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Muted recovery for UK retailers in December ends worst year on record

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Muted recovery for UK retailers in December ends worst year on record 1

By David Milliken and Andy Bruce

LONDON (Reuters) – British retailers struggled to recover in December from a partial coronavirus lockdown the previous month, marking a weak end to their worst year on record, while public debt has climbed to its highest since 1962, official data showed on Friday.

The figures suggest Britain’s economy had little momentum going into 2021. The government tightened COVID-19 lockdown rules on Jan. 5 to tackle a surge in cases that has kept Britain’s death toll the highest in Europe.

A closely watched business survey released on Monday showed the measures contributed to the sharpest fall in economic activity since May, in addition to headwinds from new paperwork for exports to the European Union.

Finance minister Rishi Sunak faces pressure from some in his Conservative Party to show spending is under control when he presents a new budget on March 3, after what is on track to be the heaviest annual borrowing since World War Two.

Sunak has again promised to put the public finances on “a more sustainable footing” once the economy begins to recover, after Friday’s data showed public borrowing since the start of the financial year in April reached a record 271 billion pounds ($370 billion).

Britain’s Office for National Statistics said retail sales volumes rose 0.3% in December, far less than economists’ forecasts in a Reuters poll for a 1.2% increase, leaving them just 2.9% higher than a year earlier.

For 2020 as a whole, retail sales were down 1.9%, the biggest calendar-year fall since these records began in 1996. Clothing sales slumped by more than a quarter and spending on fuel dropped by more than a fifth.

Sterling fell slightly against the dollar and the euro following the weaker-than-expected retail numbers.

“With no end in sight for retailers closed in lockdown, many will struggle to survive,” said Helen Dickinson, chief executive of the British Retail Consortium trade body, calling for more government help for the sector.

Department store Debenhams is among well known names to have collapsed. Administrators said last week its flagship Oxford Street store in central London would close permanently due to the latest COVID restrictions.

RECORD BORROWING

Public sector borrowing for the month of December came in at 34.1 billion pounds, just above Reuters poll forecasts. Total public sector debt had reached 2.132 trillion pounds, equivalent to 99.4% of GDP, the most since 1962.

Bank of England chief economist Andy Haldane said on Tuesday government borrowing on this scale was essential to stabilise the economy. He said he did not see a looming debt crisis, predicting interest rates would remain very low for a long time.

“This level of spending may be eye-wateringly large, but it is absolutely necessary,” said Charlie McCurdy, a researcher at the Resolution Foundation think tank.

December offered a partial respite for Britain’s economy, which has seen sharper falls in its official measure of output than any other advanced country, as well as Europe’s highest official death toll from COVID-19.

In November, the economy shrank 2.6%, due to a four-week lockdown in England and similar measures in other parts of Britain, although some restrictions had remained in place for retailers in December.

This month the government went further and shut schools as well as all non-essential retailers, which most economists think will lead to the economy contracting in the first quarter.

Flash purchasing managers index (PMI) data on Monday showed manufacturing growth slowed in early January, and services firms suffered a sharp fall in activity and reduced their workforce.

“The steepest loss of jobs was recorded in the hotels, restaurants, travel and leisure sectors, reflecting the new lockdown measures,” survey publishers IHS Markit said.

Experimental data from the ONS on Thursday showed consumer spending in early January was 35% lower than before the pandemic began in February, although the figures were not seasonally adjusted to reflect the typical post-Christmas lull.

Retail sales have performed better than other areas of consumer spending, with shoppers switching to online stores, where spending surged by 46.1% in 2020.

Excluding the slump in fuel sales, retail sales grew in 2020, albeit by the lowest level since 2011, reflecting extra spending on groceries and household goods by people stuck at home.

($1 = 0.7310 pounds)

(Reporting by David Milliken and Andy Bruce, Editing by Guy Faulconbridge, Edmund Blair and Emelia Sithole-Matarise)

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Northern Irish Brexit issue is two-way street, says EU’s Sefcovic

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Northern Irish Brexit issue is two-way street, says EU's Sefcovic 2

BRUSSELS (Reuters) – Britain must show it is fully using the avenues available under the Brexit divorce deal to minimise trade disruption in Northern Ireland before seeking concessions, a senior EU official said on Tuesday.

Britain’s exit from the EU’s trading orbit in January has created trade barriers between Northern Ireland – which remains in the EU’s single market for goods – and the rest of the United Kingdom.

Maros Sefcovic, a vice president of the European Commission, said he hoped to learn of British efforts during an online meeting on Wednesday .

“I was also reminding my British partners that this must be a two-way street,” he told a news conference.

Sefcovic said real-time access to the IT systems of customs could smooth customs processes and a trusted trader scheme could ensure Northern Irish supermarkets were properly supplied.

“I hope that tomorrow… we will get feedback from our UK partners on how all these flexibilities and grace periods are being used because it’s clearly a pre-requisite for the EU, the Commission and the member states to assess any further requests,” Sefcovic said.

The EU’s insistence on Britain honouring its withdrawal treaty has left the British province of Northern Ireland within the EU’s single market and put a customs border in the Irish Sea dividing the province from mainland Britain.

Sefcovic said that there were inevitable consequences of Brexit so not everything could be resolved.

Members of Northern Ireland’s two largest pro-British parties have said they are set take part in legal action challenging part of Britain’s divorce deal.

However, Sefcovic said companies there might over time see the divorce arrangements as an advantage.

“Being in the single market and at the same time the internal market of the UK is actually a great business opportunity. And I hope that our joint work will amplify this possibility,” he said.

(Reporting by Philip Blenkinsop. Editing by Mark Potter)

 

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Calabrio charts record year-on-year UK growth as demand for cloud technology soars during lockdown

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How cloud technology can help you keep on top of your business finances

Digital transformation acceleration drives cloud contact centre adoption of Calabrio workforce engagement management technology

Calabrio, the workforce engagement management (WEM) company, has seen a strong growth trajectory in the UK during the last 12 months, despite the global pandemic. Achieving 30% year-on-year sales growth, Calabrio International has welcomed more than 150 new customers, with the UK adding a third of those from a wide range of industries including many online challenger businesses. In addition, Calabrio has made strategic new appointments to build its customer support network.

Calabrio charts record year-on-year UK growth as demand for cloud technology soars during lockdown 3

Kris Mckenzie

Kris McKenzie, SVP, Sales, International at Calabrio commented, “Our focus on cloud-first solutions has resonated well with our customers’ need to accelerate their digital transformation and move their contact centres to the cloud in order to maintain business continuity. At a time of uncertainty when consumers need robust support more than ever before, we are witnessing first-hand the cloud transformation of customer services by organisations looking to deliver the next level in customer experience. Modern businesses and contact centres using Calabrio are able to provide exceptional service to their customers through disrupted times.

“Coupled with businesses operating solely online, we have also seen strong demand across the board from more traditional sectors such as finance, insurance, retail, consumer goods, local and central government departments. These organisations require an innovative yet reliable solution to help them manage unprecedented levels in demand.”

When Calabrio surveyed its customers recently[i] 72% of organisations stated they are either moving to the cloud, are already there or plan to increase their investment in cloud technology in 2021. In order to support forward-thinking organisations looking to optimise their investment in cloud contact centre solutions, Calabrio has made two significant appointments.

Niall Gallacher has joined Calabrio as Business Intelligence (BI) strategic consultant and will be instrumental in the design of services that drive value from data and analytics, helping Calabrio customers to solve complex business problems. Before joining Calabrio, Niall spent 6 years with Qlik as Industry Solutions Director. He has 25 years of experience in data, analytics and BI, 15 of which have been with contact centres for leading companies in telecommunications, energy and high-tech industries.

Graeme Gabriel joins as a presales engineer, supporting Calabrio’s workforce engagement suite. He will work with customers to ensure that they achieve maximum benefit from their use of Calabrio solutions, no matter the remote, on-site or hybrid environment. Graeme has international experience encompassing telephony, contact centre, WFM, analytics and customer experience (CX) across a range of sectors, and has held consultancy, advocacy and planning positions at companies including Injixo, Vluent, QPC and AVIOS.

McKenzie concluded, “We welcome both Niall and Graeme to Calabrio, during what has been an incredible year of growth for Calabrio as we supported our customers through these challenging times. This is an exciting and dynamic time for Calabrio as we continue to deliver the value of our all-in-one cloud contact centre suite, including call recording, quality management (QM), WFM, speech analytics and business intelligence suitable for organisations of all shapes and sizes.”

[i] TechValidate survey of 192 users of Calabrio.  Published 29 December 2020.

 

This is a Sponsored Feature.

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Thomson Reuters fourth-quarter revenue, adjusted earnings rise

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Thomson Reuters fourth-quarter revenue, adjusted earnings rise 4

NEW YORK (Reuters) – Thomson Reuters Corp reported higher fourth-quarter revenue on Tuesday and said it would start a two-year program that will change it from a holding company to an operating company.

The news and information company, which owns Reuters News, said revenues rose 2% to $1.62 billion, while its operating profit jumped more than 300% to $956 million, reflecting the sale of an investment, a gain from an amendment to pension plan and lower costs.

Its three main divisions, Legal Professionals, Tax & Accounting Professionals and Corporates, all showed higher organic quarterly sales and adjusted profit.

It was not immediately clear if adjusted earnings per share of 54 cents were directly comparable to the 46 cents expected.

Thomson Reuters’ markets are healthy and evolving, making this a good time to transition the company from a content provider to a “content-driven technology company,” Chief Executive Steve Hasker said in a statement.

Workplaces have been transformed by the COVID-19 pandemic and artificial intelligence has a larger role in professional markets, he said.

(Writing by Nick Zieminski in New York, editing by Louise Heavens and Jane Merriman)

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