UK factories hit by falling orders; Jamie Oliver restaurant crisis - as it happened
Rolling coverage of the latest economic and financial news, as UK factory orders slow and Jamie Oliver's restaurant chain slides into administration
- Latest: Administrators called in to Jamie Oliver's restaurants
- Oliver: I'm deeply saddened
- Staff fear job cuts; suppliers face losses
- UK factory orders weaken
- Pound hits four-month low
7.21pm BST
Finally, stock markets are holding onto their earlier gains - on hopes that the US-China trade war might cool.
7.14pm BST
In Scunthorpe, British Steel workers face another night of worry as the company's future hangs in the balance.
One told us:
"I'm worried sick and absolutely petrified. I've got three kids at home. We don't know anything, we only know what we're finding out off the news."
Related: 'I'm worried sick': Scunthorpe frets over British Steel slump
7.13pm BST
My colleague Sarah Butler has written about what went wrong at Jamie Oliver's restaurant business. Here's a flavour:
The more mass market Jamie's Italian was founded by Oliver and his Italian mentor, chef Gennaro Contaldo, in Oxford in 2008. The concept was an instant hit, with diners queueing around the block, and the group went on to open dozens around the country.
However, appetite for the chain waned as it faced rising competition from numerous Italian-inspired rivals such as Pizza Express, Strada and, more recently, Franco Manca.
Related: Jamie's Italian struggled for relevance as people changed their habits
4.36pm BST
Labour leader Jeremy Corbyn is calling for the nationalisation of British Steel, if that's what it takes to save the company and its workforce.
He says:
3.34pm BST
A quick recap
More than 1,000 jobs are being lost at Jamie Oliver's restaurant chain, after it fell into administration today.
3.29pm BST
Breaking: KPMG have just announced that 22 of Jamie Oliver's restaurants are to close, following the company's collapse into administration a few hours ago.
This means that more than 1,000 jobs will be lost, with just three outlets staying open.
3.20pm BST
Chart of the Day, to put the crisis at British Steel into context:
My favourite steel fact: in the past two years China has produced more steel than Britain has in its ENTIRE HISTORY, since modern steelmaking was invented in the industrial revolution. Here's the last few decades: pic.twitter.com/fdInHCjQFi
3.17pm BST
Tesla shares are under renewed pressure today, after an analyst group warned that problems in China could undermine its financial situation
Morgan Stanley has cut its worst-case forecast on Tesla stock from $97 to just $10, citing concerns about the company's debt load and geopolitical exposure.
"Our revised bear case assumes Tesla misses our current Chinese volume forecast by roughly half to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention.
Tesla opens the week with fresh lows, more Wall Street criticism https://t.co/7U6RGaAC9v pic.twitter.com/Ih8fQyGJaX
2.56pm BST
The New York stock markets has opened higher, on relief that America has temporarily relaxed its ban on Huawei.
2.34pm BST
There's a glimmer of good news for British Steel workers -- they will get paid this week.
British Steel has just confirmed that pay packets will be processed as normal, even though negotiations with the government over an emergency rescue deal are continuing.
"We are aware of speculation that the May salaries may not be paid. For the avoidance of doubt, we can confirm that funding is in place and British Steel employees will be paid their salaries in full.
Today in @HouseofCommons during the UQ on British Steel I called for a robust and positive industrial strategy with steel as a key part. #SaveOurSteel #Orb #Llanwern #Liberty @CommunityUnion @UniteWales @GMBWSW pic.twitter.com/EMqKf2tZb9
2.21pm BST
There was rather more drama at BP's AGM today, up in Aberdeen, where climate emergency protesters urged the oil giant to clean up its act.
2.10pm BST
There's nothing like vigorous shareholder scrutiny.... and today's annual general meeting of Metro Bank shareholders has been nothing like vigorous shareholder scrutiny.
Not a single investor asked a sharp question, or even a blunt one, at the AGM in London.
Wow - literally no questions or comments this year, so Q&A of Metro Bank's AGM is...over? Even board is surprised
Aaaand, Metro Bank AGM is officially over. Only one shareholder handed in a poll card
Metro Bank AGM - NO questions from shareholders despite what chief executive admits was "a humbling and chastening first quarter from which we will learn" #metrobank
1.27pm BST
Rebecca Long Bailey MP, Labour's Shadow Business Secretary, has called on the government to do more to help Britain's high street firms, as the administrators arrive at Jamie Oliver's restaurant chain.
"This is devastating news for workers and their families who must now be offered robust support to help them through this challenging time.
"Today's announcement is sad. Competition on the high street should never be underestimated but it is also clear that the crisis our high streets and town centres are facing cannot have helped matters.
12.50pm BST
Simon Mydlowski, partner at law firm Gordons, fears that food and drink suppliers will suffer losses from this administration (they'll join a queue of other creditors):
"A number of suppliers will have been caught unawares here, perhaps showing a little too much trust in the Jamie Oliver name, but this is not the first big restaurant chain to have suffered and it won't be the last.
Faced with higher rent, rising food prices and increased competition, restaurants need a point of difference - it's no coincidence that smaller brands with the freedom and flexibility to keep things fresh are currently the ones performing well."
Terrible news for both the people who work there, and their many many suppliers. https://t.co/Im830f4Lkw
12.26pm BST
Related: Jamie Oliver restaurants at risk of closing - the full list
12.22pm BST
What now for Jamie's Italian?
Turon Miah, senior associate at City law firm Gowling WLG, suggests that parts of the business could be spun off, or the whole enterprise could be rescued as a going concern:
"It has been almost 15 months since Jamie's Italian chain entered into a Landlord CVA to cut down on property costs.
The CVA will have been part of a wider restructuring of the business. In spite of those steps it now appears that the business strategy has not succeeded and Administrators will be appointed. It is too early to tell whether a buyer will be found for the business as a whole or whether there will need to be a piecemeal sale of its assets.
12.04pm BST
Jamie Oliver's restaurant business has been struggling for a couple of years, so today's slide into administration isn't totally unexpected.
But it's obviously a blow to the man himself, and hugely worrying for staff across the country.
Related: Jamie Oliver to close six restaurants in 'tough market' after Brexit vote
That is just not normal, in any business. You have quarterly meetings. You do board meetings. People supposed to manage that stuff should manage that stuff.
11.53am BST
Jamie Oliver has confirmed that his restaurant chain is heading into administration, saying:
"I am deeply saddened by this outcome and would like to thank all of the staff and our suppliers who have put their hearts and souls into this business for over a decade.
"I appreciate how difficult this is for everyone affected.
11.33am BST
Newsflash: Celebrity chef Jamie Oliver's restaurant empire is calling in the administrators.
The company, which includes 23 Jamie's Italian outlets, plus the Fifteen and Barbecoa restaurants, is understood to be appointing KPMG as administrator.
The group had been seeking buyers in recent months after Oliver decided to sell up amid heavy competition in the casual dining market that has already seen chains such as Carluccio's, Byron Burger and Gourmet Burger Kitchen close outlets.
Jamie Oliver restaurant empire collapses, risking 1,000 jobs https://t.co/Kyro4EObSC
11.18am BST
Tom Crotty, group director of UK chemicals giant INEOS, says the ongoing Brexit crisis is hurting British industry:
"Manufacturers are being forced into putting huge amounts of money and resources into contingency planning that could have been spent on creating jobs or making investments in new technology. This relentless Brexit uncertainty must be lifted as a matter of urgency.
"As long as the deadlock continues, the sector is being held back from solving long-term challenges such as raising productivity and addressing skills shortages."
11.12am BST
Newsflash: UK factories have suffered a slump in orders, as Brexit uncertainty and trade conflicts hurt the sector.
The CBI's latest healthcheck on British manufacturing, just released, shows that order books deteriorated in May. The number of companies reporting that orders had fallen, rather than risen, hit the highest level in two and a half years.
10.51am BST
The OECD is very clear that the US-China trade war is thoroughly bad news for global growth, as these tweets show:
BREAKING: @OECD Econ Outlook
- slash global 2019 growth to 3.2%: 3.4% 2020
- trade war hit investment & confidence, partic Europe & China
- Japan & Germany <1% growth
- US relative bright spot :2.8% 2019
Risks: more trade tensions,services start waning too,China stimulus fades pic.twitter.com/5HoNUUIj8O
#OECD has estimated the impact of new #tariffs on trade and growth: if current tariffs are maintained, they will shave 0.2/0.3% from US and China #GDP. See: https://t.co/hG0vx5aTw5 pic.twitter.com/ghlOYjpCTZ
What needs to be done to revive growth? @LauBooneEco:
1 Resolve trade disputes through cooperation
2 Investment in digital & transport infrastructure + green energy
3 Better training especially for low income workers with highest automation risk#OECDForum #OECD #EconomicOutlook pic.twitter.com/V92Sb91zD2
10.34am BST
The OECD has also produced this charts, showing how the ongoing trade war has already hurt the world economy.
Trade tensions have disrupted growth. With uncertainty high and confidence low, investment has suffered, and the manufacturing sector has taken a hit.
10.17am BST
The OECD's chief economist, Laurence Boone, fears that trade tensions are destabilising the "fragile global economy".
Speaking in Paris, she says:
"Growth is stabilising but the economy is weak and there are very serious risks on the horizon. Governments need to work harder together to ensure a return to stronger and more sustainable growth,"
10.16am BST
Newsflash: The OECD has urged the US and China to end their trade war, before more damage is done to the global economy.
The Paris-based thinktank has just released its latest economic outlook, and warned that the trade dispute between Beijing and Washington is the principle threat to growth.
Global growth slowed sharply in late 2018 and is now stabilising at a moderate level. Escalating trade conflicts and dangerous financial vulnerabilities threaten a new weakening of activity by undermining investment and confidence worldwide.
The global economy is expected to achieve moderate but fragile growth over the coming two years. Vulnerabilities stem from trade tensions, high policy uncertainty, risks in financial markets and a slowdown in China, all of which could further curb strong and sustainable medium-term growth worldwide.
10.04am BST
The pound is suffering another bout of Brexit Blues this morning.
Sterling has fallen to a four-month low against the dollar this morning, dropping below $1.27 for the first time since mid-January.
Pound lower again #forex. could be back to 1.2610 before long pic.twitter.com/GQYu4wQN2v
Related: Leadsom gives May ultimatum over Brexit bill support
The pound has recently found itself stuck between a rock and a hard place, suffering from the renewed uncertainty of Brexit, while investors flood to the relatively safer US dollar amidst the ongoing trade war.
"Looking forward, headwinds look stronger than tailwinds for the pound, particularly with another Brexit vote not set to take place for a few weeks yet. But perhaps the only real hope would come from Donald Trump pressing the pause button with regards to the trade war."
9.44am BST
Back in the UK, the future of British Steel has been plunged into fresh uncertainty.
Unless the government steps in with 30m of new funding, parts of the company could slump into administration - putting thousands of jobs at risk.
The UK's second-largest steel producer is preparing to call in administrators on Wednesday unless the government steps in with a loan on Tuesday.
British Steel, which is owned by private equity group Greybull Capital, has been scrambling to secure a 75m rescue package to stave off insolvency. Greybull and the company's lenders have agreed to inject 30m into the company.
Related: British Steel on brink of administration, putting 5,000 jobs at risk
9.33am BST
As well as the trade war, China is also facing a nasty outbreak of African swine fever.
ASF has now spread to every province in China and throughout Southeast Asia, disrupting the local pork industry.
It is estimated that between 10 and 35 per cent of the Chinese herd has been lost, resulting in a potential pork supply shortfall of 16 million tonnes per year, with export prices strengthening considerably in the second half of the year as a direct result.
9.25am BST
Investors should brace for more turbulence as the US-China trade spat rumbles on, warns Neil Wilson of Markets.com:
After blacklisting Huawei, the White House has issued three-month reprieve to allow US companies continue to do business with the group. It's all rather like the way Trump slaps on tariffs but delays the execution to allow room for negotiation.
Whether it's Huawei or tariffs, I would see all of this in the broader context of giant tug-of-war between the two superpowers being played out in front our eyes. As such, the more this goes on the lower the chance of a meaningful resolution to any of it. Trade disputes ad infinitum, ad nauseum.
9.02am BST
Huawei's founder has also hit out at America, saying it "underestimates our strength".
Ren Zhengfei claimed that his firm's strong lead in next-generation mobile technology means it can't be easily caught - even if it's restricted from buying US chips.
"Huawei's 5G will absolutely not be affected. In terms of 5G technologies, others won't be able to catch up with Huawei in two or three years.
Related: 'There will be conflict': Huawei founder says US underestimates company's strength
8.52am BST
Europe's chipmakers are leading the rally this morning, as trade war fears ease (a little).
The technology sector is outperforming the rest of the sector, up 0.75%, after semiconductor-makers suffered their worst day of 2019 on Monday.
8.24am BST
European stock markets are open, and posting some gains after yesterday's selloff.
In London the FTSE 100 is up 31 points, or over 0.4%, clawing back Monday's losses.
Up to now, the Chinese side is limited to harsh rhetoric.
Nevertheless, the last turn of the trade wars provoked a market reaction in the form of key indices decline, which increased the demand for US government bonds and defensive yen and franc.
8.10am BST
Traders in China have hailed Washington's decision to allow US companies to keep doing business with Huawei for the next three months.
Chinese stocks traded higher overnight as trade tensions cooled a little after the US commerce department granted Huawei a 90 day licence to assist existing customers, and this gave markets some much needed breathing space.
7.59am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Tensions between the US and China remains the top issue worrying investors, as fears growth that the trade war will morph into a tech war too.
"The temporary general licence grants operators time to make other arrangements and the [commerce] department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services."
Having hit Huawei with a 'keep out' order, the Trump administration has temporarily revoked large parts of it, having now realised how embedded Huawei already is. This is "to allow operations to continue for existing Huawei mobile phone users and rural broadband networks"
It's almost as if they hadn't thought this through.
"Chinese companies' legitimate rights and interests are being undermined, so the Chinese government will not sit idly by."
European Opening Calls:#FTSE 7327 +0.22%#DAX 12088 +0.39%#CAC 5368 +0.17%#MIB 20637 +0.47%#IBEX 9225 +0.28%
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