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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

‘Deeply sorry’ CBI suspends policy and membership activity until June after firms quit following second rape allegation – as it happened

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A Confederation of British Industry (CBI) logo is seen on a smartphone screen.
A Confederation of British Industry (CBI) logo is seen on a smartphone screen. Photograph: Pavlo Gonchar/SOPA Images/REX/Shutterstock

Closing post

That’s all for today, after a tumultuous day in the British business world that has left the Confederation of British Industry’s future in serious doubt.

The day began with the news that a woman has alleged that she was raped by two male colleagues when she worked at the Confederation of British Industry.

My colleague Anna Isaac reported that:

The woman told the Guardian the incident took place when she was employed at an overseas office of Britain’s most prominent business lobby group.

She said she blamed the culture at the CBI for having no support after what she claims happened to her.

The latest news of misconduct at the CBI triggered some of Britain’s biggest businesses to quit their membership, starting with Aviva and quickly spreading to include major names including John Lewis, NatWest, Virgin Media O2 and Kingfisher.

After a day of unrelenting pressure, the CBI announced it will mothball its operations until June, when members will vote on its future and purpose at an extraordinary meeting.

The news has left Britain’s business leaders questioning whether the CBI should be reinvented, or replaced.

Mujtaba Rahman, European managing director at Eurasia Group, describes the CBI as being in ‘total free fall’ after so many big names quit their membership or suspended work:

The crisis at the CBI makes the front page of the weekend Financial Times….

…and tomorrow’s Guardian, by my colleague Anna Isaac whose reporting of a second allegation of rape by a woman working at the Confederation of British Industry led to today’s exodus from the group.

CBI crisis: What the media say

Understandably, the crisis at the CBI dominates the business news today.

The Financial Times reports that the CBI “was on the brink of collapse on Friday” as many of the biggest names in British business cancelled their memberships after a second woman alleged that she had been raped while working at the UK employers’ organisation.

The Daily Telegraph’s Chief City Commentator, Ben Marlow, writes that it took the report – by the Guardian – of a second allegation of rape to finally spur corporate Britain into action.

Marlow says it took seven long weeks for UK plc to show any glimmer of a backbone, but gives credit to insurance giant Aviva for being the first to sever ties with the lobby group this morning, triggering quite the exodus and prompting the CBI to effectively mothball itself.

Sky News’s business editor, Ian King, says the CBI faces an existential crisis. He also points out that businesses led by three of Britain’s leading business women have been to the front of the action today:

An organisation that has in the past proved an extremely effective lobbyist for business has now been twice hobbled - first by government ministers distancing themselves from it and now by members distancing themselves from it.

It is no coincidence that among the first companies to announce today that they were pausing or cancelling their involvement with the CBI were ones led by women: NatWest, whose chief executive is Dame Alison Rose; Aviva, whose chief executive is Amanda Blanc and the John Lewis Partnership, chaired by Dame Sharon White.

Bloomberg says that corporate Britain has been abandoning the CBI, just as its new director general prepares to take the helm:

The CBI said it was anticipating a further report into sexual misconduct in its workplace from the law firm Fox Williams later Friday, and would provide an update next week.

Its new boss, Rain Newton-Smith, is due to start on Monday. She left the CBI last month to join Barclays Plc but has quickly returned into the role of director general in an attempt to save the organization.

"Deeply sorry" CBI suspends policy and membership activity until June

Newsflash: The Confederation of British Industry has decided to suspend all policy and membership activity until an Extraordinary General Meeting (EGM) is held in June.

The decision, just announced, following today’s exodus of members, after the Guardian reported new allegations of rape and sexual harassment at the business lobbying group.

Firms quitting today included Aviva, NatWest, the John Lewis Partnership, Vodafone, BMW, and Virgin Media O2, with many more pausing activity, such as PwC, Tesco, Sainsbury’s, Asda, Meta, Lloyds Banking Group, Unilever, and Shell. Here’s a list of the main companies taking action, in an extremely busy day.

The board of the CBI says that are “deeply sorry” and “express our profound regret to the women who have endured these horrific experiences”.

They plan to hold an EGM in June, where they will propose a “refocused CBI”, and acknowledge that “much needs to change” if the group is to win back the trust of its members.

Here’s the statement, from the CBI board:

The CBI shares the shock and revulsion at the events that have taken place in our organisation, and at past failures that allowed these events to happen. We are deeply sorry and express our profound regret to the women who have endured these horrific experiences.

We have listened carefully to what our colleagues, members and stakeholders have said over recent days and weeks. We have heard loud and clear a demand for far reaching change.

We want to properly understand from our colleagues, members, experts and stakeholders how they envisage our future role and purpose. As a result, we have taken the difficult but necessary decision to suspend all policy and membership activity until an Extraordinary General Meeting (EGM) in June.

At the EGM we will put forward proposals for a refocused CBI to our membership for them to decide on the future role and purpose of the organisation. This work and the cultural reform will be the entire and urgent focus of the organisation over the coming weeks.

Our members have told us in recent days and weeks that they believe in the importance of a collective voice to inform national policy and the unique role that an organisation like the CBI can play in public life. But much needs to change if we are to win back their trust so we may continue to represent business at this critical time for the country.

We are taking steps to address our failings but recognise these are not yet sufficient to sustain the confidence of our colleagues, members and of the broader business community. We know it will take time to rebuild trust in our purpose and culture. And to give our team and former colleagues the space to heal.

Updated

Full Story: CBI’s future in doubt after flood of UK’s biggest firms quit

The future of the Confederation of British Industry is in doubt after a flood of the UK’s biggest companies, including John Lewis and NatWest, terminated their memberships following the Guardian’s publication of new allegations of rape and sexual harassment at the business lobbying group.

The CBI, which claims to represent 190,000 members employing nearly 7 million people, will be counting the cost of the loss of lucrative annual membership fees at a time when the government has suspended all activity with the group pending the outcome of an investigation into the allegations.

The first of more than 50 big companies that announced on Friday they were severing or pausing their relationship with the CBI was the insurer Aviva. It notified the organisation of its decision in the morning, saying the lobby group was no longer in a position to speak for the British business community.

An Aviva spokesperson said: “In light of the very serious allegations made, and the CBI’s handling of the process and response, we believe the CBI is no longer able to fulfil its core function – to be a representative voice of business in the UK. We have therefore regrettably terminated our membership with immediate effect.”

The decision is understood to have been made before the Guardian published the most recent claims on Friday, in which a woman alleged she was raped by two male colleagues when she worked at an overseas office of the CBI. Sources also said another woman based at the organisation’s London office was stalked by a male colleague in 2018.

The scandal-hit group had already hired the law firm Fox Williams to conduct an independent investigation into a separate string of allegations reported to the Guardian by more than a dozen former staff, including a woman’s claim that she was raped by a manager during a 2019 summer boat party on the River Thames.

A spokesperson for the John Lewis Partnership, which owns the department store chain and Waitrose supermarkets, said:

“Due to the further very serious and ongoing allegations made relating to the CBI, we have decided to end our membership with immediate effect.”

The banking group NatWest, which had previously paused its activity with the CBI, said on Friday it had “withdrawn” its membership after careful consideration, adding it had lost confidence in the organisation’s ability to fulfil its role representing business.

As the announcements gained pace on Friday afternoon, other businesses to confirm they were terminating their CBI memberships included the carmakers BMW and JLR; the telecommunications company Virgin Media O2; and EY, one of the UK’s big four accountancy firms.

A wave of other companies said they were suspending their ties with the CBI while the allegations of sexual misconduct and harassment were investigated. These included the supermarket chains Tesco, Sainsbury’s, Asda and Lidl; the aerospace and engineering company Rolls-Royce; the accountancy firm PWC; the energy firm SSE; and Unilever, the consumer goods company that owns brands including Marmite and Dove.

PwC said in a statement that any organisation representing UK business “needs to be a trusted voice”. A spokesperson added:

“With multiple horrific allegations hanging over its head, the CBI is currently unable to do its job.”

The Guardian understands that the oil companies BP and Shell have also paused all activities with the organisation, along with the National Grid.

Here’s the full story:

Dame Helena Morrissey, the former City fund manager and founder of the 30% Club, which campaigns for more women in boardrooms, said she believed the departures of CBI members would “accelerate what would have been an inevitable decline”.

Morrissey, who has previously urged CBI members to leave the organisation, said the way it had handled the allegations had “compounded the problem”. She said there had been a “lack of process” for managing complaints.

She said:

“We can’t have young women look and think: ‘I’m not going to join industry, I’m not going to go into the business world’ because it’s a terrible culture and terrible things can happen. Obviously it also ruins it for a lot of men.”

Morrissey asked how the organisation would be able to survive without the membership fees, estimated to be £90,000 a year for a large business, of several high-profile companies.

Ashley Armstrong, business editor of The Sun, has calculated that 66 companies have axed, paused or suspended CBI membership today.

She’s heard that Capita, Manchester Airport, WPP and Cisco are terminating their membership, on top of the companies we’ve flagged through the day.

Additional companies pausing include Santander UK, TSB, JP Morgan, Morgan Stanley, Macquirie Group, Ford, KPMG, Balfour Beattie…..

Updated

Isabella Fish, retail editor of The Times, has news of more CBI members terminating their memberships – CenterParcs and London Stansted Airport.

Nils Pratley: do we need a replacement for scandal-hit CBI?

Our financial editor, Nils Pratley, warns tonight that the CBI’s survival is on the line after a day in which scores of members quit the group or suspended work with it.

Nils points out that the crisis has prompted a question – if the CBI did not exist, would it be necessary to create something that performed its role?

He reports that the majority view in big boardrooms is probably still that a pan-business lobbying body is useful, writing:

The CBI, having opposed Brexit, has had a prickly relationship with the current government, but there were signs of effectiveness before ministers suspended engagement after the Guardian’s reporting. In March, two of the CBI’s main requests – on childcare provision and capital allowances to boost investment – were embraced by the chancellor, Jeremy Hunt, in his budget.

Other lobbying areas that are seen as covering all companies – large and small, domestic and international – would include tax, employment law, environmental policies and the levelling up agenda. The CBI is also a far bigger organisation than the Institute of Directors, the other business body with a royal charter.

Yet others are less enthused. The chairs of some large FTSE 100 companies often say they already have access to government in their own right, and suggest they pay for CBI membership only out of loose responsibility to the wider UK business scene. Some see their industry trade organisations as more relevant.

And some argue that the CBI, with its heavy membership skew towards banks and the City of London, is compromised and ineffectual when the interests of financiers and the rest of the economy collide – such as when the lack of bank lending was a burning issue after the crisis of 2007-09.

Here’s the blunt assessment of one senior corporate affairs veteran: “The government has nothing to lose if it never speaks to the CBI ever again. And the CBI leadership is deluding itself if it thinks its members are going to rise in support of an organisation whose handling of these allegations has been cack-handed.”

Here’s the full piece:

Adnams pulls support, says CBI has engrained cultural and behavioural issues to deal with

Adnams, the Suffolk-based brewer, is pulling its support for the CBI, saying it cannot remain a member of the group any more.

Admans says:

Adnams is a business that sets high standards for itself and its business partners.

As an organisation that is vocal about responsible business behaviour and that expects adherence to a set of core values from its team, it has become unsustainable for us to remain members of the CBI

It is crystal clear the CBI has some engrained cultural and behavioural issues to deal with and this further series of allegations has led us to the decision to withdraw our support.

It emerged earlier this month that Adnams had held discussions about potentially leaving the CBI:

Manpowergroup UK suspends activity with the CBI

And still they come…

Manpower, the recruitment firm, is suspending all activity with the CBI.

It says:

ManpowerGroup UK is deeply concerned with the serious allegations raised against the CBI and suspends all activity with the business lobby group effective immediately.

As the investigation is ongoing, we will continue to monitor the situation and will review our membership accordingly.

Accenture terminates membership

Professional services firm Accenture has terminated its membership with the CBI with immediate effect, it tells us.

Sage terminates CBI membership with immediate effect

Sage, the FTSE 100 enterprise software company, has told its employees the company has terminated its CBI membership with immediate effect.

The CEO of Sage, Steve Hare, told staff that Sage’s executive leadership team has been closely monitoring the allegations against the CBI since they were first made in March.

In a message to staff, Hare said:

The stories are deeply concerning and since then, more allegations have continued to emerge.

[In early March, Tony Danker stepped aside as CBI director general amid an investigation into complaints about his conduct].

Explaining the decision, Hare says the legitimacy of the CBI, and its ability to represent businesses, has been undermined by the allegations of misconduct.

The reason we join groups like the CBI is so we can represent the interests of SMB [small and medium-sized businesses], and influence policy which impacts them. It has become clear that the CBI will be unable to do this effectively for some time.

Hare adds that it is important that staff to feel safe at work, and doesn’t want any doubt over Sage’s position on behaviour in the workplace.

Everybody should feel safe at work, and with Sage colleagues – that is why we talk so much about the importance of our values and why, for example, we have recently refreshed our code of conduct.

Arup terminates engagement with CBI over 'extremely serious allegations'

Arup, the UK design and engineering firm, has terminated its engagement with the CBI.

An Arup spokesperson said:

“In view of the extremely serious allegations being levelled at the CBI, we have terminated our engagement with immediate effect.”

Arup play an important role in the UK construction sector, as a link between the construction industry and the government on major projects. Its current work includes consulting on the HS2 rail link, and on the creation of a hydrogen economy in Scotland, as part of the move to net zero.

Updated

Tesco and Sainsbury's pause CBI membership

Supermarket chains Tesco and Sainsbury are pausing their membership of the CBI.

Ashley Armstrong of The Sun has the details:

Updated

Jaguar Land Rover has quit the CBI too, the Financial Times reports.

The FT also flag that consumer goods maker Reckitt Benckiser, drinks business Diageo, and supermarkets Asda and Lidl have paused engagements with the CBI.

Unilever suspends CBI membersip

Another FTSE 100 giant, Unilever, has suspended its CBI membership, joining the growing list of firms taking action.

In a statement, a Unilever spokesperson said:

“Due to the very serious and ongoing allegations, we can confirm that we have suspended our membership of the CBI.”

Unilever are the fourth-largest company listed on the London stock market, with brands including Dove, Comfort, Domestos, Hellman’s, Ben & Jerry’s and Magnum.

A spokesperson for energy firm SSE says:

“We have suspended our engagement with the CBI and will be reviewing our membership.”

Kingfisher to end CBI membership

The CBI has also lost Kingfisher, the DIY chain which owns the B&Q and Screwfix chains in the UK, and Castorama and Brico Dépôt in France.

A Kingfisher spokesperson said:

“Given the very serious and ongoing further allegations, we have taken the decision to end our CBI membership today.”

Facebook-owner Meta pauses work with CBI

Meta, the social media company which owns Facebook, Instagram, and WhatsApp, has paused its work with the CBI.

A Meta spokesperson has confirmed it has paused engagement with the CBI while the investigation is ongoing.

Updated

Rolls-Royce suspending all interaction with the CBI

Rolls-Royce, the UK engineering and aerospace firm, is suspending its work with the CBI.

It will make a final decision on its membership once the investigations being conducted into the group are concluded.

A Rolls-Royce spokesperson says:

“In light of the recent allegations, which are deeply concerning, we are suspending all interaction with the CBI with immediate effect. We will await the completion of its ongoing investigations before making a final decision on our membership.”

Asset manager Schroders is also quitting the CBI, Reuters reports.

A Schroders spokesperson has said the firm doesn’t feel the CBI is the right organisation “to represent our views” so it has decided to exit.

ITV pauses work with CBI

Broadcaster ITV tells us they are pausing engagement with the CBI with immediate effect, and will not renew their contract with the group.

Updated

BT suspends CBI membership

Telecoms group BT is suspending its membership of the CBI.

A BT Group spokesperson said:

“In light of the appalling allegations made, BT Group has decided to suspend its membership of the CBI with immediate effect.”

Energy UK terminates CBI membership

Energy UK, which represents over 100 of the UK’s biggest energy companies, has terminated its membership of the CBI with immediate effect “in light of the very serious allegations that have been reported”.

A spokesman said:

“We know that these allegations will also be shocking and upsetting for the staff at the CBI that we work with. We will review the situation following the completion of the CBI’s investigations and the actions it takes as a result.”

BP pauses engagement with CBI

BP has joined FTSE 100 energy giants Royal Dutch Shell and National Grid which have both distanced themselves from the CBI.

The Guardian understands that BP has paused all engagement with the business group.

The oil giant is expected to keep its membership under review until more is known. A spokesman for the company declined to comment.

Earlier today it emerged that Shell suspended its engagement with the CBI at the beginning of last week, but would wait until the group had carried out its investigation before making a decision on the future of its membership. A spokesperson for the company declined to comment.

A spokesman for National Grid said the company was “very concerned about all the allegations” and had “suspended all engagement with the CBI” while it reviewed its membership.

NatWest withdraws CBI membership

Newsflash: NatWest Group has withdrawn its membership of the Confederation of British Industry (CBI) “with immediate effect”.

The move by the FTSE 100-listed bank follows the series of allegations of sexual misconduct against staff.

A NatWest Group spokesperson said:

“Following careful consideration, and having previously paused all activity, NatWest Group has today withdrawn its membership of the CBI with immediate effect.

British business needs a strong representative voice. Given the extremely serious allegations made against the CBI, we no longer have confidence that it can fulfil this role at the present time.”

Once again, it’s one of the few FTSE 100 companies run by a woman (Dame Alison Rose) taking the decision to quit the CBI, as Amanda Blanc’s Aviva did this morning.

Updated

Another carmaker, Aston Martin, has said today it is “concerned by the serious allegations raised and will monitor the ongoing investigations” (that’s via the Financial Times).

List: firms who quit the CBI today, or put engagement on hold

It’s been a dramatic few hours, as the crisis enveloping the Confederation of British Industry deepens.

Insurance firm Aviva was the first to announce it was quitting the CBI, after the Guardian reported that a woman has alleged that she was raped by two male colleagues when she worked at the Confederation of British Industry.

A spokesperson for Aviva said:

“In light of the very serious allegations made, and the CBI’s handling of the process and response, we believe the CBI is no longer able to fulfil its core function – to be a representative voice of business in the UK.

We have therefore regrettably terminated our membership with immediate effect.”

Aviva’s move may have started a domino effect. Fellow FTSE 100 insurer Phoenix Group announced the cancellation of its membership a couple of hours later, as did insurance group Zurich.

Vitality, a smaller UK health insurer, also quit, questioning if the CBI had the credibility to represent business at this point.

Trade body the Association of British Insurers threw in the towel at lunchtime, saying it was “untenable to retain our membership in light of further serious allegations”.

Then came Virgin Media O2, which ended its membership, saying:

While we respect the ongoing investigations taking place, these disturbing allegations and the way the situation has been handled is not representative of business in Britain.

Retail chain the John Lewis Partnership then joined the list of departures, saying:

Due to the further very serious and ongoing allegations made relating to the CBI, we have decided to end our membership with immediate effect.

And in the last few minutes, accountancy group EY has terminated its membership…

…as has carmaker BMW, which says it is “concerned by the allegations relating to the CBI.”

Jaguar Land Rover are also cancelling their membership, the FT reports.

Fidelity International, the fund manager, has reportedly cancelled its membership too. And around 4.30pm, asset manager Schroders said they would exit too.

4pm update: NatWest, the FTSE 100 banking giant, has withdrawn its membership of the Confederation of British Industry (CBI) “with immediate effect.

5pm update: DIY chain Kingfisher says it has decided to end its CBI membership today, due to the “very serious and ongoing further allegations”.

Asset manager Abrdn has been weighing up whether to quit, according to Sky News this morning.

Update: Trade body Energy UK has terminated its membership of the CBI with immediate effect “in light of the very serious allegations that have been reported”.

As is Arup, the UK design and engineering firm.

Supermarket chains Tesco and J Sainsbury are also pausing their memberships of the body.

5pm update: Unilever, the consumer goods giant, says it is suspending membership.

…and Sage, the FTSE 100-listed enterprise software firm, is terminating its membership with immediate effect.

Other companies have decided to pause engagement with the CBI, while a review takes place.

PwC, the Big Four accountancy firm, said the CBI was “currently unable to do its job” due to “multiple horrific allegations hanging over its head”, as it suspended its work with the group.

Britain’s two pharmaceuticals firms, AstraZeneca and GSK, have also suspended work with the CBI, as has property group British Land.

Social media group Meta has confirmed it has paused engagement with the CBI while the investigation is ongoing.

Update: Energy firms BP, Shell, and National Grid have all paused engagement with the CBI, while Barclays is no longer ‘proactively engaging’ with the group.

Update: Rolls-Royce, the engineering and aerospace firm, says it is suspending all interaction with the CBI with immediate effect.

Rolls Royce added:

We will await the completion of its ongoing investigations before making a final decision on our membership.”

Energy firm SSE has suspended its engagement with the CBI.

5.30pm update: The Financial Times flag that Asda, Lidl, Reckitt Benckiser and Diageo have said they had paused engagements with the CBI.

Bloomberg flags that The Crown Estate and Lloyds Banking Group have both paused engagements with the CBI too.

Updated

In another blow for the CBI, Fidelity International, the fund management giant, has cancelled its membership, Sky News reports:

BMW terminates CBI membership

Auto giant BMW is quitting the CBI, saying it is concerned by the allegations of misconduct at the group.

The German carmaker, which employs around 8,000 people in the UK and runs the car factory in Cowley, Oxford, says:

The BMW Group is concerned by the allegations relating to the CBI.

The Group has therefore decided to terminate its membership with immediate effect.

EY quits CBI

Accountancy group EY, another member of the Big Four, has now terminated its membership of the CBI.

An EY spokesperson says:

EY has terminated its membership of the CBI and all associated activities with immediate effect.

Updated

British Land, one of the UK’s biggest property developers, has also paused engagement with the CBI.

GSK pauses work with CBI

Britain’s other big drugmaker, GSK, has paused its work with the CBI, as AstraZeneca also announced earlier today.

GSK took the move pending the outcome of the independent investigation into alleged serious misconduct and sexual harassment at the organisation, and the CBI taking appropriate (robust) action.

GSK, which is run by Emma Walmsley, one of few female FTSE 100 chief executives, says it remains a member of the CBI but has a zero tolerance approach to any form of sexual harassment in the workplace.

Updated

John Lewis Partnership quits CBI

Retail chain the John Lewis Partnership has now become the latest company to quit the CBI today, after the latest allegations of misconduct by managers at the group.

A company spokesperson for the group, which includes Waitrose supermarkets and John Lewis department stores, said:

“Due to the further very serious and ongoing allegations made relating to the CBI, we have decided to end our membership with immediate effect,”

Updated

A source with knowledge of the matter said Barclays “is not proactively engaging” with the CBI as the lobby group’s investigation continues.

It is understood that the bank has not yet made a decision on its membership.

AstraZeneca pauses work with CBI

Pharmaceuticals giant AstraZeneca has paused its work with the CBI, following the ‘grave’ allegations of misconduct at the business lobby group.

An AstraZeneca spokesperson said:

“Following these grave allegations, we have decided to pause our engagements with the CBI while these are investigated.”

Virgin Media O2 ending CBI membership

Telecommunications company Virgin Media O2 is quitting the CBI.

A Virgin Media O2 spokesperson says:

“While we respect the ongoing investigations taking place, these disturbing allegations and the way the situation has been handled is not representative of business in Britain.

We have therefore informed the CBI that we are ending our membership.”

PwC suspends activity with CBI, following 'multiple horrific allegations'

PwC, one of the Big Four accountancy firms, has suspended its activity with the CBI.

It says that the “multiple horrific allegations” hanging over the CBI means the group is unable to do its job at present.

A PwC spokesperson explains:

We see value in an organisation that represents UK business, and the issues that matter most to business as a whole.

That organisation needs to be a trusted voice, and have the membership necessary to be representative. With multiple horrific allegations hanging over its head, the CBI is currently unable to do its job. We have suspended all activity with the CBI.

The Guardian understands that Shell suspended all activity with the CBI at the beginning of last week while the business group’s review takes place.

A spokesman for Shell declined to comment.

Association of British Insurers quits CBI

The departures from the CBI continue, with the Association of British Insurers, ending its membership with immediate effect.

The ABI is the “trade association for insurance and the long term savings market”, with over 200 members across the UK industry.

An ABI spokesperson says:

“It has become untenable to retain our membership in light of further serious allegations and we have informed the CBI of our decision to leave with immediate effect.”

Updated

Zurich UK, the insurance group, is terminating its membership of CBI with immediate effect, Reuters reports.

A spokesperson for Zurich UK says the company is “deeply concerned” about allegations made about the CBI.

Asset manager Abrdn has said it is waiting for the findings of the review into the CBI.

An Abrdn spokesperson said (via Reuters):

“Like other members, we await the outcome of the current review, and look forward to understanding the CBI’s plans for dealing with the issues that have emerged.”

The CBI announced a “root-and-branch review” of its culture, governance and processes last week, following the allegations of misconduct by senior staff published by the Guardian this month.

It also dismissed former director-general Tony Danker with immediate effect, after an investigation into complaints of workplace misconduct. None of those new claims, reported on 3 April, relate to Danker, who has apologised for causing any unintentional offence.

Danker told the BBC he had been made a “fall guy” for problems at the CBI, but its president, Brian McBride, accused Danker of being “selective” in his account of his departure.

We flagged earlier that Abrdn is reported to be weighing up whether to quit the CBI.

Updated

Vitality, a smaller UK health insurer, also quit the CBI, the Financial Times reports.

Neville Koopowitz, Vitality chief executive, said:

“We don’t believe that they have the credibility to represent business at this point,”

Chip intellectual property designer Imagination Technologies has also gone, with sources telling the FT the recent allegations “tipped the balance” in favour of quitting, but the original driver had been a lack of value for money.

As flagged earlier, supermarket chain Asda has “decided to pause” all engagement with the CBI while investigations take place.

More here.

Updated

British insurer Phoenix quits CBI

Newsflash: Phoenix Group, the FTSE 100 life insurer, has cancelled its membership of the CBI with immediate effect.

Phoenix says it took the decision following this morning’s report in the Guardian that a second woman has claimed she was the victim of rape at the CBI.

A spokesperson for Phoenix Group said:

“Further to the additional allegations reported this morning, we have taken the decision to resign our membership of the CBI with immediate effect,”

Phoenix Group is the UK’s largest long-term savings and retirement business, with brands include Standard Life, Phoenix Life and SunLife.

Aviva is one of a handful of London’s blue-chip companies to be run by a woman.

Amanda Blanc has faced some appalling sexism since taking control of Aviva in July 2020. At last year’s Annual General Meeting, Blanc was told she was “not the man for the job” and that she should be “wearing trousers”.

Earlier this week, Aviva’s chairman warned he will not tolerate disrespectful behaviour from shareholders at this year’s AGM.

Blanc is Aviva’s first female chief executive, and is well known for being a pioneer in male-dominated sectors, including chairing Welsh rugby’s Professional Rugby Board.

Helen Cahill of The Times says we shouldn’t be surprised that Blanc, one of the most high-profile women in the City, is taking her firm out of the CBI.

But will others follow? Aviva’s departure will surely force other major CBI members to consider their own membership….

Aviva isn’t the first CBI member to quit, following the allegations of sexual misconduct by senior staff at the UK’s leading business lobby organisation.

It emerged early this week that the British Insurance Brokers’ Association has cancelled its CBI membership.

BIBA, which represents 1,800 insurance brokers and intermediaries, quit after allegations about senior staff at the CBI were reported by the Guardian, earlier this month.

The association – which confirmed it had left but would not comment further – was understood to have told the CBI it was leaving last week, according to This Is Money.

The loss of FTSE 100 insurer Aviva calls into question whether the Confederation of British Industry can survive the latest allegations of misconduct at the lobby group, the Financial Times says.

Aviva’s departure was announced just hours after the Guardian reported that a woman has alleged that she was raped by two male colleagues when she worked at the CBI, the second to claim she was the victim of rape at the organisation.

CBI president Brian McBride said in a statement:

“These latest allegations put to us by the Guardian are abhorrent and our heart goes out to any women who have been victims of the behaviour that is described.

While the CBI was not previously aware of the most serious allegations, it is vital that they are thoroughly investigated now and we are liaising closely with the police to help ensure any perpetrators are brought to justice.”

The government suspended engagement with the group earlier this month while the law firm Fox Williams conducts an investigation.

McBride says the CBI is expecting a further report from Fox Williams later today, adding:

The board will communicate its response to this and the other steps we are taking to bring about the wider change that is needed early next week.”

Aviva cancels its CBI membership over 'very serious allegations'

Newsflash: insurance company Aviva has quit the CBI.

The FTSE 100-listed company took the move following the allegations of misconduct at the business lobby group, and its handling of the situation.

A spokesperson for Aviva says:

“In light of the very serious allegations made, and the CBI’s handling of the process and response, we believe the CBI is no longer able to fulfil its core function – to be a representative voice of business in the UK.

We have therefore regrettably terminated our membership with immediate effect.”

Sky News is reporting that Abrdn, the FTSE 100 fund manager, has been debating whether to terminate its status as a CBI member.

Sky’s Mark Kleinman reports:

Alternatively, it could decide not to renew its membership when it expires at the end of this year, according to one source.

Brian McBride, the CBI president, has been a non-executive director of abrdn since 2020, but is due to stand down at the company’s annual meeting next month, according to an announcement earlier this year.

A City source said that abrdn, which had previously been a member of the CBI, had re-joined the group after the move was requested internally by Mr McBride.

More here.

Second woman claims she was raped by colleagues while working at CBI

A woman has alleged that she was raped by two male colleagues when she worked at the Confederation of British Industry, my colleague Anna Isaac reports.

The woman told the Guardian the incident took place when she was employed at an overseas office of Britain’s most prominent business lobby group.

She said she blamed the culture at the CBI for having no support after what she claims happened to her.

This is the second woman to claim she was the victim of rape at the CBI – it follows another member of staff who alleged she was raped by a manager on a 2019 summer boat party on the River Thames.

Separately, the Guardian has been told that a woman based at the organisation’s London office was stalked by a male colleague in 2018. Sources said he followed her in person and tracked her online, and that when she complained the CBI launched an investigation.

It is understood the CBI upheld a finding of harassment.

However, sources claim the woman was actively discouraged from reporting the stalking to the police and the alleged perpetrator retained his job.

The CBI says it has reported further allegations to the police.

Here’s the full story:

Although UK private sector output is rebounding this month, there’s a stark difference between manufacturers and services firms, says Dr John Glen, CIPS chief economist:

Glen explains:

Services saw the fastest new order growth for 13 months as consumer confidence grew and spending on a few more luxuries increased.

Whereas the manufacturing sector received another body blow and became more entrenched in contraction with a fall in new orders and another round of job shedding.

Stronger supply chain deliveries boosting operations was not even enough to improve manufacturers’ fortunes as consumers chose holidays over white goods.

Price rises could lead to May interest rate hike

UK firms also continued to lift their prices this month, adding to pressures on households.

The PMI report shows that private sector firms “once again sought to defend margins” from rapidly increasing staff costs, especially those in the service economy. Price rises accelerated slightly this month.

That, and the pick-up in growth last month, is likely to spur the Bank of England to raise interest rates for the 12th time in a row next month, when it sets borrowing costs on 11 May.

S&P Global Market Intelligence’s Chris Williamson says:

Inflationary pressures have meanwhile continued to cool in manufacturing, but price pressures have picked up in services following the resurgence of demand.

This combination of faster growth and elevated price pressures put a twelfth rate hike by the Bank of England an increasingly done deal when it next meets on 11th May, and will add to speculation that further hikes may be needed

Britain's economy growing at fastest pace in a year: PMIs show

Newsflash: The UK private sector is growing at its fastest pace in a year, as companies are boosted by a pick-up in new orders.

The latest survey of British purchasing managers has found that business activity is growing for the third month running this month, and at the fastest pace since April 2022.

The UK’s dominant service sector is driving the recovery, with companies reporting that consumer spending was resilient. This should cool concerns that the UK risks falling into recession this year.

Data provider S&P Global says that a “further robust rise” in new orders dded to signs of an improving economic landscape.

But while there was strong growth in the service economy, factory production is falling again this month. Goods producers said that demand had been hit by “customer destocking” and efforts to cut costs.

Overall, the Flash UK PMI composite output index rose to 53.9 so far this month, up from March’s 52.2, a 12-month high. Any reading over 50 shows growth.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence says the repost shows growth accelerating this month:

Growth is lopsided, however, with surging demand for services contrasting with an ongoing downturn in demand for goods, Williamson points out, adding:

“However, for now the key takeaway is that the economy as a whole is not only showing encouraging resilience but has gained growth momentum heading into the second quarter, the latest PMI reading broadly indicative of GDP rising at a robust quarterly rate of 0.4%.

Updated

Eurozone recovery unexpectedly gathering pace

The eurozone’s economic recovery has unexpectedly strengthened this month, lifted by a jump in activity at service sector firms.

The flash Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, has jumped to an 11-month high of 54.4 in April from March’s 53.7.

That indicates that the economy is accelerating this month.

Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, which co-produces the report, explains:

“The HCOB Purchasing Managers’ Indices for the euro zone show a very friendly overall picture of an economy that continues to recover,”

“However, a closer look reveals that growth is very unevenly distributed. For example, the gap between the partly booming services sector on the one hand and the weakening manufacturing sector on the other has widened further.”

The pound has dipped in the financial markets this morning, after UK retail sales fell in March.

Sterling lost half a cent to below $1.24 this morning, away from the 10-month highs around $1.255 seen a week ago.

The pound had been the best-performing G10 currency this year, as it recovered from its losses during 2022.

Victoria Scholar, Head of Investment at interactive investor, explains:

Poor weather in the UK weighed on retail sales in March following an increase in the previous month, particularly on non-food items. It was the sixth wettest March on record since 1836, with retailers such as garden centres and jewellery stores negatively. Food store sales volumes also declined in March, partly because of the recent food shortages.

Food store sales are still down 3% versus pre-pandemic levels from February 2020 because of food price inflation and the cost of living crisis. One bright spot came from motor fuel sales which rose by 0.2% in March versus a fall of 1.2% in February but remains 8.5% below pre-covid levels.

The pound sold off slightly after the data, but cable (GBPUSD) is still up 2.7% this year. However the greenback is on track for its first weekly gain in a month.”

Radio and television presenter Greg James points out that Elon Musk also experienced a loss yesterday, when the largest and most powerful rocket ever built blew up.

Although the test flight of the Starship rocket only lasted around four minutes, SpaceX and NASA say it was a success, and will have yielded plenty of useful data.

Although the Starship spacecraft failed to separate from the lower-stage Super Heavy rocket, it did take-off – succeeding in not blowing up the launch pad. So it’s an important milestone in SpaceX’s ambition of sending astronauts back to the moon and ultimately to Mars.

As Bill Blain, strategist at Shard Capital, puts it:

“Fail Fast” is Elon Musk’s unofficial motto, but it would be too cheap a shot to describe the first flight of SpaceX’s impressive Starship on a Heavy Booster in such terms.

Yesterday, the massive rocket suffered a “rapid unscheduled disassembly” 4 mins into its first flight, but Space X will have learnt an incredible amount that it will put right for the next launch. I am not normally given to saying this about Musk – but respect for getting the 400 ft thing in the air.

Updated

The Pope has also been blessed with one of Musk’s ‘grey ticks’ (for those with government or multilateral organization accounts).

Researcher John Scott-Railton has been examining the confusion caused by the removal of the old verification on Twitter.

He shows how smaller US government agencies, and those overseas, are now unverified, which risks creating confusion for users.

This ‘recklessness’ by Elon Musk could have serious consequences if there is an emergency or national disater, fears Scott-Railton, who is a senior researcher at The Citizen Lab:

The weakness in UK retail sales in March was “widespread”, says Paul Dales of Capital Economics, although it can partly be blamed on the bad weather:

Food sales dropped by 0.7% m/m, partly due to shortages on the shelves, and sales fell in four of the other six main categories.

The 3.2% m/m and 1.7% m/m respective declines in department store and clothing sales were reportedly due to March being the wettest March in 40 years.

Despite the poor weather keeping shoppers at home, online sales dipped by 0.8% m/m. Household goods and fuel sales eked out rises of 0.1% m/m and 0.2% m/m respectively.

However, Dales is encouraged that retail sales rose over the last quarter, by 0.6%.

That’s the first rise in a full quarter since Q2 2021 and suggests that the 18-month retail “recession” may have come to an end.

UK department stores felt the brunt of the bad weather in March, with sales volumes dropping by 3.2% for the month.

Clothing shops reported a 1.7% fall, while sales volumes at other non-food stores, such as jewellery stores and garden centres, fell by 0.6%.

Government accounts on Twitter have grey ticks that note their connection with government agencies, which should help users spot the real Joe Biden from presidential impersonators, for example.

UK prime minister Rishi Sunak has the grey tick too, as does the @10DowningStreet account…. and Labour leader Keir Starmer, and Liberal Democrat leader Ed Davey too.

But the grey tick may not extend to every politician.

The Australian prime minister, Anthony Albanese, has been given a grey tick, but the opposition leader, Peter Dutton, has a blue tick indicating he has subscribed to Twitter Blue.

Here’s a guide to spotting who’s really who on Twitter:

The drop in UK retail spending last month means that sales volumes are 0.7% below their levels before the Covid-19 pandemic began:

Darren Morgan, ONS director of economic statistics, says:

“Retail fell sharply in March as poor weather impacted on sales across almost all sectors.

“However, the broader trend is less subdued as a strong performance from retailers in January and February means the three-month picture shows positive growth for the first time since August 2021.

“In the latest month, department stores, clothing shops and garden centres experienced heavy declines as significant rainfall dampened enthusiasm for shopping.

“Food store sales also slipped, with retailer feedback suggesting the increased cost of living and climbing food prices are continuing to affect consumer spending.”

While losing their blue tick could prick the egos of some Twitter users, it also increases the risks of impersonation by fake accounts.

Overnight, the US Citizenship and Immigration Services warned its followers to watch out for imposters.

Twitter has previously advised government entities to apply for a free blue check through a special program, but some have reported they had thus far been unable to do so, my colleague Kari Paul explains, adding:

Experts have stated that the failure to verify such entities increases the risks of scams and even threatens to collapse disaster response online, with agencies like the National Weather System now check-less.

Musk chips in, for a few celebs....

Horror novelist Stephen King found that he still has a blue tick following the purge of legacy verified accounts on Thursday.

Last November, King had declared he wouldn’t sigh up for Twitter Blue, telling his seven million followers that Musk should pay him for producing content on the social media site.

King, who had promised to be ‘gone like Enron’ if Elon Musk started charging a fee for verification, insists he hasn’t subscribed….

…prompting Musk to reply that King was ‘welcome’:

The world’s second-richest man appears to be chipping in for a few accounts, including basketball player LeBron James and actor William Shatner, as the Verge explains here.

Updated

Elon Musk’s Twitter pulls plug on ‘verified’ blue ticks

Twitter has finally removed its “legacy” blue checks from formerly verified Twitter accounts, as policies implemented under new owner Elon Musk began to take hold, my colleague Kari Paul writes.

Musk, who purchased the company for $44bn in 2022 and has thus far struggled to make it profitable, has been threatening to remove what he called “legacy blue checks” for months now. The checkmark previously denoted accounts that had been verified for authenticity and was given to accounts of celebrities, journalists and media outlets.

Now users seeking verification will have to pay for Twitter Blue, a controversial $8 a month subscription program under which any account can obtain a blue checkmark.

The rollout of the changes on Thursday was chaotic. Numerous high-profile users took to the platform to assert they would not pay for blue checkmarks under the new policy, while others announced they would leave the platform entirely.

Nonprofit organizations Human Rights Watch and the NAACP have tweeted they will not be paying for Twitter Blue.

Famous names such as Hillary Clinton, Bill Gates, Kim Kardashian and Justin Bieber are among those who are no longer verified.

Economist Mariana Mazzucato is one of many criticising the move, accusing Musk of ‘capricious whim’:

Introduction: UK retail sales drop in wet March

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

British consumers bought less stuff last month, as inflation ate into household budgets and wet weather drove shoppers from the high street.

Retail sales volumes across Great Britain dropped by 0.9% in March, new figures from the Office for National Statistics show.

That follows a 1.1% rise in February 2023, which had lifted hopes for economic growth this year.

On an annual basis, overall retail sales volumes fell by 3.1% last monh compared to March 2022. But, shoppers spent 4.5% more to buy less, reflecting price increases over the last year – as this chart shows:

UK retail sales

The ONS reports that sales volumes at “non-food stores” fell by 1.3% during March, following a rise of 2.4% in February. Retailers blamed “poor weather conditions throughout most of March” for affecting sales.

Food store sales volumes fell by 0.7% in March 2023, following a rise of 0.6% in February 2023.

Food prices have been rocketing higher, with food and drink inflation at a 45-year high over 19%.

But, there are some signs that consumer confidence is improving. The consumer confidence index issued by market researcher GfK has risen by six points to minus 30 in April.

That follows a two-point increase in the previous month, and could be an early sign of an economic recovery.

The latest PMI surveys from the UK, across the eurozone, and the US, will show how companies are faring this month.

The agenda

  • 7am BST: UK retail sales figures for March

  • 9am BST: Eurozone ‘flash’ purchasing manager surveys for April

  • 9.30am BST: UK ‘flash’ purchasing manager surveys for April

  • 2.45pm BST: US ‘flash’ purchasing manager surveys for April

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