Treasury and business department postpone meetings with CBI after sexual misconduct claims – business live

Anna Isaac

None of these new sexual misconduct allegations at the CBI relate to Danker, and he has apologised for causing any unintentional offence.

As well as the alleged rape, the new claims against different men also include allegations of:

• An attempted sexual assault by a manager at the same staff boat party in 2019.

• A senior manager sending explicit images to junior female staff over several years.

• Other senior managers behaving unprofessionally and inappropriately towards much younger female colleagues: alleged instances include a former board member touching a female employee’s bottom and making what was seen as a sexualised remark to another woman about her appearance within earshot of several colleagues.

• A manager propositioning women after they felt he pushed them to drink more alcohol, while they were already drunk.

• Widespread use of cocaine at official CBI events.

The CBI has expanded its inquiry to include these new allegations and hired an external human resources consultant to help manage complaints, as well as the law firm Fox Williams.

What is the CBI and who funds it?

Anna Isaac

The Confederation of British Industry (CBI) is the UK’s most prominent business lobbying organisation. It is a not-for-profit organisation founded by royal charter in 1965, after a merger of older employer bodies.

It claims “unrivalled” access to government. It also claims to have the biggest number of policy specialists outside of Whitehall, the seat of the British government, in order to support its 190,000 business members, which are the chief source of its income. Its total income was £25m in 2021, of which £22m was from membership fees.

Its membership is composed of direct members and members of other trade bodies.

Its 1,500 direct members are businesses that actively hold membership, such as the supermarket Asda, the jet engines manufacturer Rolls-Royce and the law firm Allen & Overy. Fees vary significantly: top-tier businesses can pay £90,000 annually, some mid-sized companies pay half this price and smaller companies pay far less.

The bulk of its membership comes via trade bodies such as the National Farmers’ Union and the Federation of Master Builders. The CBI counts these trade bodies’ memberships within its own 190,000 total.

The lobby group has access to the prime minister and cabinet, and campaigns on issues ranging from funding for childcare to tax and skills. Its relationship with the UK government was stretched severely by Brexit, with its access to Number 10 much curtailed. A remark attributed to the former prime minister Boris Johnson – “fuck business” – was considered to be aimed at efforts by the CBI and others, to try to influence the post-Brexit UK-EU trade agreement.

Its former director general Dame Carolyn Fairbairn sought to rebuild ties with the government during the early stages of the coronavirus pandemic, including working alongside trade unions and No 10 on developing the furlough scheme.

Tony Danker took over from Fairbairn, the CBI’s first female boss, in November 2020. He continued a focus on re-engaging with the government and the opposition Labour party. He was criticised for speaking in support of Liz Truss’s disastrous mini-budget in September 2022.

The CBI is governed by a president and an executive committee, which, in normal times, is chaired by the director general. It also has a board of non-executive directors, which the director general sits on.

UPDATE: THIS HAS BEEN CONFIRMED.

The Treasury and the Department for Business and Trade have postponed meetings with the Confederation of British Industry (CBI) while the business group investigates allegations of sexual misconduct, the PA news agency reports.

A Treasury source said it had “paused engagement” while the investigation is ongoing, with a similar approach adopted by Kemi Badenoch’s department.

PA understands this means scheduled meetings between ministers and the lobbying group have been postponed as a result of the pause.

The CBI, the UK’s most prominent business lobbying organisation, has also cancelled forthcoming events including its annual dinner after the Guardian revealed multiple allegations of sexual misconduct by its staff.

The CBI has been thrown into turmoil after the Guardian reported claims from more than a dozen women who said that they had been victims of various forms of sexual misconduct by senior figures at the CBI. This included an account from a woman who alleged she was raped at a staff party on a boat on the River Thames.

The latest allegations of misconduct by senior figures at the CBI are separate to those made about its director general, Tony Danker, last month.

Royal Mail said after 11 months of talks with the Communication Workers Union over pay and changes to working patterns, negotiations have ended without a deal.

A spokesperson said:

After 11 months of talks, including mediation by Sir Brendan Barber and Acas, we are deeply concerned that our talks with CWU have concluded without an agreement.

We made substantial efforts to reach an agreement, including making a number of further improvements to our offer. These improvements were all based on feedback from the CWU, and we were hopeful that the CWU would put a deal to its members.

We remain committed to reaching an agreement with the CWU. We have been clear throughout the dispute that not transforming our network and working practices is not an option in a business losing more than £1 million a day. In the best interests of the business, our customers, and the job security of our postmen and women, change cannot be delayed any further.

The UK’s service sector has been growing for three months, according to a survey, but showed a slowdown last month despite record export growth.

The S&P Global/CIPS UK services PMI survey showed a reading of 52.9 last month, down from February’s 53.5. Any reading above 50 points to expansion; any reading below suggests a contraction.

The businesses polled reported their biggest jump in export sales since the survey started tracking this in September 2014.

Tim Moore, economics director at S&P Global Market Intelligence which compiles the survey, said:

March data confirmed that the UK service sector returned to growth during the first quarter of 2023, supported by a sustained rebound in new orders as business and consumer confidence improved from the lows seen last autumn.

Export sales provided an additional boost to the service economy during March as the ongoing recovery in business travel and events helped to drive the fastest rise in new orders from abroad for at least eight and a half years.

Increases in prices that service companies charged dropped to a 19-month low in March, but this was still higher than at any point between 1996 when the survey began and 2021.

Increases in costs faced by these businesses eased to the lowest level for 22 months, but remained “exceptionally strong”, the survey said.

UBS chairman: Takeover of Credit Suisse marks ‘historic day’

Kalyeena Makortoff

The UBS chairman has told investors that the emergency takeover of Credit Suisse last month marked a “historic day” but one that the Swiss bank “hoped would not happen,” as he warned the first-ever merger of two globally systemically important banks came with “execution risk”.

Addressing more than 1,100 shareholders at the St Jakobshalle arena near Basel, Switzerland, UBS chairman Colm Kelleher said:

It was a historic day and a day we hoped would not happen. Yet it is a significant milestone, not only for UBS and Credit Suisse but also for Switzerland, for the global financial industry.

He said that while the combined bank would create new opportunities, and help accelerate UBS’ wealth management strategy, the takeover did not come without risks:

Having a clear vision and a sound strategy is important….This transaction is the first merger of two global systemically important banks. This is not in any way an easy deal to do and brings with it execution risk.

Shareholders at Credit Suisse’s last-ever AGM yesterday were furious over the deal yesterday, and we’ll see how UBS investors respond.

However, the chairman seemed to anticipate some shareholder anger over the surprise takeover, and defended the pace of the decision in light of the market turbulence that had caused panic over Credit Suisse’s future last month. Kelleher said the bank did not have time to consult investors since “stabilising the situation required urgent action”.

The Financial Times’s European banking correspondent Owen Walker tweeted:

The economic recovery in the eurozone gathered pace last month on demand for services, but was slightly less strong than first thought, according to a closely-watched survey.

The S&P Global’s composite purchasing managers’ index (PMI) climbed to a 10-month high of 53.7 in March from 52 in February, below the preliminary reading of 54.1. March was the third month the index was above the 50 mark that separates expansion from contraction.

Price pressures also eased in March, but remained high.

Joe Hayes, senior economist at S&P Global Market Intelligence said:

The eurozone economy continues to bounce back from the lull we saw at the back-end of 2022 and the latest PMI survey will add fresh conviction to the view that, at least for now, the euro area is clear of a recession.

March’s increase in economic activity mainly reflected strong growth across the service sector. Better momentum here is encouraging given the squeeze on household incomes from high inflation and rising borrowing costs. However, the picture is mixed at the country level, with a considerable upward push to growth coming from Spain and, to a lesser extent, Italy during March. It is difficult to envisage expansions of these magnitudes being sustained, meaning that a further strengthening of growth is dependent on other parts of the eurozone.

Activity levels in Germany and France rose only modestly in March, painting a more conservative picture of underlying economic health in the eurozone. The case for further interest rate increases also remains strong based off the survey’s price gauges. Although inflation rates have cooled from their peaks, they continue to run in hot territory, particularly across the service sector.

Industrial production bounced back in France in February, rising 1.2% over the month following January’s 1.4% decline. Manufacturing output climbed 1.3% after falling by 1.5%, with transport equipment particularly strong. Car production has recovered in recent months as supply chain problems have eased.

However, energy-intensive industries showed big declines over the year, of 25.9% for steel, 22.5% for paper and cardboard and 19.9% for chemicals.

Charlotte de Montpellier, senior economist for France and Switzerland at ING, said:

These data indicate that the trend for French industrial production is still sluggish, though it does not resemble a collapse, thanks in particular to supply chain pressures easing. Nevertheless, the increase in activity in February is not sufficient to compensate for the decline in January.

In addition, it is likely that the social tensions surrounding the pension reform will result in less dynamic industrial activity in some sectors in March, before a rebound in the following months. Overall, industrial activity is likely to decline over the quarter, which will contribute negatively to economic growth in the first quarter. At the same time, the data indicate that the inflationary context is weighing on household consumption, mainly goods… We expect slightly positive quarterly growth in the first quarter of 0.1%.

The outlook for the French economy in the coming quarters remains moderate. The global weak growth is likely to weigh on exports and the industrial sector. The inflationary context could continue to weigh on household consumption. In addition, the full impact of monetary policy tightening is likely to begin to be felt, weighing on household and business investment. We expect growth of 0.7% in 2023 and 2024, after 2.6% in 2022.

Women are being paid about 90p for every £1 a man gets in the UK, the latest gender pay gap data shows.

It’s important to know how this is measured: companies line up their male employees in order of salary and do the same for women, before comparing the two in the middle to calculate the average gender pay gap.

So this is not just about men and women getting equal pay for equal work, it’s also about how many women are in senior (better-paid) jobs.

The data also shows that the gap opens up when people have kids – early on in their careers, women and men earn similar salaries.

Dharshini David, a former UK economist who is now business correspondent at the BBC, has looked at five things you need to know.

Switzerland’s financial regulator has called for more power to penalise, and name and shame banks that break the rules, following the near-collapse of the country’s second-biggest bank Credit Suisse and its rescue by UBS.

Marlene Amstad, president of the Swiss Financial Market Supervisory Authority (Finma), told journalists:

Our instruments hit their limits in extreme cases as seen in the case of Credit Suisse.

Finma has no power to fine. It’s an exception when compared with other regulators.

She said most of the watchdog’s investigations into banks had to remain secret to protect stability, and added that this should change.

Finma is keen to ensure that we can make our work more visible to the public in future – as our supervisory colleagues in other countries are often allowed to do.

Yesterday, Credit Suisse’s chairman Axel Lehmann said he was “truly sorry” for the bank’s demise, speaking at its final annual meeting where angry investors called for board members to be “put behind bars”.

Today, Switzerland’s biggest bank UBS, which agreed a rescue takeover of Credit Suisse, faces investors at its annual meeting in Basel. It is due to start shortly.

Back to the UK’s gender pay gap.

Banks HSBC, Goldman Sachs, Morgan Stanley and Standard Chartered reported a widening in the gap between what they paid men and women in 2022, according to analysis by Reuters.

At the banks that disclosed their pay gaps by ethnicity, the gap was biggest between Black staff and their white colleagues.

Businesses with more than 250 employees in Britain must disclose the difference between the regular pay and bonuses of male and female staff. The deadline was yesterday, for the year up to April 2022.

HSBC, one of the worst banks in Britain for gender pay, reported that women were on average paid 45.2% less than men. This was up from 44.9% the year before.

The UK arm of US investment bank Goldman Sachs reported a gender pay gap of 53.2%, the largest among major finance employers, and up from 51.3%.

Morgan Stanley’s UK business had a slightly wider gap of 40.8%, up from 40.5%, while Standard Chartered’s gender pay gap increased to 29% from 27%.

All four banks said that the figures reflected the under-representation of women in senior roles, and said they were taking steps to address this.

Richard Gnodde, chief executive of Goldman Sachs International, wrote to staff in a memo yesterday:

I assure you that we are intent on changing this, but of course it takes time.

In better news, most other major finance firms made some progress in closing their gender pay gaps.

The average across 20 of the biggest employers fell to 30.1% in 2022, from 31.7% in the prior year – but still remains way above the average across all UK employers of 8.3%.

In Germany, factory orders rose 4.8% in February from January, compared with a 0.5% gain in January. On the year, orders are still down by almost 6%. After a slump since last summer, industrial orders have recovered in recent months.

Carsten Brzeski, global head of macro at ING, said:

Industrial orders have now rebounded sharply since November, brightening the outlook for German industry. However, the US slowdown and the longer-term fallout from recent financial turmoil, as well as the broader impact of monetary policy tightening, could still spoil the party.

These strong industrial orders data fuel recent optimism in German industry. Interestingly, production expectations had just started to weaken again after the initial enthusiasm over the Chinese reopening at the start of the year.

Looking ahead, the outlook for German industry has clearly brightened, even if the high inventory build-up since last summer is still likely to weigh on production in the short run. Beyond the short term, however, the question will be whether today’s boost in new orders is the start of an industrial revival or whether the expected slowdown of the US economy, the fallout from recent financial market turmoil and the broader impact of monetary policy tightening will spoil the party again.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Nearly two-fifths of UK employers pay men more than women, on average – showing a worsening picture since companies were first forced to report on their gender pay gap six years ago, despite a push for more equality.

A Financial Times analysis of this year’s data shows that 79.5% of employers paid their male staff more than their female colleagues, higher than the figures last year and six years ago.

The average gap, or the difference between men’s and women’s average hourly pay, was 12.2% in 2022-23, unchanged from last year but higher than the 11.9% in 2017-18.

You can view companies’ gender pay gap reporting here. More on this later.

In other news, new car sales in the UK rose for the eighth consecutive month in March, climbing 17% from a year earlier, although sales remain below pre-pandemic levels, according to preliminary industry data.

The Society of Motor Manufacturers and Traders (SMMT) said it was the biggest month ever for battery electric car registrations. More details will be released at 9am BST.

Asian stock markets struggled, with Japan’s Nikkei down 1.6% while Hong Kong’s Hang Seng slipped 0.66%. Other markets, like Shanghai, Singapore and South Korea’s Kospi made modest gains. On Wall Street, US stocks declined yesterday after data showed US job openings hit their lowest level in nearly two years in February.

Asian markets also retreated after the Reserve of New Zealand unexpectedly hiked rates by 50 basis points instead of the widely expected 25 basis points. Other central banks appear to be considering slowing, or even pausing their rate hikes.

The Agenda

• 8.15am BST: Spain S&P Global Composite PMI for March

• 8.45am BST: Italy S&P Global Composite PMI for March

• 8.50am BST: France S&P Global Composite PMI Final for March

• 8.55am BST: Germany S&P Global Composite PMI Final for March

• 9am BST: UK New car sales for March

• 9am BST: Eurozone S&P Global Composite PMI Final for March

• 9am BST UBS Annual meeting in Basel

• 9.30am BST: UK S&P Global/CIPS Composite PMI Final for March (forecast: 52.8)

• 1.30pm BST: US Trade for February

• 3pm BST: US ISM Non-Manufacturing PMI for March