16.09.21 Commercial Awareness Update
The government has delayed imposing checks on EU goods until mid-22 in an attempt to stop Brexit from further exacerbating supply chain problems
British exports to the EU are fully checked while imports into the UK are mostly free of paperwork or border controls
An EU diplomat is quoted saying “[The UK government] talked about taking back control, but they are letting products into Britain without any controls at all. That’s fine with us.”
Lord David Frost, Brexit minister announced the delay to the UK border regime. He explains that “We want businesses to focus on their recovery from the pandemic rather than have to deal with new requirements at the border.”
He says he chooses to delay checks to counteract the effects that COVID-19 has had on the supply chain.
Frost proposes that customs declarations and controls will be introduced on January 1st 2022 and safety and that security declarations will not be needed until July 1st 2022.
Prenotification of agri-food imports to the UK will be moved back to January the 2nd 2022 to avoid disruption to food supplies during the Christmas season.
The food and drink sector in the UK, which has been preparing for these checks to be introduced at an earlier date are dismayed by the last-minute change.
The Food and Drink Federation said “the rug has been pulled” on those companies that followed government advice to prepare for the new regime, while rewarding those who ignored it.
Financial Times: UK postpones imposing checks on EU goods until 2022
Jab and Jet
Vaccinated travelers entering England will face lighter testing requirements.
The government is attempting to boost the struggling travel and tourism industry after Covid-19.
Heathrow airport, which was previously the busiest airport in Europe in 2019, has fallen to number ten as competitors Paris Charles de Gaulle and Amsterdam Schiphol recover quicker.
Later this week, ministers will announce that double-jabbed passengers will no longer need to take COVID tests before entering England.
The current system will be simplified - as green and amber groups will both be deemed as countries that are safe to travel to, with a separate ‘no-go’ list of countries that will require travelers to quarantine upon arrival in the UK.
The rule changes come after months of backlash from the tourism sector. Tourists were put off by the pre-departure lateral flow tests, they were worried about being stranded and forced to pay for accommodation if tests were positive.
Executives from leading aviation and travel bodies wrote to the prime minister this week to demand an end to all testing for fully vaccinated travelers
Sajid Javid, health secretary, indicates that the more expensive PCE test on the 2nd and eight days after arrival in the UK, replacing them with rapid tests for double-jabbed passengers.
The health department has resisted scrapping PCR tests (£75 per person on average) to track variants of CO-VID 19 as it enters the UK.
Unvaccinated travelers will still be expected to self-isolate and to test themselves on their return to England in line with current rules.
Paul Charles, a travel adviser, said ministers want to restore faith in traveling and encourage businesses to bring staff back on board before the end of the government’s furlough scheme this month. He also expects that twenty countries will be removed from the 62 countries on the red list.
Airline bookings across Europe have recovered twice as fast as those in the UK, according to data from Gatwick airport and airport lobby group ACI Europe.
Mo Money’ Mo’ Problems
In May, the annual rate of inflation was expected to peak at 2.5 per cent at the end of 2021, averaging 1.9 per cent in September to December.
Data on Wednesday shows that inflation went up to 3.2 per cent in August and changed predictions as it appeared that inflation would likely exceed 4 per cent by the end of the year.
Financial markets expect the first spike in interest rates during January-March of 2022.
18.3 percent annual rise in second hand car prices reflects a global shortage of semiconductors.
A significant reason for the rise of inflation in August was the discounted restaurant prices during the “eat out to help out” campaign.
Oil prices will likely begin to decrease at some point in future but energy prices will rise further.
The Bank of England believes that the reason for inflation is linked to the imbalance between spending and the availability of goods and services which can offset that spending.
There is a need to supply goods and services to match its demand without higher prices
With less supermarket staff, agricultural workers and caretakers in care homes, the supply of workers and skills will be unable to satisfy demand in the coming months, which may lead to an increase in wages as the furlough scheme comes to an end this month
Semiconductor shortages, which is putting pressure on production in the automotive sector, are unlikely to be resolved quickly and UK producer price has inflated to 5.9 per cent in August to reflect this.
The Bank of England is of the opinion that Inflation may only be cause for concern if companies begin to raise the prices of products so that they may offer more wages to attract employees.
Financial Times: UK inflation surges to 3.2% as food and transport costs rise
Arabian Knights In Shining Armour
The United Arab Emirates will announce an increase in investment in the UK as the UAE expands upon their previous partnership with the government.
The two will sign an agreement on Thursday that will confirm the UAE’s investment in UK infrastructure, green energy and technology.
The overall investment will total £10bn over five years.
This is double the investment that was expected when the five year “sovereign investment partnership” was announced in March, as Mubadala, Abu Dhabi’s state fund, promised to invest £800m in the UK’s life sciences sector.
According to the Financial Times, Khaldoon al-Mubarak, told the newspaper that the UAE has already invested £1.1bn in UK companies and funds, including £500m in CityFibre, a telecoms infrastructure group, during the past six months.
Johnson and Sheikh Mohammed are to sign a separate agreement to supplement the trade deal and collaborate areas including climate change, regional stability and food security.
The £1.1bn investment this year covers the acquisition of stakes in seven companies and financing to five UK funds, with some money set aside for the life sciences sector.
Adele: I Set Fire, To The Rails
The wildfires and heavy rains on the Union Pacific railway so far this year could reach $100m, as the effects of climate change disrupted the 32,000-mile network.
In June and July, the Lava and Dixie fires had highly affected Union Pacific bridges in California.
The Lava fire destroyed the 150-foot-tall, 1,200-foot-long Dry Canyon Bridge leading from southern California to northern Washington state.
Reconstruction of the bridge took 35 days, which caused the company to build reroutes which added more than 200,000 train miles to the network.
Fires on the west coast led the Union Pacific to built reroutes through Salt Lake City, Utah. The process involved redeploying labour, locomotives and equipment from other parts of the network. This was exacerbated by the high pressure on global supply chains.
Union Pacific is North America’s largest listed freight rail operator, extending into cities as far east as Chicago and west as Los Angeles. The company had made $19.5bn in revenue last year.
Items that would usually take two days to export from California to Portland started taking seven to eight days.
The Union Pacific is taking protective measures such as raising tracks out of flood plains, installing bigger culverts to ease the flow of water and working to get better weather predictions.
I’m addition, the Union Pacific also has a commitment to reduce its greenhouse gas emissions by 26 percent between 2018 and 2030.
Financial Times: Union Pacific suffers $100m cost hit from wildfires and rain