Afternoon summary
Time for a recap:
Britain’s privatisation model is under scrutiny after Thames Water entered emergency talks with ministers and the regulator Ofwat, after the sudden departure of its chief executive, which came as it sought a multibillion-pound injection of cash from shareholders.
The water campaigner Feargal Sharkey has said crisis-ridden Thames Water must not receive a penny of public money in a bailout as it faces rising costs on £14bn of debt,
Sharkey, who has been crucial in raising public consciousness about the way privatised water companies are run, said he did not believe anyone in the UK would support using taxpayers’ money to prop up the company.
With its future in doubt, Thames Water has turned to business troubleshooter Sir Adrian Montague to become its new chair.
Montague says the water sector has reached a “critical” time, adding:
I now look forward to working with the Board and Executive team and Thames Water’s regulators and investors, to focus on the Company’s turnaround plan and its future financing needs to ensure it delivers on its responsibilities to serve its customers and communities well and benefit the environment.”
Academic research has found that England’s water companies are “environmentally insolvent” because they do not have the financial means to raise the £260bn needed to deal with their sewage spillages.
Bill Blain, strategist at Shard Capital warned of the risk of a potential investment crisis in the UK, writing:
Economic success is all about confidence and common sense. This is not about the collapse of a single company – it’s about how 40 years of miscalculations, mistakes, and the primacy of political will over common sense, have finally come due.
And in other news…
UK households are pulling money out of their savings accounts at the fastest rate ever recorded, drawing on rainy-day funds to weather the cost of living storm.
The crown estate has generated record profits of almost half a billion pounds from Britain’s offshore windfarms, as talks continue over how much of the windfall should be shared with King Charles.
Package holidays to popular Mediterranean destinations such as Mallorca and Crete have soared in price by up to a quarter compared with last year amid high demand and rising costs for providers.
The UK is to gain its first lithium mine in Cornwall after a British startup agreed a deal with a French mining company that could supply much of the country’s need for the crucial electric car battery mineral.
Shoppers searching for ways to trim their budgets have boosted sales at the discounter B&M and the fashion chain H&M in the latest sign of resilient trading on Britain’s high streets.
Serco expects to make higher profits during 2023 after reporting rising demand for workers to run immigration services for the UK government.
Back in the City, several UK water companies have ended the day in the red.
Severn Trent dropped 3.5% today, while United Utilities lost 2.8% and Pennon Group fell 3.2%.
As explained earlier, investors are reassessing the longer-term implications of Thames Water’s crisis for other firms in the sector…
