Four charged with fraud over Patisserie Valerie collapse The UK’s Serious Fraud Office (SFO) has brought fraud charges against four people, including a former director, over the collapse of bakery chain Patisserie Valerie. The company, which ran almost 200 high street bakeries, collapsed in early 2019, a few months after it was found to have a multi-million pound black hole in its finances, which was blamed on “potentially fraudulent” accounting irregularities. The SFO has charged the company’s former director and chief financial officer for 12 years, Christopher Marsh, as well his wife, accountant Louise Marsh. Financial controller Pritesh Mistry and financial consultant Nileshkumar Lad have also been charged. All four suspects were served with the charges at their homes. The SFO opened a full investigation into the conduct, codenamed “Operation Venom”, in October 2018, two days after the company abruptly suspended trading and shut 70 stores with the loss of over 900 jobs across the country when its debts were revealed. All four suspects have been charged with conspiring to inflate the cash in Patisserie Holdings’ balance sheets and annual reports from 2015 to 2018, including by providing false documentation to the company’s auditors. The defendants are summoned to appear at Westminster Magistrates’ Court on 10 October to hear the charges against them. Lisa Osofsky, director of the SFO, said: Patisserie Valerie’s abrupt collapse rocked our high streets – leaving boarded-up shops, devastating job losses and significant investor losses in its wake. Today is a step forward in getting to the bottom of this scandal. One of the investors in the chain was Luke Johnson, the entrepreneur who has also owned Pizza Express. There is no allegation of wrongdoing in Johnson’s case. Closing summary The UK’s Serious Fraud Office (SFO) has brought fraud charges against four people, including a former director, over the collapse of bakery chain Patisserie Valerie. The company, which ran almost 200 high street bakeries, collapsed in early 2019, a few months after it was found to have a multi-million pound black hole in its finances, which was blamed on “potentially fraudulent” accounting irregularities. The UK economy shrank in July by 0.5% amid industrial action and extremely wet weather, official figures indicate, heightening fears of a recession in the second half of the year. Analysts expected gross domestic product (GDP) to fall back by 0.2% but the Office for National Statistics said that strikes by junior doctors reduced health service activity, while retailers who had benefited from a warm June suffered in July, which was the sixth wettest on record. BP shares fell on Wednesday after the previous night’s shock announcement that its chief executive had resigned having admitted to failing to fully detail relationships with colleagues. Bernard Looney, who spent his entire career with the oil and gas multinational, departed the £88bn company with immediate effect, less than four years into his tenure. Rishi Sunak refused three times to commit to maintaining the pensions triple lock beyond the next election, as Keir Starmer mocked him as “inaction man” over national security. In his final Commons grilling before MPs break up for party conference recess, the prime minister was evasive about the future of a policy that has become a hallmark of recent Conservative governments. Germany"s Buch to head up ECB"s supervisory arm Germany’s Claudia Buch has been picked to head up the European Central Bank’s supervisory arm, overseeing the eurozone’s €26 trillion banking sector. Buch is a German economist who currently serves as vice president of the Bundesbank and previously worked as a professor at the University of Tübingen and also sat on the German Council of Economic Experts. In a close contest, she beat Spain’s Margarita Delgado to become chair of the ECB’s supervisory board, a non-renewable five-year role. She will run the Single Supervisory Mechanism, covering more than a hundreds of the eurozone’s top lenders at a time of rising interest rates, slowing economic growth and climate threats. Core inflation in the US, which measures the price of goods and services excluding the volatile energy and food industries, actually decreased in August to 4.3%, from 4.7% in July, reflecting the impact higher energy prices are having on the overall inflation rate. Nick Chatters, investment manager at Aegon Asset Management, said: Inflation in the US has fallen again, well the core figure which excludes volatile food and energy prices, which is what the Fed cares about for its monetary policy meeting next week. The rise in the headline number is due to energy, so ignore that, focus instead on the fact that shelter inflation has fallen still further, and part of the bump is due to an increase in motor vehicle insurance. Without this, the inflation picture looks much less of an issue for a Fed that wants to pause rate hikes at the meeting this month. US stock futures are extending their losses, pointing to a lower open on Wall Street later. But some think the market reaction is slightly overdone. Andrew Hunter, deputy chief US economist at Capital Economics, said: The Fed will look through the 0.6% m/m jump in headline CPI in August as it was driven by the recent rally in energy prices. Although core prices also rose by a slightly stronger 0.3% m/m, there is little in the report to convince Fed officials that they need to raise interest rates further. Headline inflation rebounded to 3.7% last month, from 3.2%, as the 10.6% m/m surge in gasoline prices resulted in a 5.6% gain in CPI energy. We suspect that rally will be partly reversed over the rest of the year, however, and in any case it is unlikely to concern the Fed. Admittedly, there was some evidence that higher energy prices have fed through to the core index, which rose by 0.3% m/m (although base effects helped push core inflation down to 4.3%, from 4.7%). Higher fuel costs resulted in a 4.9% rebound in airfares and they may have a little further to rise. That should only reverse the sharp declines seen in recent months, however, and the downward pressure on core inflation elsewhere still looks intact. Core goods prices fell again, by 0.1% m/m, helped by another drop in used vehicle prices. The auction data still point to further declines to come. Meanwhile, although the annual rates of rent and owners’ equivalent rent inflation remained elevated at 7.8% and 7.3% respectively, the plunge in inflation for newly-signed contracts suggest they could both fall below 4% by the middle of next year. Excluding shelter, core inflation was just 2.2% in August. He concluded: Overall, there is nothing here to change the Fed’s plans to hold interest rates unchanged at next week’s FOMC meeting, and we still expect weaker economic growth and a continued normalisation in the labour market to help drive a sharper fall in core inflation over the next 12 months than most others expect. US inflation rises to 3.7%, higher than expected US inflation came in at 3.7% in August, which was higher than expected. It picked up again from July’s 3.2% annual rate, mainly because of higher gasoline prices. Consumer prices rose 0.6 last month from the previous month, the biggest monthly gain since June 2022, the Labor Department said. Heather Long, economic columnist at the Washington Post, tweeted: Four charged with fraud over Patisserie Valerie collapse The UK’s Serious Fraud Office (SFO) has brought fraud charges against four people, including a former director, over the collapse of bakery chain Patisserie Valerie. The company, which ran almost 200 high street bakeries, collapsed in early 2019, a few months after it was found to have a multi-million pound black hole in its finances, which was blamed on “potentially fraudulent” accounting irregularities. The SFO has charged the company’s former director and chief financial officer for 12 years, Christopher Marsh, as well his wife, accountant Louise Marsh. Financial controller Pritesh Mistry and financial consultant Nileshkumar Lad have also been charged. All four suspects were served with the charges at their homes. The SFO opened a full investigation into the conduct, codenamed “Operation Venom”, in October 2018, two days after the company abruptly suspended trading and shut 70 stores with the loss of over 900 jobs across the country when its debts were revealed. All four suspects have been charged with conspiring to inflate the cash in Patisserie Holdings’ balance sheets and annual reports from 2015 to 2018, including by providing false documentation to the company’s auditors. The defendants are summoned to appear at Westminster Magistrates’ Court on 10 October to hear the charges against them. Lisa Osofsky, director of the SFO, said: Patisserie Valerie’s abrupt collapse rocked our high streets – leaving boarded-up shops, devastating job losses and significant investor losses in its wake. Today is a step forward in getting to the bottom of this scandal. One of the investors in the chain was Luke Johnson, the entrepreneur who has also owned Pizza Express. There is no allegation of wrongdoing in Johnson’s case. Mick Lynch: ticket office closures mean people won"t "want to travel once the sun"s gone down" The closure of ticket offices in England will lead to a railway where people will “not want to travel once the sun’s gone down”, the union leader Mick Lynch has told MPs, describing the recent consultation as a “sham,” our transport correspondent Gwyn Topham reports. Speaking to the Commons transport select committee, the general secretary of the National Union of Rail, Maritime and Transport Workers, said the government was trying to force through job cuts and it was “nonsense” to suggest ticket office staff would be redeployed. Disability campaigners told the committee the consultation itself had been inaccessible for many disabled and vulnerable travellers, while the proposed staffing levels would threaten their right to travel. The consultation on shutting most of England’s 1,000 offices, which closed on 1 September after being extended after protests, received more than 680,000 responses. The large fall in UK GDP in July could herald a quarterly decline, according to the National Institute of Economic and Social Research, a respected think tank. Sunak: UK committed to triple-lock pension policy On the UK’s ‘triple lock’ pension policy, Rishi Sunak said today that the government remains committed to it. He told parliament: This is the government that introduced and remains committed to the triple lock. It is a government commitment to raise publicly funded pensions by whichever is the highest – earnings, inflation or 2.5%. Here’s a quick round-up of today’s other news. The mileage of local roads in England being resurfaced or treated to avoid potholes has fallen to its lowest level in five years, research has shown. There has been a decline of almost one-third in the total amount of life-extending road maintenance by local councils, according to analysis of government data by the RAC motoring organisation. Treasury officials are discussing a one-off break from the pensions triple lock that could save £1bn by preventing a bumper 8.5% increase in the state pension next year. The government is considering stripping out public sector bonuses that were awarded to workers to prevent strikes over the summer from the calculation that determines the annual rise in pensions. When James got back from travelling in 2008, he saw a job ad for Wilko. He applied and got it. Fifteen years of loyalty later – after he had worked on “practically everything you could possibly do” at the budget retailer – James* is likely to be made redundant within weeks. More than a fifth of UK shoppers’ favourite grocery items are at risk from climate breakdown, a new report has found. Consumers could also face shortages of bananas, grapes, avocados, cashews, cocoa, peas, canned tuna and tea in the coming years, as the countries they come from are hit by changing weather patterns because of CO2 emissions, the charity Christian Aid has said. Apple has announced that the iPhone 15 makes its long awaited switch to USB-C, while gaining much extended camera zoom for its most expensive Pro model. The new line of smartphones for 2023 was unveiled on Tuesday by the chief executive, Tim Cook, alongside several new Apple Watches and AirPods Pro 2 earbuds with USB-C charging, all of which the firm hopes will tempt customers to switch or upgrade and buck its recent share price slide. Opec+ cuts to lead to smaller oil supply in fourth quarter, says IEA The extension of oil output cuts by Saudi Arabia and Russia to the end of the year will mean a “substantial market deficit” through the fourth quarter, according to the International Energy Agency, a Paris-based intergovernmental organisation. In its September report, the IEA said so far this year, output from Opec+ countries (the oil cartel Opec led by Saudi Arabia plus Russia) has fallen by 2 million barrels per day although this has been tempered by sharply higher flows from Iran. Opec and its allies began limiting supplies last year to shore up the market. This month, the global benchmark Brent crude went through $90 a barrel for the first time this year. It’s currently at $92.61 a barrel, up 0.6% on the day. Russian oil export revenues surged by $1.8bn to $17.1bn in August, as higher prices more than offset lower shipments. The cuts have been partly offset by the US, Iran and Brazil pumping more oil. Non-Opec+ supply rose by 1.9m barrels per day to a record 50.5m in August, the IEA said, predicting that world supply this year will rise by 1.5 million barrels per day. The IEA said: But from September onwards, the loss of OPEC+ production, led by Saudi Arabia, will drive a significant supply shortfall through the fourth quarter. Unwinding cuts at the start of 2024 would shift the balance to a surplus. However, oil stocks will be at uncomfortably low levels, increasing the risk of another surge in volatility that would be in the interest of neither producers nor consumers, given the fragile economic environment. Forced prepayment meter ban extended – Ofgem Energy suppliers in the UK have been banned from forcibly installing prepayment meters for people over 75 years old with no support in their house, and in homes with children under the age of two, Ofgem has announced. The regulator has confirmed that the code of practice for the involuntary installation of prepayment meters will be made mandatory, while also extending protection against forced installations for the most vulnerable households. A voluntary code of practice governing the installation of prepayment meters, which all energy companies signed up to in April, was put in place after evidence emerged of bad behaviour by suppliers towards struggling customers. Currently, no suppliers are carrying out forcible installations and face severe penalties if they do unless they meet strict criteria set by Ofgem. Under the new rules, which come into effect on 8 November, suppliers must ensure they are acting in a fair and responsible way, with involuntary installations used only as a last resort. Neil Kenward, director for strategy at Ofgem, said the watchdog will be monitoring energy companies closely to ensure they are complying with the “spirit and letter” of these rules, and “will not hesitate to take action” if necessary. Protecting the most vulnerable consumers is at the heart of what we do, and this decision not only cements the protections Ofgem put in place for people deemed most at risk, it goes further to protect the most vulnerable households. Prepayment meters are an important payment method that help millions of households to manage their energy bills, but they are not suitable for everyone. Following a public consultation over the summer, the code will become part of suppliers’ licence conditions, and breaking the rules could result in enforcement action and “substantial” fines, Ofgem said. Initially, the no-install rule applied to customers aged 85 and over with no other support in their home, or households with residents with severe health issues including terminal illnesses or those with a medical dependency on a warm home. Ofgem said dropping the upper age limit to 75 and adding homes with very young children will ensure more people are protected this winter. Ofgem boss: energy bills higher for some due to lack of support Jonathan Brearley, chief executive of Britain’s energy watchdog Ofgem has warned that energy bills are likely to be higher for some people this winter than last, despite energy costs dropping. He told MPs on the energy security and net zero committee: When I look across the market this winter and I think about how does that play out for us this winter, I should start by saying we have a full focus on making sure customers are protected this winter. There is some positive news. The market is more stable, it is less volatile and prices are lower than this time last year. This time last year, we were anticipating and seeing prices at around £4,200 a year without government support. And last year, government did step in to give tens of billions of pounds of support to customers. But there is a reality for customers this year: That support is not available. So, for many people, their bills will be very similar this year, and possibly worse for some, than they were last year. Ørsted enters first solar project in UK The Danish energy company Ørsted has entered its first solar power project in the UK, which it says will become one of the largest solar farms, once it is operational. It is working with UK firm PS Renewables to build the 740 megawatt solar energy farm with battery storage in Nottinghamshire, and hopes to have it up and running before 2030. Redrow warns of sharp drop in sales and profits Redrow has warned of a sharp drop in sales and profits this year, pointing to the cost of living and mortgage crisis, and said it was using sales incentives to lure house buyers. The company scaled back its land buying, adding 1,900 plots with panning permission compared with 6,000 in 2022. It closed two if its smaller divisional offices, Thames Valley and Southern, and cut some jobs “to reflect market conditions”. Matthew Pratt, the chief executive, explained: Cost of living and mortgage affordability continue to have a negative impact on the market. Where appropriate, we’ve used targeted sales incentives to convert buyer interest into reservations. Following several consecutive Bank of England base rate increases, we remain hopeful that, as inflation eases, we will see some stability in mortgage rates. As expected, the sales market over the summer has been challenging. This has resulted in sales per outlet per week for the first 10 weeks of the new financial year of 0.34 (2023: 0.61). Redrow made an underlying profit before tax of £395m in the year to 2 July against £410m in the previous year, and revenue of £2.1bn as it completed 5,436 homes, down 5%. For the current year, it is forecasting revenue of around £1.7bn and profit before tax of £180m to £200m. Redrow said it was now installing air source heat pumps and ground floor underfloor heating as standard in detached homes on new developments.