BT Tower to become hotel in £275m deal; ‘limited room’ for tax cuts after record UK budget surplus – business live

Parliament’s Treasury Committee have fired a blast at the International Monetary Fund for not attending their session today on economic forecasting.

Chair of the Treasury Committee, Harriett Baldwin, says both the IMF and the OECD were invited to take part, and she’s “disappointed” neither has accepted the invitation.

The committee had hoped that both groups would discuss the assumptions which underpin their forecasts on the UK economy, ahead of next month’s budget.

Baldwin says it is “incredible” that the IMF won’t show up today, despite issuing forecasts about the UK, but reports that the OECD were more forthcoming.

She says:

“I’m disappointed neither has accepted our invitation to come to Westminster ahead of the Spring budget and discuss the assumptions which underpin their forecasts on the UK economy.

“I am heartened, however, by the positive intent and engagement shown by the OECD during our discussions. We will continue to work with them to find a suitable time for a public session when schedules allow, to ensure proper democratic scrutiny of their work can be carried out.

“On the contrary the IMF’s outright refusal to let us scrutinise their forecasts of the UK economy in public is infuriating. Yet they continue to utter public pronouncements about the UK from their perch in Washington. As the IMF is a public body partly funded by the UK as a shareholder, I find this incredible.”

Last November, the OECD predicted that UK growth would remain “stable but low”, with national output rising by 0.5% in 2023 and by 0.7% in 2024.

The IMF has ruffled feathers in Westminster; first it predicted the UK would go into recession last year, then changed its mind last May. Then in January it issued a strong warning to Jeremy Hunt against cutting taxes in the budget.

The session starts at 2.15pm today, with MPs hearing from Professor Sir Charles Bean (a former member of the Monetary Policy Committee and the OBR Budget Responsibility Committee), Dr Jack Meaning, the chief UK economist of Barclays, and Nina Skero, chief executive of the Centre for Economics and Business Research

Barely a day goes by, it seems, without downbeat economic news from Germany.

And today’s is that Berlin’s government has slashed its growth forecast for this year.

The German government expects the economy to grow 0.2% this year, far less than a previously forecast 1.3%, as weak global demand, geopolitical uncertainty and persistently high inflation dent hopes for a swift rebound.

The revised forecast was approved by the cabinet on Wednesday as part of the government’s annual economic report, government sources told Reuters.

A draft of the report seen by Reuters says:

“The German economy continues to find itself in difficult waters at the beginning of the year.”

Germany’s economy shrank by 0.3% in the final quarter of 2023, and would enter a technical recession if it shrinks in the current quarter too.

We want to hear people’s memories of the BT Tower following the news that it will be converted into a hotel.

Did you visit the restaurant or work there?

Jasper Jolly

Speaking of UK manufacturers…weapons manufacturer BAE Systems has reported record profits last year, thanks to increased military spending prompted by Russia’s war on Ukraine and the Israel-Gaza conflict.

BAE Systems made underlying profits before interest and tax of £2.7bn on record sales of £25.3bn in 2023.

Charles Woodburn, the BAE chief executive, said the weapons manufacturer was expecting “sustained growth in the coming years”.

He told reporters on Wednesday:

“Instability in Europe, the Middle East and other parts of the world brings into sharp focus the vital role that we play in protecting national security.”

Just in: Output at UK manufacturers has fallen over the last quarter, while prices are heading upwards.

The CBI’s latest Industrial Trends Survey, just released, shows that a net balance of 19% of firms reported a drop in output in the last quarter – worse than the 10% recorded in the thee months to January.

However, manufacturers expect output to rise marginally in the quarter to May.

And there’s worrying news for the Bank of England: Expectations for average selling price inflation accelerated in February.

A balance of 17% of companies are rasing prices this month, up from 9% in January.

Tha’s the highest reading for selling price expectations since July 2023, but still much lower than the multi-decade high of +80% in March 2022.

Anna Leach, CBI deputy chief economist, says:

“UK manufacturing conditions remain challenging, with lower output volumes widely reported across the sector this month. But there were also some hopeful signs.

Order books improved – in the case of export orders to above their long-run average – and manufacturers continue to expect output to improve in the months ahead.

The UK stock market is having a weak morning, with blue-chip shares in the red.

The FTSE 100 index has lost 66 points, or 0.85%, to 7652 points.

HSBC are dragging the index down; its shares have lost 8% this morning, after reporting a fall in profits in the last quarter.

Mining giant Glencore are down 3.2%, after it posted a 75% drop in net income for last year, from $17.3bn to $4.28bn.

Joshua Mahony, chief market analyst at Scope Markets, says:

HSBC represents the biggest drag on the FTSE 100, as shares in this banking giant tumbled in spite of their record full-year profits for 2023. Investors took a dim view of the $3 billion impairment charge associated with the bank’s Chinese investment, dampening sentiment around the Asia-focused bank. With continued concerns around the Chinese real estate sector, and global interest rates expected to fall, investors are taking a somewhat cautious approach after both earnings and revenues fell short of expectations.

Glencore shares have slumped into a two-year low this morning, following on from an earnings report that has seen this mining giant report a collapse in their adjusted core earnings, which halved from $34 billion to $17.1 billion. This served as a stark reminder of the impact felt by falling commodity prices, with continued difficulties in the Chinese economy highlighting ongoing concerns that we may see further struggles this year.

Just in: Banknotes featuring a portrait of King Charles III will be issued from 5 June, the Bank of England has announced.

The portrait of the monarch will appear on existing designs of all four banknotes (£5, £10, £20 and £50), with no other changes to the existing designs.

The new banknotes will only be printed to replace those that are worn, and to meet any overall increase in demand for banknotes, the Bank says.

And there’s certainly no need to throw existing notes away! Polymer banknotes that feature the portrait of Queen Elizabeth II will remain legal tender, and will co-circulate alongside the King notes.

But businesses that use machines that accept, sort or check banknotes will need to adapt them so they accept these new designs (there are details of what to do here).

The Bank says:

Machines requiring updates include those receiving notes, such as transport ticketing machines, self-service checkouts, gaming machines, vending machines, back-office machines and any other machines that are used to check banknotes are genuine.

Just in: BT is selling its telecommunications Tower in the centre of London to MCR Hotels, for £275m.

MCR Hotels plan to turn BT Tower into a hotel, which means it will remain as a London landmark for the future, the telecoms group says.

Brent Mathews, property director at BT Group says:

“The BT Tower sits at the heart of London and we’ve been immensely proud to be the owners of this important landmark since 1984. It’s played a vital role in carrying the nation’s calls, messages and TV signals, but increasingly we’re delivering content and communication via other means.

This deal with MCR will enable BT Tower to take on a new purpose, preserving this iconic building for decades to come.”

The Tower, located in Fitzrovia, was built in 1964 by the General Post Office (GPO), and used to spread telecommunications traffic from London to the rest of the country.

But its role in communications has diminished as fixed and mobile technology changes, and its microwave aerials were removed more than a decade ago as they were no longer needed to connect London to the rest of the country.

As well as containing communications equipment and office space, it also contains a viewing galleries and a rotating restaurant on the 34th floor.

The restaurant has gone, but that floor does still spin, and gives some brilliant views over central London. It’s used for hosting corporate and charity events these days (public access ended in 1971 after a bomb blast).