1 UK economy shrinks in July (Larry Elliott in The Guardian) One of Britain’s leading economic thinktanks has said the UK economy shrank last month as the impact of the Brexit vote led to a pronounced weakening in activity. The National Institute of Economic and Social Research estimated that gross domestic product contracted by 0.2% in July.
Niesr published the findings after official government figures showed that the UK trade deficit widened and factory production eased back in the weeks immediately before and after the EU referendum on 23 June.
The thinktank came to a gloomy conclusion after data from the Office for National Statistics (ONS) showed that a spurt in manufacturing came to an end in June, with output dropping by 0.3%. Meanwhile, UK exports failed to match imports, with the trade deficit rising by £0.9bn to £5.1bn.
However the ONS said there was little evidence of industry adopting a cautious approach because of uncertainty caused by the closely fought referendum campaign. The organisation’s chief economist, Joe Grice, said: “As we previously highlighted in our preliminary estimate of GDP, production and the wider economy grew strongly in April, and then remained at roughly the same level throughout May and June.
2 Executive pay at 144 times average pay (Ian Pollock on BBC) The average pay for chief executives of firms in the FTSE 100 index is now 144 times that of the UK’s average salary, says the High Pay Centre.
But such apparently excessive pay is not a new concern. Back in the early 1960s the Conservative government was interested in cutting back the sprawling and loss-making British railway network. The man who was chosen for the job was a senior ICI director called Dr Richard Beeching.
He was appointed as chairman of the new British Railways Board in 1961 and two years later published his first, and infamous, report on “The Reshaping of British Railways”. Even before he devised his controversial plans for pruning British Rail, there was another controversy, at least in the newspapers – over his pay. The Times reported in 1961 that Dr Beeching would be paid the same as his ICI salary while he was on secondment to the government.
That was the then huge figure of £24,000, which was thirty times higher than the average annual UK salary of just over £800 a year and £14,000 more than that of the then Prime Minister Harold Macmillan.
Let’s fast forward a couple more decades to the 1980s. It was then that the current trend for spiralling executive pay took root. In 1987, the boss of the Burtons men’s clothing firm, Sir Ralph Halpern, was paid £1.3m, becoming the first million-pound-a-year-businessman in the process. Since then, we have seen a parade of ever-higher pay packages for supposedly top executives.
In 1994, the then chief executive of privatised British Gas, Cedric Brown, was pilloried as Cedric the Pig. He had enjoyed a 75% pay rise to £475,000 a year, for running what had been a boring state owned utility only a few years before.
The economist Paul Ormerod, who famously wrote a book “The Death of Economics” more than 20 years ago, wrote last year that we shouldn’t look to his profession for an explanation. “Economics has no theory with which to explain the distribution of income,” he said.
But not everyone thinks “excessive” executive pay really matters. That reliable supplier of contrary economic views, the Adam Smith Institute, said in a blog: “Ultimately, it’s hard to see the public interest argument here.” “If shareholders are really missing a trick and overpaying their chief executives, who loses out? “Well, shareholders, in the form of lower profits. And they’re the ones who stand to gain if they can fix that problem.”
3 Facebook blocks ad-blockers (San Francisco Chronicle) Facebook is blocking ad blockers on the desktop version of its service, saying well-made, relevant ads can be “useful.” At the same time, the world’s biggest social media company says it is giving users easier ways to decide what types of ads they want to see — unless, of course, the answer is “none.”
Ad blockers filter out ads by refusing to display page images and other elements that originated with a known ad server. But Facebook has found a way around this. Beginning Tuesday, the desktop version of Facebook will show users ads even if they have ad blockers installed.
The changes don’t affect the mobile Facebook app, which brings in the bulk of the company’s advertising revenue. As with most new Facebook features, the changes are being rolled out to users over time, so some people might see it before others.
Facebook’s ad-blocker blocker works by making it difficult for software to distinguish advertisements from other material published on Facebook, such as photos or status updates. Facebook says it wants to make it easier for people to control the types of ads they want to see. For example, if you don’t want to see ads from a specific business, or ads that target a specific category like travel, cat owners or wine lovers, you can say so.