BUSINESS LIVE: Wage progress accelerates; Britvic takeover cleared; Capita to chop extra workers

Outsourcing giant Capita has raised its cost-saving target from £160million to up to £250million, with the group’s AI push leading to more job losses.

The London-listed company, which hires about 41,000 people around the world, said it was increasing the use of artificial intelligence, which has helped further reduce costs.

Capita said voluntary employee attrition – meaning when staff choose to leave the company – of about 21 per cent will contribute to the savings target and reduce the need for redundancies.

Capita also revealed that it was expecting about a £20million annual hit from the rate of employer national insurance increasing next year.

A £4billion Greek industrial conglomerate has confirmed plans to seek a primary listing in London in a fresh boost for the City.

Metlen Energy & Metals, which is listed in Athens, said yesterday that it has filed paperwork with the watchdog, the Financial Conduct Authority (FCA).

It is the first step in a regulatory process that would see the company list in London in 2025, the company said.

Thomas Pugh, economist at RSM UK:

‘The jump in wage growth excluding bonuses to 5.2% puts another nail in the coffin of an interest rate cut on Thursday. What’s more, there was little sign that firms have reduced hiring ahead of the budget. Our base case is that the MPC will cut rates once a quarter next year, but strong wage growth and a second Trump presidency increases the risk of fewer rate cuts.

‘There was little evidence that pre-budget worries caused firms to radically alter their employment plans. Employment rose by 173,000 in the three months to October and the unemployment rate remained at 4.3%. Admittedly, the employment statistics are unreliable at the minute so the jump may have been driven by revisions to the data rather than a genuine increase. It may also be that most of the impact on the labour market will come after the budget. Indeed, the number of employees on payrolls dropped by 35,000 in November, but this metric is extremely volatile, and we don’t put much faith in one month’s numbers so this is one to watch.

‘The pay growth figures are more reliable, though, and will make the MPC nervous. With private sector ex-bonus pay growth rising to 5.4%, the chances are that pay growth will be a little faster in Q4 than the 5.1% the MPC had pencilled in. That gives the MPC a solid reason to keep rates on hold at 4.75% on Thursday and will make it even more cautious in cutting interest rates next year.’

Britain’s competition regulator has cleared Carlsberg’s takeover of soft drinks maker Britvic, saying it would not refer the £3.2billion transaction for an in-depth probe.

Carlsberg struck a deal to acquire the British soft drinks maker in July, aiming to establish a UK beverage ‘powerhouse’.

The deal, which is expected to close on 16 January, will see the Danish brewer taking over Britvic’s bottling agreement with PepsiCo. Carlsberg already bottles PepsiCo drinks in several markets and sees potential to expand into additional geographies in the future.

Carlsberg and Britvic said in a separate joint statement that all regulatory conditions have been satisfied, including clearances from the European Commission and the UK’s Competition and Markets Authority.

UK wages grew by a stronger than expected 5.2 per cent in the three months to October, fresh data from the Office for National Statistics shows.

The data, which surpassed forecasts of 5 per cent growth in average weekly earnings before bonuses, could further weigh on expectations for the pace and scale of Bank of England interest rate cuts.