Business Bulletin: 19th January

Image: DncnH

Image: DncnH

Domestic

Jeremy Corbyn has announced a plan to stop companies paying dividends on shares if they pay less than the living wage. The plan is designed to encourage companies to increase wages to a fair level. However, Mr Corbyn’s ambitious plan has come in for criticism from the CBI whose chief of staff has said “The idea of politicians stepping into the relationship between a private company and its shareholders would be a significant intervention, and not one that we would support.” Labour moderates will be concerned that Mr Corbyn’s latest announcement will damage the party’s credibility in the City.

British Telecom’s takeover of mobile network EE has received approval from the Competition and Markets Authority (CMA). The £12.5 billion deal will combine the largest fixed-based landline service in Britain and one of the largest mobile networks. The CMA said that as BT’s market share of mobile was not a major player in mobile that the deal can go ahead.

Ofgem, the energy market regulator, has said that energy firms are overcharging customers for energy. This is due to the falling wholesale price of energy, which has declined by a third in the last 18 months. The regulator has said that the vast majority of consumers are not benefiting from this decline in price, despite half of the value of an energy bill being made up of the cost of the wholesale price.

International

The Venezuelan Government has announced a 60 day economic emergency as the economic situation grows steadily worse. The measures include tax rises and emergency financing to pay for the country’s welfare payments. The edict also increases state control over industry and places limitations on electronic currency transactions. The worsening situation in Venezuela has led to shortages of basic food and consumer goods, with inflation running 141 per cent. The country has been hit particularly hard by the global oil price collapse, as oil exports account for 95 per cent of its income.

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