Sunday newspaper round-up: Inflation, OneWeb, Rolls-Royce

By Alexander Bueso

The consultancy unit of EY think that consumer price inflation could hit 15% over the next winter. The prediction is a worst case scenario from the economists at EY-Parthenon, premised on President Putin blocking natural gas supplies to Europe, soaring food prices and inflation expectations becoming embedded amongst the population. Inflation in the UK hit a 40-year high in June, rising at an annual pace of 9.4%, and candidate for Prime Minister, Rishi Sunak, has described the cost of living as the “number one challenge we face”. – Sunday Times
OneWeb, the satellite company that is part-owned by the British government, may be taken over by EU rival Eutelsat as early as Monday. The announcement would put paid to the ambition of a company that was to be the country’s response to Elon Musk’s Starlink. The transaction, which will be billed as a merger, will see the government’s near-20% stake diluted and value the taxpayers’ holding in the company at $600m. Two years before the government had invested $500m (£416m) into OneWeb in order to stave off its collapse as a result of the pandemic. The French and Chinese governments own 20% and 5% stakes in Eutelsat, respectively. However, a source said the government had clinched several concessions. Eutelsat was also now expected to pursue a secondary listing on the London Stock Exchange. – Guardian

The outgoing chief executive officer of Rolls-Royce, Warren East, sounded a bullish note on the outlook for the aviation sector’s recovery from Covid-19. East said the manufacturer had been seen rising demand from airline customers. He also predicted that China would gradually open up to international travel. “Over the last three to six months, we’ve seen a step […] increase in the level and intensity of commercial discussions with our airline partners, as they think about their future fleet requirements,” he said. – Sunday Times

Surging prices for electricity forced National Grid to issue an emergency appeal to Belgium last week in order to keep the lights on in the UK. The appeal was sent by the Electricity System Operator to the operators of Nemo, the cable running from Belgium to the UK, after National Grid was unable to secure sufficient power on the normal market. According to experts, the incident cast doubt on the Grid’s ability to deal with what is expected to be a crisis in winter. At one point on Wednesday, ESO paid an all-time record of £9,724 per MWh to import power through Nemo, amid heightened demand across the Channel and outages in the French nuclear fleet. – Sunday Telegraph

Asos is delaying some autumn orders in anticipation that customers will cut back on new outfits in response to the cost of living crisis. According to suppliers, some stock had been completely cancelled over recent weeks all at short notice. Nevertheless, insiders were adamant that cancellations were not above normal levels, although there had been “a few more postponements”. The company had also come out highlighting how its new strategy, unveiled last November, included buying on shorter lead times and tightening inventory, but one supplier remained worry that stock levels at the fashion retailer had “clogged up” and that the trend towards cancellations was accelerating. – The Financial Mail on Sunday

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