Reckitt Benckiser Expects £175M Hit from Russian Business Exit

Consumer goods group Reckitt Benckiser has announced it will absorb a £175m financial hit stemming from the sale of its business operations in Russia to local manufacturer Arnest Management. The transaction forms part of Reckitt's broader strategy to divest its assets in the country, following a trend of departures by Western corporations following the invasion of Ukraine.

Broader economic data highlighted shifting conditions across sectors, with hospitality firms experiencing a demand boost driven by favorable weather, the FIFA World Cup, and an increase in domestic holidays as high costs and economic uncertainty deterred foreign travel. Despite this, overall services growth remained lacklustre under persistent cost-of-living pressures. In an unusual trend relative to recent years, manufacturing output outpaced services, supported by expanding exports.

Inflationary pressures remain elevated, fueled by an ongoing energy shock and supply constraints linked to the Middle East conflict, compounding existing business cost pressures from prior government policies. These rising costs contributed to a continued contraction in employment, which has declined steadily since the autumn 2024 budget.

Meanwhile, business optimism regarding the coming year improved slightly during the survey period, reflecting temporary relief from eased geopolitical tensions and a subsequent retreat in oil prices. However, with renewed volatility in the Middle East, analysts note that a sustained cooling in inflation and a lasting recovery in business confidence remain uncertain.