All the talk is about back pay in the Shirebrook offices of Sports Direct at the moment. This week, the independent shareholders of the Derbyshire-based company will vote on whether to pay the older brother of founder Mike Ashley £11m in back pay.
The vote at the general meeting will come a few days after another group of Sports Direct workers were found to have been underpaid. The company and its employment agencies Best Connection and Transline were last week named and shamed by the government for paying warehouse workers less than the legal minimum wage, underpaying them by nearly £1m in total.
Sports Direct and the two agencies made up three of the top four underpayers in the latest list from the Department for Business, Energy and Industrial Strategy. At the other end of the pay scale, Wednesday’s meeting will see whether John Ashley should get his multimillion-pound back pay after an internal report found that he had missed out owing to PR concerns over the mammoth sum.
Not that Mike Ashley thinks the vote to pay him will go through. He said last month he expected shareholders to vote against it, because of the passage of time, but believes it should be paid. “Technically, the money is still owed,” he said.
Awkward call coming up for Dixons Carphone
There are not expected to be any early Christmas presents for shareholders in Dixons Carphone this week when the retailer announces its half-year results. Analysts have been sounding the warning bells amid concerns about a tough smartphone market.
Last month broker Stifel Nicolaus downgraded it from a buy to a hold. Not that this will be the first time shareholders have been made aware of the problems: last August, the company warned of a steep fall in profits as it emerged customers were holding on to their phones for longer as the weak pound pushed up the price of handsets.
The company – which trades as Currys, PC World and Carphone Warehouse – said that smartphone prices had risen in the aftermath of the Brexit vote and that people were now holding on to them for an average of 29 months instead of 24.
In addition, the scrapping of EU roaming charges also took a toll on the lifetime value of phone contracts. There was one glimpse of light for the retailer (but not necessarily the consumer): chief exec Seb James said in the summer there had been no change in how people use phones, and so worsening battery life might force them to upgrade eventually.
‘Expected inflation’ is on the rise too
The economic squeeze is expected to continue for beleaguered British households. The Office for National Statistics will release figures on inflation for November on Tuesday, with economists polled by Reuters expecting that the consumer prices index rise will hold at 3% – the highest rate in the past five years.
In October, inflation hit its highest level since 2012 as higher transport and food costs lifted prices. Last month, the Bank of England increased interest rates to 0.5%, in line with expectations, and cited the inflation rise as partial justification for the move.
Wage growth has been lagging behind as prices increase, meaning that households are being increasingly squeezed in their monthly budgets. A Bank of England survey of public perceptions of where inflation is likely to go in future shows that people expect it to be at 2.9% in two years’ time, up from a previous prediction of 2.7%.
The central bank has said that it expects to raise interest rates gradually over the coming years and that the rate of inflation will fall to 2.2% by late 2019.
How the public see the rate of inflation changing in future is monitored closely by policymakers.
