Troubled Water

Thames Water is back in the firing line following Ofwat’s decision to put the monopoly into a “turnaround oversight regime”.

Earlier this year, Thames Water were looking to increase bills by 45% as it attempted to shore up its finances. While Ofwat rejected these proposals, the regulator signalled that water bills would rise 21%, but insisted that the company make improvements to “customer service and the environment at a fair price for customers”.

Over the course of last year Thames Water was responsible for 16,990 sewage discharges – over double that of the previous year – as serious Pollution incidents rose by around 6%.

Thames Water – which supplies around 16 million households – has said that it has £1.8bn in liquidity, which it said is enough to cover its operations until May of next year. This comes as their net-debt position sits at around £15.2bn, having risen by as much as £14bn since their previous financial year because of greater levels of spending on infrastructure.

As such the group is reportedly seeking to gain around £3.5bn in extra liquidity from creditors and prospective investors. With many of its shareholders already rejected injecting fresh funds into the business, its position looks increasingly precarious.

It’s not lost on anyone that without additional funding, the Government may be required to bail out Thames Water.

Ahead of the election however, the now Business Secretary, Jonathan Reynolds, telegraphed that a Labour government would not want to renationalise the group.

While the Thames Water saga continues, the CEO of Thames Water Chris Weston defended the bonus of £195,000 that he received after his appointment in January. The monopoly’s CFO also took home a £446,000 bonus last year, adding insult to injury given the company’s track record.

Following today’s draft judgement, attention now turns to the final decision expected in December.

George Clooney joined the ranks of high profile Democratic donors calling on President Joe Biden to step aside from the race for the Whitehouse.

Writing in the New York Times, Clooney – whose fundraising events have helped raise tens of millions of dollars for the party – said that “Our party leaders need to stop telling us that 51 million people didn’t see what we just saw.” While applauding Biden on many of his achievements over his long political career, Clooney said that “the one battle he cannot win is the fight against time”.

Clooney’s high-profile comments follow Texan Representative Lloyd Doggett becoming the first Democratic Congressperson to call for President Biden to step aside from the Election last week. Reflecting Clooney’s sentiments, Doggett said that “I am hopeful that [Biden] will make the painful and difficult decision to withdraw”.

Just across from Doggett’s seat in the House, on Tuesday, the Democratic Senator from Colorado Michael Bennet became the first Senator from Biden’s party to call on the President to resign.

At present, Biden appears resolute in his desire to run for re-election despite polls suggesting that the incumbent President is coming under pressure in key swing states.

With the Democratic National Convention being held between 19 to 22 August – the conference which formally declares the party’s Presidential Candidate – the time left to replace Biden is quickly running out.

This morning, UK GDP for May came in at 0.4% growth on a year-on-year basis, missing market expectations of 0.6% but rising considerably from April’s print which showed growth fall 0.7%.

On a monthly basis, Output was more positive with growth of 0.4% – exceeding expectations of 0.2%. Here, services output grew by 0.3%, production output grew by 0.2% and construction output grew by 1.9%. The rise in output was steered by growth in the retail sector in addition to professional, scientific and technical activities.

Attention now turns to the ways in which the new Labour governments polices will influence growth following the Chancellor’s promise to “take immediate action to fix the foundations of the economy, rebuild Britain and make every part of the country better off”.