UK retail sales slide as pessimism mounts; oil hit by China Covid protests – business live | Business

UK households might be paid to help Britain’s grid operator avoid a potential blackout on Tuesday evening, partly due to problems in the French energy grid and a drop in wind power.

National Grid’s electricity systems operator division said it is considering whether to activate a live run of its demand flexibility service for the first time on Tuesday.

The scheme, which launched at the start of this month, has already been tested twice in the last two weeks but has not yet been run for a live event.

National Grid said it would decide by around 2.30pm today whether to issue the notice to suppliers and households.

Electricity demand is rising as European temperatures fall, while weak wind speeds are hitting renewable energy supplies.

Just in: UK retail sales weakened sharply this month as the economy weakened.

Retailers reported that demand fell this month, with stores bracing for a difficult December as consumers are hit by the cost-of-living crisis.

Expectations for sales in the coming month also weakened, to the weakest since March 2021, the CBI’s latest ‘distributive trades’ survey of UK retail shows.

Retailers are also cutting jobs – and expect to keep lowering their headcount next month.

That’s a sign of pessimism, as retailers fear that spending this Christmas will be weaker than last year.

Here are the key findings:

• Retail sales declined in the year to November (-19% from +18% in October) with a broadly similar fall expected next month (-21%).

• Sales volumes were seen as average for the time of year (+3% from +20% in October) and are expected to remain broadly in line with seasonal norms in December (-1%).

• Online retail sales contracted in the year to November (-5% from -23% in October). Internet sales have now been flat or falling for 13 months, and an accelerated contraction (-26%) is expected next month.

• Retailers remained notably pessimistic about the business situation over the next three months (-22%), to a similar extent to August (-22%).

• Employment growth in retail slumped in the year to November (-17% from +13% in August) – the first decline in headcount since August 2021. A further fall (-12%) is anticipated next month.

• Retailers expect to reduce investment in the next 12 months compared to the previous 12 (-38% from -31% in August), to the greatest extent since May 2020.

Martin Sartorius, principal economist at the CBI, says retailers are facing a tough time.

“It’s not surprising that retailers are feeling the chill as the UK continues to be buffeted by economic headwinds. Sales volumes fell at a firm pace in the year to November, and retailers remain notably downbeat about their future business prospects.

This pessimism is reflected in investment intentions worsening to the greatest extent since May 2020.

The outlook for oil has worsened today, sending crude down around 3%.

Investors are worried that authorities will clamp down hard against the protesters in China, and tighten restrictions even more, with daily infections at daily highs.

Raffi Boyadjian, lead investment analyst at XM, explains:

Risk assets took a knock at the start of the week as worries about instability in China and how the country’s unyielding zero-Covid policy might further blight the outlook led investors to search for safety. Anti-lockdown protests started spreading after a deadly fire in Xinjiang last Thursday where residents were reportedly unable to escape the residential complex due to the harsh Covid restrictions.

But the protests erupted further over the weekend, turning into nationwide demonstrations against the government’s handling of the pandemic as anger boiled over. It is yet unclear how authorities plan to quell the ever-growing unrest given their unprecedented scale, or just how much more widespread these protests will become.

But this is uncharted territory for President Xi Jinping and the Communist Party, and it is making the markets nervous.

China’s stock market posted its worst one-day fall in a month today, as investors worried about the protests against Covid-19 restrictions.

The CSI 300 shed 42 points to finish at 3,733 points, a two-week low.

The selloff was led by ‘academic and educational services’, property companies, financial companies and miners.

A U.S. crackdown on Chinese tech giants citing national security concerns also weighed on shares of technology firms, Reuters points out.

Gary Ng, economist at Natixis, says:

“The market does not like uncertainties that are difficult to price and the China protests clearly fall into this category. It means investors will become more risk-averse.”

The CSI 300 is down 25% this year, caught up in the global selloff

Bloomberg are reporting that the turmoil at Apple’s key manufacturing hub of Zhengzhou could create a production shortfall of close to 6 million iPhone Pro units this year

They say:

The situation remains fluid at the plant and the estimate of lost production could change, the person said, asking not to be named discussing private information.

Much will depend on how quickly Foxconn Technology Group, the Taiwanese company that operates the facility, can get people back to assembly lines after violent protests against Covid restrictions. If lockdowns continue in the weeks ahead, production could be set further back.

The Zhengzhou campus has been wracked by lockdowns and worker unrest for weeks after Covid infections left Foxconn and the local government struggling to contain the outbreak. Thousands of staff fled in October after chronic food shortages, only to be replaced by new employees who rebelled against pay and quarantine practices.

Videos fro Zhengzhou have shown police in China beating workers who protesting over working conditions and pay at the iPhone factory. More here:

Shares in Apple are down around 1.4% in premarket.