained above 10% in March, far higher than in the United States and Europe, as bread prices rose at a record pace. Energy an ‘Achilles’ heel’The United Kingdom is a net importer of energy, unlike the United States. UK inflation to fall sharplyThe good news is that UK inflation is expected to fall rapidly through the remainder of the year, as lower wholesale gas prices feed through to household energy bills. From April, “UK inflation might start to drop faster than in Europe,” he said. But core inflation could take longer to fall in the United Kingdom, according to Gregory of Capital Economics.

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