UK Labour Data, Truth Social, and Ukrainian Grain in Focus 

This morning, data from the ONS indicated that UK wage growth excluding bonuses came in at 6% (annualised) in the three months to March 2024. This came in line with the previous month’s print, and while representing a decrease from the period between April 2023 to September 2023 where wage growth was consistently above 7%, remains historically high relatively speaking.

When looking at wage growth including bonuses, the data well surpassed expectations coming in at 5.7% against a consensus which was pointing to 5.3%.

The evidence of persistently high wage growth indicates that policy makers will continue to face pressures from the labour market as they seek to bring inflation down to their 2% target.

The UK’s unemployment rate rose 10bps to 4.3% in the three months to March, coming in line with market expectations. This marks the highest rate of unemployment since July 2023 and a meaningful rise from December’s recent lows of 3.8%.

The rise in unemployment came as the number of those out of work increased by 46,000, indicating that the number of unemployed people stands at 1.49m. The number of those in work however increased over the period too, rising 17,000 to 33 million.

Elsewhere, job vacancies fell from 913,000 to 898,000. This represented a 2.8% fall in the level of job vacancies from the previous period and 17.3% from a year ago with the ONS citing that vacancies have fallen in 13 of the 18 industry sectors. Job vacancies however remained some 13% above their pre-covid levels, indicative of the structural changes to the work force over the last few years. The data also indicates that there are now 1.6 unemployed people per job vacancy, a rise from the 1.4 level recorded from October to December.

In the US, there’s an interesting story emerging that had originally passed us by. Trump’s Truth Social Media company was audited by a company called BF Borgers, who also audit around 170 other US publicly traded companies. Now that firm has been charged by the SEC, who have accused the company of “massive fraud” and that the “deliberate and systemic failures” affect more than 1,500 company filings from the past three years.

Despite having 170 Public companies on its books, BF Borgers only has ten certified accountants! An impossibly small number for so much work and it’s amazing that this firm hasn’t been picked up sooner. There are suggestions that it was the high profile of Trump Media that gave the SEC cause to consider who would be bold enough to want to audit that firm, which in turn led to this being exposed.

The wider implication is that there is now a load of publicly listed companies that will be late to file returns, as they scramble to appoint new auditors and there are also nine clients of the firm that were hoping to raise a combined $150m the public offerings that will now have to start again. Trump’s company has already secured a new firm!

It’ll be interesting to see if short sellers now target the firms that were using Borger, with the argument that their financials can’t be relied upon.

Ukraine has managed to return its grain shipping to near pre-war levels, the New York Times reports. Data shared with the newspaper shows that the country managed to ship 27.6 million tons of grain and oilseed through the Black Sea, just 200,000 tons short of the 2018-2021 average.

This isn’t only good news for Ukraine, but the rest of the world too. When Grain exports went all but offline in 2022 prices soared globally. Having lost economic assets, such as metal factories, in the East of the country, Ukraine could see GDP increase by 4% this year because of getting grain exports back up.

The win is a result of a lot of hard work by the Ukrainian military in clearing a shipping corridor, and keeping it cleared. The consistency in delivering a secure route has meant that there are plenty of ships that are now willing to make the journey. That said, the country is restricted to just Odesa ports, as those further East are either occupied by Russia or too close to the front.

Melinda Gates has announced that she will leave the Gates Foundation early next month. As part of the deal, Melinda Gates will have $12.5bn to put towards her work on behalf of women and families.

The foundation was set up in 2000 and now stands as one of the world’s largest privately owned charities. It has since focused on enhancing healthcare, reducing extreme poverty, expand educational opportunities and increasing access to IT while working in 135 countries.

Since its inception, the total amount of grant payments has surpassed $77.6 bn while the foundation’s endowment stands at just over $75bn as of December 2023.

Bill and Melinda Gates have given around $60bn to the foundation, while Warren Buffett has chipped in $40bn.