BUSINESS LIVE: Wage growth hits record high

British bookmaker 888 Holdings does not expect any operational impact from the ongoing probe by the UK gambling regulator, it told investors this morning after posting a 9 per cent rise in first-half earnings helped by effective cost-cutting measures.

The William Hill owner last month appointed a new CEO after shrugging off its second-largest shareholder FS Gaming’s call to appoint its candidates to top roles that led the GB Gambling Commission to launch a review of the betting firm’s licences in the UK.

FS Gaming push for former GVC, now known as Entain, executives to be appointed to 888’s board, could have forced the firm out of its biggest market.

Russia’s central bank will hold an emergency meeting on interest rates today after a blame game with the Kremlin prompted a sharp slide in the rouble.

The currency plunged to its lowest level against the dollar for a year and a half – at less than one US cent – before paring back the losses after the meeting was announced.

Russia’s economy has been in crisis since it launched its war on Ukraine in February last year left it facing isolation from the West.

Legal & General made a forecast-beating operating profit of £941million in the first half of 2023, boosted by its bulk annuity business, with the group on track to meet its five-year ambitions.

Analysts had forecast the British life insurer and asset manager to post an interim profit of £834million.

Higher UK interest rates have improved the funding positions of defined benefit, or final salary, pension schemes, enabling employers to offload pension risk to an insurer through a so-called bulk annuity more cheaply.

‘We remain on track to achieve our five-year ambitions and deliver attractive returns for our shareholders,’ chief executive Nigel Wilson said in a statement.

Julia Turney, partner at professional advisory consultancy Barnett Waddingham:

‘The labour market is tight – most people who want jobs have them. This, combined with the cost-of-living pressures facing consumers, means wages are climbing, and are set to surpass inflation altogether later this week.

‘The CIPD has revealed that almost half of UK employers have made counteroffers in the last year to try to keep staff – it’s clear that the war for talent is back on, and the battleground is salaries.

‘But this upwards spiral is not sustainable. If wages continue to rise, so will inflation – labour costs will increase, and so in turn will prices. To break the cycle, the responsibility is on businesses to create an environment where staff are both fairly paid and highly valued.

‘Organisations must take a planned holistic approach which goes beyond just cash remuneration – it should include benefits, culture, and wellbeing. Most employees who stay in their role do so because they love the work and the culture, and many who leave dislike the work and team. Employers who tackle this problem head-on will be able to not just compete in the war for talent, but shift the battle entirely.’

Wages rises have hit a new record raising fresh concerns about inflation – despite signs the jobs market is weakening.

Regular pay was up by 7.8 per cent annually in the quarter to June, the fastest pace since comparable figures began in 2001.

Although the sharp increase was still slightly below the eye-watering hikes in prices, the ONS findings will cause anxiety in the Bank of England as it considers whether to push interest rate higher. Less reliable but more up-to-date pay data suggest that the upwards momentum might have slowed.

Dr. Roger Barker, director of policy at the Institute of Directors:

‘The latest data shows a gradual easing of labour market pressures, as the number of vacancies in the economy declined by a further 60,000 in the three months up to July.

‘However, there are still more than a million unfilled positions, which is of great practical concern to businesses leaders.

‘Even more worryingly for policy makers, wage inflation shows no sign of abating.

‘The concern for business is that this may feed into the persistence of stubbornly high rates of inflation and high interest rates. Such a backdrop of continuing wage cost pressures and labour shortages is not a positive one for many businesses.’

Bank of England officials were last night investigating the worst disruption to Britain’s banking payment systems in nearly nine years.

Home buyers and sellers may have seen deals held up as a result of the outage, which lasted for about five-and-a-half hours yesterday.

The Bank, which is run by governor Andrew Bailey said a ‘technical issue’ hit its real-time gross settlement (RTGS) service and CHAPS high-value payments system, which handle hundreds of billions of pounds of transactions each day.

Marks and Spencer has told investors it now expects profit growth this year, with its soon-to-be-published interim results likely to significantly improve against previous expectations.

M&S said: ‘There remain considerable uncertainties about the economic outlook, and there is a risk that the consumer market will tighten as the year progresses.

‘Nevertheless, we now expect the outcome for the year to show profit growth on 2022-23, and the interim results to show a significant improvement against previous expectations.’

Specialist insurer Just Group has posted a 154 per cent jump in first-half profit, beating market estimates, thanks to bumper sales of its retirement income products and higher new business income.

Underlying operating profit hit £173million in the six months to 30 June, up from £68million last year and beating forecasts of £162million.

UK wages excluding bonuses grew at the fastest pace year-on-year since records began at 7.8 per cent in the three months to June, fresh Office for National Statistics data shows.

Wage growth has been an area of concern for the Bank of England as it attempts to wrangle inflation under control.