Your commercial news round-up: Nike, interest rates, house sales, water companies

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Are you up to date with this week’s commercial news? Nike has postponed its investor meeting following a revenue drop and the Bank of England (BoE) governor has stated that further interest rate cuts could be on the cards. Meanwhile, UK house sales have risen at the fastest rate since lockdown and the number of complaints against water companies has increased. Read on to discover more!

• In the four weeks to 21 September, UK house sales rose at the fastest rate of increase since spring 2021, driven by lower mortgage rates and increased demand from buyers. Data from property portal Zoopla showed that the number of sales agreed rose by 25% compared to the same period last year, while buyer inquiries to estate agents increased by 26% over the same period. Zoopla also found a 16% annual increase in new properties coming to the market and a 12% rise in the stock of homes for sale. Research by the BoE showed that mortgage approvals rose to their highest level in two years in August. Alex Kerr, economist at consultancy firm Capital Economics predicted that there’s “scope for mortgage rates to fall further and for house price growth to accelerate next year” following declines in swap rates, which influence mortgage deals.
   
• The number of unresolved customer complaints against water companies in 2023/2024 in England and Wales has increased by almost a third, reaching the highest level in nearly a decade. The Consumer Council for Water (CCW) reported a 29% rise in cases escalated to them by households that were unable to find a resolution with their supplier. The increase is attributed to customer dissatisfaction with issues such as sewage spills, billing errors and problems with water meters. An annual report showed that 222,956 complaints had been made to water companies in England and Wales. Chief executive of CCW, Mike Keil, explained: “We’re particularly concerned to see a significant rise in complaints from customers with water meters who are questioning the accuracy of their bill.” After reviewing complaints and the way in which complaints had been handled, CCW rated both Thames Water and Yorkshire Water as "poor".
   
• Nike has postponed its investor meeting and pulled its financial guidance for the year, following a 10% drop in revenue and a 28% decline in net income over the three months to 31 August. The sportswear giant is facing falling sales and increased competition from rivals. The company's new CEO Elliott Hill will take over on 14 October and is expected to focus on reviving sales and regaining market share. Nike's previous CEO John Donahoe prioritised sales through the company's own stores and website but placed less focus on US retailers, which meant that competitors like New Balance swiftly dominated this market space. The company's performance in China has also been affected by a decrease in consumer spending and a preference for locally made products.
   
• BoE Governor Andrew Bailey has stated that interest rate cuts may become “more aggressive” if inflation news continues to be positive. This contrasts with the Bank's previous cautious approach to rate cuts. The BoE’s recent survey of a ‘decision maker panel’ found that expectations for consumer price index inflation has dropped and that there’s been a small reduction in business uncertainty. However, Bailey’s announcement caused the pound to drop steadily throughout today (3 October). At 12:20pm sterling was down around 1.2%, with £1 equalling $1.31. This is a drop of more than 1.5 cents, which is the biggest one-day drop against the dollar since 7 March 2023. The Bank is expected to make a decision on interest rates in early November. Before Bailey’s announcement markets indicated an 88% chance of interest rates being cut to 4.75% but this probability has now risen to 96.5%.

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