Carillion crisis: Theresa May rules out bailout as Labour accuses ministers of collusion - as it happened

Graeme Wearden

from on 2018-01-16 23:22 (#3DDCE)

Government under pressure over handling of Carillion's collapse, as suppliers cut jobs and creditors face huge losses

News story: Suppliers start to cut staff
Evening summary: Government under growing pressure
John McDonnell: Treasury colluded to drip-feed contracts
PM says taxpayer won't bail out Carillion
Creditors might get just 1p in the pound
Directors face 'fast-track' investigation

10.57pm GMT

The Metro has former Carillion boss Richard Howson in its sights, as he owns a six-bedroom ski chalet in the Alps....

Tomorrow's front page:
TAKING THE PISTE#tomorrowspaperstoday #bbcpapers #skypapers pic.twitter.com/kyWjYad34X

10.51pm GMT

Our latest Carillion story, about the strain on suppliers, is on tomorrow's front page:

GUARDIAN: Teach five year olds the danger of knife crime #tomorrowspaperstoday pic.twitter.com/1e6lUvJgyL

10.23pm GMT

Hello again. Wednesday's front pages are coming through, and many are leading on the Carillion crisis.

The Daily Telegraph's business section focuses on the meagre scraps that will be available to Carillion's creditors:

TELEGRAPH BUSINESS: Carillion creditors in line for less than 1p in 1 #tomorrowspaperstoday pic.twitter.com/eu9lSUF6Gx

CITY AM: Screws turn in Carillion execs #tomorrowspaperstoday pic.twitter.com/KH5QeEgz1n

FINANCIAL TIMES: Cash strapped Carillion held just 29m in its final days #tomorrowspaperstoday pic.twitter.com/rRuRcsx7Tb

Carillion fall is just the beginning #tomorrowspaperstoday pic.twitter.com/582XktItXQ

7.53pm GMT

The dramatic collapse of Carillion has started to hit thousands of the firm's suppliers, as the real world impact of the demise starts to emerge, the Guardian reports tonight.

"It is a bit like Lehman Brothers [the Wall Street investment bank that collapsed in 2008]. You don't know what the impact will be.

A very large part of Carillion's work was project management where subcontractors do the work, but these subcontractors don't know if they will be paid."

Subcontractors begin laying off staff after Carillion collapse https://t.co/fpZBBdZace

7.48pm GMT

The UK government is under growing pressure tonight over its handling of the collapse of Carillion, one of the UK's biggest contractors.

Prime minister Theresa May has insisted that taxpayers should not have bailed out Carillion, which plunged into liquidation yesterday. She told a cabinet meeting that the government would be "vigilant in monitoring for any emerging issues in public services" at schools, hospitals, prisons and beyond.

"When there were loud and clear worrying signs about Carillion, why, instead of intervening, did the Treasury Minister collude in the strategy of drip-feeding more contracts to Carillion to buoy up an obviously failing company?"

"I put it no stronger than this: at this stage, there are real suspicions that the Government was too close to this company and too wedded to its privatisation role.

7.42pm GMT

Although Carillion wasn't a household name, the collapse of such a major player in the outsourcing and construction industry has rattled the sector.

Could other firms be next?

About half of Capita's annual turnover of 4.9bn comes from central and local government work, ranging from administering the teachers' pension scheme to providing tech services to the NHS, electronic monitoring services and running the Gas Safe register for the Health and Safety Executive. It has 70,000 UK employees, and a net debt of 1.6bn compared with its market value of 2.8bn.

The company's shares have lost two-thirds of their value over the past two years after a series of profit warnings and boardroom changes.

7.39pm GMT

7.24pm GMT

Accountancy firm PwC is under scrutiny tonight over its involvement in Carillion's collapse.

PwC staff were appointed as 'special managers' yesterday, to help the Official Receiver run the company. But the firm doesn't come to the crisis with a blank slate - last year, it was advising Carillion's pension trustees, according to the Financial Times.

The head of a rival accounting firm, who requested anonymity, added that PwC's appointment "simply looks wrong".

"From a professional point of view they might just be the right side of the line [in terms of managing conflicts], but optically they will be on a hiding for nothing.

PwC:

- advised Carillion's pension trustees on its financial difficulties
- advised gov on what to do if Carillion collapsed
- are handling the liquidation now that it has collapsedhttps://t.co/UbtJAIbt8Z

7.13pm GMT

Conservative MP Bernard Jenkin agrees that lessons need to be learned from the Carillion crisis.

Jenkin chairs the Public Accounts Committee, which announced an inquiry into the outsourcing of public services yesterday.

6.57pm GMT

Unions have warned the government that the "clock is ticking" for thousands of Carillion workers.

The GMB says there are at least 8,473 Carillion private sector workers in the UK, whose jobs are vulnerable following the firm's liquidation on Monday.

"The clock is ticking for Carillion's 8,500 private sector workers, and the Government must now offer them reassurance and financial guarantees.

"No worker should go hungry, default on a bill or miss a rent or mortgage payment because of a crisis they did not cause."

6.44pm GMT

Carillion's collapse means the company's workers and pensioners will soon be in the hands of the UK's pension's lifeboat.

The Pension Protection Fund is widely expected to take on Carillion's pensions deficit, of around 580m. Those already taking pensions will be protected, but those members below retirement age will face cuts of 10-20%.

The former pensions minister Steve Webb told the Guardian that "Carillion would be the biggest-ever hit on the PPF" but that the lifeboat would be able to "comfortably absorb" the Carillion scheme.

Nigel Green, the chief executive of deVere Group, one of Britain's biggest independent financial adviser firms, said: "UK final salary pension schemes have an enormous deficit black hole, which raises the inevitable question: how many more big hits can the PPF take?"

6.25pm GMT

Labour MP Rachel Reeves is also piling pressure on the government tonight.

She's calling on ministers to urgently tighten Britain's corporate governance rules to prevent another Carillion crisis.

In the end, the people who lose out when money is siphoned off is suppliers, workers, and when government contract are involved it's ultimately the British tax payer.

It's not acceptable that those risks can be transferred to the taxpayers and employees, while the executives get the bonuses and the dividends.

As workers, suppliers and taxpayers pay the price for Carillion's collapse, the Chief Executive who was sacked last year for his part in the company's downfall is still being paid 660,000 a year. Govt must act to prevent companies siphoning off millions at taxpayers' expense. pic.twitter.com/vYSJbCQrgg

6.09pm GMT

Here are the key quotes from shadow chancellor John McDonnell in parliament earlier today, as he called for "full transparency" into the Carillion crisis.

"I put it no stronger than this: at this stage, there are real suspicions that the Government was too close to this company and too wedded to its privatisation role.

"It would be completely wrong for a company that had got itself in this state to be bailed out by the state and that is what we are not doing.

"I think that the Government is dealing with this in a responsible and measured way, rather than making cheap political shots at a time when people's jobs are in question and we are working to sort that out."

5.57pm GMT

The Federation of Small Businesses is alarmed to hear that Carillion's creditors might only recover 1% of the money they are owed (as flagged up earlier).

The Evening Standard's Russell Lynch has the details:

The revelation comes in a High Court witness statement submitted by the interim chief executive, Keith Cochrane, on the company's liquidation yesterday and seen by the Standard.

Cochrane's account of the six-month prelude to the company's demise also delivers a broadside against the firm's lenders and reveals that private sector clients were refusing to give them new work in contrast with the Government, which awarded them major contracts on the HS2 rail scheme last summer.

Carillion crisis: suppliers could get less than 1p in pound, PwC slammed, banks to take hit https://t.co/0LFhpVVZ8P pic.twitter.com/v8TO5Y4Gja

5.42pm GMT

Here's a video clip of John McDonnell telling MPs today that the government was "too close" to Carillion, and chose to "drip-feed" contracts to the company rather than heed the warning signs.

"There are real suspicions that this Govt was too close to Carillion & too wedded to it's privatisation role."
"We need full transparency of the meetings that took place between Govt ministers and representatives of #Carillion." @johnmcdonnellMP pic.twitter.com/qEJRqocfFo

5.34pm GMT

Shares in UK geotechnical engineering contractor Van Elle have tumbled by almost 8% today, after it told shareholders that it is owed 1.6m by Carillion.

5.25pm GMT

The Carillion crisis has spurred many Guardian readers to write in with your views (as well as many excellent online comments, of course!).

For example, Paul Davies of Goring, Oxfordshire, says ministers must be held to account:

The government has been trumpeting its code that requires large companies to treat their suppliers fairly and pay them on the same terms as the government pays the big companies. Instead it has emerged that Carillion used its suppliers as a bank - refusing to pay them except on 120-day terms, while being paid on 30-day terms by the government.

For the officials and ministers in so many departments to have turned a blind eye to this bullying by Carillion is a disgrace and it is surely time that both officials and ministers in transport, defence, health, education and elsewhere are held accountable for this total failure. If ministers weren't aware of this, the officials should be subject to disciplinary procedures.

"More is not always better. Million, billion, trillion" Carillion."

Our lead package for tomorrow's letters spread https://t.co/UJDBtMKx0A

5.16pm GMT

Reuters has calculated that Carillion paid out $1bn (775m) to its shareholders in dividends since the firm was created 19 years ago.

The company has been criticised for its 'progressive dividend' policy -- basically boosting returns to investors each year.

5.08pm GMT

Labour's shadow chancellor John McDonnell has blamed "shambolic Tory government and mismanagement by Carillion's fat-cat bosses for the company's collapse.

Writing in the Guardian tonight, McDonnell says:

Nothing has come to symbolise the worship of free market solutions - often against all the evidence - more than the persistent belief that key public services would be better provided by profit-seeking companies. As the journalist Robert Peston put it, the collapse of Carillion represents the definitive end of a 25-year love affair with the private provision of public services.

The end of the affair has revealed some unedifying details about some of the participants in it: the apparent reliance by Carillion's management on "low-balling" bids to win them, then sweating suppliers and workers to squeeze a profit; Chris Grayling's insistence on awarding Carillion the HS2 contract even after its first profit warning; David Cameron's decision to appoint Carillion's chairman, Philip Green, as an adviser on corporate responsibility.

If the Tories won't wake up to the reality of the changing economic landscape, it's time they stood aside and let us take over.

4.54pm GMT

Andrew Bounds, the Financial Times North of England correspondent, reports that there was little action at a Carillion site in Salford, Manchester, today:

The "come to work" message has not got through to #Carillion private sector sites. This one in Salford by the Lowry Hotel. pic.twitter.com/BJL5Acv809

4.48pm GMT

Here's a picture of Andy Bradley of Flora-Tec, who was forced to lay off 10 staff because he's owed 800,000 by Carillion (see this morning's posts)

4.29pm GMT

The agency Scottish Enterprise is setting up a hotline to help any Scottish companies affected by the collapse of Carillion, particularly on the 1.5bn project to build the Aberdeen bypass.

Keith Brown, the Scottish economy secretary, outlined the measures to MSPs this afternoon.

4.16pm GMT

The shockwaves from Carillion's liquidation has reached Canada, where the company employs 6,000 people.

The call for the Canadian government to step in came from Unifor and the Ontario Council of Hospital Unions (OCHU/CUPE), which represents employees at the William Osler Health System, The Royal Ottawa Hospital, Halton Healthcare and the Sault Area Hospital.

The hospitals have service contracts with Carillion, the unions said, adding the workers are among the 6,000 Canadian workers affected by the Carillion liquidation.

4.01pm GMT

Liberal Democrat leader Sir Vince Cable has welcomed the government's decision to fast-track the investigation of Carillion's current and former directors.

But, like John McDonnell earlier, he also wants ministers to answer questions about their actions.

"We also need a National Audit Office probe, followed by parliamentary scrutiny by the Public Accounts Committee to fully understand what led to Carillion's collapse.

"We need to know why the Government felt it was not wrong to feed Carillion lucrative public sector contracts when they knew the company was in severe trouble because of its profit warnings."

3.38pm GMT

ITV's Joel Hills has more details of the Carillion witness statement, and it's very bad news for creditors:

Witness statement filed at High Court by Carillion CEO is doing the rounds. It's fascinating. Reveals that expected recovery for creditors in liquidation is 0.8p - 6.6p in the . Ouch.

3.08pm GMT

Nationwide Building Society has agreed to pay around 250 Carillion employees who work its data centres and head office until the end of this month.

"We have been negotiating with Nationwide since the end of last week.

Nationwide has said to the Carillion employees on the Nationwide contract - about 250 in total - that they will ensure they will be paid to the end of the month."

"My question to Nationwide is, should you really be outsourcing these sorts of services? It might have looked good at first, but it has fallen apart. If they say to us again they want to outsource some work currently done in house, we'll be saying, Carillion? Are you sure?"

2.48pm GMT

The FT reports that Carillion had reached a perilous financial position by the time it fell into liquidation on Monday morning.

Their reporter, Gill Plimmer, explains writes:

Carillion was left with just 29m in cash when it collapsed, according to a document that reveals the extent of the construction company's financial black hole.

Papers seen by the Financial Times show the insolvent construction company owed 1.29bn to its banks, including a 790m revolving credit facility and 349m in private placement notes.

So @gillplimmer1 has obtained papers showing:

-Carillion had just 29m in cash when it collapsed
-Owed 1.29bn to its banks (higher than previous guidance of 900m)
-PwC and EY rejected requests to be administrators amid concerns they would not be paidhttps://t.co/JnDTGwsHAl

2.37pm GMT

Newsflash: America's stock market has hit a new alltime high, as the bull market continues.

The Dow Jones index jumped by 0.86%, or 223 points, to 26,027. This is the first time it has ever burst over the 26k mark. The S&P 500 and the Nasdaw are also at new peaks.

Dow Jones index opens above 26,000 points pic.twitter.com/JJxLf8fPBp

2.29pm GMT

Sky News is reporting that Carillion's interim chief executive, Keith Cochrane, has accused Royal Bank of Scotland of undermining efforts to keep it afloat.

Cochrane apparently criticised banks, including RBS, in a witness statement filed at the High Court

According to Mr Cochrane's witness statement, RBS informed Carillion last Thursday that it wanted the company to pre-fund supplier payments made through the bank, which meant it would need to make those payments two days earlier than cashflow forecasts had assumed.

He said this negatively impacted Carillion's liquidity by between 2m and 20m.

"The company relied upon that EPF in order to assist it making payments to its suppliers.

"Santander informed the group's suppliers that arrangements to automatically prepay invoices submitted by the supplier would be terminated and it sent a separate email to certain of its suppliers that 'all payments with Carillion are stopped'.

1.58pm GMT

Theresa May told her cabinet that the "taxpayer could not be expected to bail out a private company" following the collapse of Carillion, according to her official spokesman.

Number 10: "There is no taxpayer money to bail out the company"... says money going to Receiver to pay for cost of insolvency, but other money for public services would have been paid to Carillion

"She said Government would be vigilant in monitoring for any emerging issues in public services and in providing support for employees of companies with private sector Carillion contracts."

"This means the Official Receiver's investigation will consider whether those who are, or were previously directors of the company may have caused detriment to those owed money, including workers and businesses affected."

At Cabinet, Business Secretary Clark explained letter to Insolvency Service asking for statutory investigation into the conduct of Carillion directors to be extended to include previous directors and for it to be fast-tracked

1.17pm GMT

Labour's shadow chancellor, John McDonnell, has accused the UK government of colluding to support Carillion by 'drip-feeding' it with contracts.

We need a full public inquiry, immediately, to find out exactly what happened.

We want to know what the government's involvement in all this is.

This could be a bottomless pit if we're not careful.

Government ministers seem to have colluded in a strategy where, even when they know the company was in trouble, when the company's share price was collapsing and there were profit warnings and resignation [they] still drip-fed this company with public contracts.

It was just a strategy that was bound to fail, and put pressure on workers and unfortunately now taxpayer as well.

The Carillion collapse has raised real suspicions that the government was too close to this company and too wedded to its privatisation role

12.58pm GMT

City AM's Cat Neilan has tweeted Greg Clark's letters, which ratchet up the pressure on Carillion's management, and its auditors at KPMG.

... and Clark's #Carillion letter to #FRC pic.twitter.com/OYgv7Q8G3X

Here's the letter in which @GregClarkMP asks the investigation "consider the extent to which the conduct of the directors of #Carillion led to it's insolvency". pic.twitter.com/BP5N1tS7mp

12.34pm GMT

Newsflash: The UK's Department for Business is pushing for a "fast-track" investigation into Carillion's directors.

NEW Business Secretary has asked the Official Receiver to speed up and broaden their investigation into Carillion Directors (to include former Directors) and whether they 'caused detriment' to workers and businesses who are owed money.

It is important we quickly get the full picture of the events which caused Carillion to enter liquidation, which is why I have asked the Insolvency Service to fast-track and broaden the scope of the Official Receiver's investigation.

In particular, I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors. Any evidence of misconduct will be taken very seriously.

12.30pm GMT

Nicky Morgan MP asks Philip Hammond how the government will help small firms who are struggling to pay wages and their tax liabilities.

Hammond says HMRC already has a scheme to help firms who have problems pay their tax bills. Ministers have agreed that HMRC should 'signpost it' on the government's Carillion information websites.

12.21pm GMT

Shadow chancellor John McDonell warns the government that thousands of Carillion employees will turn up to work tomorrow, not knowing if they have a job.

Workers in the supply chain also face an uncertain future, McDonell adds.

12.14pm GMT

Over in parliament, chancellor Philip Hammond has been quizzed about the Carillion crisis.

Labour MP Helen Goodman asks about what protection is being provided to the Official Receiver, which took control of Carillion's operations after it fell into liquidation yesterday.

Helen Goodman asks chancellor about the indemnity on the Carillion Receiver that I reported last night --
Hammond: Treasury has provided a line of credit to official receiver [for provision of public services], recovering cost from Departments which would have paid for services

11.35am GMT

The TUC says its proposed Carillion taskforce would have five priorities:

11.25am GMT

BREAKING: Britain's trade unions are calling for a 'national taskforce' to be set up, to protect UK firms from the collapse of Carillion.

"We urgently need a national taskforce involving unions to safeguard jobs, services, and pensions.

"Workers can't be left at the back of the queue. Each and every worker at Carillion needs to know where they stand. They have bills and mortgages to pay, and deserve certainty on their future.

11.18am GMT

The Treasury have created a little video to show how they're helping Britons cope with inflation:

Stats out today show #inflation was 3% in December. We're helping families with the cost of living by ai cutting taxes, ai freezing fuel duty and increasing the National Living Wage a pic.twitter.com/FFbGDgw70y

11.01am GMT

Getting back to Carillion....and the Bank of England has reassured MPs that Britain's financial system won't be shaken by the firm's collapse.

"The direct exposures are entirely manageable across all institutions."

"Will there be a wider indirect issue with all the suppliers?... That is a more difficult one. I am not massively worried about it."

10.43am GMT

Aberdeen Standard Investments chief economist Lucy O'Carroll warns that inflation will only fall slowly this year:

"Today's headline number doesn't amount to a hill of beans in isolation. But it's more interesting in the context of what's been happening with inflation lately. It appears to be steadying around 3%, and could stay close to this level for the next few months.

Looking a little further into 2018, inflation is likely to drift down gradually as the rise in prices caused by the pound's decline falls out of the numbers.

10.21am GMT

Ian Kernohan, Economist at Royal London Asset Management, is also hopeful that UK inflation has passed its peak:

"Last month saw CPI inflation fall slightly to 3%. Much of the recent rise in inflation was driven by sterling's devaluation during 2016.

"However, this factor will begin to fade and inflation should fall back towards the 2% target over the coming year, with Producer Prices figures already showing input price inflation falling sharply."

"We can finally breathe a small sigh of relief as inflation has slightly fallen. We're by no means back to the luxury of low inflation but the fact it hasn't risen again gives us a slight helping hand.

"We aren't out of the woods yet though, for many of us prices are still rising faster than wages, so purse strings will still be tight. The cost of everyday items like food and household goods as well as transport continue to push up the cost of living, so budgeting is key.

10.08am GMT

BBC economics correspondent Andrew Verity has dug into the inflation data, and spotted some big cost increases:

A few little horrors from the inflation numbers: Coffee, tea and cocoa up 9.5%. Oils and fats (including butter) up 11.1%. Electricity up 11.4%

As expected UK inflation seems to be peaking - positive for the consumer outlook https://t.co/s0t7MFEBM6

10.05am GMT

The pound has dropped by 0.2% following the inflation figures, as City traders calculate that it makes an early interest rate rise less likely.

This has pushed the FTSE 100 index up to 7791 points, a whisker away from a new all-time high.

9.56am GMT

This drop in inflation shows that the impact of the pound's sharp tumble after the Brexit vote is now fading.

Nancy Curtin, chief investment officer at Close Brothers Asset Management, explains:

"Consumers will breathe a sigh of relief that escalating living costs are showing signs of abating. The Brexit vote brought with it the side effect of depreciating sterling, and the subsequent rise in import costs, pushing inflation well beyond the Bank of England's target.

These effects are dissipating somewhat, and core inflation remains lower still.

9.52am GMT

Britain's financial 'pinch' seems to be easing, says Richard Lim, chief executive of Retail Economics:

"The good news is that inflation appears to have peaked. We expect inflation to fall fairly sharply, to around 2.5% by Spring, which will ease the pressure on household budgets.

"That said, food inflation remains near four-year high and petrol prices rose sharply as the continued impact of Brexit and rising commodity prices fed through supply chains.

9.51am GMT

This is from James Tucker of the Office for National Statistics:

Rising air fares having a smaller impact on headline #inflation than last year and falling cost of various toys and games helped nudge down inflation in December. Partially offset by rising tobacco prices, because of duty increases.

9.50am GMT

The UK government will be relieved to see Britain's inflation rate fall, says Dennis de Jong, managing director at UFX.com:

"Amidst the negative headlines around the collapse of Carillion, there is some more positive news for Prime Minister Theresa May this morning, as December's inflation figure has eased slightly from its six-year high in November.

"With inflation dropping, and sterling back to its highest level since the Brexit referendum, there is a growing feeling of optimism around the British economy at the moment, with many predicting inflation will fall closer to the Bank of England's 2% target in 2018.

9.48am GMT

Good news for households -- Danske Bank analysts suggest Britain's inflation rate may have now peaked.

Signs that #UK core inflation has peaked, perhaps because $GBP depreciation effect has peaked. In our view, #inflation is set to move lower (unlike the latest projections from Bank of England) $GBPUSD $EURGBP #brexit pic.twitter.com/iGqB6EpKqt

Inflation slips but real wages are still negative, long road to travel before workers are getting richer. Keys for the Bank of England now are wages and productivity, less so movements in CPI.

UK inflation slowed to 3%y/y in December, as expected, with air fares the primary reason. More importantly, core inflation slowed by more than expected to 2.5%y/y. pic.twitter.com/XyhPTFI2l7

Inflation drops but still leaves savers with shrinking nest eggs https://t.co/3L2ivvQUWh

9.44am GMT

Despite December's dip in inflation, the cost of food, household goods and transport services pushed the cost of living up.

9.38am GMT

The Office for National Statistics says the downward effect on inflation came mainly from air fares, along with a fall in the prices of a range of recreational goods, particularly games and toys.

9.38am GMT

This chart shows how inflation (in yellow) has finally started falling for the first time in six months.

9.34am GMT

Newsflash: Britain's inflation rate has fallen for the first time since last June.

The Consumer Prices index rose by 3.0% in December, down from 3.1% in November (a six-year high)

9.24am GMT

The collapse of #Carillion dominates this morning's front pages. pic.twitter.com/xeuHJWdZIc

9.23am GMT

Economics professor Mariana Mazzucato says Carillion's collapse should trigger a fundamental rethink about how public services are supplied, and paid for:

Outsourcing to companies like Carillion= PSEUDO privatisation. Parasitic contracts mean income for company not from clients in 'market' but from government through a guaranteed profit margin. Need complete rethink how to run public services for public value not shareholder value.

9.23am GMT

Julia Palmer, a partner at Begbies Traynor, says small companies who supplied Carillion face little prospect of being paid.

Palmer told Wake Up To Money:

There's an order of priority. Secured creditiors will be paid first, ahead of unsecured creditors, of whom there will be be a very large number.

Many sub-contractors will be reeling, wondering how on earth they recover from this.

9.15am GMT

Top UK government ministers are expected to discuss Carillion's collapse later today, when Theresa May's cabinet meet at Downing Street.

Last night, ministers held a meeting on the crisis. Afterwards, Cabinet Office minister David Lidington claimed efforts to deal with the crisis had "gone pretty well".

"The message today was that day one had gone pretty well, people were turning up to work, we had not had reports of any serious disruption to service delivery."

9.09am GMT

UK's horticultural services company Flora-tec has been badly hit by the collapse of Carillion, giving a chilling example of the 'domino effect' that could hit the UK economy.

Andy Bradley of landscaping firm Flora-tec has taken a 880k hit and cut 10 jobs following Carillion collapse. "The government continued to give them billion pound contracts... and we took comfort from that," he tells #WakeUptoMoney @bbc5live pic.twitter.com/yHdwTyQpb1

I had to make 10 people redundant yesterday. that's 10 people with mortgages and car loans It's an absolute disgrace...

I've got people to pay. I've not got the money to pay them.

8.38am GMT

Infrastructure investment company John Laing has told the City that it can handle Carillion's collapse.

John Laing has nine 'operational PPP (public partnership) projects where Carillion are the Facilities Management provider, 4 schools projects, 4 emergency services projects and 1 road project.

The Investment Adviser's asset management team have been aware of the issues affecting Carillion and have had contingency plans in place for some time.

These have involved discussions with a number of potential replacement providers and the Investment Adviser is in the process of implementing these contingency plans and seeking to appoint alternative FM providers on all of the 9 projects to replace Carillion.

8.23am GMT

Several construction and engineering firms have updated the City this morning about the Carillion crisis.

Van Elle, a geotechnical engineering* contractor, told shareholders that it is currently owed 1.6m by Carillion for various contracts in December, and work taking place in January.

8.02am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, business and the eurozone.

Last month the Bank of England governor found himself having to pen a letter to the Chancellor of the Exchequer explaining the reasons as to why the Bank of England had exceeded its headline inflation target by more than 1%, after CPI came in at 3.1% for November, the highest level since March 2012. Later this morning we'll find out if the December numbers have fallen back from those heady peaks.

While most expectations are for that indeed to be the case, with a drop back to 3%, one can't help feeling that this optimism might well be misplaced.

JD SPORTS +4%; Christmas sales +3%, sees FY profit ahead of est (300m v 270-95m) sales growth seen online and thru overseas expansion.

Stat of the day: @PremierFoods_FS sold 220m mince pies last year. Or 3 for every man, woman & child

Greggs says it'll open even more stores in 2018 - after posting its financial figures from last year. Like-for-like sales were up 3.7% #CapitalReports pic.twitter.com/j2bvLUd0tc

Jeremy Helsby to retire as @savills CEO at end of 2018 after a transformational 11 years in the top job. Congrats to Europe CEO Mark Ridley who will succeed him. Here he is (third from left) chairing last night Savills forecast event. pic.twitter.com/w2f31kBIfm

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