Commercial news round-up: Inflation, public sector pay, John Lewis, Apple, G4S

We are supposed to be in the “season of mists and mellow fruitfulness”, but the business world is anything but mellow as it confronts a host of issues stemming from the country’s economic problems, as well as the prospect of Brexit. This report brings you up to speed on some of the week’s important commercial news as you continue to hone the wider business knowledge that you will need as a lawyer.  

• The UK average rate of inflation has risen to a five-year high of 2.9%, meaning that the costs of goods and services are rising faster than workers’ pay. The fall in the value of the pound following the EU referendum and rising oil prices are the main reasons for price rises.
• The government has bowed to pressure to lift the cap on public sector pay rises. Public sector workers such as nurses, firefighters and police have had their pay capped at an annual 1% rise for the last six years. With inflation well above 1%, the cap has meant those workers have experienced successive real-terms pay cuts, making them steadily worse off. The government’s decision to lift the cap has been welcomed in some quarters, but unions have reacted angrily because the mooted pay rises don’t match inflation, meaning that public sector workers are still having their pay cut in real terms, just less severely. Strikes now seem inevitable, while there is also huge concern that the pay rises are being taken out of existing budgets, meaning that frontline services will probably have to be cut to fund them.
• Much-loved retailer John Lewis is also feeling the Brexit squeeze – its pre-tax profits dropped by half in the first half of 2017 as Brexit fears appeared to impact the confidence of consumers. A significant restructuring will also have dented the company’s profits in the short term.
• Apple has revealed its new smartphone, the iPhone X, which uses groundbreaking facial recognition technology. The tech giant reviewed its supply chain earlier this year, so hopefully this phone won’t be made from materials mined by child labourers.
• The security firm G4S, which runs prisons and detention centres across the country and famously bungled the security of the London 2012 Olympics, has been found to be creaming off much more profit from its contracts than the government intended. G4S has been withholding a lot of the government money that it was supposed to spend on service provision for its own profits. That G4S staff were secretly filmed bullying and ridiculing suicidal inmates at the Brook House immigration detention centre near Gatwick makes the company’s suitability as a service provider all the more open to question. 

Be sure to check the News section every Thursday for this weekly commercial news round-up. Follow @LawCareersNetUK on Twitter and like us on Facebook for instant business news updates.