<!–[if IE 9]><![endif]–>Wads of British Pound Sterling banknotes are stacked in piles.








7.13am EST07:13

More reaction to the Uber landmark ruling, our main story today.

Martin Chitty, employment partner at law firm Gowling WLG says:


Uber has lost the argument at every level with the Supreme Court today adopting in clear and unqualified terms the reasoning of the previous decisions. The degree of control Uber has – in terms of price setting, excluding drivers if they decline pick-ups, the inability of drivers to be anything more than single-trip conveyors with no passenger relationship and the warning issued for bad reviews all point to them being workers.

The Supreme Court took a purposive view of the legislation – it is there to protect those who have a limited bargaining power. Uber’s argument that they did what hotel booking sites do was rejected. This ends the argument in the UK courts – Uber 0 Drivers 4.







7.08am EST07:08

Bitcoin hits new record, market cap approaches $1 trillion

Bitcoin has hit a fresh record high, rising 2.6% to $52,932, putting it on course for a weekly gain of over 8%. It has gained 60% in value so far this month and its market value is approaching $1 trillion (it’s currently at $981.8bn).

The world’s best-known digital currency is attracting more buyers as it has gained acceptance from a number of mainstream investors and companies, including the electric carmaker Tesla, Mastercard and the US bank BNY Mellon.

However, there are still many critics who point out that bitcoin is highly volatile and question its intrinsic value. Analysts at JPMorgan said bitcoin’s current prices are well above estimates of fair value, and noted that its mainstream adoption increases bitcoin’s correlation with cyclical assets, which rise and fall in line with economic changes, thereby reducing the benefits of diversifying into cryptocurrencies.


Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed.

Yesterday, Tesla boss Elon Musk, whose recent tweets have helped fuel bitcoin’s rally, said owning it was only a little better than holding cash. But he also defended Tesla’s purchase of $1.5bn bitcoin.

Elon Musk
(@elonmusk)

Tesla’s action is not directly reflective of my opinion. Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company.

February 19, 2021

Updated
at 7.11am EST







6.49am EST06:49

Joanna Partridge

Joanna Partridge

All-male boards have disappeared from the UK’s 350 largest listed companies, according to monthly statistics compiled for the 30% Club, which campaigns for gender diversity in senior management of businesses, reports my colleague Jo Partridge.

This is only the second time that all FTSE350 firms have had at least one female board member – although the goal achieved last May only lasted temporarily. Luxury carmaker Aston Martin was the final FTSE-350 firm to retain an all-male board until the start of this month, when it appointed Anne Stevens to its board.

However data compiled by BoardEx showed that 19 out of those 350 companies only have one female board member. Only 70% of the 350 firms have 30% or more female representation – the target promoted by the 30% Club.

The eradication of all-male boards is cause for celebration, said Ann Cairns, global chair of the 30% Club and executive vice-chair of Mastercard, however she warned there is more work to be done to improve diversity.


Time and again research has shown companies with diverse boardrooms and senior leadership outperform their peers. Simply put, diversity is good for business.

Last year’s fleeting experience of their disappearance across the FTSE 350 proves how fragile progress in the UK’s corporate gender diversity remains. And there’s even more work to do to bring female representation up to parity on those boards, let alone boost the numbers of female chairs, CEOs and CFOs.







6.47am EST06:47

Let’s take another look at the purchasing managers surveys from IHS Markit/CIPS for the UK, which indicated that joint services and manufacturing activity was close to stabilising this month.

Howard Archer, chief economic advisor to the forecasting group EY Item Club, says:


The ‘flash’ purchasing managers’ survey for the UK manufacturing and services sectors indicated that overall activity was close to stabilisation in February after contracting at the fastest rate for eight months in January.

While the improvement in activity eases some concern about the potential size of contraction in the UK economy in Q1, it still appears that the UK is being much more affected by lockdown and restrictions now than it was in Q4 2020. The EY Item Club expects the economy will experience a Q1 contraction – possibly around 4% quarter-on-quarter.

After Q1, the EY Item Club expects the economy to benefit progressively through 2021 from the roll-out of COVID-19 vaccines. Consumers look well-placed to play a key role given the recent high savings ratios, although much will depend on how much unemployment ultimately rises. After an extended period of weakness, business investment is expected to gain momentum over the course of the year as companies grow more confident in the economy.

The group is predicting GDP growth of 5.0% in 2021 followed by expansion of 6.5% in 2022, with the economy regaining its peak level of fourth-quarter 2019 GDP in the third quarter of next year.

Updated
at 6.52am EST







6.33am EST06:33

Back to the Uber landmark ruling.

TUC general secretary Frances O’Grady has called on the government to use the much-delayed employment bill to reform the law around worker status.


No company is above the law. Uber must play by the rules and stop denying its drivers basic rights at work. This ruling is an important win for gig economy workers and for common decency. Sham self-employment exploits people and lets companies dodge paying their fair share of tax.

Unions will continue to expose nasty schemes that try and cheat workers out of the minimum wage and holiday pay.

But we also need the government to step up to the plate… Everyone should qualify for employment rights unless an employer can prove they are genuinely self-employed.

<!–[if IE 9]><![endif]–>Frances O’Grady, General Secretary of the TUC.






6.28am EST06:28

Louise Taylor

Louise Taylor

In football news, Kyril Louis-Dreyfus has become the youngest chairman in English football after his protracted takeover of Sunderland was finally approved by the English Football League on Thursday, writes our north-east football correspondent Louise Taylor.

The 23-year-old Frenchman is the son of the late billionaire Robert Louis-Dreyfus, the former Marseille owner, and he can look forward to a trip the directors’ box at Wembley next month when Sunderland face Tranmere Rovers in the final of the Papa John’s Trophy.

Lee Johnson’s side are seventh in League One, one point below the play-off zone, and their new owner is targeting an eventual return to the Premier League. Louis-Dreyfus said:


I am proud to become a custodian of this esteemed institution but I also recognise the significant responsibility that comes with it.

I am confident that together we can weather the present storm and put solid foundations in place to bring sustainable and long-term success to the club.

Sunderland’s former owner, Stewart Donald, will retain a minority shareholding as will the directors Charlie Methven and the Uruguayan businessman Juan Sartori. Donald said the takeover means Sunderland are now debt free.

<!–[if IE 9]><![endif]–>New Sunderland chairman Kyril Louis-Dreyfus watches from the stands.






5.51am EST05:51

And here is our story on the pound, which rose through $1.40 for the first time since April 2018 earlier today, and is now hovering just below at $1.3996.






5.48am EST05:48

Here is our full story:






5.20am EST05:20

Uber has suffered a landmark defeat in the UK’s Supreme Court, which means Uber drivers – who were deemed as self-employed – will now be classed as ‘workers’ in the UK, and qualify for certain employment rights. Seb Maley, chief executive of the consultancy Qdos, says:


This is a landmark victory for Uber drivers. It has the potential to set a precedent for all gig economy workers, many of whom need and deserve employment rights.

The ruling should serve as a stark reminder to businesses that employment status isn’t always clear cut, and that decisions must be made carefully. If a firm engages an individual under the wrong status, the cost – both financially and reputationally – can be massive.

But while many gig economy workers want greater protection and employment benefits, we shouldn’t assume that all self-employed people need them. There are hundreds of thousands, if not millions of people working for themselves who want to remain entirely independent.







5.17am EST05:17

Landmark victory for Uber drivers

Sarah Butler

Sarah Butler

The Supreme Court has dismissed Uber’s appeal against a landmark employment tribunal ruling that its drivers should be classed as workers with access to the minimum wage and paid holidays, writes my colleague Sarah Butler.

Six judges handed down a unanimous decision backing the October 2016 employment tribunal ruling that could affect millions of workers in the gig economy.

The Supreme Court highlighted that any attempt by organisations to draft artificial contracts aimed at side-stepping basic protections were void and unenforceable.

Judges criticised the controversial contracts Uber asked their drivers to sign saying they “can be seen to have as their object precluding a driver from claiming rights conferred on workers by the applicable legislation.”

In the judgment, Lord Leggatt said he was ‘not convinced’ that the contractual arrangements Uber conducted with drivers was compliant with the regulatory regime supervised by Transport for London.

<!–[if IE 9]><![endif]–>Rideshare driver Jesus Jacobo Zepeda of Lancaster, California takes part in a rally to demand that ride-hailing companies Uber and Lyft follow California law and grant drivers “basic employee rights’’, in Los Angeles, California, August, 2020.






4.48am EST04:48

UK downturn in February less bad than feared – PMI

The UK downturn was less bad than feared in February, the flash PMI reading from IHS Markit/CIPS suggests. Its composite index, which comprises manufacturing and services, jumped to 49.8 from 41.2 in January, just below the 50 mark that divides expansion from contraction.

Things improved for services firms, despite the Covid-19 lockdown, although activity continued to decline. Manufacturers have been boosting production but output was hit by Brexit, which has made it harder to export, and fell to a nine-month low.

  • Flash UK Composite Output Index Feb: 49.8, 2-month high (Jan final: 41.2)
  • Flash UK Services Business Activity Index Feb: 49.7, 4-month high (Jan final: 39.5)
  • Flash UK Manufacturing Output Index Feb: 50.5, 9-month low (Jan final: 50.7)
  • Flash UK Manufacturing PMI Feb: 54.9, 2-month high (Jan final: 54.1)

Chris Williamson, chief business economist at IHS Markit, says:


The UK economy showed welcome signs of steadying in February after the severe slump seen in January, albeit with business activity remaining sharply lower than late-last year due mainly to the ongoing national lockdown.

Although the hospitality sector, including hotels and restaurants, reported a further steep decline, as did the transport and travel sector, rates of contraction eased considerably. Business and financial services companies meanwhile recovered to register modest expansions, helping the hard-hit service sector to come close to stabilising.

In contrast, the manufacturing sector’s performance worsened amid escalating Brexit-related export losses and supply chain disruptions. More than half of all companies reporting lower exports attributed to the decline to Brexit-related factors. Brexit was also the most commonly cited cause of supply delays.

More encouragingly, although the data hint at a renewed contraction of the economy in the first quarter, business expectations for the year ahead improved to the highest for almost seven years, suggesting the economy is poised for recovery. Confidence continued to be lifted by hopes that the vaccine roll-out will allow virus related restrictions to ease, outweighing concerns among many other firms of the potential further damaging impact of Brexit-related trading issues.

IHS Markit PMI™
(@IHSMarkitPMI)

🇬🇧 UK flash #PMI pointed to a stabilising in private sector output in February, with the headline index rising to 49.8 (Jan: 41.2). Service sector activity held steady, while worsening supply disruption led manufacturing growth to a 9-month low. Read more: https://t.co/uC6witdhx0 pic.twitter.com/E4ZX5iJEAg

February 19, 2021

Updated
at 4.55am EST







4.28am EST04:28

FTSE 100 dragged down by retail sales, NatWest loss

The FTSE has been yo-yoing this morning, dipping into negative territory and is now up 0.1% again, after the disappointing UK retail sales figures which showed a much larger-than-expected drop of 8.2% in January.

NatWest shares, down 0.99%, are also weighing on the bluechip index, after the bank – renamed from Royal Bank of Scotland – slumped to a loss of £351m for 2020 versus a profit of £4.2bn a year earlier.

NatWest also confirmed that it intends to pull out of Ireland, with plans to wind down and sell assets from its local Ulster Bank operations after an “extensive” review.

Our banking correspondent Kalyeena Makortoff reports:

NatWest has cut its banker bonus pool to the lowest level since its financial crisis bailout, after swinging to a full-year loss in 2020.

The bank was stung by a surge in bad debt provisions, having put aside £3.2bn to cover a potential jump in defaults because of the coronavirus pandemic. The loss ends three straight years of profit for the lender, which has struggled to stay out of the red since its £45bn bailout in 2008.

The bonus pool for NatWest bankers has been cut by 33% as a result, leaving staff to share £206m. It is the lowest total since it came into state ownership at the height of the financial crisis. The bank, which is still 62% taxpayer-owned, paid its chief executive, Alison Rose, £2.6m for 2020. Rose voluntarily waived her bonus in light of the Covid-19 crisis.

However, the bank is restarting its dividend after the Bank of England lifted its temporary ban on shareholder distributions in December to allow limited payouts. NatWest’s rival Barclays has also resumed payouts.

Updated
at 4.29am EST







4.19am EST04:19

Bitcoin has just hit a new record high, rising more than 2% to $52,757.






4.10am EST04:10

Eurozone services hit in February while factories thrive

Service sector firms in the eurozone were hit by lockdown measures and declined further in February while factories raced ahead, according to IHS Markit’s closely-watched surveys.

The composite PMI, seen as a good economic indicator, pointed to further contraction in business activity across the eurozone, but edged closer to the 50 mark separating growth from contraction. The flash reading was 48.1 in February, up from January’s 47.8.

  • Flash Eurozone PMI Composite Output Index at 48.1 (47.8 in January). 2-month high.
  • Flash Eurozone Services PMI Activity Index at 44.7 (45.4 in January). 3-month low.
  • Flash Eurozone Manufacturing PMI Output Index at 57.5 (54.6 in January). 4-month high.
  • Flash Eurozone Manufacturing PMI at 57.7 (54.8 in January). 36-month high.

Chris Williamson, chief business economist at IHS Markit, says:


Ongoing Covid-19 lockdown measures dealt a further blow to the eurozone’s service sector in February, adding to the likelihood of GDP falling again in the first quarter. However, the impact was alleviated by a strengthening upturn in manufacturing, hinting at a far milder economic downturn than suffered in the first half of last year. Factory output grew at one of the strongest rates seen over the past three years, thanks to another impressive performance by German producers and signs of strengthening production trends across the rest of the region.

Vaccine developments have meanwhile helped business confidence to revive, with firms across the eurozone becoming increasingly upbeat about recovery prospects. Assuming vaccine roll-outs can boost service sector growth alongside a sustained strong manufacturing sector, the second half of the year should see a robust recovery take hold.

One concern is the further intensification of supply shortages, which have pushed raw material prices higher. Supply delays have risen to near-record levels, leading to near-decade high producer input cost inflation. At the moment, weak consumer demand – notably for services – is limiting overall price pressures, but it seems likely that inflation will pick up in coming months.

<!–[if IE 9]><![endif]–>Nivea tins on a production line at a Beiersdorf factory in Hamburg.






4.00am EST04:00

Sterling hits $1.40 for first time in nearly 3 years

Sterling has just hit $1.40 against the dollar for the first time in nearly three years, despite the poor UK retail sales data. Traders are betting on a faster economic recovery in the UK thanks to its rapid Covid-19 vaccination campaign.

The pound rose 0.2% to $1.4005, the highest level since April 2018.

Updated
at 4.12am EST







3.58am EST03:58

Ruth Gregory, senior UK economist at Capital Economics, says the chancellor should resist the urge to try to reduce the budget deficit in the budget on 3 March and instead focus on continuing to support those areas of the economy that need it.


Borrowing still looks on track to come in below the OBR’s November forecast and our forecast of £410bn (19.6% of GDP). What’s more, our optimistic view that the crisis won’t lead to big long-term scarring effects should allow the deficit to fall back to pre-virus levels by 2024/25 without the need for major tax rises.

So the big risk is that the chancellor withdraws the fiscal support too soon. That could undermine the economic recovery and cause more problems for the public finances than it solves.







3.54am EST03:54

We already noted that the UK public finances are much better than expected, as tax receipts have held up well. Ed Conway, economics and data editor at Sky, also observes that debt interest payments are at a record low, making it cheaper for the government to service its debt – and buys it time.

Ed Conway
(@EdConwaySky)

The headlines about today’s public finances data will undoubtedly focus on the size of the deficit.
Less often mentioned is that debt interest payments are at a record low. This has important implications, as I write in my @thetimes column today https://t.co/Q9QFrBbjeb pic.twitter.com/Af5eD4XJgg

February 19, 2021







3.41am EST03:41

Germany’s up next. The eurozone’s biggest economy has fared better than France: business activity has strengthened in February and overall output is expanding, thanks to a recovery in the export-led manufacturing sector.

  • Flash Germany PMI Composite Output Index( 1) at 51.3 (Jan: 50.8). 2-month high.
  • Flash Germany Services PMI Activity Index(2) at 45.9 (Jan: 46.7). 9-month low.
  • Flash Germany Manufacturing Output Index( 4) at 62.2 (Jan: 59.0). 3-month high.
  • Flash Germany Manufacturing PMI(3) at 60.6 (Jan: 57.1). 36-month high.

Phil Smith, associate director at IHS Markit, says:


February’s flash PMI results point to ongoing resilience in the German economy midway through the opening quarter, despite the country remaining under strict lockdown measures. Ongoing weakness in services, where large parts of the sector remain either closed or disrupted by virus containment measures, continues to be counterbalanced by strong, export-driven growth across manufacturing.

Trading Economics
(@tEconomics)

#Germany Markit Composite PMI Flash at 51.3 https://t.co/pLUA65WmuN pic.twitter.com/2xXAZDZdr1

February 19, 2021

Trading Economics
(@tEconomics)

#Germany Markit Manufacturing PMI Flash at 60.6 https://t.co/3ceK1Tkqaq pic.twitter.com/yCDIeklA8t

February 19, 2021

Trading Economics
(@tEconomics)

#Germany Markit Services PMI Flash at 45.9 https://t.co/67ci1U6XhK pic.twitter.com/C9cg1O1oFk

February 19, 2021







3.34am EST03:34

Larry Elliott

Larry Elliott

Here is our full story on UK retail sales and government borrowing.

The impact of the UK’s third lockdown on the economy has been laid bare by official figures showing that spending in stores and online fell by more than 8% last month while government borrowing was the highest for a January since modern records began, writes our economics editor Larry Elliott.

All sectors of retailing except for food and online outlets were affected by the imposition of tough new restrictions across the UK, and although the Office for National Statistics said the decline was not as severe as the 22% drop in the first lockdown last April, it was substantially worse than the 3% drop the City had expected.

The closure of non-essential stores hit two sectors – clothing and footwear, and household goods – particularly hard. Clothing sales were down 35% from December, while household goods registered a drop of almost 20%.

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