The founder of Tulchan is set for a £35m pay day after selling the London-based financial based corporate public relations firm to rival global advisory Teneo, my colleague Mark Sweney reports.

Teneo, the US PR firm acquired by private equity group CVC in a $700m deal in 2019, is understood to have acquired Tulchan in a deal that values the business at more than £70m.

The exact value of the deal has not been revealed and will be determined depending on the performance of Tulchan over the next four years, the Guardian understands.

Andrew Grant, who founded Tulchan in 2000, is understood to control broadly half of the business, with the remainder split among 14 other partners. Here’s the full story.

Amazon’s plan to shut its warehouse in Gourock, near Greenock in Inverclyde, has been heavily criticised by Scottish politicians who fear it is a devastating blow to the area.

Labour’s West of Scotland MSP, Katy Clark, said (via PA Media):

“It is appalling that after 19 years in the area, Amazon has announced it intends to up sticks.”

She urged Scotland’s government to invervene:

“This is devastating for the local community and the 300 workers who may find themselves out of a job.

“These workers have been heroic supporting households and providing vital supplies throughout the pandemic and holiday periods.

“The Scottish Government needs to intervene as a matter of urgency to support these workers back into employment.”

Another Labour MSP, Neil Bibby, described the planned closure of the Gourock site as “devastating”.

Mr Bibby, who also represents the West of Scotland region, added:

“For 19 years, Amazon has been a major source of jobs in a part of Scotland with high unemployment and for 300 people to find out they are out of a work so soon after Christmas is a hammer blow.

“The Scottish Government should leave no stone unturned in trying to minimise the impact of these job losses and help people back into employment.”

A Scottish Government spokesperson said:

“It is very disappointing to learn of the announcement made today by Amazon to consult on closing its distribution centre in Gourock.

“This will be a difficult time for staff, their families and the local areas affected.”

Any fresh setback to a global economy already rapidly weakening as a result of high inflation, interest rates and war could result in a second recession within three years in 2023, the World Bank has warned.

In its half-yearly health check, the Washington-based institution said it had cut its 2023 growth forecast from 3% to 1.7% after the risks it identified six months ago all materialised, our economics editor Larry Elliott writes.

The Bank’s global economic prospects report said the tougher than anticipated anti-inflationary measures, persistently high energy prices and continued lockdowns in China had led to a much weaker outlook for this year than it had expected last summer. Almost every advanced country and nearly 70% of emerging and developing countries have had their growth forecasts cut.

Given the fragility of the global economy, the World Bank said any new adverse development – such as higher than expected inflation, abrupt rises in interest rates to contain it, a resurgence of the Covid-19 pandemic or escalating geopolitical tensions – could push the global economy into recession. Not since the 1930s have two global recessions occurred in the same decade.

More here:

The World Bank has slashed its 2023 growth forecasts to levels that would leave some major countries on the brink of recession.

The World Bank now expected global GDP growth of 1.7% in 2023 -- down from a previous forecast of 3%.

Its latest Global Economic Prospects report warns that global growth is “slowing sharply”, due to high inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine.

The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95% of advanced economies and nearly 70% of emerging market and developing economies.

The US is only expected to grow by 0.5% this year, a cut of 1.9 percentage points below previous forecasts and the weakest performance outside of official recessions since 1970.

In 2023, euro-area growth is expected at zero percent—a downward revision of 1.9 percentage points. In China, growth is projected at 4.3% in 2023—0.9 percentage point below previous forecasts.

The World Bank warns that the global economy was at risk of falling into recession.

Given fragile economic conditions, any new adverse development—such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions—could push the global economy into recession.

This would mark the first time in more than 80 years that two global recessions have occurred within the same decade.

BioNTech, the German vaccine developer, is to acquire UK artificial intelligence startup InstaDeep in a deal that could be worth £562m deal.

BioNtech is acquiring 100% of InstaDeep’s shares, excluding those it already owns for an upfront payment of £362m in cash and shares, plus additional payments that could be worth about £200 million if certain milestones are hit.

The transaction follows BioNTech’s initial equity investment as part of InstaDeep’s Series B financing round in January 2022.

BioNTech, which developed its Covid-19 vaccine with Pfizer, says the InstaDeep deal will help it “build world-leading capabilities in AI-driven drug discovery” and to develop next-generation immunotherapies and vaccines to address diseases with high unmet medical need.

Professor Ugur Sahin, CEO and Co-founder of BioNTech, says:

“Since the inception of BioNTech, we have focused on leveraging computational solutions to create personalized immunotherapies that can reach a wide patient population.

“The acquisition of InstaDeep allows us to incorporate the rapidly evolving AI capabilities of the digital world into our technologies, research, drug discovery, manufacturing, and deployment processes. Our aim is to make BioNTech a technology company where AI is seamlessly integrated into all aspects of our work.”

The battery startup Britishvolt is in talks with an Indonesia-linked oil and gas investor for a £160m rescue deal that would almost wipe out the value of existing shareholders’ stakes, my colleague Jasper Jolly reports.

The investor consortium is led by DeaLab Group, a UK-based private equity investor that has been involved in several fossil fuel and renewable energy transactions in Indonesia, and an associated metals business, Barracuda Group.

A takeover of the project, if completed, would provide welcome relief for employees and enable the company to continue its ambitious effort to build a factory capable of making 30 gigawatt hours of batteries every year – enough for hundreds of thousands of cars. Building gigafactories is seen as a key aim by the UK government, which pledged £100m in financial support to the project.

Britishvolt’s site, near Blyth in Northumberland, is seen by many in the automotive industry as one of the UK’s best potential locations for a gigafactory because of proximity to power lines carrying renewable energy and a deep-sea port. However, the startup reached the brink of collapse in October as it ran out of money, with building work on the factory mostly halted since the summer.

Under the terms of the rescue deal, the investors will pay £30m for 95% of the business – a deal that would leave existing shareholders including co-founder Orral Nadjari and FTSE 100 companies Glencore and Ashtead with 5% of the business worth less than £2m. The consortium would then commit a further £128m to fund the next stage in Britishvolt’s plan.

More here:

In the financial markets, shares in Virgin Orbit Holdings are down over 20% in premarket trading, after the UK’s historic attempt to launch satellites into space failed.

Last night, Virgin Orbit’s Cosmic Girl, a customised Boeing 747, released a rocket loaded with nine satellites, in a historic first mission from Spaceport Cornwall near Newquay.

But the rocket was lost after “a technical failure”, which Virgin Orbit has pledged to “tirelessly” investigate, as my colleague Steven Morris reports here.

UK space chiefs have said they would try again to send satellites into space from British soil within a year, but the failure of the mission is a set-back for Virgin Orbit and for Cornwall’s ambitions to be a new launchpad for space ventures.

Shares in Virgin Orbit are on track to drop 22%, to $1.50, when the US market opens.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says there were high hopes that last night’s operation would be the start of a brighter future for Virgin Orbit.

Streeter explains:

The cash burn rate for the company has been huge, and the prospects for revenue have been significantly set back.

While space may have been heralded as the new investment frontier, the ventures clearly come with a huge amount of risk.

Given the initial launch from Newquay airport also progressed well, the aborted mission is “hugely disappointing but doesn’t not fully dim Newquay’s prospects as a future space hub”, Streeter argues, adding:

However, as investment case, the flight ahead for space looks set to be volatile.’’

Goldman Sachs has dropped its prediction that the eurozone will fall into recession, but still expects a UK recession this year.

The US investment bank now expects the euro zone economy to grow by 0.6% during 2023, up from its previous forecast of an 0.1% contraction.

Goldman economists, led by Sven Jari Stehn, told clients in a research note that recent falls in gas prices, and the end of China’s Covid-19 restrictions, would support growth, saying:

We maintain our view that Euro area growth will be weak over the winter months given the energy crisis but no longer look for a technical recession.

This reflects more resilient growth momentum at the end of last year, sharply lower natural gas prices and earlier China reopening.

Growth is expected to be weaker Germany and Italy, which are more reliant on energy-intensive industrial activity, than France and Spain.

Goldman has also raised its UK growth forecast, in response to lower wholesale gas prices.

But, it still expects a UK recession given “persistent headline inflation, rising mortgage rates and structural headwinds to labour supply”.

UK GDP is forecast to fall by 0.7% this year, up from a 1% fall predicted before, with Goldman predicting “a notably more pronounced downturn in the UK than the Euro area”.

The City minister, Andrew Griffith, has been quizzed about crypto assets by MPs on the Treasury Committee this morning.

Griffith said despite risks and “vulnerabilities,” the UK should be at the forefront of a “potentially game changing technology”, quoting an Ernst & Young estimate of a £60bn opportunity.

About 2.3 million people in the UK own some of crypto assets, one MP said.

Griffith said there was clearly a balance to be struck between protecting consumers, saying it was “clearly regrettable” that some had suffered large losses from crypto investments, and reaping benefits from a “disruptive” new technology, such as lower transaction costs.

Asked whether crypto assets can improve financial inclusion, Griffith said he wanted to “hear more on that,” noting that a digital currency is easily accessible via an app. But he said he was “worried” about people who can’t get bank accounts using crypto assets instead, saying it would be “very premature” to remove banks as an intermediary.

The Bank of England is currently considering whether to create a central bank digital currency, like other countries (such as the US, EU, and China).

“With the UK’s strong financial reputation, I’d rather be right than first,” the minister said.

Businesses have expressed “huge disappointment” over the threat to their survival from a sharp reduction in support for their energy bills from the government – and it could hurt Britain’s green ambitions too.

Leading energy consultancy Cornwall Insight argues that – as well as the impacts on business earnings and cash flow – the cut to support could curb businesses ability to invest in decarbonisation.

Gareth Miller, chief executive at Cornwall Insight, said:

“Some larger and more financially resilient firms will still be able to continue their plans. But many may now be unable to create borrowing capacity or free cash flow, at least over the coming few years, whilst they face this cocktail of cost challenges.

“It’s not about the will, it’s about the means. If the government is going to reduce direct support for business energy bills, then perhaps the policy focus should turn to how they can offset this by using tax and investment incentives, the design of energy markets, and greater financial reward for the demand side, allowing businesses to offset financial pressures, as well as maintain their pursuit of net zero.”

Yesterday the government announced a revamp of the capacity market – which is designed to ensure there is a reliable electricity supply regardless of the weather – to incentivise investment into low-carbon technologies.

Amazon has announced plans to shut three of its 30-plus UK warehouses, affecting 1,200 jobs, our retail corresponent Sarah Butler reports.

Workers from the facilities in Doncaster, Hemel Hempstead in Hertfordshire and Gourock in western Scotland will be offered roles at other Amazon locations.

It is thought unlikely that many of the 300 workers at the Gourock site will want to relocate as there is not another Amazon facility nearby, as is the case with the Doncaster and Hertfordshire factories.

The closures of the older sites come as Amazon prepares to open new delivery warehouses in Peddimore in the West Midlands and Stockton-on-Tees, County Durham, which will employ 2,500 people.

A spokesperson for Amazon said the company remained “committed to our customers, employees, and communities across the UK”, saying:

“We’re always evaluating our network to make sure it fits our business needs and to improve the experience for our employees and customers.

As part of that effort, we may close older sites, enhance existing facilities, or open new sites, and we’ve launched a consultation on the proposed closure of three fulfilment centres in 2023,.

The potential job losses come after Amazon announced last week that it planned to cut 18,000 jobs around the world – mostly in its head offices – in an effort to become more efficient under Andrew Jassy, who took over as chief executive in summer 2021.

More here:

Amazon has said it plans to shut three UK warehouses in a move which will impact 1,200 jobs, PA Media reports.

Last week, Amazon announced it was expanding its staff-cutting plans to affect more than 18,000 workers.

The online retailer’s chief executive, Andy Jassy, cited “the uncertain economy” for the move and said Amazon had “hired rapidly over the last several years”.

Disney’s boss has told employees who are working from home to return to the office four days a week from the start of March, according to reports.

Bob Iger, the chief executive, said hybrid workers will be asked to treat “Monday through Thursday as in-person workdays”, according to an email seen by CNBC, which first reported the news.

“As I’ve been meeting with teams throughout the company over the past few months, I’ve been reminded of the tremendous value in being together with the people you work with,” Iger wrote.

“As you’ve heard me say many times, creativity is the heart and soul of who we are and what we do at Disney. And in a creative business like ours, nothing can replace the ability to connect, observe and create with peers that comes from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors.”

Recruiter Robert Walters has warned that its full-year profit is expected to be slightly below market expectations, as the global economic slowdown hits demand for new staff.

In a trading update this morning, CEO Robert Walters cited difficult market conditions as he warned that full year profits for 202 are expected to be slightly below current market expectations, although still a record.

He said:

“The global macro-economic backdrop became increasingly uncertain as the quarter progressed resulting in a softening of recruitment activity levels across many of the Group’s markets.”

Robert Walters also reported an 11% increase in net fees, year-on-year, in the last quarter of 2022.

But its headcount peaked in November and declined in December “reflecting the more challenging market conditions”.

Net fee income in Mainland China fell by 24% in the quarter, “market conditions still heavily impacted by Covid disruption and restrictions”.

Shares in Robert Walters are down 8%, with other recruiters also lower (Pagegroup are off 7.2%)

Victoria Scholar, head of investment at interactive investor, explains:

Shares in Robert Walters are extending losses today with the stock nursing an annual loss of nearly 40% over a one-year period. On the one hand, the recruitment firm has benefited from labour shortages which have prompted businesses to seek help sourcing potential hires and filling key roles. On the other hand, the recruitment firm which has a specialism in technology has suffered amid the slew of job cuts in the sector.

Plus, the broader global slowdown when combined with China’s covid lockdowns has muted hiring activity as businesses batten down the hatches, putting recruitment plans on hold amid cost inflation pressures and a softening consumer.”

Business secretary Grant Shapps says energy suppliers need to pass on falling wholesale energy prices to customers, such as businesses.

Speaking on the Today programme, Shapps insisted that the government doesn’t want to see small businesses go under due to high energy prices, as the Federation of Small Businesses warns could happen.

Nor should that be the case, Shapps argues, pointing out that wholesale gas prices are lower than they were before Putin invaded Ukraine, but still historially high.

The problem, though is that this isn’t being felt by businesses in their energy bills, Shapps points out

Shapps says ministers are very concerned that customers benefit from falling wholesale prices, saying:

One of the things the Chancellor and I are very concerned about is those wholesale prices, which as I say, have now come down again, making sure that’s passed on to the end users and those businesses.

So we’ve written to Ofgem to ask them to review the market and how that’s operating to make sure that it’s wholesale prices lead to lower prices for those businesses as well.

The Institute of Directors are disappointed that there isn’t targeted support for the hospitality sector in the government’s new energy support package.

Alex Hall-Chen, principal policy advisor for Sustainability, Skills and Employment at the IoD, says businesses will be reassured that some support will continue for a further twelve months beyond the end of March.

But, she warns, shifting to a discount on energy bills rather than the current fixed cap will create more uncertainty for firms, making it harder to budget.

It could force some struggling small firms under, Hall-Chen says:

“However, whilst many manufacturers will also receive additional support, it is a shame that the government has not found a way to target other firms most exposed to volatile international energy markets, such as those in the hospitality sector.

“The design of the new scheme will also provide less certainty for businesses in budgeting. Given that future energy costs will no longer be able to be projected with any degree of confidence, the willingness of directors and auditors to sign off their entities as going concerns will be impaired. In the case of the most vulnerable SMEs, this may affect insolvency assessments and lead some companies to cease trading altogether.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The UK government’s new energy support packages for businesses does not go far enough to protect companies from the shock of gas and electricity prices, industry groups are warning.

Under the plan, announced last night, non-domestic users will receive reduced support for their energy bills from the end of March. Rather than a fixed cap on energy costs, there will be a reduction to wholesale prices, for a year.

Martin McTague, National Chair of the Federation of Small Businesses, fears that small firms are being “left at the mercy” of the economic war being waged by Vladimir Putin, who drove up gas prices last year.

He told Radio 4’s Today Programme that the new scheme is a “massive disappointment”, and will hardly scratch the surface for many businesses.

The new plan means non-domestic energy customers – including businesses, schools and charities – will automatically receive a discount of £6.97 a megawatt hour for gas and £19.61 a MWh for electricity. James Cartlidge, the exchequer secretary to the Treasury, said this was the equivalent to a £2,300 saving for a pub, or £400 for a typical small retail store.

But businesses with energy costs below £107 a MWh for gas and £302 a MWh for electricity will not receive support.

McTague points out that around one in four small businesses have said they’d be in trouble if there was a big increase in wholesale energy prices in March.

They’ve already spent £18bn getting this far. It seems absolutely crazy to abandon so many firms when they’ve spent so much money getting them through the winter.

The government has said the existing package, which expires at the end of March, was unsustainable – Cartlidge pointed out last night that “it is not for the government to habitually pay the bills of businesses.”

McTague, though, points to the shock suffered by businesses last year, saying it it is “completely unrealistic” to think that small businesses can adapt to the new energy landscape in six months, over the winter.

They have to have a realistic timetable in which they can adapt to the new, much higher prices.

Otherwise, what you’re essentially doing is leaving them at the mercy of Putin.

Last night, McTague warned that 2023 “looks like the beginning of the end for tens of thousands of small businesses”.

The steel industry has welcomed the launch of the Energy Bill Discount Scheme [EBDS], but warned that it falls short when compared to the support available in European countries, such as Germany.

UK Steel say the extended support will provide a critical shield against high energy prices. But… Gareth Stace, director general of UK Steel, fears that domestic steelmakers will continue to suffer a ‘competitive disadvantage’:

The Government is betting on a calm and stable 2023 energy market, in a climate of unstable global markets, with the scheme no longer protecting against extremely volatile prices. The German Government guarantees an electricity price of €130/MWh for the whole of 2023, ensuring German industry can continue to operate competitively within Europe and beyond.

In contrast, the reformed EBDS provides a discount for electricity prices above £185/MWh, leaving UK steel producers paying an estimated 63% more for power than German steel producers this year. This situation will maintain a long-standing competitive disadvantage for UK producers, resulting in higher production costs and a reduced ability to compete this year.

The agenda

• 7.45am GMT: French industrial production for November

• 9.45am GMT: Treasury Committee hearing with Andrew Griffith, Economic Secretary to the Treasury, on crypto-assets and the Government’s ‘Edinburgh reforms’ to financial services

• 11am GMT: NFIB index of small US business optimism