UK factory output ‘falls at fastest pace for seven years’

Activity in the UK’s manufacturing sector contracted at the fastest pace for seven years in August, a closely-watched survey has suggested.

The uncertainty surrounding Brexit and the global economic downturn were some of the factors hitting firms, according to the survey from IHS Markit/CIPS.

The purchasing managers’ index (PMI) produced by IHS Markit/CIPS fell to 47.4 in August, down from 48 in July.

A figure below 50 indicates the sector is contracting.

New orders fell at the fastest pace for seven years, and business confidence fell to its lowest level since the survey first began to track the measure in 2012.

“High levels of economic and political uncertainty alongside ongoing global trade tensions stifled the performance of UK manufacturers in August,” said Rob Dobson, director at IHS Markit.

“The global economic slowdown was the main factor weighing on new work received from Europe, the USA and Asia.

“There was also a further impact from some EU-based clients routing supply chains away from the UK due to Brexit.”

The UK economy contracted by 0.2% in the second quarter of the year – the first time it has shrunk since 2012.

If the economy contracts in the current July-to-September period, then it will deemed to be in recession as it will have shrunk for two quarters in a row.

Mr Dobson said the PMI survey’s results suggested the manufacturing sector – which accounts for about 20% of the UK’s economy – was contracting at a quarterly pace of “close to 2%”.

However, Howard Archer, chief economic adviser to the EY Item Club, said that could be too pessimistic.

“With the CIPS surveys tending to be overly sensitive to political uncertainty and carmakers maintaining production in August (having brought their annual summer shutdowns forward this year), the sector’s performance is unlikely to be that grim,” he said.

“But with global and domestic headwinds showing no sign of easing, the remainder of 2019 is set to remain a difficult period for manufacturers.”

Andrew Wishart, UK economist at Capital Economics, said that while the latest PMI survey was weak, “we still doubt that manufacturing will pull the economy as a whole into recession”.

One in seven Brits admit to committing fraud

A new report released today shows one in seven British adults have committed one or more types of consumer fraud, while two in three know someone who has.

There are many types of first-party fraud – including:

• Money muling – agreeing to transfer illegal funds to a third-party from their bank account, generally keeping a share for themselves
• Claimed non-delivery – ordering goods online and falsely claiming they haven’t been delivered to get a refund

The most common type of consumer fraud committed by the British public is ‘fronting’, closely followed by ‘deshopping’, which 1 in 20 (5%) admit to carrying out.

Attitudes towards first party fraud

Alarmingly, many Britons consider some types of consumer fraud as reasonable, with the highest proportion seeing ‘fronting’ as reasonable. However, the consequences of committing this type of fraud could see individuals driving without valid insurance, and in some cases, result in a criminal record.

Interestingly, ‘money muling’ is considered reasonable by one in five Britons, the consequences of which could result in individuals unable to open a bank account and obtain a mortgage, as well as a potential prison sentence.

Demographics of consumer fraud

The research revealed that younger people were more likely to take part in fraudulent activity, with 21% of 18-34 year olds admitting they have committed first-party fraud, compared to only 6% of people aged over 65.

Prevention key to reducing fraud

The report found that companies are more likely to invest their energy into detection and prosecution of consumer fraud, rather than prevention. This is despite the fact that detection can be problematic, and prevention is generally regarded to be more effective. The report argues that efforts to reduce fraud would be better directed towards awareness campaigns focused on educating consumers about different types of fraud and their consequences, such as criminal records, fines, or difficulties in obtaining banking and credit facilities.

Chief Executive Officer of Cifas, Mike Haley, who was responsible for the report, commented: ‘It’s sad to note how common fraud is among the British population, and that even more people find such acts of dishonesty acceptable.

‘Many people seem unaware that what they consider to be reasonable,  such as buying shoes to wear for a night before returning them, or adding their parent as a main driver for cheaper insurance, can be considered acts of fraud.

‘We wanted to raise awareness of the consequences what can be considered everyday fraud, such as finding it difficult to obtain a financial product or a mobile phone account, and in some cases such as being a money mule, end up with a criminal record.’

Matthew Oakley, Director of WPI Economics, who co-authored the report, said: ‘It is shocking that one in seven British adults admit to having committed first-party fraud.

‘That many people also see this as reasonable highlights the lack of understanding of fraud as a criminal and harmful act.

‘This report shines a light on some of the routes to people committing fraud and highlights how industry can work together to tackle these; in particular by making sure that fewer people see fraud as reasonable and that the opportunities to commit fraud are reduced.’

Waitrose announces store closes as middle classes shoppers go to Lidl

The favourite grocer of the middle classes, Waitrose, is shutting seven more shops with the discounter Lidl swooping on three in renewed signs of the rapidly changing retail market.

Waitrose began as a small grocery shop in Acton, north London, 115 years ago. It has 334 shops, employs 52,590 people and merged with John Lewis in 1937.

However Lidl, which arrived in Britain in the 1990s, controls a bigger slice of the grocery market than Waitrose as customers have been lured by its cut-price offerings since the recession. The German company has 760 shops.

Waitrose admitted that it had not been able to make a profit on the seven affected stores and would be selling four outlets in Bromley, Kent, Oadby in Leicester, Sandhurst in Berkshire and Wollaton in Nottingham and closing another three in Marlow, Buckinghamshire, Stevenage in Hertfordshire and Waterside in British Airways’ headquarters near Heathrow.

The grocer said that it had started consultation with the 677 employees at risk. “We haven’t taken this decision lightly but we have to do what’s right for the business as a whole,” Mark Gifford, Waitrose & Partners director of shop trade, said.