Business Roundup for Spain and the UK

Inflation surprise THE UK’s annual inflation rate dipped slightly to 6.7 per cent in August.

The Bank of England, City and Chancellor of the Exchequer, Jeremy Hunt, had foreseen a slight increase to 7 per cent owing to reduced growth in food prices and monthly reductions in hotel and air travel costs.

The latest drop from July’s 6.8 per cent was the sixth consecutive fall in the headline inflation figure which includes commodities like food and energy.

Analysts pointed out that this does not imply prices are falling but means they are increasing more slowly.

Food and drink prices rose by 13.6 per cent in the year ending in August and although this was lower than the highest inflation rate of 19.1 per cent earlier this year, it is still historically high.

Not-so-simple sums THE Solidarity Tax on Spain’s largest fortunes, introduced at the end of last year, has brought in 60 per cent less than expected.

Hacienda, Spain’s Finance ministry which is headed by Maria Jesus Montero, calculated in 2022 that the temporary tax introduced to alleviate the cost-of-living crisis had the potential to collect an annual €1.5 billion.

Instead, the public purse has received just €623 million, with 10,032 Madrid residents paying the lion’s share of €555 million.

Although Hacienda initially estimated that the tax would affect 23,000 taxpayers, it has been paid by 12,010, according to figures released on September 20.

Last orders THE first six months of 2023 saw 383 pubs close permanently in England and Wales.

This practically equals the 386 which shut down in 2022, prompting Chris Jowsey, chief executive of the Admiral Taverns group, to warn that rates relief was vital for the survival of many pubs.

More closures could follow, he added, if chancellor Jeremy Hunt went ahead with his plans to eliminate the existing 75 per cent rebate on business rates next March.

“Without it, costs for many pubs will rise dramatically by many thousands of pounds, fuelling inflation and forcing closure for many independents,” Jowsey said.

All above board NEITHER Saudi Arabia’s STC, nor its intermediary Morgan Stanley, acted illegally in acquiring a 9.9 per cent holding in Telefonica

Spain’s National Securities Market Commission (CNMV) ruled out irregularities after its investigators examined recent reports that Morgan Stanley secretly built up STC’s €2.1 billion stake.

Instead it found that the bank initially obtained just under 3 per cent over an unspecified period before acquiring the remaining 7 per cent and announcing the entire 9.9 per cent to the CNMV on September 5.

Consequently, neither STC nor Morgan Stanley infringed regulations that require investors to notify holdings of more than 3 per cent, the CNMV announced.

Charge for returns THE H&M fashion chain is the latest retailer to charge shoppers for returning items that have been bought online.

Brought into line with Zara, Boohoo, Uniqlo and Next, who all charge for returns, H&M is now asking customers to pay £1.99 (€2.30) when returning an internet purchase online or instore, with the cost deducted from their refund.

Returns will still be free for H&M members, the retailer said.

Sector insiders said returns were “a headache” as this meant warehouse staff took longer to process stock.

Big buildup SPECIALIST magazine, the Engineering News-Record (ENR), again ranked the Turner Construction Company as the leading general building contractor in the US.

Turner’s $16.25 billion (€15.14 billion) revenues last year put it ahead of Bechtel, the US’s other leading contractor, the ENR announced.

The company is a subsidiary of ACS, the Spanish multinational company which is headed by Florentino Perez, president of the Real Madrid football club.

Turner was also recognised by the ENR as the country’s Number One Green Contractor for the sixteenth consecutive year.

AVE looks east SPAIN’S state-owned rail operator Renfe hopes to attract Chinese tourists with high-speed travel during the high season.

Apart from passengers heading for the coast, AVEs are less-used for business trips and Renfe has signed an agreement allowing China’s biggest tour operator, Trip.com.Group, to sell AVE tickets online.

China is now one of the world’s largest tourism sources, with visitors spending “substantially more” than those from other countries, Trip.com.Group said.

In 2019, Spain received 700,000 Chinese tourists, who usually remained in the country for a week and spent an average of €2,407 per person.

Approximately 136,000 Chinese tourists visited Spain in the first half of this year, spending €421 million, an average of €3,106 per person.