CITY AM – MOO-Vin’ ON
The lead for the London business newspaper CITY AM reports consumer goods giant Unilever topped the FTSE 100 leaderboard on Tuesday as news of job cuts and a spin-off of its ice cream business appealed to investors.
Online, the paper leads with the latest UK inflation rates.
Unilever: Why job cuts and ice cream split may be a sweet deal for the FTSE 100 business
Consumer goods giant Unilever topped the FTSE 100 leaderboard on Tuesday as news of job cuts and a spin-off of its ice cream business appealed to investors.
Shares in the maker of Dove soap and Marmite climbed over three per cent after it was announced that it would cut five per cent of its workforce in efforts to save around £683m.
The board also said its ice cream division, which makes the popular Ben and Jerry’s and Magnum brands, would be “better delivered under a different ownership structure.”
Today’s decision is thought to be influenced by the billionaire activist investor Nelson Peltz. Peltz acquired a stake in the firm two years ago, in 2022, and at the time, investors cheered his arrival following his success at Unilever’s peer P&G.
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Inflation drops faster than expected ahead of Bank of England’s interest rate decision
Inflation fell faster than expected last month, dropping to its lowest level in nearly two and a half years, as markets brace for the latest interest rate decision from the Bank of England.
Figures from the Office for National Statistics (ONS) showed that the headline rate of inflation dropped to 3.4 per cent in February, down from four per cent the month before.
Economists had expected a reading of 3.5 per cent.
“Food prices were the main driver of the fall, with prices almost unchanged this year compared with a large rise last year, while restaurant and café price rises also slowed,” Grant Fitzner, chief economist at the ONS said.
Food and alcohol prices rose five per cent in the year to February, the lowest increase since January 2022 and down from a seven per cent increase in January.
Prices for restaurants and hotels fell to six per cent, down from 7.1 per cent. This helped to offset increases in petrol prices and rental costs.
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The Bank of England should cut rates soon – but timing is everything
The Bank of England has faced a growing tide of criticism that it risks being too slow in cutting interest rates having failed to respond quickly enough when inflation started to rise.
Critics of the Bank point to the fairly rapid descent in inflation over the past few months, which has surprised economists. They also point out that the UK is technically in a recession.
Andy Haldane, former chief economist at the Bank, is often seen as one of the leading advocates of this view.
“It’s one thing to have missed inflation on the way up, which happened. It’s quite another to then have crushed the economy on the way down,” he said.
This view is also popular among Conservatives who fear that excessive caution from the Bank could stymie a budding recovery just when the government needs to convince voters that its economic plan is working.
Conservative MP John Baron told Bank Governor Andrew Bailey last month during a Treasury Committee hearing that the economic warning lights were “flashing red” while “inflation is coming down, and coming down fast”.
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