Business Roundup for Spain and the UK

OBR omens THE Office for Budgetary Responsibility (OBR) warned that Britons faced their worst decline in living standards since records began in the 1950s.

The Treasury watchdog pointed out that they also bore the greatest tax burden since the Second World War.

The OBR added that the economy was on track to shrink by 0.2 per cent this year, despite Chancellor Jeremy Hunt’s announcement that the UK would avoid technical recession.  He would meet debt targets only by a narrow margin after the big childcare outlay and freezing fuel duty, OBR said.

No thanks FIFTY-FIVE THOUSAND people in Spain, the majority in Andalucia, Cataluña and Madrid, ignored bequests last year.

The General Council of Notaries (CGN), which processed 355,000 inheritance claims in 2022, revealed that rejections had risen to 15.6 per cent.

The CGN’s spokeswoman, Maria Teresa Barea, attributed this to the “difficult” economic situation, as heirs were reluctant to pay death duties or accept a legacy burdened with debts, she said.  In other cases, beneficiaries felt that it would be unfair to accept a bequest left by a distant relative they hardly knew.

Down to earth VIRGIN ORBIT, founded by billionaire Richard Branson,  has halted operations and furloughed stuff as it seeks a funding lifeline.

The California-based satellite launch company is putting all operations on temporary hold with only a skeleton team still working.

Employees learnt at a March 15 staff meeting that remaining personnel would be put on unpaid furlough, although they could cash in annual leave.

The news follows Virgin Orbit’s failed attempt to launch the first satellite from UK soil at Spaceport Cornwall in Newquay last January.

Putting them on furlough would buy time to finalise a new investment plan, the company’s chief executive, Dan Hart, told staff.

Layoffs at Ford FORD ESPAÑA announced staff reductions that will affect 1,144 employees at its Almussafes (Valencia) plant. 

The company explained that this labour adjustment had been included in the restructuring of European operations  made necessary by the transition to electric vehicles. 

Ford also assured the Almussafes employees in an internal memo that it was “resizing” its Spanish workforce but would work “together and in a constructive manner” with the unions to minimise the impact that the measure would have on employees, their families and the local community. 

At present 600 Kuga models come off the Almussafes assembly line each day, as well as 300 Transit vans and 200 of the S-Max and Galaxy cars that Asmussafes will cease producing in April.  The future of the factory’s engine section is also uncertain. 

Changing tastes ALCOPOPs and CDs have been dropped from the monthly update of the cost of living in Britain.

Together with compact digital cameras, they are no longer included in the ONS’ typical shopping basket which is used to measure the annual inflation rate.

The Office for National Statistics (ONS) has dropped them following its annual review of spending habits in the UK which takes into account changing tastes and habits while ensuring that the official cost of living yardstick is as accurate as possible.

The three items were replaced by electric bicycles, frozen berries for making smoothies, and home security devices.

Covid’s economic aftermath COINCIDING with the third anniversary of the first Covid lockdown, the Bank of Spain warned that the pandemic’s effect on the nation’s health could also have an impact on the economy.

A survey assessing the economic effects of a possible overall decline in the general health of Spain’s population concluded that this could lead to an increase in health spending.  This in turn would create the need for more health professionals, the report’s authors Samuel Hurtado y Mario Izquierdo said.

“Although at present this is very difficult to evaluate it could be a factor to take into account, together with the problem of an ageing society,” they said.

“Should this dynamic continue or even increase, it could be decisive for the economy’s potential output in the medium to long term.”

Merger boost MASMOVIL’S revenue and profits enjoyed a boost last year ahead of its planned merger with Orange.

Earnings totalled approximately €2.9 billion in 2022, an increase of 17 per cent on 2021, while income from services increased by 19 per cent to €2.6 billion.

At the same time MasMovil was also able to reduce its debt by €500 million while its portfolio of clients continued to grow with the addition of 800,000 new lines.  Of these, 227,000 corresponded to broadband connections and 565,000 to mobile clients.

Freehold deal SAINSBURY’S is taking full ownership of investment vehicles Highbury and Dragon in which it holds a 49 per cent stake.

It will pay £430.9 million (€491.5 million) for Supermarket Income REIT’s 51 per cent holding in Highbury and Dragon, created in 2000 and comprising freeholds of 26 stores that it leases.

Britain’s largest chain after Tesco with 600 supermarkets and more than 800 convenience stores, will acquire the 21 premises that it previously rented from Supermarket Income REIT and which will continue to operate as Sainsbury’s supermarkets.

It will sell the five remaining stores but lease back four of them.

Income tax breaks SPAIN’S taxpayers can expect to save between €9 and €550 on their 2022 tax returns.

The changes are the result of adjustments made by the central government for incomes below an annual €21,000 and the updating of  autonomous regions’ minimum rates.

Taxpayers earning between €16,000 and €20,000 will benefit most, with savings of between €540 and €300, depending on region where they live, while those earning more than an annual €100,000 will, on average, pay €150 less.

However, those on €30,000 will hardly benefit, with discounts of less than €10.

Better year for Seat  SEAT is out of the red with a 2022 operating profit of €33 million, compared with €233 million pre-tax losses in 2021 and €339 million in 2020.

This was possible thanks to Cupra, Seat’s high-performance road car branch whose 179,632 units represented 40.6 per cent of last year’s global production.  Two-thirds were Formentor models, produced at Seat’s Martorell ( Barcelona) branch.

Seat and Cupra sales of 386,000 vehicles fell by 18.1 per cent worldwide last year although production contracted by 0.8 per cent, with 420,000 units.

The semiconductor crisis was responsible for the downturn, as Volkswagen prioritised microchips for brands generating the biggest profit margins.

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