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Rolling coverage of the latest economic and financial news, as unions fear British Steel will announce the closure of coking ovens at its Scunthorpe plant
LIVE Updated 13m ago
The British Steel works in Scunthorpe, England. Photograph: Christopher Furlong/Getty Images
Unions warn British Steel jobs at risk amid coking ovens closure fears
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Unions fear British Steel is set to announce the closure of coking ovens at one of its plants today, with the loss of hundreds of jobs.
Union officials were told earlier this month that British Steel, owned by China’s Jingye, was considering closing coke ovens at its site in Scunthorpe.
An announcement could be made on Wednesday, unions believe.
Charlotte Brumpton-Childs, GMB national officer, said it would be “devastating news“ for the people of Scunthorpe and all British Steel workers across the UK.
She explains (via PA Media):
“With grim predictability, the Government’s investment is a sticking plaster that does nothing to help the long-term structural issues affecting our steel industry.
“Now steel workers, their families and communities will once again be asked to pay the price.
“GMB urges British Steel and the UK Government to continue talks.
“Ministers need to decide if they want the UK to have a future in steel or whether they want it to wither and die like so much of our proud manufacturing heritage.”
Coking ovens turn coal into coke, which burns at the higher temperature needed for the steel production process.
British Steel, which was bought in 2020 by Jingye, has been in talks with the government over a possible £300m support package for several months, as is its Indian-owned rival Tata Steel.
At the start of February, the Unite union warned that 1,2000 jobs were at risk at British Steel’s Scunthorpe steelworks.
Jingye and Tata Steel (which owns Port Talbot near Swansea, in Wales) are seeking support to upgrade their steel blast furnaces to electric arc furnaces with much lower carbon emissions.
Also coming up today
UK supermarket shoppers could be facing weeks of shortages of fruit and vegetables.
Yesterday, Asda introduced a limit on tomatoes, peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries, and today Morrisons will restrict customers to two per item on packs of tomatoes, cucumbers, lettuce and peppers from Wednesday.
UK prime minister Rishi Sunak is exploring a 5% rise for public-sector workers, the Financial Times reports, to end an escalating wave of strikes.
This possible breakthrough comes after yesterday’s public finances gave the Treasury was given an unexpected £30bn windfall.
Ministers and nurses’ leaders are due to hold “intensive talks” on Wednesday in an unexpected move that has raised hopes that they will thrash out a deal to end the long-running pay dispute. The Royal College of Nursing has suspended next week’s planned strike.
But yesterday, Jeremy Hunt insisted the government is unable afford a bigger pay increase for nurses and other public sector workers at next month’s budget, despite official figures showing an unexpected boost for the exchequer in January.
Lloyds Banking Group has reported a flat annual pre-tax profit for last year. Lloyds made £6.9bn last year, as a jump in income driven by higher interest rates was offset by mounting bad loan provisions.
Lloyds CEO Charlie Nunn says the results are ‘resilient’, and told the Today Programme that the bank expects a mild UK recession in 2023, with a recovery in 2024.
European stock markets are set to open lower, after Wall Street posted its biggest loss of 2023 so far.
The Dow Jones industrial average shed 2% on Tuesday, as a strong survey of US purchasing managers fuelled concerns that America’s central bank will keep interest rates higher for longer than hoped.
The US Federal Reserve will release the minutes of its last meeting tonight, which will give insight into whether policymakers expected to ‘pivot’ away from higher borrowing costs anytime soon.
The agenda
7am GMT: German inflation rate for January
9am GMT: Italian inflation rate for January
9am GMT: Ifo index of German business confidence
9.30am GMT: House of Commons Science and Technology Committee to question Google, Microsoft and BT on AI regulation
1.55pm GMT: US Redbook Index of retail sales growth
7pm GMT: US Federal Reserve to publish minutes of this month’s meeeting
Key events
Sky: Government officials fly to China to win support for British Steel bailout
Sky News reported overnight that government officials will this week fly to China in an effort to convince Jingye, the owner of British Steel, to finalise plans for a state funding package
Civil servants from the Department for Business and Trade are travelling to meet executives from Jingye Group amid protracted talks about a £300m grant to the Scunthorpe-based company.
Sources told Sky the talks were expected to focus on the value of an energy subsidy package, which could take the overall value of government support for British Steel to approximately £1bn.
The timescale for the feared closure of British Steel’s coking ovens in Scunthorpe is unclear, the BBC says, as is how many compulsory redundancies it will involve.
The BBC’s Simon Jack reports:
Union officials told the BBC that the industry “is on a knife edge”.
Government sources described the decision as “disappointing” given that negotiations are still ongoing between British Steel’s Chinese owners Jingye, Tata, and the Treasury about a support package worth £300m to each company.
British Steel: We reluctantly have to consider cost-cutting
British Steel points out that Jingye has invested £330m in capital projects during its first three years of ownership.
But, a British Steel spokesman says the energy crisis has driven up the company’s costs. That, and the tough economic outlook, means it must consider cost-cutting.
The British Steel spokesman says:
“Jingye is committed to our long-term future but decarbonisation is a major challenge for our business and, like most companies, we’re facing significant challenges because of the economic slowdown, rising inflation and exceptionally high energy prices.
“For example, last year our energy bill rose by £120 million while we’ve also faced an increase of over £70 million in our annual carbon costs.
“We have taken action to reduce costs within our control; however, steelmaking in the UK remains uncompetitive when compared to other international steelmakers.
“Our energy costs, carbon costs and labour costs are some of the highest across the world, which are factors that we cannot influence directly. For the reasons outlined, we entered into talks with the UK Government in summer 2022 and are extremely grateful for its support.
“It’s important we have the correct policies and frameworks in place to back our drive to become a clean, green and sustainable company, and we’re continuing to discuss this with the Government.
British Steel insists that it is “committed to working together”, so that Britain can make home-made steel for generations to come, adding:
“Unfortunately, like many other businesses we are reluctantly having to consider cost-cutting in light of the global recession and increased costs. We have discussed this in preliminary talks with the trade unions in which we shared the challenges we face.
“We look forward to working closely with them to ensure a long-term, safe and sustainable future for the company, thousands of employees and many more in people in our supply chain.”
The Unite union is also concerned that British Steel will announce job cuts today.
Unite general secretary Sharon Graham says:
“British Steel workers are faced with the toxic combination of a greedy employer that is reneging on investment promises and a shambolic UK Government that has no serious plan for the industry.
“Unite’s members in British Steel are clear that they will fight this and they will have the full support of their union.”
Unions warn British Steel jobs at risk amid coking ovens closure fears
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Unions fear British Steel is set to announce the closure of coking ovens at one of its plants today, with the loss of hundreds of jobs.
Union officials were told earlier this month that British Steel, owned by China’s Jingye, was considering closing coke ovens at its site in Scunthorpe.
An announcement could be made on Wednesday, unions believe.
Charlotte Brumpton-Childs, GMB national officer, said it would be “devastating news“ for the people of Scunthorpe and all British Steel workers across the UK.
She explains (via PA Media):
“With grim predictability, the Government’s investment is a sticking plaster that does nothing to help the long-term structural issues affecting our steel industry.
“Now steel workers, their families and communities will once again be asked to pay the price.
“GMB urges British Steel and the UK Government to continue talks.
“Ministers need to decide if they want the UK to have a future in steel or whether they want it to wither and die like so much of our proud manufacturing heritage.”
Coking ovens turn coal into coke, which burns at the higher temperature needed for the steel production process.
British Steel, which was bought in 2020 by Jingye, has been in talks with the government over a possible £300m support package for several months, as is its Indian-owned rival Tata Steel.
At the start of February, the Unite union warned that 1,2000 jobs were at risk at British Steel’s Scunthorpe steelworks.
Jingye and Tata Steel (which owns Port Talbot near Swansea, in Wales) are seeking support to upgrade their steel blast furnaces to electric arc furnaces with much lower carbon emissions.
Also coming up today
UK supermarket shoppers could be facing weeks of shortages of fruit and vegetables.
Yesterday, Asda introduced a limit on tomatoes, peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries, and today Morrisons will restrict customers to two per item on packs of tomatoes, cucumbers, lettuce and peppers from Wednesday.
UK prime minister Rishi Sunak is exploring a 5% rise for public-sector workers, the Financial Times reports, to end an escalating wave of strikes.
This possible breakthrough comes after yesterday’s public finances gave the Treasury was given an unexpected £30bn windfall.
Ministers and nurses’ leaders are due to hold “intensive talks” on Wednesday in an unexpected move that has raised hopes that they will thrash out a deal to end the long-running pay dispute. The Royal College of Nursing has suspended next week’s planned strike.
But yesterday, Jeremy Hunt insisted the government is unable afford a bigger pay increase for nurses and other public sector workers at next month’s budget, despite official figures showing an unexpected boost for the exchequer in January.
Lloyds Banking Group has reported a flat annual pre-tax profit for last year. Lloyds made £6.9bn last year, as a jump in income driven by higher interest rates was offset by mounting bad loan provisions.
Lloyds CEO Charlie Nunn says the results are ‘resilient’, and told the Today Programme that the bank expects a mild UK recession in 2023, with a recovery in 2024.
European stock markets are set to open lower, after Wall Street posted its biggest loss of 2023 so far.
The Dow Jones industrial average shed 2% on Tuesday, as a strong survey of US purchasing managers fuelled concerns that America’s central bank will keep interest rates higher for longer than hoped.
The US Federal Reserve will release the minutes of its last meeting tonight, which will give insight into whether policymakers expected to ‘pivot’ away from higher borrowing costs anytime soon.
The agenda
7am GMT: German inflation rate for January
9am GMT: Italian inflation rate for January
9am GMT: Ifo index of German business confidence
9.30am GMT: House of Commons Science and Technology Committee to question Google, Microsoft and BT on AI regulation
1.55pm GMT: US Redbook Index of retail sales growth
7pm GMT: US Federal Reserve to publish minutes of this month’s meeeting
English (US)