Sharon White stepping down from John Lewis; UK house prices fall at fastest rate since 2009 – business live

The downturn at UK manufacturing continued in September, new data shows, which could drag the economy into a contraction by the end of this year.

Data provider S&P Global reports that output, new orders and employment at UK factories all fell last month.

Manufacturers were hit by weaker demand from both domestic and overseas customers, with exports suffering from client uncertainty and the subdued global economic situation.

This left the UK manufacturing purchasing managers’ index at 44.3 in September – below the 50-point mark showing stagnation, and one of the weakest readings in the last 14 years (although slightly higher than August’s 39-month low of 43.0).

The report says:

All five of the sub-indices comprising the PMI (new orders, output, employment, stocks of purchases and supplier delivery times) were consistent with a weakening of underlying sector performance.

Manufacturers said they cut their output for the seventh month running, as they reacted to falling new orders.

Demand was hit by “ongoing market uncertainty, the cost-of-living crisis and weak conditions in overseas markets”, the report says.

New export business contracted for the twentieth month in a row, due to lower demand from within Europe, the US, mainland China and Brazil.

Rob Dobson, director at S&P Global Market Intelligence, explains:

“September saw the manufacturing sector still mired in contraction territory, as weak conditions at home and abroad hit new order intakes and led to a further scaling back of production volumes.

The cost-of-living crisis and recent rapid rise in interest rates are taking their toll, according to producers, raising the possibility of the broader UK economy slipping back into contraction during the second half of the year.

The downturn is being felt throughout the manufacturing sector, with demand falling from both households and businesses. The resulting rise in caution at manufacturers is driving risk aversion and shifting their focus towards margin protection and cost control, highlighted by further cuts in employment, purchasing and inventories. These all point to companies battening down the hatches in expectation of stormy conditions ahead.

There was slightly better news for producers on the price front, as a mix of lower costs and rising selling prices aided margin protection efforts. However, with oil prices on the rise, the environment may become less disinflationary in the coming months.

Full story: John Lewis boss Sharon White to step down

Sarah Butler

Sharon White, the chair of British retailer John Lewis Partnership, plans to step down in February 2025 at the end of her five-year term, my colleague Sarah Butler reports.

White has asked the board of John Lewis – Britain’s biggest department store chain, which also operates Waitrose supermarkets – to start looking for a successor as she will not seek a second term.

Her resignation makes White the shortest serving chair in the business’s history, according to the BBC, which first reported her planned exit.

She has also requested a review of the chair’s accountabilities to ensure that these continue to support a turnaround plan.

White said:

“Having led the partnership through the pandemic and the worst of the cost of living crisis, it is important that there is now a smooth and orderly succession process and handover.

“The partnership is making progress in its modernisation and transformation with improving results. There is a long road ahead and I am committed to handing on the strongest possible partnership to my successor.”

She said the chair of John Lewis was “a special and unique role in UK business” with responsibilities for the “long-term health” of the group’s staff-owned model which aimed for “commercial success twinned with a commitment to first rate customer service and action in our communities”.

Here’s the full story:

It’s official: Sharon White, the chairman of the John Lewis Partnership, is to stand down when her current term expires after five years at the group, as rumoured this morning (see earlier post).

In a statement, JLP says White has asked the Partnership Board to initiate the process to appoint a successor as she enters “the latter stages of her five-year term”, which is officially due to end in early 2025.

White began the role in February 2020 and her five-year term as Chairman comes to an end in February 2025.

As part of the recruitment process, White has also asked the Board to review the accountabilities of the Chairman’s role to ensure that these continue to support the successful transformation of the business, JLP says.

White says:

“The Chairman of the John Lewis Partnership is a special and unique role in UK business. The Chairman is responsible for the long-term health of the Partnership’s model – commercial success twinned with a commitment to first rate customer service and action in our communities.

“Having led the Partnership through the pandemic and the worst of the cost of living crisis, it is important that there is now a smooth and orderly succession process and handover.

“The Partnership is making progress in its modernisation and transformation with improving results. There is a long road ahead and I am committed to handing on the strongest possible Partnership to my successor.”

As flagged earlier, John Lewis warned last month that its plan to return to “sustainable” profit would take two years longer than planned, partly due to the impact of inflation. It made a £59m loss for the six months to July.

In March, it posted a worse than expected £230m full-year loss in the last financial year, meaning staff at its John Lewis department stores and Waitrose supermarkets didn’t get a bonus.

In the economic world, the eurozone manufacturing sector remained mired in a deep downturn last month as factory orders plummeted and job losses accelerated.

The latest poll of purchasing managers across the euro area found that the eurozone manufacturing economy continued to contract at a sharp rate at the end of the third quarter.

The latest HCOB PMI data found considerable weakness across the sector, with new orders continuing to shrink at one of the fastest paces since the survey began in 1997.

Firms cut back on job numbers, bought fewer components and less raw materials, and also ran down their inventories, even though input costs fell sharply yet again.

This pulled the HCOB eurozone manufacturing PMI down to 43.4, from August’s 43.5, which shows a sharper contraction.

Germany’s factory sector suffered a faster drop in activity, with output there falling at the fastest rate in almost three-and-a-half years.

One in four new UK homeowners opt for ‘marathon mortgages’ to cut payments

Mark Sweney

A quarter of young homeowners who have a new mortgage have opted to pay it back over 35 years or more in an attempt to make monthly payments more affordable, according to Experian this morning.

Analysis by the credit data company found that 25% of new homeowners aged 29 and under between January and March this year had opted for a repayment term of at least 35 years.

This compares with the historical typical level of about 10%, which Experian recorded in January 2020.

First-time buyers and movers are increasingly opting for “marathon” mortgages – with lenders offering terms of as long as 40 years on some deals – for lower monthly payments in an effort to bridge the gap between rising living costs and still-high asking prices.

More here:

The BBC’s Simon Jack is reporting that Sharon White plans to stand down as chair of the John Lewis Partnership, when her current term ends in 2024:

White, the former CEO of communications regulator Ofcom, has had a tough time at John Lewis – staff were critical of the group’s performance earlier this year, and last month it admitted its turnaround plan will take two years longer than scheduled.

She has also been mentioned as a possible candidate for a peerage should Labour win the next election: