The Resolution Foundation has said that Philip Hammond should raise £7 billion through changes to the UK’s wealth taxes. The UK’s leading think tank released a report ahead of the Hammond’s government spending review, with suggestions on how to finance public services with the increased demand from the ageing population. “Yes, this is politically difficult, but the good news is that relatively large sums can be raised simply by tightening up our existing wealth taxes and subsidies. That is how we protect our public services without placing all the burden of taxation on hard-earned income from work,” said the director of the Resolution Foundation, Torsten Bell. Five wealth taxes that can potentially be “tweaked” are entrepreneurs’ relief, council tax top band rates, inheritance tax loopholes, pension lump sum tax relief and Help to Buy Individual Savings Accounts. Adam Corlett, who is an analyst at the Resolution Foundation, said that tightening wealth taxes will be unavoidable as pressure on public services grows. “Britain’s wealth is undertaxed, and the wealth taxes we do have are in serious need of reform. There’s a strong case for scrapping council tax and inheritance tax altogether, and replacing them with proper wealth taxes that are more progressive and harder to avoid … [but] even without comprehensive reform of our main wealth taxes, loopholes can be closed, fairness improved and billions raised to fund the needs of an ageing society without hitting the pockets – or votes – of the majority.”  

Wizz Air reported a surge in passenger numbers of 18% for the month of December. The budget airline said passengers were up to 2.6 million, with load factor also up 1.3 percentage points to 88.8% during the festive period. In the rolling 12 months, Wizz Air passenger numbers were up 19.6% at 33.8 million while the load factor rose 1 ppt to 92.4%. The group also increased its capacity in December by 16.5% to 2.99 million, now serving an additional 14 new routes. Wizz Air is the largest low-cost airline across Central and Eastern Europe. Wizz Air is a constituent of the FTSE-250 Index. Elsewhere across the aviation industry, Ryanair (LON:RYA) also reported encouraging passenger numbers for the month of December. It reported a 12% growth in December traffic compared to a year previously, up to 10.3 million customers. Ryanair also said that it operated over 57,000 scheduled flights in December, with more than 81% landing on time. Whilst the Christmas period provided a boost to both airlines, in general, the aviation industry has been struggling amid increased competition and higher fuel prices. Earlier this year, both Ryanair and Wizz Air issued profit warnings, as industrial action weighed from air traffic control staff and cabin crew caused disruptions. Shares in Wizz Air (LON:WIZZ) are currently up 2.51% as of 11:35AM (GMT).

The rise of streaming is taking a toll on the CD industry, where last year sales fell by 23%. Data from the British Phonographic Industry has revealed the fall in sales, which is the biggest drop since the industry peaked in 2000. Kim Bayley from the Entertainment Retailers Association said on BBC Radio 5 Live: “Lots of us have changed the way we consume music and film, and more people are streaming from Netflix or Spotify.” “But I think we should remember that [physical music] is almost a £2 billion business. Even HMV has sales still of a quarter of a billion pounds, so that’s not a small business,” she added. In 2018, 32 million CDs were sold compared to the 41.6 million sold in 2017.

Next released a trading statement on Thursday, reporting strong sales in the pre-Christmas shopping period. Despite this, it has lowered its full-year profit by 0.6%. Full price sales for the Christmas trading period, which began on 28 October and ended 29 December, have been in line with the guidance released in September. Total full price sales were up 1.5% compared to the same period in 2017. Online sales, including interest income, were 2.2% above expectations. This growth was not reflected in its retail sales which remained 1.7% below expectations. For the year ahead, Next expects its full price sales to grow 3.2%, which remains in line with its September guidance. Despite this, the fashion retailer did slightly reduce the full-year profit that it previously outlined. It is now expected to come in at 0.6% below the level previously outlined, a reduction to £723 million. Moreover, the retailer expects earnings per share of 435.2p. This is a 4.4% increase compared to the previous year.

In the trading update, Next outlined that all forecasts come with a strong level of uncertainty as a result of Brexit.

“Any sales forecast made in January comes with a high degree of uncertainty. This year uncertainty around the performance of the UK economy after Brexit makes forecasting particularly difficult. We have not factored into our sales estimates the potential benefits of a smooth transition or the downsides of a disorderly Brexit,” Next said. At the end of 2018, PwC reported that the UK high street was facing the toughest trading conditions in five years. Indeed, the poor footfall numbers of 2018’s Boxing Day sales reflect a broader sector-wide crisis that hit retailers last year. In addition to Brexit uncertainty, we took a look at some of the factors fuelling the UK retail crisis. These include smarter shopping habits and changing UK weather patterns that are impacting clothing lines. At 09:15 GMT today, shares in Next plc (LON:NXT) were trading at +3.71%.

Ryanair released its traffic statistics on Thursday. It reported a 12% growth in its December traffic to 10.3 million customers. The low-cost airline said that it operated over 57,000 scheduled flights in December, with more than 81% landing on time. December’s 10.3 million flyers is a 12% growth compared to December 2017. The figures also included 0.3 million customers from Austrian low-cost airline Laudamotion. Ryanair acquired Laudamotion last year. Indeed, in March last year, the low-cost airline reported that it had acquired a 75% stake of the airline owned by Niki Lauda. This was its first acquisition in 15 years. The company said it would invest €100 million in Austria’s Laudamotion, which it would assist in developing as another low-cost airline.

Ryanair also reported a load factor of 95%.

Last year saw some chaotic changes for the airline’s passengers as confusion was caused over its second baggage rule change in 2018. The airline dramatically reduced the free luggage passengers could take on board. Under the previous rule, passengers were permitted one large and one small cabin bag to take on board with them through security. This rule changed to a baggage allowance of a ‘medium’ sized bag. Passengers were given, however, some leeway of 25% bigger than the new maximum dimensions. In addition, the airline decided to not alter its plans to close its base in the Netherlands. This decision was taken in spite of a court order blocking the company from relocating crew against their will. Since August, two staged walkouts took place in Portugal, Germany, Spain, Belgium and the Netherlands. It also announced the anticipated closure of two crew bases in Germany. In July, the airline gave a 90-day notice to over 300 pilots and cabin crew members in Dublin. It also revealed the anticipated closure of two crew basis in Germany. At 08:40 GMT, shares in Ryanair Holdings plc (LON:RYA) were trading at +0.9%.

The John Lewis Partnership has reported a rise in sales on Christmas eve – an 11% growth in sales compared to the year previous. Sales at the partnership, which includes both John Lewis and Waitrose stores, saw sales rise not only on Chrismas Eve but also on Boxing day. Barry Matheson, who is the group’s head of shop trade for Scotland and the north of England, said the stores had “very strong sales on Christmas Eve and a confident start to clearance sales both online and in shops”. Beauty and leisure products at the department store rose by 25%, whilst a rise in technology products pushed sales up 3.1%. Fashion sales surged by 11%. Waitrose provided a particular boost to sales, with a 19.2% rise on the same week a year ago. “As always at this time of year, our sales figures are heavily distorted by the fall of Christmas and New Year. Both these weekly performances were in line with expectations,” said a spokesperson for the group. Nicholas Carroll, who is a senior retail analyst at research group Mintel, said: “There has obviously been a big distortion by the way the last week has included Christmas Eve, and we will get a better picture in few days time when we get sales for the whole of the six week Christmas trading period.” “Even so at a time when retailing is meant to be on its knees, the John Lewis figures that we can see look fairly good and they imply an increase in sales of about 4% over the two week period.” Retailers including Marks & Spencer (LON: MKS), Debenhams (LON: DEB) and Tesco (LON: TSCO) will update investors next week. Next will release an update on Thursday. Sales at in the run-up to Christmas varied amongst retailers. Online fashion retailer Asos issued a profit warning.    

Rail fares increased by 3.1% in England and Wales on Wednesday, leading to protests across stations. The rise in rail prices is considerably more than the 2.6% rise in the average wage in 2018, increasing the cost of rail fares by hundreds of pounds to many commuters. Despite the high number of strike action, cancellations and delayed trains the increase in fares has been defended by Transport Secretary Chris Grayling and the rail industry who have said that 98p on every pound spent on tickets is reinvested back into the rail. The shadow transport secretary, Andy McDonald, has not defended the increase to price fares and said: “Today’s rail fare increases are an affront to everyone who has had to endure years of chaos on Britain’s railways.” “Falling standards and rising fares are a national disgrace. The government must now step in to freeze fares on the worst-performing routes,” he added. Prices in London will be frozen, thanks to London Mayor Sadiq Khan. Anthony Smith, who is the chief executive of the independent watchdog TransportFocus, said: “Passengers now pour over £10 billion a year into the railway alongside significant government investment, so the rail industry cannot be short of funding. When will this translate into a more reliable services that are better value for money?” Frances O’Grady, the TUC general secretary, said: “The most reliable thing about our railways is the cash that goes to private shareholders each year. But with the most expensive fares in Europe, that can’t be right. It’s rewarding failure and taking money away that should be invested in better services.” “It’s time to take the railways back into public hands. Every penny from every fare should go back into the railways. The number one priority should be running a world-class railway service, not private profit.”  

The footwear brand Mahabis has entered administration. The retail group, which was founded in 2014, called in administrators just days after Christmas. “We are very sorry to report that Mahabis Limited entered administration late on the 27th December 2018,” said Mahabis in a statement. “We have, for the moment, ceased trading as the administrators take over the business … We are all desperately disappointed at this outcome. Please bear with us as we do our best to work through the current circumstances,” the statement added. The group had sold almost one million pairs of slippers in over 100 countries. Whilst it is not yet clear what caused the downfall of the retailer, Mahabis was worth around £75 million – £100 million. Customers who want to return recently bought footwear from Mahabis have been told not to expect a full refund. “It is very likely that if you return goods you will not receive a full refund and any refund will take many months,” said the group. “We would recommend therefore that you consider carefully whether or not to actually return goods.” Mahabis, where shoes cost around £70, targetted millennials through pop-up ads and email discount offers. The footwear company is thought to owe creditors £2.6 million to creditors in the 12 months to June 2017. Staff at the firm worked a four-day week. The Mahabis boss, Ankur Shah, published a manifesto which encouraged ‘down-time’ for employees. The brand is the latest to be hit by the UK’s difficult trading environment. Other brands that have collapsed over the past year include Toys R Us and Poundworld.