While many homeowners are feeling the pain of rising interest rates, those working for building companies may be getting doubly hit. Persimmon, Britain’s biggest homebuilder, this morning said it cut hundreds of jobs in the six months through June as it navigates a housing slump and an uncertain economic outlook. Rival Bellway Plc also warned of job cuts this week in the face of weak demand for new homes.
(Bloomberg) — While many homeowners are feeling the pain of rising interest rates, those working for building companies may be getting doubly hit. Persimmon, Britain’s biggest homebuilder, this morning said it cut hundreds of jobs in the six months through June as it navigates a housing slump and an uncertain economic outlook. Rival Bellway Plc also warned of job cuts this week in the face of weak demand for new homes.
Here’s the key business news from London this morning:
In The City
Persimmon Plc: The company reduced headcount by almost 300 in the six months through June and further reviews are ongoing to cut costs. The firm also said it’s planning to cut certain specifications in homes that are less important to customers, resulting in savings of up to £1,800 per plot.
- Still, the housebuilder said it expects to sell at least 9,000 homes this year, which is towards the top end of its previously indicated range
Deliveroo Plc: The London-based delivery company took strides towards hitting a profit in the first six months, continuing a trend of delivery companies rebounding after a rough post-pandemic period. It also raised earnings guidance for the year to a range of £60 million to £80 million.
- European food delivery companies have been focused on cutting costs to boost profitability after growth slumped following a pandemic-era boom. Deliveroo cut 9% of its workforce earlier this year, saying it needed to focus on profits in a “difficult consumer environment.”
Entain Plc: The gambling company said it has set aside £585 million for a possible settlement with UK authorities following an investigation into potential bribery offenses at its former Turkish business.
Savills Plc: Former Burberry Group Plc Chief Financial Officer Stacey Cartwright will take over as chair of the estate agent, succeeding Nicholas Ferguson who will retire at the end of the year.
- Read More: One Tweet Exposed an Elite London Firm’s Toxic Workplace
Energy Secretary Grant Shapps is set to examine potential changes to the price cap on household power and gas bills as part of a wider drive to restore competition to the sector. The cap — introduced in 2019 to protect customers from price-gouging — has now effectively become the universal energy price for consumers. Only a small number of firms offer deals below the cap — which is set quarterly by regulator Ofgem.
Shapps is keen to ensure competition is returned to the sector, and as part of that is preparing to look at whether the cap is still fit for purpose, a person familiar with the matter told Bloomberg. He’s not yet considering scrapping the measure, and no decision is imminent.
In Case You Missed It
Britain’s property market showed signs of slowing to a crawl after a jump in mortgage costs reduced both buyer demand and the volume of sales.
Finally, China lifted a ban on group travel to a slew of countries including the UK, in a major relaxation of travel restrictions that could boost global tourism.
Quarterly GDP figures will take centre stage at 7 a.m. tomorrow. The UK economy likely stalled in the three months through June, partly due to strikes and a “modest drag” from the extra bank holiday in May, according to Bloomberg economists.
“For the current quarter we forecast a gain of 0.1%, but that’s likely to be the last positive news for a while,” the economists say, adding that they’re expecting further interest rate increases to tip Britain into a recession.
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