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The ongoing game of interest rate, employment figure dominoes

Plus, female business leaders are backing Rachel Reeves, one in three Asda staff have been attacked at work and Roger Federer's inspirational commencement address

The Conservatives have revealed their 76-page manifesto at Silverstone today (insert “the wheels are already off” jokes here). We’ll cover what the major parties are doing to help businesses grow later in the week.

Elsewhere, new data from the Office for National Statistics (ONS) shows that wage growth remains high in the UK, coming in at 6 per cent in April. That is double the rate of inflation, leading analysts to suggest that the Bank of England may wait to cut interest rates when it meets for its latest decision next Thursday.

The strong growth was expected after the introduction of a higher national living wage on 1 April. Yet it comes despite a wider cooling in the labour market. Between March and May, the number of vacancies dropped by 12,000 to 904,000, the 23rd consecutive quarter that vacancies have fallen. The number of unemployed people per vacancy was up 1.7 per cent, compared to 1.5 per cent for the previous quarter.

The ONS says: “This month’s figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong.”

Bank of England Museum located within the Bank of England in the City of London

The figures have raised concerns among business leaders over the state of the UK labour market. Nicholas Hyett, investment manager at investment service Wealth Club, says they “do not paint a pretty picture of the UK labour market. Falling vacancies makes those numbers particularly concerning, suggesting there is a genuine lack of demand for staff.”

Shawbrook’s chief commercial banking officer Neil Rudge goes further, suggesting the ONS data is a symptom of a bigger problem for growing businesses in particular. He cites data from a survey it conducted showing that 60 per cent of SMEs are concerned about access to talent over the next 12 months at the same time that 55 per cent are looking to hire new staff.

That, he says, means that while SMEs want to hire, they are being put off by the significant cost burden caused by wage inflation, national insurance and pension contributions, and hiring, training and retaining staff. 
Rudge says: “These businesses may be the missing piece in the puzzle that is the current labour market, and access to the right talent is crucial to support their significant growth ambitions and drive the UK economy forward.”

Business Question

Guess the leader

  • I started my business in the West Midlands
  • The company was founded in 2000 but had an older legacy
  • I am a co-CEO
  • I’m one of the country’s richest people
  • I was awarded a CBE in 2012
  • My company employs over 7,500 and has over 90 million customers
  • I’m betting that you think that business is a family affair

The answer can be found at the bottom of the page.

Business in Brief

Everything you need to know

1. The Guardian has published a letter signed by more than a dozen female business leaders backing Rachel Reeves as chancellor. Resi CEO Alexandra Depledge, Hays Travel owner Irene Hays and Richer Sounds CEO Julie Abraham were among the signatories who say they have met the shadow chancellor and appreciate “her openness to business and her commitment to a genuine plan for economic growth”. Read the full letter here.

2. A new survey has revealed that more than one in three (35 per cent) of Asda staff have been attacked at work. In the poll by the workers’ union GMB, workers reported they had been spat at, suffered broken bones, hit with bottles and had death threats against them and their children. You can read more here.

3. Elon Musk has threatened to ban Apple devices from his companies if the iPhone maker pushes ahead with an OpenAI partnership, which was announced at the company’s developer day yesterday. Musk posted on X that the move was an “unacceptable security violation.” You can read more here

4. Raspberry Pi is set to raise £166m in a welcome boost for the London Stock Exchange. The firm’s IPO share price is set for £2.80, with terms suggesting a valuation of £541.6m. You can read more here.

5. Happy news out of the South West today, with St Austell Brewery reporting “strong” profit growth and record sales for 2023. The business owns more than 160 pubs, inns and hotels across the West Country. Total revenue was £229.5m, up 10 per cent on the previous year. You can read more here.

Business Quotes

Inspiration from leaders

“It’s fine to celebrate success but it is more important to heed the lessons of failure.”
– Bill Gates

Business Thinker

Ideas on the future of business and leadership

1. 73-year-old British billionaire Sir Richard Branson unveils succession plan to give Virgin Atlantic to his kids

2. A VC gets flamed for pulling out of deals. Founders say it’s all too common

3. Cryptoverse: Soccer tokens shine ahead of summer of sport

And finally…

Roger Federer commencement address at Dartmouth College

Tennis legend Roger Federer gave the commencement speech at Dartmouth University over the weekend and it was fantastic. There were so many inspirational snippets from it, but here’s my personal favourite:

Perfection is impossible… In the 1,526 singles matches I played in my career, I won almost 80% of those matches… Now, I have a question for all of you… what percentage of the points do you think I won in those matches?

Only 54%.

In other words, even top-ranked tennis players win barely more than half of the points they play.

When you lose every second point, on average, you learn not to dwell on every shot.

When you’re playing a point, it is the most important thing in the world.

But when it’s behind you, it’s behind you… This mindset is really crucial because it frees you to fully commit to the next point and the next one after that with intensity, clarity and focus.

You can watch a few of the highlights here and the full video here.

The answer to today’s Business Question is Denise Coates.

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