Macron rejects special access for City after Brexit
Emmanuel Macron has warned Theresa May that the UK will have to pay into the EU’s coffers in order to secure a Brexit deal on financial services. Asked whether France would look to “punish” Britain, by insisting that financial services should not be included in a UK-EU trade deal after Brexit, Mr Macron said: “The choice is up to Britain: it’s not my choice – but they can have no differentiated access to financial services. If you want access for financial services, be my guest – but it means you have to contribute to the budget, and accept European jurisdiction. It’s a situation that exists for Norway.” In response, Mrs May repeated her position that Britain would leave the EU’s single market after Brexit. However, she also expressed her belief that a Brexit trade deal should “cover both goods and services”.
Brexit is not a “catastrophe” for the City of London – Noyer
Christian Noyer, a former Bank of France governor, has said that Brexit will not be a “catastrophe” for the City of London. He said that concerns about the impact of Brexit on the City had been overblown. He explained: “Twenty years ago London was already the first financial centre and Paris was much more important. Many banks had concentrated their forces in London which had tens or sometimes hundreds of staff in Paris before. So if that goes back to where we were 20 years ago it is not a catastrophe for the City.” The comments were welcomed by Lord Llewellyn, Britain’s ambassador to France, who said it showed that it was in both countries’ interests to strike a good Brexit deal.
ATM cull will cut off 200 towns
The consumer group Which? has warned that two hundred towns and villages could be cut off from cash machines if banks get their way on ATM charges. Which? found that 123 postcode districts with 111,000 residents do not have an ATM. Meanwhile, another 116 districts have just one machine - and in 37 of these, the provider charges a fee. Gareth Shaw of Which? said: “Reducing the free-to-use ATM network would hit consumers who rely on access to cash machines hard. These proposals could place a strain on communities across the UK that are already struggling to access the cash they need following mass bank closures.”
Cable: Santander boss embroiled in RBS case
Nathan Bostock, who is now head of Santander UK, has been named in Parliament by Liberal Democrat leader Sir Vince Cable as being ultimately responsible for the mishandling of business customers at RBS’s Global Restructuring Group. Sir Vince also questioned why the FCA was still withholding its report into the case. Santander declined to comment. Meanwhile, Treasury committee chair Nicky Morgan said the Treasury should explore putting corporate lending under the oversight of the FCA and establishing a specialist tribunal to mediate between banks and small business customers.
Minister urged to intervene on Barclays pensions
Members of Barclays’ pension scheme have asked Esther McVey, the work and pensions secretary, to intervene amid growing unease about the bank’s plans to put pensions under the control of the investment banking arm of the company.
Investors remain keen on blockchain
Blockchain, the technology which underlies bitcoin, has continued to catch investors’ imagination as two new deals were unveiled yesterday. Draper Esprit saw its share price leap by 8.4% after announcing an investment in cryptocurrency wallet business Ledger. Meanwhile, Shell made its first investment in blockchain, taking a minority stake in London start-up Applied Blockchain.
More profits hit by tax overhaul
Morgan Stanley's quarterly profit fell to $686m in the fourth quarter of 2017 due to a provision related to the new US tax law. Meanwhile, American Express has said it plans to suspend its share buyback programme after the tax reform resulted in a $2.6bn charge and pushed it to a quarterly loss. Elsewhere, BNY Mellon has pledged to spend much of its tax windfall on staff and investments in the business.
Goldman leads fundraising for research platform after Mifid II
Visible Alpha has expanded its roster of big Wall Street name backers and set its sights on MiFID-led European growth after closing a $38m funding round led by Goldman Sachs.
HSBC to pay forex fine
HSBC is set to pay $101.5m (£73m) to settle a US investigation into currency rate-rigging.
Uber agrees investment deal with SoftBank
A group of investors led by SoftBank has closed a deal with Uber, making SoftBank the largest stakeholder in the ride-services firm and providing a much-needed boost to controversy-ridden Uber. The deal includes a large purchase of shares from existing Uber investors and employees at a discounted valuation for the company of $48bn.
Greening hits out at Heathrow expansion plans
The former Education Secretary Justine Greening has criticised the government over its plans to expand Heathrow. Ms Greening said she believed the proposals were “flawed”, adding that the plan was “more expensive, lower value, more congesting, noisier and provides fewer connections”.
Future of A380 secured
Emirates Airline has announced an order for up to 36 Airbus A380s. The $16bn (£11.5bn) deal amounts to a reprieve for the A380 after Airbus threatened to stop making the jet if it could not come to a deal with Emirates.
Support for small firms hit by Carillion collapse
The government has set up a task force aimed at supporting small businesses and workers affected by the collapse of Carillion. The group is chaired by Business Secretary Greg Clark and includes representatives from business, trade unions, construction trade associations and lenders. Meanwhile, three banks have said they will provide money to support small business customers who are struggling after the failure of Carillion. Lloyds is creating a £50m fund, while RBS is offering £75m worth of assistance and HSBC £100m. Elsewhere, a regulatory filing notes that HSBC used credit derivatives to reduce its lending exposure to Carillion, packaging the derivatives into a $5bn so-called “synthetic securitisation.”
Insider deals ignored
The FCA has only prosecuted eight cases of insider trading in the past five years, securing just 12 convictions. This is despite research by the Times suggesting stock market abuse is far more widespread. Mark Dampier, research director at Hargreaves Lansdown, said: “Given the scale of regulation nowadays these figures are really surprising and suggest insider dealing is still a major problem.”
Asset managers fear delegation changes post-Brexit
Ministers, Bank of England officials and company executives fear that Paris-led efforts to tighten delegation rules will limit access for British-based fund managers to Dublin and Luxembourg.
European Investment Bank lending in UK falls sharply
The European Investment Bank has reported that its new contracts with the UK totalled £1.89bn last year, down from £5.54bn the previous year. Only £377m came after the British government triggered Article 50.
LEISURE AND HOSPITALITY
Christmas slowdown for restaurants
According to the Coffer Peach Business Tracker, Christmas trading was disappointing for Britain’s restaurant and pub chains with like-for-like sales down 0.1% compared to the previous year. National sales at restaurant chains dropped by 1%.
GKN rounds on ‘fake’ Melrose claims
GKN has stepped up its defence against Melrose’s hostile takeover bid, branding the 32% premium its suitor is offering as “fake”. The engineer’s chief executive Anne Stevens said she needed to “debunk inaccurate assertions” from Melrose, which has launched a £7.4bn bid for the business.
Countrywide issues profit warning
Countrywide has issued a profit warning, saying profits will dip to £65m. This is down from £83.5m in its previous results and down 10% on analyst expectations. It expects full year income to total £672m. The firm says performance was hit by a “disappointing” fourth quarter, noting that lettings income fell 8%. It added that income from sales and lettings is expected to be down 17% to £205m.
£1.6bn Battersea deal a UK record
A deal that will see two Malaysian state-backed funds buy Battersea Power Station values the building at £1.6bn – a sum that marks a UK record. The Battersea Power Station Development Company said the Grade II-listed power station will be sold to Permodalan Nasional Berhad and the Employees Provident Fund of Malaysia.
Strong Christmas helps Primark buck high street trend
Primark has reported “record sales” in the week leading up to Christmas. Parent company Associated British Foods said the high street chain’s revenues rose 9% in the 16 weeks to January 6th, and by 7% on a constant currency basis, while like-for-like sales in the UK were “strong”. ABF said Primark’s mainland European business was held back by unusually warm weather in October. Total ABF sales increased 4%, keeping it on course to meet full-year expectations.
Poundworld seeks cash injection
Poundworld is in talks with its majority owner, TPG Capital, for a new cash injection following a troubling Christmas period. The discount retailer is reportedly looking for another £30m to £40m of investment after disappointing sales and one-off costs saw its debt pile increase last year. Poundworld's most recent accounts, for the year up to March 2017, saw the company lose £600,000 in restructuring costs, £600,000 to fines, £3.9m as assets decreased in value, and £5.7m to cover onerous leases.
Household spending returns to pre-crisis levels
Household spending has returned to levels last seen before the financial crisis, official figures show. Average weekly household spending rose to £554.20 in the 2016-17 financial year, according to data from the ONS.
Productivity possibly underestimated
Analysis by the ONS suggests Britain’s productivity could be better than thought because advances in broadband and digital technology mean officials may have underestimated the size of the telecoms industry.