The Body Shop to cut 489 jobs, with 75 more shops to close; UK mortgage approvals highest since mini-budget chaos – business live | Business

The administrators running Body Shop have sent a full list of the stores which are to shut in the next four-to-six weeks:

Tony Wright, joint administrator of The Body Shop, says the administrators are looking at “all options”, having decided to close another 75 stores.

Wright says:

“In taking swift action to right-size The Body Shop UK store portfolio, we have stabilised the business and are providing the best opportunity for this iconic brand to have a long-term, sustainable future.

The UK business continues to trade in administration, and we remain fully focused on exploring all options to take the business forward.”

The administrators running The Body Shop have announced that nearly 500 staff will be made redundant within the next six weeks.

They have decided to close 75 Body Shop stores over the next four to six weeks, on top of the seven closures announced last week.

This means that 489 staff will “regrettably be made redundant over the next 4-6 weeks as individual stores are closed”, administrators from the accounting firm FRP say.

116 Body Shop stores will remain open.

The Body Shop was bought by restructuring firm Aurelius for an initial payment of £117m in a deal agreed in November and finalised in early January.

Aurelius is understood to be the main creditor, with secured debt that will ensure it gets paid by administrators before most other creditors. It is expected to take back the chain, but only after many shops have closed and jobs been cut.

Video games developer Electronic Arts (EA) has announced it is cutting 5% of its staff, as part of a cost-cutting and restructuring programme.

This means around 670 employees will lose their jobs.

In an email to staff announcing the cuts, EA chief executive Andrew Wilson said the company is moving away from creating new games, and will instead focus on its “owned IP, sports, and massive online communities”.

Wilson said the company will stop work on some in-development games and cancel other planned titles “that we do not believe will be successful in our changing industry”.

Instead, it will “double down” on its existing titles – which includes EAFC, the football game series formerly known as Fifa.

He said the company is “leading through an accelerating industry transformation where player needs and motivations have changed significantly”.

Newsflash: economist Clare Lombardelli has been appointed as a deputy governor of the Bank of England.

Lombardelli is currently chief economist at the Organization for Economic Cooperation and Development, having joined the OECD last year after a long stint working at the UK Treasury.

She will succeed Ben Broadbent, currently the Deputy Governor for Monetary Policy at the Bank of England, on 1st July, on a five-year term.

Lombardelli’s departure to the OECD early last year had been seen as a blow to the UK government, as she had 20 years’ experience in economic analysis culminating in serving as the Treasury’s chief economic adviser.

She started her career at the Bank of England and has also worked in 10 Downing Street as the Private Secretary for Economic Affairs to prime minister David Cameron (see her LinkedIn profile).

The Bank says Lombardelli will oversee the formulation and implementation of UK monetary policy and will lead the Bank’s research, data and analytics.

She will also lead the response to the current review the Bank’s forecasting functions, being carried out by former top US central banker Ben Bernanke, after the BoE failed to predict the recent spike in inflation.

Jeremy Hunt, Chancellor of the Exchequer, says:

“I am delighted to appoint Clare Lombardelli as the next Deputy Governor for Monetary Policy at the Bank of England. Clare brings significant experience to the role tackling financial and economic issues both domestically and internationally.”

Andrew Bailey, Governor of the Bank of England, said:

“I’m really pleased to welcome Clare Lombardelli back to the Bank as Deputy Governor for Monetary Policy.

Clare’s impressive career means she brings a huge amount of relevant experience and expertise to the Monetary Policy Committee, and the Bank more broadly, at a time of great importance for the UK economy.

Here’s some early reaction to UK mortgage approvals hitting their highest level since October 2022 last month.

Ashley Webb, UK economist at Capital Economics, points out that mortgage approvals were the highest since the panicky weeks after the mini-budget of 2022, which drove up borrowing costs:

January’s money and credit figures suggest the drag on consumer spending and the housing market from higher interest rates is easing, which suggests an economic recovery, at least in some sectors, has already begun.

The jump in mortgage approvals for house purchase, from 51,506 in December to 55,227 in January (consensus forecast 52,000), took them to the highest level since October 2022, before the spike in mortgage rates following the “mini” budget caused lending to slump.

Tom Bill, head of UK Residential Research at estate agent Knight Frank, says the market is adjusting to the prospect of lower interest rates:

“Buyers and sellers have realised the interest rate landscape has changed meaningfully in the last four months. Rate cut expectations have softened since Christmas but mortgage approvals and transaction numbers are heading in the right direction after a year of stubborn inflation and rising rates in 2023.

Both are still a fifth below their five-year average but demand will get stronger as inflation comes under control, which should underpin a 3% UK house price increase in 2024.”

Aaron Milburn, UK managing director at credit intelligence provider Pepper Advantage, says signals that interest rates may have reached their peak have lifted mortgage approvals in January.

The Bank of England has clearly set a path to lower rates as inflation shows signs of steady decline, a move that has breathed new life into the mortgage market as banks pre-emptively lower their fixed-term rates to entice buyers. These moves appear to be paying off after a period of relative stagnation as banks tap into strong mortgage demand.

“While the increase in mortgage approvals is a positive sign, other corners of the market remain under significant pressure. Mortgage arrears remain high as the cost-of-living crisis persists – while economically mobile, cash-rich buyers feel that they are able to take on expensive mortgages, we need to remain cognisant that this is not the full picture in a polarised market. For home buyers and economists, all eyes will be on the Bank of England’s next rates decision in March.”

The jump in UK mortgage approvals in January (see 9.38am) is the latest sign that activity in the housing market is rallying.

Overnight, property website Zoopla has predicted that home sales will rise by 10% this year, following a pick-up in sales and demand in early 2024.

Zoopla reports that all measures of activity were higher this month than in February 2023, with agreed sales up by 15% and buyer demand up by 11%.

As a result, the market is on track to reach 1.1m transactions across the year, up from 1m in 2023, it said.

Across the UK prices were down by 0.5% year-on-year, although this masked regional variations. In Scotland, Northern Ireland, Wales, the Midlands and the north of England prices increased, but across the south of England they fell.