Banks face fines for failing to provide free access to cash
The Treasury will today publish new guidelines for the provision of cash. The new rules will require banks to provide facilities for making deposits and withdrawals within a three-mile radius of retail customers and businesses. Those who fail to do so could face being fined by the Financial Conduct Authority. Commenting on the new rules, Andrew Griffith, economic secretary to the Treasury, said: "People shouldn't have to trek for hours to withdraw a tenner to put in someone's birthday card, nor should businesses have to travel large distances to deposit cash takings." John Howells, chief executive of the UK's largest ATM network, Link, said: "The UK is not ready to become a cashless society, so it's good to see these rules become law."
Mortgage rates continue to fall as Halifax cuts prices
Mortgage rates are continuing to fall as Halifax, the country's biggest mortgage lender, announces a cut to its rates. The average two-year fixed residential mortgage rate is now 6.77%, down from 6.79%, and the average five-year fixed residential mortgage rate is now 6.26%, down from 6.28%. Despite expectations of the Bank of England raising interest rates, mortgage rates are still dropping. Traders now see a 50/50 chance of rates peaking at 6% or 6.25%.
China orders state-owned banks to support struggling currency
China has ordered state-owned banks to help prop up its struggling currency, the yuan, as its central bank vows to stem its slide. The yuan has lost around 2.5% against the dollar this month and 6% since the beginning of the year. In an effort to slow its depreciation, major banks have been selling dollars and buying yuan. The People's Bank of China has pledged to avoid "excessive movements" in the yuan and plans to step up macroeconomic policy adjustment. The government is also trying to reassure the public about the state of China's heavily indebted property sector. Fu Linghui of the National Bureau of Statistics stated that policy changes would "help boost market confidence" and improve housing consumption and investment.
US mortgage rates reach 20-year high
The average long-term US mortgage rate has reached its highest level in 20 years, posing challenges for homebuyers already grappling with high home prices and limited supply. Freddie Mac reported that the average rate on the benchmark 30-year home loan rose to 7.09%, the highest since April 2002. The rate was 6.96% the previous week. The surge in rates is attributed to the improving economy and the rise in the 10-year Treasury yield.
BAE shares fall on space deal
BAE Systems has confirmed the $5.6bn (£4.4bn) acquisition of US company Ball Aerospace, an arm of Ball Corporation. The UK defence giant said the deal would extend its reach into space but its stock was sold off on the news with investors deeming the deal on the expensive side. However, AJ Bell investment director Russ Mould, said if BAE executes smartly on the integration process the deal should be earnings accretive in the short term. “BAE is looking to expand in nascent sectors like space as well as build on its capabilities in electronics and this deal looks a decent fit in both areas,” Mould added.
Adyen’s shares plunge almost 40% after profits disappoint
The Dutch payments group Adyen has seen its profits hit by an ongoing hiring spree and increasing competition in the US. Shares closed down 39% on Thursday knocking €18bn from its market cap.
LEISURE & HOSPITALITY
Rank boss blames tourist tax for weak sales at casinos
The chief executive of Rank Group, which owns Grosvenor Casinos, has added his voice to calls for Rishi Sunak to reinstate VAT-free shopping. John O’Reilly said axing the tax rebate had hurt sales and deterred wealthy Middle Eastern gamblers from spending in the UK. Rank said on Thursday that sales across Grosvenor’s London casinos were still 26% below pre-pandemic levels in the first half of the year.
Scotch whisky exports slide
Figures compiled by the Scotch Whisky Association show exports fell in the first half of the year, with a dip in sales to the US and India blamed for the drop in volumes. Scotch whisky exports in the January to June period were valued at £2.57bn, a fall of £95.8m, or 3.6%, compared with the previous year.
Birkenstock UK sees sales soar
Birkenstock’s UK arm has reported a drop in profits for the year, slipping to £734,000 down from £962,000, with the group blaming administrative expenses for the dip. However, total turnover reached £34m in the year ended September 2022, up from £23m in the same period the prior year while full year retail revenues more than doubled, soaring 139% year on year to £4.5m. The German footwear maker is gearing up for a New York listing that would value the business at $8bn (£6.2bn).
UK and US bond yields rise on rate fears
The cost of UK government borrowing has risen to the highest level since the financial crisis. Recent data showing strong wage growth and sticky core inflation triggered an accelerated sell-off in UK bonds this week as markets bet on the Bank of England raising rates to a peak of 6% and keeping them there until at least next summer. The yield on the benchmark ten-year UK gilt was up seven points on Thursday to hit 4.7%, the highest since 2011, while two-year yields gained 6 points to reach 4.9%. Economists said higher borrowing costs and rising interest rate expectations will cost the Chancellor an extra £12bn a year by 2027, wiping out any fiscal headroom he may have had in the run-up to the election. Yields rose on US treasuries too, after Fed minutes showed rate-setters remained concerned about the threat of inflation.